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Bloodbath at PSX as jittery investors jettison shares, down over 1,700 points



Stocks suffered losses for the fifth straight session on Thursday, bleeding more than 1,700 points on the back of rumours of a hike in interest rates, economic uncertainty, and the unrelenting depreciation of the rupee.

The bourse stayed flat for 10 minutes after the opening bell. However, at 9:40am, the market began its gradual slide with the KSE-100 eventually losing 659 points by 12:00pm, sinking to 45,584.62. After 2:50pm, the market plunged steeply — by 1,784.93 points — to reach a low of 44,459.62. When trading closed, it corrected itself to 45,002.41, down 1,242.14 points, or 2.69pc from the previous day’s 46,244.55.

The last time the market plunged so sharply (by over 1,500 points by day’s end) was after then-prime minister Shehbaz Sharif’s announcement of a 10pc “super tax” on large-scale industries in June 2022.

Intermarket Securities’ Equity head Raza Jafri told that the KSE-100 continued to be under severe selling pressure owing to a lack of confidence emanating from a weak economy, particularly the depreciating rupee.

“While value buyers may return if the dip extends, meaningful valuation rerating needs clarity to return,” he added.

Arif Habib Corp analyst Ahsan Mehanti echoed Jafri’s viewpoint, saying stocks fell across the board on economic uncertainty amid a slump in the rupee and a likely hike in interest rates owing to high inflation.

“The caretaker finance minister’s assertion of a lack of fiscal capacity to give relief on power bills and concerns for unresolved circular debt crises in the power sector played a catalyst role in [yesterday’s] bearish close,” he said.

The market had witnessed a sharp drop after rumours circulated that the State Bank of Pakistan was set to convene an emergency meeting in which it is expected to raise interest rates by up to 300bps, noted JS Global in its daily report.

KASB Securities chairman Ali Farid Khawaja told that investor sentiment “is very fragile”. “Any comment around political instability worries the market,” he said.

However, in Khawaja’s view, the bearish trend “will be short-lived” as he expects the market to recover. “We have seen similar volatility in the past as well.” He said reports of the Saudi crown prince’s visit to Pakistan “should be a strong catalyst for investor sentiment”.

Yousuf M. Farooq, director of research at Chase Securities, said market sentiment has changed over the last few days because of the anticipation of a rate hike.

“The market is expecting higher rates on changing expectations for inflation on the back of a continuously sliding rupee, higher oil and electricity prices and an anticipation of second-round impacts.”

He added that higher interest rates mean a higher cost of capital and cheaper stock prices.

“The market on the other hand is extremely cheap when compared to other crisis-ridden countries. The PSX is trading at three-four times earnings and earnings, dividends and buybacks have remained robust.”

Investor Jibran Sarfaraz told DawnNewsTV said a reduced inflow of dollars and the rumours circulating about an impending interest rate hike — by an expected 2 to 3pc — have resulted in the sell-off.

“You can see there is pressure on the market because of this, and the dollar [rate] is also increasing day by day which is creating problems for importers and investors are worried.”

He said until economic and political stability returns, “nothing can be done”.

Sarfaraz’s solution: controlling inflation and, by extension, the interest rate. “Whichever government comes to power should focus on stabilising the dollar [and inflation]. The more interest rates stay high, the more investors will hesitate.

“Unless the interest rate eases, investors won’t come because they’re getting 22-23 pc interest rates [by stowing their money in banks]. They will move where the higher profit margin is higher.”

Meanwhile, economic and business journalist Afshan Subohi highlighted predictability was crucial for any business to thrive.

“The capital market, in particular, operates and sustains on future expectations,” he told, pointing out that “current nervousness” in the PSX and the index dive manifested the fear for the future more than the current economic challenges.

“All relevant quarters including the current set of power yeilders need to be mindful of the fact that people and businesses are losing hope,” Subohi said.

He added that instead of inventing arguments to delay elections, efforts should be directed to hold polls in 2023 and ensure the peaceful transfer of power as quickly as possible.


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Cnergyico imports Pakistan’s first private-sector Russian crude cargo



Pakistan refiner Cnergyico has imported the country’s first private-sector shipment of Russian crude oil, it said on Monday, as the cash-strapped nation takes advantage of Moscow’s discounts on its oil exports.

