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Express Tribune
2 days ago
- Business
- Express Tribune
PSX loses momentum as investors opt for profit-taking
Listen to article The Pakistan Stock Exchange (PSX) commenced the week with lacklustre trading on Monday as the benchmark KSE-100 index lost momentum owing to profit-taking by investors ahead of expiry of July-end contracts. After fluctuating within a narrow range throughout the day, the benchmark index recorded a decrease of 379.78 points, or 0.27%, and settled at 138,217.58 by the close of trading. In its market review, Topline Securities commented that the KSE-100 index settled at 138,218, down 380 points. 'The market remained range bound throughout the session, fluctuating between intra-day high of 139,201 and intra-day low of 138,150, as investors engaged in profit-taking ahead of July-end contract expiry,' it said. Pressure on the index came from Fauji Fertiliser Company, United Bank Limited, Oil and Gas Development Company, Systems Limited and Hub Power, which dragged the market down by 438 points. On the other hand, HBL, Engro Fertilisers and Pakistan Aluminium Beverage Cans provided some support, contributing 152 points, Topline added. Arif Habib Ltd Deputy Head of Trading Ali Najib remarked that the 135,000 level served as initial support for the KSE-100 index, backed by strong corporate earnings and consistent foreign inflows. 'If this level is breached, the index may drift towards the 132,000 mark, where compelling valuations and expectations of monetary easing could help revive investor sentiment and reignite buying interest,' he said. Overall trading volumes decreased slightly to 608.2 million shares compared with Friday's tally of 609.4 million. The value of shares traded stood at Rs23.5 billion. Shares of 479 companies were traded. Of these, 193 stocks closed higher, 245 decreased and 41 remained unchanged. First Prudential Modaraba topped the volumes chart with trading in 58.7 million shares, up 48 paisa to close at Rs4.98 per share.
Express Tribune
6 days ago
- Business
- Express Tribune
FX dips to $19.96b despite SBP's uptick
Listen to article Pakistan's total liquid foreign exchange reserves stood at $19.96 billion as of July 11, 2025, marking a marginal decline of $71.6 million over the previous week, according to data released by the State Bank of Pakistan (SBP) on Thursday. The reserves held by the SBP rose by $23 million, reaching $14.53 billion, compared to $14.50 billion recorded a week earlier. This reflects the second consecutive weekly increase in central bank reserves. However, commercial banks saw a notable dip in their net foreign holdings, which fell by $95 million to $5.43 billion. The current foreign reserves provide Pakistan with over three months of import cover. Out of the SBP's total foreign exchange holdings of $14.5 billion, approximately $9.4 billion comprises deposits from friendly countries. In June 2025, China rolled over $3.4 billion in commercial loans, with $2.1 billion deposited directly with the SBP. Saudi Arabia and the UAE have provided up to $2 billion and $1 billion, respectively, while Qatar has contributed around $3 billion through deposits and direct investments. Moreover, the central bank conducted two separate Open Market Operations (OMOs) on Thursday to inject a liquidity of Rs902.5 billion into the banking system - one under the Shariah-compliant Mudarabah-based framework and the other through a conventional reverse repo arrangement. Both operations were conducted with an eight-day tenor. In the Shariah-compliant OMO, the central bank accepted all three submitted quotes within a narrow rate band of 11.13% to 11.15% per annum. The total injection was Rs37.39 billion (realised value) against a face value of Rs37 billion, with the rate of return fixed at 11.13%. Simultaneously, the SBP carried out a conventional reverse repo OMO, receiving 13 quotes, of which 11 were accepted. The accepted bids amounted to a face value of Rs883.2 billion, with a realised value of Rs865.13 billion. The rate of return was 11.08% per annum. In the latest Pakistan Investment Bonds' (PIBs) auction held on July 16, the government raised Rs311.82 billion, surpassing its target of Rs300 billion, mainly through five-year bonds. Cut-off yields dropped significantly across all tenors by 19 to 54 basis points compared to June, which reflected strong market confidence and expectations of policy rate cut amid easing inflation and improving macroeconomic indicators. Notably, the two-year and five-year bonds saw the steepest decline in yields, while the 15-year bond got no bids. "The sharp decline in yields signals growing market anticipation of a policy rate cut in the upcoming monetary policy, likely driven by easing inflation and improved macro indicators," noted Ali Najib, Deputy Head of Trading at Arif Habib Limited. The Pakistani rupee remained stable against the US dollar on Thursday, closing at 284.97, down by just one paisa from 284.96 a day earlier. Meanwhile, gold prices in Pakistan continued to slide, mirroring a downturn in the international market, where bullion extended losses following robust US economic data. The data bolstered expectations that the Federal Reserve would remain cautious in resuming monetary easing this year, putting pressure on safe-haven assets like gold. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold dropped by Rs900 per tola, settling at Rs355,100. Interactive Commodities Director Adnan Agar noted, "After dipping slightly, the market has rebounded somewhat. The $3,300 level is acting as a strong support," he said. "If prices fall below that, we could see a bearish trend. However, if this level holds, resistance lies ahead at $3,350, then $3,380 and eventually at $3,400."
