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Express Tribune
12-04-2025
- Business
- Express Tribune
M-12 motorway cost swells six times to Rs71b
Listen to article The delay in land acquisition for motorway project M-12 (Sialkot-Kharian) and an unprecedented increase in inflation and Karachi Inter-bank Offered Rate (Kibor) have caused a massive rise of six times in the cost of the project to Rs71 billion. Sources in the National Highway Authority (NHA) told The Express Tribune that construction cost of the project stood at Rs22.5 billion initially in 2021 that jumped up to Rs71 billion for six lanes by December 2024. They said that NHA chairman, in a recent high-level meeting, informed Prime Minister Shehbaz Sharif that due to the realignment of road from the original Request for Proposal (RFP), prompted by the hydraulic model study for a bridge at the Chenab River, there was a delay in land acquisition for the realigned portion. He said that additional delays were caused by changes in scope and an unprecedented increase in inflation and Kibor. As a result, the concessionaire submitted a request to NHA for renegotiation of the public-private partnership (PPP) agreement in November 2023. The P3A board referred the matter to the Special Investment Facilitation Council (SIFC) in October 2024, he said, adding that due to the aforementioned factors, the construction cost of the project increased from the initial Rs22.5 billion in 2021 to Rs61.529 billion for four lanes and Rs71 billion for six lanes by December 2024. The working group had recommended on December 12, 2024 that the Sialkot-Kharian motorway be constructed as a six-lane facility from the outset. They directed NHA to submit a position paper through the Ministry of Communications to the Planning Commission for approval from the relevant forums. In pursuance of the working group's decision, a study was conducted to assess the traffic volume. It concluded that two additional lanes would be required by 2027, with extra expenditure of Rs20.7 billion. However, the construction of six lanes from the outset would cost an additional Rs9.5 billion, resulting in approximate savings of Rs11 billion. Accordingly, the NHA and the Frontier Works Organisation (FWO) deliberated on three options on February 21, 2025 including the six-lane option proposed by NHA, with a base construction cost of Rs71 billion and a total project cost of Rs81.97 billion. Sources said that the prime minister and the bodies concerned endorsed the proposal for the construction of six lanes from the outset. It was decided in a recent meeting that the Ministry of Communications and NHA would submit a position paper involving the six-lane option for M-12 (Sialkot-Kharian) and other scope changes for approval from the relevant forums. It was also decided that NHA would submit a revised financing structure and seek the P3A board approval within two weeks. Additionally, the NHA will submit a revised PC-1 of the project for approval from the Central Development Working Party (CDWP) and the Executive Committee of the National Economic Council (Ecnec) within one month, by April 10, 2025. NHA and FWO shall execute an amendment to the PPP agreement in line with the approved financing structure by April 30, 2025. It was further decided that in future, any technical study that may impact the execution of a project should be included as part of the feasibility study to ensure comprehensive planning and avoid delays. NHA shall deliver a comprehensive presentation to the minister for planning, development and special initiatives on its priority Public Sector Development Programme (PSDP) projects within one week. Also, the NHA shall develop a holistic master plan for planned motorways and highways, ensuring end-to-end connectivity rather than isolated, fragmented development. Considering the strategic and socio-economic importance of N-25, it was agreed that NHA should undertake fast-track construction of the Karachi-Quetta section, followed by the Quetta-Chaman section, with a targeted completion timeline of three years. Additionally, the NHA should ensure the establishment of service and rest areas at suitable locations to enhance the safety and convenience for road commuters.
