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Business Recorder
6 days ago
- Business
- Business Recorder
KSE-100 closes marginally higher after range-bound trading
The Pakistan Stock Exchange's (PSX) benchmark KSE-100 Index closed marginally higher after witnessing range-bound trading as investors remained cautious ahead of the FY26 budget to be presented to June 10. At close, the benchmark index settled at 118,332.90, marginal increase of 111.78 points or 0.09%. 'The stock market saw a range-bound session today, with the index moving within a confined band due to rollover pressures and uncertainty surrounding the upcoming budget,' brokerage house Topline Securities said in its post-market report. Positive momentum was driven by notable contributions from MEBL, SYS, PKGP, PPL, and DGKC, which together added 223 points to the index. Topline said. Another brokerage house Ismail Iqbal Securities said a wait-and-see approach dominated sentiment, with participants largely staying on the sidelines in the absence of clear market moving triggers. On Monday, the KSE-100 index fell sharply as investors reacted to the postponed budget and uncertainty over the IMF's approval of the circular debt plan. The benchmark index dropped by 881.55 points, or 0.74%, settling at 118,221 points. Internationally, the Asian shares eased on Tuesday, though US futures rose after President Donald Trump delayed his threatened 50% duties on European Union shipments, while the US dollar was headed for a fifth straight monthly loss. In Japan, yields on super-long government bonds fell early in the session, retreating from their all-time highs in the wake of last week's heavy selloff in the bonds. Markets in the US were closed on Monday for a holiday, making for thin overnight trading conditions and leaving investors latching on to lingering optimism from Trump's U-turn on his threat to impose 50% tariffs on imports from the EU next month, restoring a July 9 deadline. Nasdaq futures were up 1.26% in Asia while S&P 500 futures similarly rose 1.11%. FTSE futures advanced 0.94%. UK markets were also closed on Monday. Results from Nvidia are due on Wednesday, where the AI darling is expected to report a 65.9% jump in first-quarter revenue. Elsewhere, MSCI's broadest index of Asia-Pacific shares outside Japan was down 0.17%, while Japan's Nikkei similarly fell 0.15%. China's CSI300 blue-chip index edged 0.06% lower while the Shanghai Composite Index was little changed. Hong Kong's Hang Seng Index dipped 0.1%. Focus for investors this week will also be on speeches from a slew of Federal Reserve policymakers and Friday's US core PCE price index, for clues on the outlook for US rates. Meanwhile, the Pakistani rupee declined further against the US dollar, depreciating 0.04% in the inter-bank market on Tuesday. At close, the local currency settled at 282.17, a loss of Re0.11 against the greenback. Volume on the all-share index increased to 690.39 million from 635.53 million recorded in the previous close. The value of shares rose to Rs23.83 billion from Rs18.58 billion in the previous session. K-Electric Ltd was the volume leader with 267.62 million shares, followed by WorldCall Telecom with 31.56 million shares, and P.T.C.L with 20.01 million shares. Shares of 459 companies were traded on Tuesday, of which 211 registered an increase, 210 recorded a fall, while 38 remained unchanged.
Arab News
22-05-2025
- Business
- Arab News
Pakistan FY26 budget to continue fiscal consolidation, focus on IMF guidelines — analysis
KARACHI: Pakistan will continue fiscal consolidation, focus on IMF guidelines and bring untaxed and low tax areas into the tax net as it announces its federal budget for fiscal year 2025-26 next month, a top Pakistani brokerage house said in a budget review. Islamabad is currently holding budget talks with the IMF, which earlier this month approved a loan program review for Pakistan, unlocking a $1 billion payment which the State Bank of Pakistan said had been received. A fresh $1.4 billion loan was also approved under the IMF's climate resilience fund. 'We expect this budget to continue fiscal consolidation, focus on IMF guidelines and bring untaxed/low tax areas in tax net,' Topline Securities said in a budget review. The brokerage house said the government had committed with the IMF to continue with fiscal consolidation in the FY26 budget to ensure debt sustainability. 'The government targets primary surplus of 1.6 percent of GDP (vs. 2.0-2.1 percent of GDP in FY25), a surplus for the third consecutive year after two decades. The government has also committed to use any windfall dividend expected from the central bank over and above 1 percent of GDP to retire debt,' the review said. The analysis predicted the Federal Board of Revenue's FY26 tax revenue growth target could be the lowest in six years. 'FBR revenue target is expected at Rs14.1-14.3 trillion, up 16-18 percent YoY, which will be the lowest percent growth in the last 6 years,' it said. The FBR has achieved a five-year revenue Compound Annual Growth Rate of 25 percent from FY21-25. 'We believe, out of this required 16-18 percent growth, approximately 12 percent would be achieved through autonomous growth driven by real GDP growth of 3.6 percent and inflation of 7.7 percent. The remaining 4-5 percent growth translates into additional tax measures of Rs500-600 billion,' the analysis estimated. Revenue measures expected include a change in the GST calculation price of sugar, the likely introduction of taxes on pension, retailers and wholesalers and a likely increase in federal excise duty on cigarettes, fertilizer products and pesticides by 500bps. A tax on the income of freelancers, vloggers and YouTubers is also expected. 