Latest news with #ArifHabibCommodities
Arab News
4 days ago
- Business
- Arab News
Pakistan stock market hits record high on ADB funding boost, insurance sector buying
ISLAMABAD: The Pakistan Stock Exchange (PSX) surged to an all-time high of more than 120,000 points on Tuesday, with analysts attributing the rally to the Asian Development Bank's (ADB) financing package for Pakistan and strong buying by insurance companies in banking, fertilizer and power sectors. The benchmark KSE-100 index closed at an unprecedented high of 120,450.87 points, marking a gain of 1,573.07 points, or 1.32 percent, from the previous day's close of 118,877.80. The development follows the ADB's approval of an $800 million package to help Pakistan enhance fiscal reforms and economic stability, alongside the government's approval of over Rs800 billion for public sector development projects in the upcoming budget. 'Stocks closed all time high led by scrips across the board after ADB approval of $800 million financing package,' Ahsan Mehanti, CEO of Arif Habib Commodities, told Arab News. 'Government set FY26 growth target at 4.2percent and government approval for Rs880 billion PSDP in the federal budget FY26 announcements next week.' Mehanti said the anticipated budgetary relief for oil refineries, real estate and agriculture sectors, along with gains in rupee's value, played a catalytic role in the bullish close at the PSX. Raza Jafri, head of Intermarket Securities, said this was the first time the KSE-100 Index has ever closed above the 120,000-point mark. 'Strong buying by insurance companies in sectors such as banks, fertilizers and power led the market higher,' he said. The budget for fiscal year 2025–26 is expected to be presented in Pakistan's lower house of parliament on June 10, following the Eid Al-Adha holidays. Pakistan's annual inflation rate rose to 3.5 percent in May, though the country's macroeconomic outlook has improved in recent months, supported by a stronger current account balance, increased remittances and declining inflation. Authorities remain cautious as they aim to build on recent economic stabilization, guide the country toward gradual growth, and reaffirm their commitment to ongoing economic reforms.
Arab News
27-05-2025
- Business
- Arab News
Pakistan stocks brace for ‘bumpy ride' amid fears of tax-heavy, IMF-driven budget
KARACHI: Pakistan's stock market is expected to experience a 'bumpy ride' in the coming days due to what some analysts on Monday described as a challenging new budget the South Asian nation is set to announce next month in line with recommendations from the International Monetary Fund (IMF). Prime Minister Shehbaz Sharif's administration has been in talks with the IMF over its new fiscal plan, though the Fund's team left Pakistan last week without reaching an agreement on key issues, including higher defense spending and the proposed taxation of agricultural income. As a result, the benchmark KSE-100 Index remained largely flat in recent days and slipped 0.7 percent to 118,221 points on Monday, following rumors that the government planned to raise the Capital Gains Tax (CGT) on share trading income. 'Given the new measures that have been IMF-driven and that are impacting sentiment at the stock exchange, we are expecting some bumpy rides and [do] not [expect] a clean ride up like we saw in the prior year,' Ahsan Mehanti, chief executive officer at Arif Habib Commodities, told Arab News in an interview. Finance Minister Muhammad Aurangzeb is expected to present the new budget on June 10 in Pakistan's National Assembly, the parliament's lower house, after the government postponed its earlier budget date of May 2 by nearly a week. SMALL INVESTORS The prevailing uncertainty has kept small investors like Abdur Rauf and Jawed Khanani from buying stocks, fearing an unfavorable outcome from the ongoing budget talks between the government and the IMF. 'If the budget turns out negative for the market, our money will get stuck,' said Rauf, a 68-year-old retailer, who said his 'investment level has come down to 25 percent due to the budget factor.' He maintained the government, by taxing bonus shares, was discouraging listed companies from issuing them to shareholders. 'They [the companies] are now giving dividends, which too have been taxed at 15 percent for tax filers and 30 percent for non-filers,' he said, adding, 'after deducting the dividend tax and members' [brokers'] commission, the investor is left with little money.' Due to heavy taxation, small investors, mostly households and retired salaried individuals, have almost disappeared from the equity market, while large investors are also operating under pressure. 