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Arab News
19-06-2025
- Business
- Arab News
Arif Habib Group submits bid as deadline nears for expressions of interest in PIA stake sale
ISLAMABAD: The chairman of the Arif Habib Group, a prominent Pakistani conglomerate with diversified interests across various sectors, said on Thursday the consortium had submitted its bid to acquire a stake in Pakistan International Airlines (PIA), the country's loss-making national flag carrier. Expressions of interest are due today, Thursday, for an up to 100 percent stake in PIA as the government moves forward with a long-delayed privatization plan aimed at easing pressure on its strained public finances. The sale of PIA will be the first major privatization for around two decades. Turning around loss-making state-owned enterprises is a condition of an ongoing $7 billion bailout by the International Monetary Fund. The government tried unsuccessfully to last year offload a stake in PIA, which is a major burden on its budget, but the sale was aborted because of the poor state of the airline and the conditions attached to any purchase. 'We have submitted our bid for acquiring the PIA stake,' Arib Habib, the chairman of Arif Habib Group, told Arab News. The group has a broad portfolio encompassing financial services, including brokerage and investment banking, fertilizers, cement, steel, real estate development, energy, and more. Some of its notable subsidiaries include Arif Habib Limited (AHL), Fatima Fertilizer Company Limited, Aisha Steel Mills Limited, Javedan Corporation Limited, and Sachal Wind Power. 'This time we are going into this process as a consortium that includes Arif Habib Corporation, Fatima Fertilizers Ltd., Lack City Holdings and City Schools Group.' In an advertisement issued by the government last month, it had said the deadline for the submission of expressions of interest and Statements of Qualification for the 'Divestment of Pakistan International Airlines Corporation Limited through privatization' had been extended to 4pm hours on Thursday, June 19, 2025. It did not provide a reason for the extension. No changes had been made to the remaining terms and conditions, the privatization commission had said. In April 2025, the commission invited expressions of interest from domestic and international investors to acquire a majority stake, ranging from 51 percent to 100 percent, in PIA, initially setting a submission deadline of Tuesday, June 3, 2025. According to the public notice, each EOI must be accompanied by a non-refundable processing fee of $5,000 or Rs1.4 million, with consortia required to pay the fee through any one member. Eligible bidders include legal entities such as companies, firms, and corporate bodies, either individually or as part of a consortium. Reuters reported on Wednesday that among those planning bids are Pakistani conglomerate the Yunus Brothers Group, owners of the Lucky Cement and energy companies, and a consortium led by Arif Habib Limited. Fauji Fertilizer Company, which is part-owned by the military, has also said it will be making an expression of interest. 'The board … has approved submission of an expression of interest and pre-qualification documents to the Privatization Commission … and undertaking a comprehensive due-diligence exercise,' FFC said in a notice to the Pakistan Stock Exchange this week. FFC is Pakistan's biggest fertilizer maker and has diversified interests in energy, food and finance. Any deal on PIA would expand the military group's footprint into aviation, though final terms will hinge on the government's privatization process and regulatory approvals. A group of PIA employees has also come forward to bid. 'The employees will use their provident fund and pension, in addition to finding an investor to place a bid. We're doing this to save jobs and turn around the company,' Hidayatullah Khan, president of the airline's Senior Staff Association, told Reuters this week. This is Pakistan's second attempt to sell PIA. A 2024 auction drew only one offer – Rs10 billion ($36 million) for 60 percent of the airline from real-estate developer Blue World City – far below the government's Rs85 billion ($305 million) floor price, and was rejected. Pakistan had offloaded nearly 80 percent of the airline's legacy debt and shifted it to government books ahead of the privatization attempt. The rest of the debt was also cleaned out of the airline's accounts after the failed sale attempt to make it more attractive to potential buyers, according to the country's privatization ministry. In April, PIA posted an operating profit of Rs9.3 billion ($33.1 million) for 2024, its first in 21 years. The airline has for years survived on government bailouts as its operational earnings were eaten up by debt servicing costs. Officials say offloading the debt burden and recent reforms like shedding staff, exiting unprofitable routes and other cost-cutting measures led to the profitable year. Ahead of the attempt to sell the airline last year, PIA had faced threats of being shut down, with planes impounded at international airports over its failure to pay bills and flights canceled due to a shortage of funds to pay for fuel or spare parts. With inputs from Reuters
