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Business Recorder
01-08-2025
- Business
- Business Recorder
US cuts Pakistan tariff to 19% from 29% after trade deal
The US administration has imposed a 19% reciprocal tariff on a wide range of Pakistani goods, significantly lower than the initially proposed 29%, under a sweeping new executive order signed by President Donald Trump on Thursday. Trump announced new tariffs of up to 41% on goods imported from dozens of countries, including Pakistan, citing persistent trade imbalances and a lack of reciprocity in bilateral trade relationships. Courtesy: 'Conditions reflected in large and persistent annual US goods trade deficits constitute an unusual and extraordinary threat to the national security and economy of the United States,' the executive order states. Pakistan's revised tariff rate of 19% is lower than that of several regional economies, including India (25%), Bangladesh (20%), Vietnam (20%), and Sri Lanka (20%). Courtesy: JS Global The development came a day after the US administration struck a deal with Pakistan, in which Washington would work with Islamabad to develop the South Asian nation's oil reserves. 'We have just concluded a Deal with the Country of Pakistan, whereby Pakistan and the United States will work together on developing their massive Oil Reserves,' Trump wrote on social media. 'We are in the process of choosing the Oil Company that will lead this Partnership. Who knows, maybe they'll be selling Oil to India some day!' Islamabad described the deal as a marker of a broader partnership with Washington. Finance Minister Muhammad Aurangzeb, who led the final round of talks, said there was a larger economic and strategic agreement. 'From our perspective, it was always going beyond the immediate trade imperative, and its whole purpose was, and is, that trade and investment have to go hand in hand,' he said, in video-taped remarks. Pakistan faced a potential 29% tariff on exports to the United States under tariffs announced by Washington in April on countries around the world. Tariffs were subsequently suspended for 90 days so negotiations could take place. Islamabad's trade surplus with Washington was around $3 billion in 2024, mainly due to textile exports. The United States is Pakistan's biggest market for textiles.
Business Recorder
28-07-2025
- Business
- Business Recorder
PSX ends week on positive note
KARACHI: The Pakistan Stock Exchange (PSX) remained range-bound yet closed the week ended July 25, 2025, on a positive note, as investors weighed macroeconomic signals, anticipated monetary easing, and corporate earnings. The KSE-100 Index added 610 points, or 0.44 percent week-on-week (WoW), to settle at 139,207 points. Despite the gain in index value, market participation was subdued. Average daily traded volume in the ready market dropped 16.7 percent to 635 million shares, while traded value in rupee terms slumped over 20 percent. Analysts attributed the dip in activity to the rollover week and a lack of strong domestic triggers. Analysts noted that a pivotal driver of investor sentiment during the week was the long-awaited sovereign rating upgrade by S&P Global. After a hiatus of three years, Pakistan's credit rating was lifted from CCC+ to B–, prompting a rally in long-dated Eurobonds which hit three-year highs. The improved sovereign risk perception also helped the Pakistani rupee appreciate by 0.5 percent week-on-week to close at 283.45 against the US dollar—the strongest weekly gain in nearly two years. Meanwhile, in the currency and debt markets, yields on treasury bills fell by 10–39 basis points, with the one-month paper declining to 10.85 percent. The SBP raised Rs 424 billion in the latest T-bill auction, more than double its target. This sharp decline in yields has fueled expectations that the central bank could cut the policy rate by 50 basis points in its upcoming Monetary Policy Committee (MPC) meeting scheduled for July 30. According to AKD Securities, the central bank is now expected to resume monetary easing, targeting a policy rate of 10.5 percent, supported by cooling inflation. July's Consumer Price Index (CPI) is projected to come in at 2.5 percent, down from 3.2 percent in June. Real interest rates are estimated at 8.5 percent, offering ample room for easing. In another significant macro move, the government has formed a task force to tackle the Rs 2.8 trillion gas circular debt. JS Global reported that multiple strategies are under consideration, including commercial borrowing and the introduction of a