Pakistan’s Textile Sector

"Pakistan’s textile sector faced ongoing challenges, primarily due to sluggish recovery in global economies, stringent monetary policies aimed at curbing high inflation, and rising energy costs. Textile exports grew marginally by 0.9% year-on-year (YoY) to USD 16.7 Billion. Within the sector, Knitwear exports declined by 0.7% to USD 4.4 Billion, while Ready-Made Garments saw a modest increase of 2.1% to USD 3.6 Billion. Cotton production surged to a record 10.22 Million bales, up from 4.9 Million bales in FY 2023, however, cotton arrivals in Pakistan plunged to a 40-year low as of September 15, 2024, down by 64%, according to the Pakistan Cotton Ginners Association (PCGA). Total arrivals this year stand at 1.434 Million bales compared to 3.933 Million bales during the same period last year. The sector struggled with high costs for imported raw materials, the phasing out of the Export Finance Scheme, elevated interest rates, weak external demand, and heightened competition from China. Overall, FY 2024 was a challenging year for Pakistan’s textile industry, marked by both internal and external pressures." Excerpt from Interloop Annual report 2024

Brent Crude Logs Biggest Weekly Drop Since September on Weak Demand, Easing Tensions

Oil prices were under pressure this week. Brent crude oil futures fell 1.9% to $73 per barrel on Friday, registering the biggest weekly loss since early September, with prices dropping over 7%. The decline was attributed to weaker demand forecasts from OPEC and the International Energy Agency (IEA), slowing economic growth in China, and signs of easing geopolitical tensions in the Middle East. Both OPEC and the IEA revised down their demand forecasts for 2024 and 2025. China's refinery output declined for the sixth consecutive month, impacted by weak fuel demand and the growing adoption of electric vehicles (EVs). Meanwhile, U.S. crude oil production reached a new record last week. Although a drawdown in U.S. crude inventories and stronger-than-expected retail sales in September provided some support to oil prices, easing concerns about a broader conflict in the Middle East exerted additional downward pressure on the market.

A Snapshot of Exchange Traded Funds at PSX

PSX Strongly Rebounds

The Pakistan Stock Exchange (PSX) reacted positively to the conclusion of the IMF staff-level agreement and has now recovered a substantial part of the losses sustained on Monday. Today, out of the 1,139-point gain in the KSE-100 Index, around 800 points were contributed by UBL, OGDC, PPL, and Meezan Bank.

PakStox Outlook

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