Arab News
11-06-2025
- Business
- Arab News
FY26 budget: Markets rally, analysts welcome fiscal plan, business chambers voice mixed views
KARACHI: Analysts, investors and key business chambers on Wednesday broadly welcomed Pakistan's federal budget for 2025-26 as a 'balanced' attempt at fiscal consolidation and economic stimulus, though they raised concerns about the achievability of the government's ambitious growth target of 4.2 percent and heavy reliance on existing taxpayers. Presenting the federal budget on Tuesday, the government announced a range of tax reforms, spending priorities, and incentives aimed at maintaining its ongoing $7 billion International Monetary Fund (IMF) loan program while also trying to revive investor sentiment and ease pressure on the salaried class. 'The budget announced by the government yesterday [Tuesday] was pretty much in line with what we were expecting, a balanced budget,' said Sana Tawfik, head of research at Arif Habib Ltd, a major Pakistani financial services company. 'The government tried to ensure that the reforms being undertaken currently are on track and Pakistan continues with the fiscal consolidation phase.' Tawfik was pointing to several key ongoing fiscal and structural reforms that align with Pakistan's commitments under the IMF program and broader efforts to stabilize the economy. These include fiscal consolidation through broadening the tax base, rationalizing subsidies, and phasing out tax exemptions; revenue mobilization though increased taxation on interest income, a phased reduction in the super tax and the removal of certain tax exemptions to improve revenue collection; and debt rationalization by managing debt servicing costs, likely by shifting to more concessional financing and restructuring high-cost debt. While presenting the budget, the government also maintained it would continue its focus on providing relief to the salaried class and try to strike a balance between austerity with social protections. Tawfik agreed that the government had attempted to strike such a balance between providing relief and raising revenue, citing relief measures for the salaried class in the budget and the phased reduction in super tax. 'The government tried to make sure that we continue with the reforms that we have undertaken in the recent past, while ensuring that we meet the targets set for the upcoming fiscal year,' Tawfik said. UNREALISTIC GROWTH TARGET? However, Tawfik was skeptical of the government's 4.2 percent GDP growth target, calling it 'unrealistic' in the current economic context. 'Agriculture has been underperforming, and industries have not been performing due to the high cost of doing business. While we have seen interest rates coming down, agriculture would be the key sector to look forward to,' she said. Arif Habib Ltd. has forecast GDP growth of around 3.6 percent for FY26, below the government's target. Tawfik also noted that while the government had projected inflation at 7.5 percent, her team expected it to be slightly lower, around 6 percent to 6.5 percent, although risks remained from global commodity prices, exchange rate pressures and the fading base effect. She also flagged a projected current account deficit for FY26, in contrast to a surplus of $1.5 billion expected this fiscal year, citing pent-up demand and increased imports. Muhammad Waqas Ghani, head of research at JS Global Capital Ltd., echoed the sentiment that the budget was more 'measured' compared to previous years. 'In the last two years, we've seen very strict budgets. This time, the government has been a little lenient. We've seen reform measures but also some relaxations,' Ghani said. He pointed to tax relief for the salaried class and incentives for the construction sector, though he noted that the Public Sector Development Programme (PSDP) allocation had decreased. 'There are many allied industries that benefit when we see measures taken for construction,' he said, while noting a less favorable outcome for the auto sector. Ghani acknowledged the government's target of a 2.4 percent primary surplus as 'optimistic,' but achievable, and described the overall budget as 'laying the groundwork' for sustained economic growth. On the 4.2 percent GDP target, he noted: 'It's an optimistic target… but with interest rates coming down, we hopefully will see contribution from [agriculture and industrial] segments, and we can get closer to the target.' STRONG SUPPORT FROM EQUITY MARKETS While the budget drew applause for investor-friendly policies and efforts toward macroeconomic stability, analysts cautioned that delivery on ambitious fiscal and growth targets remained key to sustaining momentum. The stock market, however, responded positively from the opening bell. 'As soon as the market started today [Wednesday], it rallied close to 1,400 points,' Ghani said. 