special levy, aiming to resolve the crisis without burdening end consumers. Other macro developments included a revised economic growth forecast from the Asian Development Bank (ADB), which pegged Pakistan's FY25 GDP at 2.7 percent. Meanwhile, foreign direct investment showed tepid movement as repatriation of profits and dividends totalled US $2.2 billion for FY25, unchanged from the previous year. However, JS Global noted that the power sector saw the highest outflow of US $399 million, up 62 percent year-on-year. Sector-wise, market performance was mixed. Food, auto assemblers, and Chemical outperformed with weekly gains of 6.2 percent, 4.2 percent, and 2.8 percent respectively, pharmas and power sector saw notable declines of 1.1 percent, 0.7 percent, and 0.6 percent respectively. Among individual stocks, Unilever Pakistan Foods Limited (UPFL) led the charge with a 39.3 percent WoW gain. It was followed by Habib Growth Fund (HGFA) up 23.1 percent, First Habib Modaraba (FHAM) up 10.4 percent, and Atlas Honda (ATLH) which gained 10.2 percent. On the losing side, Pakistan Services Ltd (PSEL) fell 13.5 percent, Pakgen Power (PKGP) declined 8.8 percent, and Bannu Woollen Mills Limited (BWML) slipped 7.3 percent. Investor flows indicated that foreign investors and other organizations remained net sellers, offloading $7.6 million and $8.5 million worth of equities, respectively. However, mutual funds and individual investors absorbed much of the selling with net purchases of $7.8 million and $5 million. On the corporate front, earnings season has begun to reveal early trends. Honda Atlas Cars (HCAR) reported a strong annual rise in profit after tax to Rs828 million for 1QMY26, primarily driven by higher unit sales and lower input costs. However, AKD noted that gross margins were below expectations, partly due to increased marketing spend on HRV variants. In the oil and gas sector, exploration and production companies are facing downward pressure. AKD expects sector-wide earnings to decline by 17 percent year-on-year due to lower production volumes, depressed oil and gas prices, and royalty payments. Nevertheless, improved cash collections are expected to sustain dividend distributions. The brokerage reiterated its 'Buy' ratings for OGDC, PPL, and POL with strong upside targets. In the power sector, profitability is under stress as well. Earnings for key players like Hub Power and Nishat Power are projected to fall sharply, with some companies eyeing a pivot toward electric vehicles for growth. Nishat Power's board has already approved a Rs2 billion equity investment in NexGen Auto in collaboration with China's Chery Automobile. The market commentators noted that market is treading cautiously upward, fueled by hopes of a monetary pivot and underpinned by improving macro indicators. With monetary policy, inflation, and earnings in focus, the coming weeks will likely determine whether the KSE-100 can break out from its current range and set sights on new highs. Copyright Business Recorder, 2025
Express Tribune
01-07-2025
- Business
- Express Tribune
PSX tops Asian markets with 60% return
Listen to article Pakistan's equity market closed FY25 as the top-performing market in Asia, delivering a 60% return and significantly outperforming all major regional peers. This strong performance was driven by macroeconomic stability, structural reforms, and improved investor sentiment, despite global and domestic challenges. Analysts from JS Global and AKD Securities cited a robust recovery in confidence, high trading activity, and strong sectoral performance as key drivers. Waqas Ghani Kukaswadia, Head of Research at JS Global, said the rally reflected a turnaround in investor sentiment due to better economic indicators and policy continuity. According to data from JS Global, Pakistan Stock Exchange (PSX), and Bloomberg, Pakistan's performance outshone China (16%), Vietnam and Korea (10% each), and India (6%), while the Philippines, Indonesia, Taiwan, Malaysia, and Thailand posted negative returns. Thailand declined the most, by 16%. Despite the rally, Pakistan's equity market remains undervalued. It trades at a price-to-earnings (P/E) multiple of just 6.3 times, far below regional averages. India trades at 23.1 times, Taiwan at 16.5, Malaysia at 14.1, and China at 13.4. The Philippines and Indonesia also trade at higher multiples — 10.2 and 10.9, respectively. Analysts believe this valuation gap highlights strong upside potential, particularly for long-term investors seeking undervalued emerging market exposure. Muhammad