'Government is expected to announce some relief measures namely (1) extension in exemption limit on salary or reduction of tax rate by 2.5 percent for all salary brackets, (2) rationalization of duties on trade, (3) likely housing finance subsidy, (4) inflation adjustment in minimum salary and unconditional cash transfer, and (5) some rationalization in super tax,' the analysis said. It said the government would reportedly set a GDP growth target of 3.5-4.5 percent 'while we expect GDP growth target for FY26 at 3.5-4.0 percent led by services.' The analysis predicted the budget was likely to be neutral for the stock market in the short-term, neutral to positive for cement, steel, oil and gas, consumers, and independent power producers, and neutral for oil marketing firms, IT, banks, pharma, autos and textile. Pakistan's 37-month $7 billion IMF loan program, approved on Sept. 25, 2024, aims to build resilience and enable sustainable growth. Key priorities include entrenching macroeconomic sustainability through implementation of sound macro policies, including rebuilding international reserve buffers and broadening of the tax base; advancing reforms to strengthen competition and raise productivity and competitiveness; reforming state-owned enterprises and improving public service provision and energy sector viability; and building climate resilience. Highlighting progress in Pakistani policies to stabilize the economy, the IMF said earlier this month when it approved the latest tranche that Pakistan's fiscal performance had been strong, with a primary surplus of 2.0 percent of GDP achieved in the first half of FY25, keeping Pakistan on track to meet the end-FY25 target of 2.1 percent of GDP. 'Inflation fell to a historic low of 0.3 percent in April, and progress on disinflation and steadier domestic and external conditions, have allowed the State Bank of Pakistan to cut the policy rate by a total of 1100 bps since June 2025,' the IMF added. 'Gross reserves stood at $10.3 billion at end-April, up from $9.4 billion in August 2024, and are projected to reach $13.9 billion by end-June 2025 and continue to be rebuilt over the medium term.'
Business Recorder
22-05-2025
- Business
- Business Recorder
Budget FY26: govt to continue fiscal consolidation, follow IMF guidelines, says Topline
The government is likely to continue fiscal consolidation in the upcoming budget and is expected to closely align with International Monetary Fund (IMF) guidelines, as the government remains committed to sustaining a primary budget surplus for the third consecutive year, a brokerage house said on Thursday. 'We expect this budget to continue fiscal consolidation, focus on IMF guidelines and bring untaxed/low tax areas in the tax net,' said Topline Securities, in its report titled Pakistan Federal Budget FY26 Preview. 'Furthermore, we believe, this Budget FY26 hold high importance from a policy point of view as various additional legislative engagements are likely to be undertaken, i.e. inclusion of Section 114c, National Tariff Policy, Captive Power Levy Ordinance, removing cap on Debt Servicing Surcharge (DSS) amongst others,' it said. Pakistan is set to announce the Federal Budget FY26 on June 02, 2025. Salaried class: Call for revision of tax slabs, rise in exemption limits On the revenue front, Topline Securities believed that the Federal Board of Revenue (FBR) revenue target is expected to be around Rs14.1-14.3 trillion, up 16-18% YoY. 'We believe, out of this required 16-18% growth, ~12% would be achieved through autonomous growth driven by real GDP growth of 3.6% and inflation of 7.7%. The remaining 4-5% growth translates into additional tax measures of Rs500-600bn, we estimate.' To meet its target, the government is expected to '(1) change in GST calculation price of sugar from Rs72.22 per kg to market price, this measure is expected to yield annual incremental revenue of Rs70-80bn, (2) likely introduction of pension tax, (3) likely removal of exemptions on FATA/PATA, (4) likely tax on retailers and wholesalers, (5) likely increase in FED on cigarettes, (6) increase in FED on fertilizer products and pesticides by 500bps, (7) likely tax on income of freelancers/vloggers/youtubers and (7) likely remove remaining exemption or increase in sales tax on goods mentioned in Schedule 5, 6, and 8 i.e. Pharma, food amongst others,' the brokerage house said. On the other hand, the government may also announce a slew of relief measures in the upcoming budget, such as extension in exemption limit on salary or reduction of tax rate by 2.5% for all salary brackets, rationalization of duties on trade, likely housing finance subsidy, inflation adjustment in minimum salary and unconditional cash transfer, and some rationalization in super tax. Low-cost housing projects in Pakistan: PM takes step to fuel growth Topline was of the view that the budget was likely to be 'neutral for the market in the short term'. 'However, in the medium term, the market will take it positively, considering a stable economic roadmap, which would be signalled by this budget. 'Nonetheless, the relationship with India will keep the market volatile until a complete/new peace agreement is signed.'