The South Asian nation has started snapping up crude oil that Russia has discounted after its exports were banned from European markets over Russia’s invasion of Ukraine.

Pakistan’s first cargo, imported by the government, arrived in June and a second government-to-government shipment is under negotiation.

It had been assumed that private imports would not be commercially viable because, among other things, cargoes have to be split and transferred to smaller ships as Pakistan’s ports cannot handle large tankers.

But Cnergyico used its single point mooring, which can accommodate deep-draft tankers, a company spokesman said in response to questions from Reuters. The crude is to be refined at the company’s refinery in the southwestern city of Hub.

Processing the 100,000-metric-ton shipment of Urals crude “marks an important milestone for the company and for the country as well,” said the spokesman. “It demonstrates the company’s capabilities and readiness to refine different types and complexities of crude oil.”

Cnergyico operates the largest refinery in Pakistan, with a capacity of 156,000 barrels per day (bpd), accounting for one-third of a national capacity of 450,000 bpd.

It is the only refinery with its own single-point mooring.

Cnergyico plans to sell gasoline and diesel refined from the Urals crude locally, and export furnace oil, or fuel oil, typically used in industrial boilers, power plants, and ship engines.

“There is ample demand for furnace oil in the global market, which can help Pakistan generate foreign exchange,” the spokesman said.

Cnergyico conducted due diligence and consulted with external sanctions counsel to ensure the import of Russian oil did not violate sanctions, he said.

Pakistan aims to import 100,000 bpd from Russia this year, which would account for the bulk of its total imports, help address a foreign exchange crisis and keep a lid on record inflation.

Last year, Pakistan’s total crude imports registered at 154,000 bpd.

The government paid in Chinese yuan for its first import of discounted Russian crude, which went to state-owned Pakistan Refinery Ltd.

Cnergyico declined to comment on what currency it used to pay for its Russian cargo.

A source with knowledge of the deal told Reuters that Cnergyico will also pay in yuan through a letter of credit from a Chinese Bank.

The benefits of the Russian discounts, however, are being offset by increased shipping costs and the lower-quality fuels produced from the heavy sour Urals crude grade compared with products refined from crude from Pakistan’s main suppliers, Saudi Arabia and the United Arab Emirates, analysts say.

Cnergyico said it expects to make the Russian imports viable through the export of furnace oil to generate foreign exchange.


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PPP ‘only’ political party that wants timely elections, says Bilawal



Taking a dig at his allies in the erstwhile Pakistan Democratic Movement-led ruling coalition, PPP Chairman Bilawal Bhutto Zardari on Monday claimed the PPP was the “only” political party in the country that wanted timely elections.

“PPP is the country’s only party that wants elections to take place,” he said in a press conference in Karachi, lamenting how “so-called” political leaders were coming up with excuses to delay polls.

“You must have seen that sometimes a so-called leader comes on screen and says: ‘Delimitation has to happen and until then [elections can be delayed]’. Okay let’s accept delimitation [needs to be done] but that process has been completed so now there should be no issue in giving the date [for polls].

“If not delimitation, then sometimes someone begins talking about the weather that ‘it is very cold in February and January so how will we contest elections,’ while others talk about the law and order situation,” Bilawal said.

His statement appeared to be a criticism of JUI-F emir Maulana Fazlur Rehman’s concerns over holding elections in Balochistan and Khyber Pakhtun­khwa at a time when they remain grip­­ped by intense winter.

In a media talk on Sunday, the JUI-F chief had said it was not possible to hold general elections in KP and Balochistan in January. “In January, weather would be harsh in Chitral, Khuzdar, and other parts of KP and Balochistan,” he had said.

The Election Commission of Pakistan earlier this month announced that general elections would be held in January next year but did not provide a date. In the run-up to polls, political parties have begun preparation for their electoral campaigns.

In another significant step toward polls, the ECP last week issued a report of preliminary delimitation of constituencies in light of the 2023 digital census.

Talking about the discourse over the timing of elections today, Bilawal said the public should realise who was running away from accountability in polls and who was ready to present themselves for answerability before voters.

“The PPP will continue its politics and would not rest before securing the notification for an election date,” he asserted.