Awais Ashraf of AKD Securities credited the KSE-100 Index's momentum to aggressive monetary easing, tight fiscal policy, and a strong external account. These factors made equities the top asset class for a second straight year. The KSE-100 rose by 60.1% in local currency and 57.1% in USD terms, driven largely by capital appreciation. The rupee depreciated by 1.9% in FY25, after appreciating 2.7% in FY24. Rising import demand and limited external financing impacted the currency, despite a current account surplus. Investor participation surged in FY25. Trading volumes rose 43.6% year-on-year to a record 823 million shares. The value traded jumped 82.6% to Rs38.1 billion. The rally was broad-based, led by the Main Board. The Pharmaceutical sector posted the highest return of 99%, followed by Cement (93%), Oil Marketing Companies (88%), and Fertilisers (78%). Banks contributed the most to index gains with 15,160 points, followed by Fertilisers (8,292 points), E&Ps (6,845), and Cement (5,596). The only sector to negatively impact the index was Automobile Parts & Accessories, which pulled it down by 90 points. However, FY25 also brought challenges. Pakistan's reclassification by FTSE to Frontier Market status in September 2024 led to foreign outflows. Foreign investors sold $304.3 million worth of equities, ending a two-year buying streak. The banking sector saw the largest outflow of $108.7 million, followed by fertilisers ($66.9 million), E&Ps ($65.8 million), food ($42.3 million), and power ($21.3 million). In contrast, the technology sector saw net inflows of $21.8 million, with cement, textiles, and OMCs also attracting some inflows. Domestically, mutual funds became net buyers for the first time in three years, purchasing $232.9 million in equities. Companies and individual investors were also active, buying $94.5 million and $68 million, respectively. NBFCs and smaller institutions made marginal purchases. However, banks, insurance firms, and brokers reduced their equity exposure by $55.1 million, $21.2 million, and $17.6 million, respectively. Looking ahead, analysts remain optimistic about the PSX. Kukaswadia said the re-rating story is intact, supported by macro stability, lower interest rates, and improving sentiment. Ashraf added that continued monetary easing, structural reforms, and fiscal discipline will keep equities in focus. Falling fixed-income yields make equities even more attractive. Pakistan's forward P/E stands at just 5.6 times. Ashraf highlighted sectors like energy, banking, and fertilisers as key beneficiaries. AKD's top stock picks for FY26 include OGDC, PPL, MCB, MEBL, HBL, FFC, ENGROH, PSO, FCCL, INDU, ILP, and SYS.
Business Recorder
01-07-2025
- Business
- Business Recorder
Inflation in Pakistan rises to 3.2% in June 2025
Pakistan's headline inflation clocked in at 3.2% on a year-on-year basis in June 2025, a reading lower than that of May 2025, when it stood at 3.5%, showed Pakistan Bureau of Statistics (PBS) data on Tuesday. On month-on-month basis, it increased by 0.2% in June 2025, as compared to a decrease of 0.2% in the previous month and an increase of 0.5% in June 2024. CPI inflation average during FY25 stood at 4.49% as compared to 23.41% in FY24. Inflation in Pakistan has been a significant and persistent economic challenge, particularly in recent years. In May 2023, the CPI inflation rate hit a record high of 38%. However, it has been on a downward trajectory since then. The CPI reading is in line with the government's expectations. The Finance Ministry in its monthly economic report expected inflation to ease to a range between 3-4% in June. 'On the external front, higher remittances and exports will continue to keep the current account in surplus for FY 2025,' read the monthly outlook. Earlier, the Economic Survey 2024-25 noted that inflation is projected to remain within the range of 4.5-5% during FY25, supported by a sharp decline in the prices of perishable food items and adequate stocks of key non-perishable commodities. Meanwhile, the latest CPI reading was also in line with the projections made by several brokerage houses. JS Global projected Pakistan's headline inflation to lower to 3.1% in June. 'Following a 3.5% YoY reading in May 2025, the CPI is expected to be at 3.1% YoY in June 2025. The base effect is now fading, signalling a return to normalised price trends,' said JS Global. Meanwhile, Insight Securities, another brokerage house, expected headline inflation to clock in at 3.2% in June. Urban, rural inflation The PBS said CPI inflation urban decreased to 3% on year-on-year basis in June 2025, as compared to 3.5% of the previous month and 14.9% in June 2024. On month-on-month basis, it remained stable at 0.1% in June 2025, as compared to 0.1% in the previous month and 0.6% in June 2024. CPI inflation rural increased by 3.6% on year-on-year basis in June 2025, as compared to an increase of 3.4% in the previous month and 9.3% in June 2024. On month-on-month basis, it increased by 0.5% in June 2025, as compared to a decrease of 0.5% in the previous month and an increase of 0.3% in June 2024
