PakStox Outlook

The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) reduced the policy rate by 200 basis points to 17.5%, citing a faster-than-expected decline in both headline and core inflation due to delayed energy price hikes and favorable global oil and food prices. This marks the third consecutive rate cut after maintaining a steep policy rate of 22% for a year. Key developments include falling global oil prices, stable foreign exchange reserves of $9.5 billion, improved inflation expectations, and declining government security yields. However, the agricultural sector faces challenges, particularly in cotton production. The MPC expects real GDP growth for FY25 to remain between 2.5% and 3.5%. Workers' remittances and export earnings have improved, while the current account deficit is contained within 0-1% of GDP. Fiscal consolidation has improved Pakistan's debt-to-GDP ratio, falling to 67.2%. However, to meet fiscal targets, tax collection must increase significantly...

Maple Leaf Cement Factory Limited (PSX: MLCF) - Annual Financial Results as of June 30, 2024 For the year ending June 2024, MLCF earned a net income of Rs. 5 per share. No dividend was declared. Revenue registered a 7% increase. Gross profit increased by 28%. Profit before tax decreased by 3%. Profit after tax increased by 17%. Financial charges saw a significant rise, increasing by 50%. The tax rate for the year remained at 41%, compared to 51% last year. In the last quarter (Q4 Jun 2024), MLCF earned a net income of Rs. 0.9 per share. The profit after tax in the last quarter increased by 5% over the average of the last four quarters. MLCF is currently trading at a price-to-earnings ratio of 6.8. The company has a 0.66% exposure in the KSE100 Index, 0.94% in the KSE30 Index, and 1.35% in the KMI30 Index. MLCF holds 7.5% stake in Next Capital and 7.5% stake in Pioneer Cement (PSX:PIOC), classifying these as short-term investments. Kohinoor Textile Mills (PSX:KTML) is the holding compan...

Brent crude oil futures dropped over 3.4% to below $70 per barrel on Tuesday, approaching their lowest level since November 2021. This helps in bringing inflation down and strengthens policy rate cuts expectations in the next MPC meeting of the State Bank of Pakistan, OPEC has once again lowered its global oil demand outlook, marking the second such revision in just two months. The organization now anticipates a daily demand increase of 2 million barrels in 2024, a decrease of 80,000 barrels from its prior estimate. For the year 2025, OPEC has reduced its forecast to 1.7 million barrels, 40,000 barrels lower than previous projections. This downward adjustment is largely attributed to weaker oil consumption in China, particularly as the surge in electric vehicle sales dampens demand for traditional fuels. Moreover, the possibility of OPEC+ increasing production in December further exacerbates the situation, with analysts suggesting a potential oil surplus in 2025.