Express Tribune
7 days ago
- Business
- Express Tribune
Rupee slips 29 paisa amid import pressure
Listen to article After a brief pause, the Pakistani rupee continued its decline against the US dollar on Wednesday, falling by 0.10% in the inter-bank market amid increasing import payments, profit repatriation by multinational companies, and a cautious sentiment ahead of upcoming external debt repayments. The currency closed at 284.96, marking a depreciation of 29 paisa from Tuesday's closing rate of 284.67. This resumption of the downward trajectory follows a marginal appreciation of the rupee against the US dollar on Tuesday, when it gained 0.02%. By the end of the trading session, the rupee had closed at 284.67, up by five paisa from the previous day's close at 284.72. "The Pakistani rupee weakness stems from persistent demand for the dollar amid rising import payments, profit repatriation by multinationals, and cautious sentiment ahead of upcoming external debt repayments," said Arif Habib Ltd Deputy Head of Trading Ali Najib. In addition, the SBP is also consistently buying the US dollar from the market, taking its intervention to over $6 billion in 8MFY25, a deliberate strategy to rebuild forex reserves, driven by strong remittances, IMF funding, and debt rollover considerations, he added. Despite improving forex reserves, speculative activity and global dollar strength continue to weigh on the rupee, he said. Without stronger inflows or policy tightening, the currency is likely to face further mild depreciation in the short term. Globally, the US dollar strengthened on Wednesday alongside rising Treasury yields. The uptick followed fresh US inflation data, which suggested that President Donald Trump's renewed tariff measures may be beginning to filter into consumer prices, further pressuring currencies like the Japanese yen. Gold prices in Pakistan declined on Wednesday, in contrast to the international market, where bullion rose on the back of escalating tensions in the Middle East, tariff uncertainty, and weaker US producer price data. According to the All Pakistan Sarafa Gems and Jewellers Association, the price of gold fell by Rs3,000 per tola, settling at Rs356,000. Similarly, the rate for 10 grams dropped by Rs2,572 to Rs305,212. This follows Tuesday's decline of Rs700 per tola, when the price had closed at Rs359,000. Interactive Commodities Director Adnan Agar said the recent resurgence in global prices was tied to the revival of tariff concerns linked to Trump's trade stance. "The Trump tariff issue has resurfaced. Because of that, the market is likely to remain in this range." Agar identified strong support at $3,300, suggesting the market could range between $3,380 and $3,420 in the near term unless fresh developments alter the outlook. Globally, spot gold rose 0.2% to $3,328.14 per ounce, as of 0937 am EDT (1337 GMT). US gold futures edged 0.1% lower to $3,333.60, according to Reuters.