'The government should exempt dividends [from taxes], reduce the [brokers'] commission and abolish the tax on bonus shares so that investors could get some relief from companies and fresh investments could come to the market,' Rauf told Arab News. Khanani also expressed concern over rumors of increased tax on dividend income and hoped the new budget would bring down existing tax rates. 'People hope that the [existing] 15 percent CGT on non-filers [of tax] should be brought down to 12 percent or 10 percent,' he said, seated in a small trading booth at the Pakistan Stock Exchange's main trading hall. GROWTH-ORIENTED OR CHALLENGING BUDGET? Meanwhile, big market players like Arif Habib, chairman of the Arif Habib Group, one of Pakistan's leading business conglomerates, are optimistic the government will unveil a growth-oriented budget after stabilizing the economy over the past year. 'You see, after the [economic] stabilization, the market expectations are that the new policies would be for the growth in the economy,' he told Arab News in an interview. Regarding high taxes, he said the government was 'very much concerned that the taxation rates in Pakistan are high' and would aim to provide maximum relief to investors and the general public if the IMF agrees to its proposals. Habib, who is believed to have close connections in policymaking circles, informed the IMF's broader conditions hinge on the size of the budget deficit. 'The Pakistani side wants to have some aggressive approach,' he continued. 'They wish that we may, in fact, incur some budget deficit, higher budget deficit, but give relief to the investors and to the general public.' However, he noted this would depend on the IMF's approval of a fiscal gap figure the Sharif government may be proposing for the next year. 'Now the number in fact being discussed in the market is about 5.1 percent or 4.9 percent,' he said. Habib said he sees no 'element of harshness' in the new budget but noted that the key question for the government is how much relief it can offer the market. 'Expectations are high,' he added. 'And if those are not met, then the markets would not, in fact, be happy about it.' Analyst Mehanti offered a contrasting view, saying higher taxes are likely for sectors listed on the PSX. 'It will be a very, you know, challenging budget,' he said. 'We are expecting, you know, higher levies for oils, fertilizer, stock market and real estate.'
Arab News
14-05-2025
- Business
- Arab News
Pakistan's record gold exports set to suffer after government moves to curb outflows to India — analysts
ISLAMABAD: Pakistan's increasing gold exports are likely to take a hit due to a ban on the import and export of precious metals introduced amid last week's military standoff with India, analysts said on Wednesday. On May 6, the government enforced a 60-day ban on the import and export of precious metals, jewelry and gemstones to stabilize its foreign exchange reserves, just one day before India attacked Pakistan. The deadly escalation followed an attack in Indian-administered Kashmir on April 22 that killed 26 tourists, which New Delhi blamed on Pakistan despite Islamabad's denial of any involvement. Nearly two weeks after the incident, the nuclear-armed neighbors exchanged ballistic missiles and artillery fire after India targeted what it called 'terrorist infrastructure' inside Pakistan. Gold remains a traditional store of value in the country, which primarily sources its imports of the metal from the United Arab Emirates, Switzerland, Turkiye and other major gold-trading global centers. 'This ban is expected to be lifted,' Ahsan Mehanti, the Chief Executive Officer at Arif Habib Commodities Ltd, told Arab News. 'However, it is negatively impacting the country's gold exports that were increasing to a record level.' According to the Pakistan Bureau of Statistics, the country's jewelry exports rose by 58 percent to Rs3 billion ($11 million) in March this year, matching the total for the entire previous year. 'This 58 percent surge is a record,' Mehanti said, adding the ban will have a short-term impact on gold exports this year, which are bound to increase later when the ban is lifted in July. 'The ban was imposed when the [Pakistan-India] border tensions started intensifying,' he continued. 