Express Tribune
24-03-2025
- Business
- Express Tribune
Stocks slump on profit-taking
Pakistan Stock Exchange (PSX) on Monday took a deep dive after hitting record highs last week as the KSE-100 index plunged over 2,000 points primarily due to institutional profit-taking across various sectors. Market jitters were compounded by reports of the International Monetary Fund's (IMF) disapproval of policy changes including a reduction in property transaction rates, lowering March 2025 tax target and slashing industrial power tariffs, which weighed heavily on investor sentiment. Additionally, the negative impact of rising Karachi Inter-bank Offered Rate (Kibor) and an increase in royalty on cement manufacturers in Khyber-Pakhtunkhwa (K-P) further contributed to the market's downturn. According to Ahsan Mehanti of Arif Habib Corp, stocks closed sharply lower amid institutional profit-taking. Reports of IMF's disapproval of reduction in property transaction rates and lowering of March tax target amid revenue collection shortfall further contributed to the downturn, he said. Mehanti added that higher Kibor as well as reports of no agreement with the IMF on reduction in industrial power tariffs played the role of catalysts in bearish close at the PSX. At the end of trading, the benchmark KSE-100 index recorded a slump of 2,002.56 points, or 1.69%, and settled at 116,439.62. In its review, Topline Securities commented that the KSE-100 index ended in the red with a loss of 2,003 points. The market faced downward pressure due to IMF's concerns over the lack of adjustments to electricity tariffs and no reduction in property taxes, as reported in the media, it said. Additionally, the proposed increase in royalty on cement manufacturers in K-P contributed to the negative sentiment. The decline was primarily driven by Oil and Gas Development Company (OGDC), Engro Corporation, Fauji Fertiliser Company, Pakistan Petroleum and Mari Petroleum, which pulled the index down by 811 points, Topline noted. Arif Habib Limited (AHL), in its report, stated that selling pressure hit the KSE-100 near the all-time high levels. Some 16 shares rose while 79 fell with TRG Pakistan (+2.92%), Pakistan Aluminium Beverage Cans (+5.5%) and Atlas Honda (+3.34%) contributing the most to the index gains. On the flip side, OGDC (-4.04%), Pakistan Petroleum (-3.59%) and Mari Petroleum (-2.5%) were the biggest index drags, it said. Systems Limited announced CY24 earnings per share (EPS) of Rs25.6, down 14% year-on-year. The EPS for 4QCY24 came in at Rs6.9, up 32% year-on-year. In addition, the company announced a final cash dividend of Rs6 per share and a stock split of 5:1, reducing the face value of each share from Rs10 to Rs2. As a result, the total number of ordinary shares would increase from 292.9 million to 1.46 billion, AHL pointed out. "We are looking forward to the KSE-100 finding support between 115k and 116k this week," it added. JS Global analyst Muhammad Hasan Ather remarked that profit-taking continued at the start of the week, with the benchmark KSE-100 closing 2,003 points lower at 116,440. Selling was primarily led by stocks of oil and fertiliser sectors, he said. The most active stocks of the day were Pak Elektron, Cnergyico PK and TRG Pakistan with trading in 28.6 million, 19.2 million and 15.7 million shares, respectively. "Moving forward, while profit-taking is expected to continue, we advise investors to view any dip as a buying opportunity, particularly in oil & gas, cement and technology sectors," Ather added. Overall trading volumes decreased to 312 million shares compared with Friday's tally of 369.1 million. Shares of 468 companies were traded. Of these, 124 stocks closed higher, 266 fell and 78 remained unchanged. The value of shares traded during the day was Rs21 billion. Pak Elektron was the volume leader with trading in 28.6 million shares, falling Rs2.31 to close at Rs45.87. It was followed by Cnergyico PK with 19.2 million shares, falling Rs0.04 to close at Rs7.94 and TRG Pakistan with 15.7 million shares, gaining Rs1.99 to close at Rs70.20. During the day, foreign investors bought shares worth Rs498.1 million, the National Clearing Company of Pakistan reported.
