FinPocket

Market recovery and energy crisis deepens

17 Oct, 2021

On Market Front

Tracking KSE-100

TRACKING KSE-100

After weeks of the downward trend on the KSE100 index, it made a comeback on Thursday, and the index gained 1,112 points. This week index increased by 345 points to close at 44,822. The possibility of successful negotiation with IMF, exclusion of Pakistan from the FATF gray list and global equity market showing recovery drove the investor’s confidence in PSX as well. Analysts expect that the result season will provide support, and the upward momentum will continue.

RESULT ARE IN

RESULT ARE IN

Habib Bank Ltd (HBL: -0.10%) has announced the 3QCY21 result on Friday where the bank reported a consolidated PAT of PKR 9.0bn (EPS: PKR 6.11). Meezan Bank Ltd (MEBL: -0.07%) announced the 3QCY21 result on Thursday where the bank reported consolidated PAT of PKR 7.0bn along with PKR 1.50 interim cash dividend. Lotte Chemical Pakistan Ltd (LOTCHEM: +2.02%) announced the 3QCY21 result on Friday, where the company posted a net profit of PKR 628mn (EPS: PKR0.41). 

JUST CAN'T DO IT

Archroma Pakistan Limited (ARPL: -3.34%) has announced force majeure due to the company’s inability to procure raw materials and supplies coming from China. Force majeure is a standard clause in contracts that essentially frees both parties from liability or obligation when an extraordinary event or circumstance is beyond the parties’ control. However, this event will not do long-term damages but will impact the company’s profitability in the short term.

On Economic Front

GLOBAL ENERGY CRISIS

GLOBAL ENERGY CRISIS

Pakistan is currently facing severe energy crises. The government has increased oil prices to PKR 12.44 per liter and increased base electricity tariffs to PKR 1.39 per unit.  Both of the steps were unavoidable due to the increase in global oil prices and the condition for the continuation of the IMF program. 

POLICY, POLICY & POLICY

POLICY, POLICY & POLICY

To meet the growing demand and encourage investment by the Steel Sector, the government is planning to launch a medium to long-term policy to spur the growth in the steel sector. NEPRA is exploring the launch of the electric trading market where consumers of 1MW and more will purchase electricity from IIP’s directly. If executed right, this move will likely reduce the pressure on the circular debt. 

Bonus Read

OIL & GAS EXPLORATION

OIL & GAS EXPLORATION

Foreigners have sold USD 445mn worth of oil and gas exploration stocks since 2017. Oil and gas productions from the big three OGDC, POL, and PPL’s have consistently fallen, and they are down by 15% for oil and 16% for gas. One question, isn’t this due to lack of exploration activities led by circular debt?

Of course, it is!

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