Express Tribune
21-05-2025
- Business
- Express Tribune
Profit rates revised for National Savings schemes
The Central Directorate of National Savings (CDNS) has reduced rates of return on several National Savings Schemes (NSS), with cuts up to 100 basis points (bps), it was reported on Wednesday The Savings Account (SA) rate dropped by 100bps to 9.50% from 10.50%, according to Topline Securities. Defence Saving Certificates (DSC) returns fell by 21bps to 11.91% from 12.12%, while Bahbood Savings Certificates (BSC) declined by 24bps to 13.44% from 13.68%. Rates for Pensioners Benefit Account (PBA) and Shuhda Family Welfare Account (SFWA) were also lowered by 24bps each, now standing at 13.44%. Similarly, Regular Income Certificates (RIC) returns decreased by 18bps to 11.52% from 11.70%.
Business Recorder
16-05-2025
- Business
- Business Recorder
KSE-100 closes 313 points lower as late-session selling erases earlier gains
The Pakistan Stock Exchange (PSX) witnessed mixed trading on Friday, as its benchmark KSE-100 Index swayed in both directions before closing the last session of the week lower by 313 points. The KSE-100 faced range-bound trading in the first half, followed by strong buying in the latter hours, which pushed the index to an intra-day high of 120,506.18. However, selling returned in the final hours to erase the intra-day gains and pushed the index into the negative territory. At close, the benchmark index settled at 119,649.14, down by 312.77 points or 0.26%. 'This lackluster activity can be attributed to lack of trigger and investor`s preference to remain on sideline before the weekend after index gained to close at its ever high level,' brokerage house Topline Securities said in its post-market report. Top positive contribution to the index acme from ENGROH, SYS, BAHL, UBL and BAFL, as they cumulatively contributed 271 points to the index. On the other hand top negative contribution to the index came from FFC, LUCK, MARI, OGDC, PSO and EFERT, as they lost value to weigh down on the index by 476 points to the index. On Thursday, buying rally continued at the PSX with the KSE-100 gaining over 1% to close all-time high of 119,962 level. On week-on-week basis, the KSE-100 gained 11.64% on ceasefire between Pakistan and India with mediation from the US and the approval of loan tranche for Pakistan from the International Monetary Fund (IMF). Pakistan's current account (C/A) posted slight surplus of $12 million in April 2025, against massive surplus of $1.2 billion (revised) last month, data released on Friday by the State Bank of Pakistan (SBP) showed. On year-on-year (YoY) basis, the C/A decreased 96% against a surplus of $315 million (revised) recorded in the same month last year. In a bid to attract investment and promote exports, the federal government on Friday decided to significantly decrease import duties, including a phased elimination of additional customs duty (ACD) and regulatory duty (RD). As per a statement released by the Prime Minister's Office (PMO), PM Shehbaz Sharif has directed the abolition of ACD, which currently ranges from 2% to 7%, and RD, which currently ranges from 5% to 90%, over the next four to five years. Moreover, Pakistan on Friday launched its first Sovereign Domestic Green Sukuk worth Rs30 billion at the PSX, pushing the share of Shariah-compliant financing in the country's total domestic debt to 14%, announced Finance Minister Muhammad Aurangzeb. Pakistan's domestic debt stands at Rs37 trillion, of which Rs5 trillion—approximately 14%—is Sukuk-based debt. Aurangzeb also informed that Pakistan was in the process of 'restructuring and reorganising' its debt profile in line with global standards. 'In this regard, you will be hearing about various innovative funding products for domestic and as well as for international investors', he said. Meanwhile, the Pakistani rupee saw a marginal decline against the US dollar, depreciating 0.02% in the inter-bank market on Friday. At close, the local currency settled at 281.66, a loss of Re0.05 against the greenback. Volume on the all-share index decreased to 572.29 million from 698.96 million recorded in the previous close. The value of shares declined to Rs29.03 billion from Rs39.09 billion in the previous session. At-Tahur Ltd was the volume leader with 44.63 million shares, followed by Cnergyico PK with 32.29 million shares, and Lotte Chemical with 28.64 million shares. Shares of 465 companies were traded on Friday, of which 206 registered an increase, 209 recorded a fall, while 50 remained unchanged.