Express Tribune
12-03-2025
- Business
- Express Tribune
Stocks dip as economic concerns prevail
Thorough research and patience are key. Investors should remain realistic, avoid chasing quick returns and focus on building a stable, long-term portfolio. photo: file Listen to article Pakistan Stock Exchange (PSX) on Wednesday experienced a subdued trading session as the KSE-100 index closed marginally lower because of a lack of positive triggers. Market sentiment was weighed down by several economic factors, including an increase in the Karachi Inter-bank Offered Rate (Kibor) following the State Bank of Pakistan's (SBP) decision to keep the policy rate unchanged and disappointing car sales. Additionally, the prevailing uncertainty ahead of budget and concerns over the pending International Monetary Fund (IMF) approval of a relief package for industrial power tariffs further dented investor confidence. Arif Habib Corp MD Ahsan Mehanti commented that stocks faced downward pressure amid a surge in Kibor following status quo in the SBP's monetary policy. "Dismal data of car sales, which fell 25% month-on-month in February, pre-budget uncertainty and concerns over the pending IMF approval of a relief in industrial power tariffs played the role of catalysts in bearish close at the PSX," he added. At the end of trading, the benchmark KSE-100 index recorded a decline of 93.12 points, or 0.08%, and settled at 114,084.54. Topline Securities, in its review, wrote that the stock market experienced a mixed session, with the benchmark index fluctuating between the peak of +484 points and the low of -176 points. The market's performance was influenced by the ongoing IMF review. The positive movement was primarily fuelled by Mari Petroleum, Bank Alfalah, Maple Leaf Cement, Pakistan Aluminium Beverage Cans and DG Khan Cement, which together contributed 147 points to the index. Conversely, Fauji Fertiliser, Oil and Gas Development Company (OGDC) and Engro Holdings weighed on the market, pulling the index down by 188 points, Topline said. Arif Habib Limited (AHL) observed that the KSE-100 index continued to trade sideways with further consolidation. A total of 49 shares rose while 47 fell. The biggest contributors to the index gains were Mari Petroleum (+1.4%), Bank Alfalah (+0.81%) and Maple Leaf Cement (+2.53%). On the contrary, the largest drags included Fauji Fertiliser (-1.15%), Pakistan Petroleum (-1.31%) and OGDC (-0.72%), it said. In major news, Moody's upgraded Pakistan's banking outlook from stable to positive. "This change reflects the banks' resilient financial performance and improving macroeconomic conditions compared to a year ago," it said. Looking ahead, AHL anticipated a target of 116k in the near term. KTrade Securities, in its market wrap, said that the PSX witnessed a lacklustre session, where trading was characterised by low volumes and a lack of catalysts to drive growth. The cement sector was a bright spot that performed well and bucked the overall trend. However, fertiliser and oil stocks contributed significantly to the index's decline, it said. The law and order situation in Balochistan and K-P as well as the IMF review were key factors that could impact market performance in the short term, KTrade added. JS Global analyst Muhammad Hasan Ather commented that there was a volatile session, where the benchmark index initially gained 484 points before closing down 93 points. The decline was attributed to profit-taking in key sectors, despite earlier gains driven by oil and gas exploration, oil marketing companies, refinery and power generation stocks, he said. Ather expected the market to remain cautious, with investors closely monitoring macroeconomic developments and the anticipated second IMF tranche of $1 billion. Overall trading volumes decreased to 299.6 million shares compared with Tuesday's tally of 318.5 million. Shares of 432 companies were traded. Of these, 159 stocks closed higher, 213 fell and 60 remained unchanged. The value of shares traded during the day was Rs20.3 billion. Sui Southern Gas Company was the volume leader with trading in 18.3 million shares, falling Rs0.19 to close at Rs36.84. It was followed by At-Tahur Limited with 14.9 million shares, gaining Rs3.54 to close at Rs38.91 and The Bank of Punjab with 14.4 million shares, losing Rs0.07 to close at Rs13.09. During the day, foreign investors bought shares worth Rs582.1 million, the NCCPL reported.
