Karachi: The KSE-100 index climbed by 686 points, closing at 114,399, with a trading volume of 404 million shares, marking a significant uptick in market activity. Key performers in terms of price change included FFC, PIOC, and PSO, while JDWS, TGL, and SRVI experienced declines. Trading was predominantly centered in the cement, oil marketing companies, and banking sectors.
According to Taurus Securities Limited: The market roundup also highlighted several economic developments and policy changes. A potential rate cut is anticipated amid low inflation and an International Monetary Fund (IMF) review. However, the IMF has raised objections to the government's plan to borrow Rs1.25 trillion to address circular debt issues. In a separate development, the National Electric Power Regulatory Authority (Nepra) announced a cut in the fuel cost adjustment, benefiting residential and agricultural consumers.
Meanwhile, the government has proposed a new power surcharge, which may impact consumers. Exchange firms are optimistic about a $5 billion inflow by the end of Ramazan, setting a trade volume target of the same amount. The Federal Board of Revenue introduced significant changes to the Export Facilitation Scheme as part of ongoing economic reforms.
In the global market, Saudi Arabia reduced oil prices for Asia for the first time in three months, and China has rolled over a $2 billion loan for another year. On the domestic front, weekly inflation fell for the first time in seven years, while GST collection for July to December surged by 53.5 percent year-on-year to Rs283.177 billion.
Pakistan is currently resisting the IMF's carbon levy, and Kenya has decreased the customs valuation for Pakistani rice by 25 percent. The government is also proposing a revision in solar tariffs following the IMF's rejection of a GST cut on electricity bills. Additionally, plans are underway to introduce digital prize bonds for secure financial transactions.
In the export sector, services saw a 6.16 percent increase over seven months, despite a dip in industrial power consumption in Karachi. However, there are growing concerns over wheat production due to a 35 percent water shortage in Punjab and Sindh, and cotton output has dropped by 34 percent. Punjab is responding by incentivizing early cotton sowing.
The power sector reported losses of Rs158 billion due to inefficiency and theft, as noted by the All Pakistan Business Forum. Meanwhile, exploration and production firms are considering a $5 billion investment in the energy sector, although oil marketing companies are warning of a collapse due to forced refinery quotas. Additionally, KE's power generation costs have exceeded those of the national grid by over 100 percent.