Express Tribune
16-07-2025
- Business
- Express Tribune
PSX sees modest gains as KSE-100 closes 440 points up
Segregation of client assets is critical as brokers have been penalised for using client money illegally. PHOTO: AFP The Pakistan Stock Exchange (PSX) witnessed another day of consolidation on Wednesday, with the benchmark KSE-100 index closing at 136,380 points, gaining 440 points or 0.32% after oscillating in both directions during the session. Early trade saw mild negativity, with the index hitting an intraday low of 135,543 points—down 397 points (0.29%)—amid profit-taking, noted Ali Najib, Deputy Head of Trading at Arif Habib Ltd. However, bargain hunters stepped in at the day's low, lifting sentiment and helping the market close in the green. Investor optimism was reinforced by Finance Minister Muhammad Aurangzeb's latest briefing to Moody's, where he highlighted key signs of economic recovery. These included easing inflation, a stable exchange rate, policy rate cuts, rising foreign exchange reserves—now above $14 billion—and strengthening remittance and export trends. These indicators have strengthened Pakistan's case for a potential rating upgrade in Moody's upcoming review. Market Snapshot – July 16, 2025 Unlock today's market moves and stay one step ahead! — PSX (@pakstockexgltd) July 16, 2025 Among the major positive contributors were fertiliser and energy stocks, with FFC, EngroH, EFERT, PSEL, and ATRL adding a combined 1,162 points to the index. Meanwhile, the banking sector weighed on performance, with UBL, MEBL, MCB, BAHL, and BAFL cumulatively knocking off 556 points due to persistent selling pressure. Overall market activity remained subdued, with total traded volume at 702 million shares and a turnover of Rs32 billion. PIBTL led the volumes chart with 90.7 million shares traded. The 135,000 level is expected to act as key support in the near term, underpinned by strong corporate earnings and steady foreign inflows, as noted by Ali Najib. A decisive breach could see the index test 132,000, where attractive valuations and expectations of further monetary easing may reignite investor interest and trigger fresh buying.
Express Tribune
16-07-2025
- Business
- Express Tribune
Lending to govt hits record high
The decline in ADR highlights banks' reluctance to lend aggressively, due to concerns about borrower creditworthiness, regulatory constraints or a lack of demand from the private sector. photo: file Listen to article At first glance, Pakistan's economy appears to be on the path to recovery, macro indicators are stabilising, and optimism is cautiously returning. But a closer look reveals that many of the country's deep-rooted structural problems remain unresolved. One such issue is the Investment-to-Deposit Ratio (IDR), which has now reached an all-time high of 103%, even exceeding total deposits. This means that banks are channelling the bulk of their deposits into government securities, effectively crowding out the private sector, the true engine of sustainable economic growth. While this trend may bolster short-term bank profitability and fiscal financing, it raises serious concerns about the long-term health of the real economy, which depends on private sector credit to drive investment, innovation, and job creation. Pakistan is bound by restrictions imposed by the International Monetary Fund (IMF), which prohibits the government from directly borrowing from the State Bank of Pakistan (SBP) through money printing. This measure is aimed at curbing unchecked monetary expansion, which fuels inflation and undermines economic stability. In response, the government machinery, including the State Bank of Pakistan (SBP), has resorted to injecting massive liquidity into private banks through Open Market Operations (OMOs), recently reaching an unprecedented Rs14 trillion. This level of intervention is extraordinary, especially when compared to peer economies. The injected funds are then funnelled into government securities, creating a self-serving loop: banks earn risk-free profits by lending to the government, while the government avoids borrowing directly from the SBP. This cycle not only enriches a few without exposing them to market risks but also starves the real economy of credit, depriving millions of people and businesses of the economic opportunities they desperately need. "As of June 2025, the Investment-to-Deposit Ratio (IDR) reached 103%, up 608bps YoY, indicating that banks have invested more than their total deposits — highlighting a tilt towards government papers rather than private sector lending," noted Deputy Head of Trading at Arif Habib Ltd, Ali Najib. This means that banks have now invested more than their total deposits, a clear indication that they are increasingly favouring risk-free government securities over lending to the private sector. The trend underscores a cautious stance amid ongoing economic uncertainty. During the same period, total deposits rose by 14.1% year-on-year to Rs35.5 trillion, while bank investments surged by 21.2% to Rs36.6 trillion. In contrast, advances increased by only 8.7%, reaching Rs13.5 trillion, indicating a slower pace of credit expansion. This divergence in growth has led to a decline in the Advance-to-Deposit Ratio (ADR) to 38.1%, down from 40.0% a year earlier and 39.8% in May 2025. The decline in ADR highlights banks' reluctance to lend aggressively, partly due to concerns about borrower creditworthiness, regulatory constraints, or a lack of demand from the private sector — but mainly due to the fact that when there is a safe avenue, why would anybody take the risk? Looking ahead, the banking sector is expected to remain stable, according to AHL, supported by rising deposit inflows and strong earnings from government-backed investments. However, the continued preference for investment over lending could constrain private sector growth and job creation, unless broader macroeconomic stability and investor confidence are restored. Experts suggest that the central bank and policymakers may need to revisit regulatory and fiscal measures to encourage more balanced credit allocation across the economy.