Bilawal further said that the PPP was ready to present its ideology and manifesto before the public as a part of its preparations for the upcoming elections.

In a media talk earlier today, PPP’s Yousuf Raza Gilani echoed Bilawal’s remarks. “I have read Fazlur Rehman’s statement … apart from him, no one has raised any objections to elections in January,” he said.

The ex-prime minister also stated that any party that had reservations about delimitation should raise the issue with the ECP.

Meanwhile, PPP veteran leader Farhatullah Babar has said the “vibes say no elections” and warned of the consequences of “denying people free choice”, which he stated could invite disaster.

“Hold free, fair elections. Don’t play with fire. Federation at brink, don’t push it into pit,” he warned in a social media post on X (formerly Twitter).


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China thrill in track and field but footballers flop again at Asiad



HANGZHOU: China swept four gold medals in track and field at the Asian Games on Sunday to celebrate national day, but their men’s football team failed to read the script and were dumped out by South Korea.

The hosts are running away at the top of the overall medals table in Hangzhou with 132 golds and still seven days of competition to go.

China is enjoying a long holiday for national day and patriotic fervour filled the 80,000-seater Olympic stadium in the eastern city for the evening’s athletics.

Waving mini flags and roaring on the home competitors, they were not to be disappointed.

Wang Jianan, nicknamed Ed­die, leapt an impressive 8.22m on his first attempt in the long jump. It proved enough to defend his title.

Discus thrower Feng Bin, who like Wang was dethroned as world champion in August, also bounced back in style to claim gold with a throw of 67.93m, a Games record.

“I’m really happy. After all, today is national day, a very special day for every Chinese person,” the 29-year-old Feng said.

“To win my first Asian Games medal on this day makes me extremely happy and excited.”

There was more home success through Lin Yuwei in the 100m hurdles and Zheng Ninali in the women’s heptathlon.

China’s men’s football team is often derided at home and they once again failed to get in the holiday mood.

They were outclassed and soundly beaten 2-0 by South Korea in the last eight to disappoint a bumper crowd of nearly 40,000.

The Koreans, who are chasing a third gold medal in a row in the under-23 competition, face Uzbekistan in the semi-finals.

Japan beat North Korea 2-1 and will play Hong Kong, surprise 1-0 victors over Iran, in the last four.

The North Koreans rounded on the Uzbek match officials at the final whistle and at least one furious player had to be held back by his team-mates.

China also suffered a comprehensive loss in the final of the women’s team badminton competition.

The South Korean squad raced onto the court and some players were in tears after a 3-0 win for their first gold in the event for nearly 30 years.

South Korea’s coach Kim Hak-kyun called the gold “precious” and said they were already targeting more success at next summer’s Paris Olympics.

“This is thanks to the determination, mindset, mentality and unity of our players,” said Kim.

China did however recover to win the final of the men’s team competition 3-2 after going behind to India.

The home nation also enjoyed double gold in table tennis, with Sun Yingsha winning women’s singles gold and the duo of Fan Zhendong and Wang Chuqin taking the men’s doubles title.

In some of the first action of the day, Thailand’s Arpichaya Yubol snatched women’s golf gold after India’s Aditi Ashok blew a seven-shot overnight lead.

In the men’s event, rising star Taichi Kho kept his nerve despite a charge by PGA Tour star Im Sung-jae for a one-stroke victory.

It was Hong Kong’s first gold in golf at the Asian Games.

At the shooting range the Chinese women’s trap team of Li Qingnian, 42, Wu Cuicui, 35, and Zhang Xinqiu, 29, set a new world record of 357 points on their way to winning gold, eclipsing the previous world best of 354 points set by the United States in 2018.

In trap competitors wield shotguns and aim at clay-based targets being fired rapidly away from the shooter at different angles.

The silver medal went to India, whose team included Rajeshwari Kumari, 31, daughter of acting president of the Olympic Council of Asia and former Asian Games champion in shooting, Randhir Singh.

In the men’s U23 3×3 basketball, Mongolia won their first ever Asian Games bronze medal in a team event, before Taiwan pipped Qatar 18-16 to win gold and trigger elation on the court and a huge roar from Taiwan journalists in the media centre.

Published in Dawn, October 2nd, 2023


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