'We are in an IMF program and we're seeing a decent budget this time. All of these things point to the fact that the market is going to reach new heights in the coming months.' Indeed, despite macroeconomic challenges, the budget drew strong support from equity markets. A post shared by Arab News Pakistan (@arabnewspk) 'Measures we have seen so far are broadly positive for the stock market,' said Tawfik. 'The government kept capital gains tax and dividend income tax unchanged, which the market had feared would be increased.' Sector-specific measures were seen as favorable for cement, steel, and textile sectors, particularly with subsidies for low-cost housing and removal of sales tax exemptions for certain regions, which levels the playing field for local manufacturers. 'Intraday today, market has gone north of 124,000 points, and we have seen an intraday surge of 2,000 points,' Tawfik said. DIVIDED BUSINESS COMMUNITY The reaction from Pakistan's business chambers, however, was more mixed. Both the Federation of Pakistan Chambers of Commerce and Industry (FPCCI), and the Karachi Chamber of Commerce and Industry (KCCI), warned that unless structural reforms were implemented and energy costs reduced, the budget may not succeed in spurring industrialization or export growth. The FPCCI welcomed certain relief measures, particularly for the salaried class and property sector, but flagged concerns about revenue expectations. 'We welcome steps to end harassment of taxpayers,' said Atif Ikram Sheikh, President FPCCI, noting the simplified tax return form as a positive step. However, he added: 'The increase in tax collection target by Rs2,500 billion ($8.8 billion) is unrealistic.' The FPCCI also expressed disappointment over the absence of support packages for key sectors such as IT, minerals, fishing, and e-commerce. The KCCI, by contrast, issued a harsh critique of the budget, calling it disconnected from ground realities. 'This is a camouflage budget,' said Zubair Motiwala, Chairman of the Businessmen Group (BMG) at KCCI. 'There is no meaningful relief for the business community or the common man. Instead of reforms to expand the tax base, the government is squeezing existing taxpayers.' KCCI President Muhammad Jawed Bilwani added: 'Electricity bills are unaffordable, interest rates are high, and there's no relief for the industrial sector. Without addressing the cost of doing business, you cannot expect growth or job creation.'
Business Recorder
26-05-2025
- Business
- Business Recorder
Motorways in Sindh top priority of federal govt: Aleem
KARACHI: Federal Minister for Communications Abdul Aleem Khan has said that the construction of motorways in Sindh is a top priority of the government, and the M-6 and M-10 motorways will be launched simultaneously, as the M-6 is Pakistan's lifeline, which was unfortunately neglected by previous governments. Talking to the media along with Arif Habib chairman Arif Habib Group here on Monday, he said that a motorway will be incomplete in its utility without being connected to the Ports and both the M-6 and M-10 will be linked to the Karachi Port to ensure their full functionality. Highlighting the significance of the M-6 Project, the minister informed that it is a nearly Rs 400 billion initiative comprising upon five sections, each approximately kilometres long. 'There is no better opportunity for investment than in this project,' he pointed out. Aleem Khan said that financing has already been secured for two sections while discussions for the remaining three are ongoing. 'We will finalise the feasibility report and present it to the Prime Minister within the next 15 days,' he added. The federal minister further said that the motorways from Karachi to Hyderabad and from Hyderabad to Sukkur will be completed as early as possible while work on the N-25 Highway from Karachi to Quetta is also scheduled to begin later this year. 'Karachi's challenges are not just provincial, they are national issues and we will address them on a priority,' he emphasized. Replying to the questions, Khan stressed that his focus is on delivering progress rather than engaging in blame games. 'My effort is to prioritise the launch of motorway projects in Sindh; similarly, we are committed to completing the Kaghan-Naran motorway,' he said. He informed that the National Highway Authority (NHA) has recorded unprecedented growth in revenue over the current fiscal year and attaining the target from Rs 64 billion to Rs 110 billion while this additional income will be utilised into improving road infrastructure and constructing new motorways. To ensure road safety, he said that strict measures are being implemented against dangerous driving on motorways. 'Drivers exceeding 150 km/h are not only being fined but also facing FIRs,' he added. Mandatory use of M-Tags is helping reduce long queues, and staffing shortages in motorway police are being addressed,' Aleem Khan said. Regarding his visit to Karachi, the minister mentioned that he, along with the Federal Secretary Communications and Chairman of the NHA held meeting with the Chief Minister of Sindh and assured him of full support from his ministry. He also held a highly productive meeting with the business community led by Arif Habib, where investors expressed interest in participating in the development of Sindh's motorways and road networks. Additionally, he noted that a joint team is being formed to focus on additional options for the Lyari Expressway in Karachi, including improvements to interchanges and exploration of further development projects. Copyright Business Recorder, 2025