'This military escalation could have led to an increase in the circulation and prices of gold in Pakistan, but no such thing happened because of the government's ban.' He maintained the ban helped the gold market avoid speculative trading that kept the prices in check. Mehanti said since international gold prices have declined on the back of the US-China trade war's settlement, 'we expect the surge [in Pakistan's gold exports] to be higher than the previous record surge of 58 percent.' Pakistan's Dawn newspaper reported on May 8 the export curb aimed to limit the flow of gold and other precious metals to India via Dubai, citing unnamed government officials. It added the ban was also intended to restrict the outflow of dollars from the cash-strapped country, which has spent over $28 million on importing 368 kilograms of gold so far this year. However, the commerce ministry spokesperson, Muhammad Ashraf, denied the ban had any 'relevance to the Pak-India conflict.' A member of the managing board of Karachi Sarafa & Jewellers Group, M. Iqbal, said Pakistan's gold market was linked to the international gold market, which is mainly driven by the dollar. 'Gold would take a hit when the United States faces an issue like what we saw during the US-China tariffs war,' he explained. The cash-strapped country also exported $4.1 million worth of gems in the first nine months of FY25 ending in June. Prime Minister Shehbaz Sharif's administration is relying mainly on the International Monetary Fund's (IMF) $7 billion loan program to keep debt-ridden Pakistan's balance of payments in check, as exports have grown only six percent this year while foreign direct investment has remained stagnant for decades. The government has incentivized jewelry exporters through duty drawbacks and zero-rating for specific inputs, which helped the country's jewelry exports rise 43 percent last year. Gold prices in Pakistan hit a record high late last month but have been declining since the US and China resolved their trade tariff dispute. On Tuesday, 12 grams of the yellow metal were priced at $1,222 (Rs344,200). In 2023, Pakistan relaxed several gold import regulations to promote transparency, minimize smuggling and establish computerized customs valuation and tracking systems.
Arab News
13-05-2025
- Business
- Arab News
Pakistan Stock Exchange surges over 1,000 points amid ceasefire optimism
ISLAMABAD: The Pakistan Stock Exchange (PSX) gained over 1,000 points on Tuesday, driven by investor optimism over ceasefire talks between Pakistan and India boosting regional stability, analysts said. The KSE-100 index gained 2,769 points to reach 120,067.12 during intraday trading before settling at 118,575.88, up by 1,278.15 points or 1.09 percent from the previous close of 117,297.73. Pakistan's stocks had rallied after US President Donald Trump on Saturday announced a ceasefire between nuclear-armed neighbors Pakistan and India. Both states had exchanged missile, drone and artillery strikes last week amid surging tensions. 'Stocks closed higher as investors weigh Pak-India ceasefire talks fostering stability and the foreign minister's assurance on thin fiscal impact of conflict,' Ahsan Mehanti, the Chief Executive Officer of Arif Habib Commodities, told Arab News. Pakistan Finance Minister Muhammad Aurangzeb had also told Reuters in an interview on Monday that the conflict would not have a large fiscal impact on Pakistan. He described the standoff as a 'short duration escalation' with minimal fiscal impact, saying it can be 'accommodated within the fiscal space which is available to the government of Pakistan.' Mehanti added that rupee stability, upbeat global equities, and a surge in global crude oil prices also played a catalytic role in the bullish close at the PSX. Head of Intermarket Securities Raza Jafri highlighted that the KSE-100 was holding its levels following yesterday's massive rise. On May 12, Pakistani stocks rose more than nine percent, the highest single-day gain in decades, according to analysts, following a ceasefire with India and the approval of a $1 billion tranche by the International Monetary Fund (IMF), which Pakistan is expected to receive today as part of a larger $7 billion bailout agreement. 'The energy sector continues its rebound — on hopes of circular debt clearance — while news reports of a possible construction package (low-income housing units and mortgage financing) saw the Cement sector rally,' Jafri added.