Express Tribune
24-06-2025
- Business
- Express Tribune
PSX surges 5.58% as market rallies after Iran-Israel ceasefire
Listen to article The Pakistan Stock Exchange (PSX) posted a sharp rally on Tuesday, with the benchmark KSE-100 Index soaring 5470.16 points, or 4.71%% to 121,637.63 points during intra-day trading, reflecting heightened investor optimism following US President Donald Trump's announcement of the ceasefire between Iran and Israel. The current index gained 6,479.11 points over the previous close of 116,167.47, marking one of the largest single-day gains in recent trading. Source: PSX The market reached an intraday high of 122,725.21 and a low of 120,369.53. Trading volume stood at 236.9 million shares, with a total value of Rs20.6 billion, indicating strong buying interest across sectors. The upward movement reflects renewed investor confidence amid easing geopolitical tensions and hopes of regional stability. Waqas Ghani Kukaswadia, Head of Research at JS Global remarked that widespread buying activity was witnessed across all sectors, driving a strong rally. Trading was halted for an hour due to the sharp upward movement. The market is up by 5.65%, he added. Read: Stocks slump in panic selling Earlier on Monday, PSX saw a steep sell-off, driven by escalating geopolitical tensions following the US attack on Iran. The benchmark KSE-100 Index plunged by 3,856 points (3.21%) to close at 116,167, after hitting an intra-day low of 115,887. This marks one of the sharpest single-day losses in recent months. According to Ahsan Mehanti of Arif Habib Corp, stocks slumped amid a sell-off in global equities due to the escalation in Middle East tensions. Supply disruptions driven by expected retaliation to the US attack on Iran contributed to a weak export outlook and high inflation worries, which played a major role in selling activity at the PSX, he said. Investor sentiment was dampened by rising geopolitical tensions, especially the intensifying conflict between Israel and Iran, which led to heightened uncertainty and widespread risk aversion. The nervousness triggered broad-based panic selling, observed Topline in a market review. Topline added that major index-heavy stocks, including Engro Holdings, Pakistan Petroleum, Lucky Cement, OGDC and Mari Petroleum, were among the top laggards, dragging the index down by 1,054 points. In its commentary, Arif Habib Limited (AHL) stated that the week started with strong selling following the escalation in the Middle East over the weekend. Only five shares rose while 93 fell, with Engro Holdings (-5.02%), Pakistan Petroleum (-6.3%) and Lucky Cement (-4.02%) being the biggest drags. JS Global analyst Mubashir Anis Naviwala remarked that the PSX suffered heavy losses amid a sharp sell-off, opening with a steep 2,000-point gap down amid panic selling. The index failed to recover throughout the session, touching the low of 115,887 and eventually closing with a massive loss of 3,856 points at 116,167. Total traded volume stood at 595 million shares, with top activity in WorldCall Telecom, Sui Southern Gas Company, Pervez Ahmed Consultancy, K-Electric and Kohinoor Spinning Mills, he noted. The sharp decline reflected heightened fears driven by uncertainty and external pressures. "We advise investors to remain cautious, focusing on risk management and selective accumulation," the analyst added. Overall trading volumes increased to 595 million shares compared with Friday's tally of 421.6 million. The value of shares traded was Rs23.5 billion. Shares of 468 companies were traded. Of these, 56 stocks closed higher, 386 fell and 26 remained unchanged. WorldCall Telecom was the volume leader with trading in 53.3 million shares, falling Rs0.10 to close at Rs1.35. It was followed by Sui Southern Gas Company with 36 million shares, losing Rs4.2 to close at Rs38.8 and Pervez Ahmed Consultancy with 24 million shares, dropping Rs0.12 to close at Rs2.72. Foreign investors bought shares worth Rs162 million, the National Clearing Company reported.