Business Recorder
22-05-2025
- Business
- Business Recorder
Pakistan rupee depreciates to 17-month low against US dollar
Rupee's Performance Against US Dollar Since 04 March 2025 The Pakistani rupee declined further against the US dollar, depreciating 0.03% in the inter-bank market on Thursday to hit 17-month low. At close, the local currency settled at 282.06, a loss of Re0.09 against the greenback. On Wednesday, the Pakistani rupee closed the day at 281.97. The rupee was previously recorded at 282 level against the US dollar on December 27, 2023. 'A rise in import demand has put pressure on the currency,' Sana Tawfik, head of research at brokerage Arif Habib, said. Internationally, US fiscal concerns and a tepid auction of Treasury bonds slapped the US dollar to a two-week low versus the yen on Thursday, while President Donald Trump tried to push his sweeping spending and tax-cut bill through Congress. The lacklustre 20-year bond sale reinforced the 'Sell America' narrative, weighing on not just the US dollar but Wall Street as well, with traders already jittery after Moody's cut the US triple-A credit rating last week. Bitcoin pushed to a fresh all-time high on Thursday, partly as investors sought out alternatives to US assets. Gold also benefitted, reaching an almost two-week top of $3,325.79 and putting it within $175 of April's record peak. The US dollar slipped to 143.27 yen early in Asia, the weakest level since May 7. Bitcoin was last 1.6% higher at $110,049.82, after earlier reaching a record high of $110,636.58. Oil prices, a key indicator of currency parity, fell 1% on Thursday after a report that OPEC+ is discussing a production increase for July, stoking concerns that global supply could exceed demand growth. Brent futures fell 64 cents, or 1%, to $64.27 a barrel by 0800 GMT. US West Texas Intermediate crude dropped 59 cents, or 1%, to $60.98. Inter-bank market rates for dollar on Thursday BID Rs 282.06 OFFER Rs 282.26 Open-market movement In the open market, the PKR lost 15 paise for both buying and selling against USD, closing at 283.09 and 284.15, respectively. Against Euro, the PKR lost 2 paise for buying and 3 paise for selling, closing at 320.07 and 322.77, respectively. Against UAE Dirham, the PKR lost 6 paise for buying and 5 paise for selling, closing at 77.15 and 77.55, respectively. Against Saudi Riyal, the PKR lost 6 paise for buying and 2.05 rupees for selling, closing at 75.46 and 77.85, respectively. Open-market rates for dollar on Thursday BID Rs 283.09 OFFER Rs 284.15
Business Recorder
12-05-2025
- Business
- Business Recorder
Arif Habib expects super tax cut in upcoming budget
Arif Habib, the founder and CEO of Arif Habib Corporation Limited, expects a reduction in the super tax in the upcoming budget for the fiscal year 2025-26. Talking to media persons at the Pakistan Stock Exchange (PSX) on Monday, Arif Habib shared that Prime Minister Shehbaz Sharif, in a recent meeting held just a few days ago, has indicated that in the upcoming budget, further relief will be provided to various industries as well as the salaried class. 'I think we can also expect a reduction in the super tax in particular,' said Habib. The federal government will present the next fiscal year's budget on June 2. Commenting on the ongoing cross-border tensions, Arif Habib maintained that India 'wrongly accused' Pakistan and misled its people. 'As a result, it is not only facing backlash from its public but is also under severe criticism in its parliament. On the other hand, Pakistan has emerged as a hero,' he said. The chief executive said the Pakistan stock market reacted 'very positively' amid a series of favourable developments for the country. 'Pakistan has received several good news items one after another — including the approval of the International Monetary Fund (IMF) programme, a reduction in the policy rate,' the business magnate said. The PSX staged a strong comeback on Monday, driven by a convergence of positive developments, including a ceasefire agreement between India and Pakistan, as well as the IMF's approval of crucial funding. The benchmark KSE-100 Index surged nearly 10,000 points during the trading session. Habib added that Pakistan is progressing on the economic front and has shown the world that it is a strong and capable country. In a surprise and much-awaited move, Pakistan and India have agreed to a temporary ceasefire on Saturday. US President Donald Trump confirmed that India and Pakistan agreed to a 'full and immediate ceasefire,' amid both countries launching strikes and counter-strikes against each other's military installations. He also expressed willingness to work with both countries to find a solution concerning Indian Illegally Occupied Kashmir.
