PakStox Outlook

Pakistan stocks remained under severe pressure   this week  on political tensions and delays in IMF deal. This week KSE100 Index lost 3.36% (1388 points) closing below 40K at 39,942.  See Chart . Breaking silence  Inte r­national Monetary Fund (IMF)   on Friday tied assurances from the country’s (Pakistan) external partners with the renewal of its package deal.   Read Cash Margin Requirement (CMR)  on import of goods has been removed by the State Bank of Pakistan. This was imposed as the country faced foreign exchange crunch. This was having a choke hold on business activities. SBP reserves have improved recently on lower current account deficit and foreign exchange support from China banks.  Read More. Pakistan's total liquid foreign exchange reserves  crossed the $10 billion mark supported by foreign inflows.  Read Real Estate Investment Trust (REIT) Management Companies have been allowed by the  State Bank of Pakistan for privat...

In line with expectations, the Federal Reserve raised interest rates by a 25bps. This is the ninth increase in a year. The Fed is trying to achieve a balance in its declared war on inflation while trying to tackle the emerging banking crisis. 

AICL,  announced its annual results for the year ending December 2022. AICL announced a cash dividend of Rs. 1.5 per share as its final dividend. This is in addition to the Rs. 1.5 per share announced with the half yearly results, making a total of Rs. 3 per share for the whole year, translating into a cash dividend yield of over 10%.

Pak Suzuki (PSX:PSMC)  yesterday announced a whopping annual loss after tax of Rs. 6.33 billion (loss per share Rs. 77) for the year ended 2022.  See notice . Share Price (Rs.) 3 Month 1 Year PSMC 117.85 -3.31% -41.94%

Commodity giant Trafigura is among the companies that received bags of stones from a London Metal Exchange warehouse instead of the nickel briquettes they purchased. twt . Real Effective Exchange Rate (REER) of Pak Rupee in February this year came at 86.5 as compared to 93.96 in Jan'23.

Pakistan: Secondary market yields down up-to 72bps.   3Y PIB yield down by 36bps to 18.23% followed by 72bps decline in 5Y PIB to 15.16% and 38bps decline in 10Y PIB to 15.24%. Oil continues to be weak.  WTI trading below $69 and Brent below $75. Russian and Saudi officials met to discuss oil market stability. US Stocks regains as European market recouped   losses of day before yesterday. Dow Jones closed up 372 points at 32,247. As anticipated, the ECB increased interest rates  on Thursday by 50 basis points, bringing borrowing costs to their highest level since late 2008. The whole WTI futures  curve is now below the bottom range of $67-$72 a barrel given by the White House to buy crude for the SPR.

Share Price (Rs.) 1 Month 3 Month 1 Year 24.43 -4.54% 4.54% 57.56% LOTCHEM announced,  for the year ending December 2022, an annual earnings per share of Rs. 6.68 (vs. Rs. 3.07 last year)  and a cash dividend of Rs. 2 per share, in addition to the Rs. 4 per share cash dividend announced at the half-year. The company has changed hands, so new owners may change dividend payout policy. LOTCHEM earned a profit after tax of Rs. 10.1 billion for the year ending December 2022. This is higher by 117% over PAT of Rs. 4.64 billion last year. This substantial rise in PAT is primarily because of increase in Sales by 49% over last year and higher gross profit margin of 17.7% compared to GP margin of 11.28% last year. This growth in the PAT is despite a 144% increase in “other operating expenses” and more than doubling ‘“finance costs’. The tax rate for LOTCHEM this year was also high, at 36%, compared to 29% last year. On a quarterly basis, EPS in the fourth quarter was Rs. 1.33, declining...