Express Tribune
28-01-2025
- Business
- Express Tribune
'Govt needs to be cautiously optimistic'
Listen to article ISLAMABAD: The International Monetary Fund (IMF) on Tuesday advised Pakistan to stay on course and show some patience amid growing demand from the private sector to open up the economy to create jobs and reduce unemployment. Pakistan "needs to stay on course, remain committed to programme objectives and at the same time needs to have a little bit of patience," remarked Mahir Binici, IMF Resident Representative in Pakistan. Binici was speaking during the "Dialogue on Economy", organised by the Pakistan Business Council (PBC). The resident representative, who recently took over, said that Pakistan had to be optimistic cautiously and had patience to stay on course in order to deliver on reforms so that people could benefit from that. The government has been facing increasing pressure from within and the business community to further ease monetary policy, open imports and let the economy grow. However, many voices are opposing such demands as the country is still passing through a phase of relative stability and its economic fundamentals are weak. Economic growth in the first quarter stood at only 0.92%, which was far lower than the optimism created by the government. "There is no automatic switch from stability to growth and we need to change the DNA of the economy to avoid any new balance of payments crisis after any new spurt of economic growth," said Finance Minister Muhammad Aurangzeb at another session during the dialogue. He did not promise any relief for the salaried class but admitted that "salaried persons were paying taxes disproportionate to their incomes". He appeared helpless in reducing tax rates, saying it was not possible until other sectors started paying their due share in taxes. Mahir Binici said that Pakistan's economic recovery had been in place and "we expect that the positive growth momentum will continue in this and the next fiscal year." Inflation has receded and a significant progress has been the improvement in the external sector. The SBP is building external buffers, Binici added. The finance minister anticipated a further cut in interest rate following the easing of inflation in January. He said that the Karachi Inter-bank Offered Rate (Kibor) was already trading below the 12% policy rate. The foreign exchange reserves of $13 billion by June this year would provide comfort to international credit rating agencies to improve Pakistan's rating to B, he projected. Mahir Binici said that unlike the typical IMF programmes that started with a crisis, the crisis situation and the stabilisation were already partially addressed during the last nine-month programme. The objective of the new programme was to maintain and cement economic stability with structural reforms, said the resident representative, adding that focus should be on reform agenda rather than achieving stability without adjustment. The objective is to have stronger, sustainable and more inclusive growth. Sustainable growth could be achieved through reducing distortions, ending state interventions and removing a variety of concessions, which would "enable us to have more resilient growth," said the IMF local head. Speaking at another session, Pakistan's former ambassador to the United States, United Kingdom and United Nations Dr Maleeha Lodhi said that without economic strength, Pakistan could not play a major role on the global front. Pakistan had to navigate its foreign policy challenges in a global geopolitical environment that was marked by five important features – growing multipolarity but weakening multilateralism, US-China competition, rising East-West tensions, increasing importance of middle powers and advanced technology, she added. She said that Pakistan could not be a middle power until it had economic strength and made technological advancements. There were six priority areas for Pakistan's foreign policy in the months and years ahead, said Lodhi. They are relations with China and the US, while avoiding getting into the crosshairs of their confrontation, although that might be easier said than done, dealing with an increasingly testy relationship with Afghanistan, managing the adversarial relationship with India, balancing ties between Saudi Arabia and Iran, and keeping relations with the EU on a positive track. She said that China remained Pakistan's top foreign policy priority. While relations remain strong, a number of problems need to be resolved. "China's three main concerns are lack of political stability in Pakistan, security of Chinese personnel working here and the public manner in which requests are made for loan rollovers and debt relief as this has implications for lending to other countries," she said. Regarding the US, Maleeha Lodhi said that the big unknown was how relations with Trump's America would shape up especially as Pakistan's geopolitical importance had diminished for Washington after its exit from Afghanistan. She said that America's top strategic priority was to contain China but Pakistan could not be part of any anti-China coalition. Another limiting factor is Washington's growing strategic and economic relationship with India, in a strategy to project Delhi as a counterweight to Beijing. "The challenge is to find space for Pak-US relationship between these two strategic realities. This will not be easy as Pakistan doesn't figure in Trump's foreign policy priorities," she added. With India, resumption of formal dialogue is not in sight but a backchannel is needed to manage tensions. At the moment, there is no framework for crisis management, said the former ambassador.
