Friday, May 30, 2025
Home Blog Page 3

Business Confidence Rebounds in Pakistan: OICCI Survey Shows +16-Point Surge

Khashif Sarfraz
-
0
Business Confidence Rebounds in Pakistan: OICCI Survey Shows +16-Point Surge

In a welcome sign for Pakistan’s economy, the Overseas Investors Chamber of Commerce and Industry (OICCI) has released the results of its Business Confidence Index (BCI) Survey – Wave 27, revealing a strong rebound in business sentiment. Conducted in March and April 2025, the survey recorded a 16-point improvement, pushing the index into positive territory.

From Negative to Positive: A Turning Point for Business Sentiment

The overall Business Confidence Index rose from -5% (Oct-Nov 2024) to +11%, reflecting renewed optimism across key sectors. This recovery is attributed to:

  • Macroeconomic stability

  • Falling inflation

  • Improved outlook for the next six months

Sector-Wise Breakdown: Manufacturing Leads the Way

Here’s how different sectors performed:

  • Manufacturing: from -3% to +15%

  • Retail/Wholesale: from -18% to +2%

  • Services: from +2% to +10%

This resurgence suggests a broad-based recovery, especially among industrial and commercial businesses.

Government Response: Economic Direction Validated

Senator Muhammad Aurangzeb, Federal Minister for Finance & Revenue, expressed optimism following the survey results.

“The uptick in business confidence is a clear sign that our economic direction is on the right track. We’re committed to creating an investment-friendly environment and strengthening macroeconomic stability,” he said.

OICCI’s Take: Resilience and Opportunity

Yousaf Hussain, President of OICCI, highlighted the resilience of Pakistan’s business sector:

“This sharp recovery reflects the readiness of businesses to embrace new growth opportunities. But to sustain it, we need policy consistency, transparency, and stronger stakeholder engagement.”

Looking Ahead: Positive Expectations for Next Six Months

A notable 45% of survey respondents anticipate improved business conditions in the next half-year. Key drivers include:

  • Economic growth prospects

  • Supportive government policies

  • Improved investment climate

  • Enhanced security conditions

This renewed optimism could signal increased investment, job creation, and industrial expansion if current trends hold.

KSE-100 Dips Amid Budget Uncertainty; Global Markets Mixed on US Tax Bill and Debt Concerns

Khashif Sarfraz
-
0
KSE-100 Dips Amid Budget Uncertainty; Global Markets Mixed on US Tax Bill and Debt Concerns

Volatility persisted at the Pakistan Stock Exchange (PSX) on Friday as investor anxiety mounted ahead of the federal budget announcement. The benchmark KSE-100 Index dropped over 400 points during the first half of the trading session, trading at 118,742.59 as of 9:45am, down 410.45 points (0.34%).

Sectors Under Pressure

Key sectors facing heavy selling included:

  • Automobile Assemblers

  • Commercial Banks

  • Oil & Gas Exploration

  • Oil Marketing Companies (OMCs)

  • Power Generation

Index-heavyweights such as HUBCO, PSO, SSGC, MARI, OGDC, PPL, POL, UBL, and NBP all traded in the red, reflecting widespread investor caution.

Budget Anxiety Fuels Sell-Off

Market analysts attribute the bearish sentiment to uncertainty over the upcoming federal budget, particularly concerns surrounding new IMF-driven taxes. Thursday’s session also closed in the negative, with the KSE-100 Index falling 778 points (0.65%) to close at 119,153, as investors remained on the sidelines awaiting clarity.

Global Markets Update: Mixed Reactions to US Tax Bill

Asian markets showed modest gains on Friday, recovering slightly after a turbulent week. The MSCI Asia-Pacific Index (excluding Japan) edged up 0.1%, though still on track to post a 0.4% weekly loss, snapping a five-week winning streak.

Wall Street saw limited movement despite upbeat US PMI data indicating a pickup in business activity during May. Gains were capped by renewed concerns over long-term US debt sustainability, following the passage of President Trump’s tax bill by the US House of Representatives.

While the bill fulfills many of Trump’s campaign pledges, it is expected to increase the US national debt by $3.8 trillion over the next decade, ballooning the total to $36.2 trillion.

In response, Moody’s downgraded the US credit rating, citing escalating fiscal risks. Treasury yields surged, particularly on long-term bonds, though some buying returned as yields hit attractive levels. The 30-year Treasury bond yield fell by 1 basis point to 5.037%, retreating from a 19-month high.

Outlook: All Eyes on Pakistan’s Federal Budget

With Pakistan’s federal budget around the corner, investor sentiment is expected to remain subdued. Market watchers are closely monitoring for:

  • New tax measures

  • IMF conditions

  • Relief packages or incentives for key industries

Until there’s clarity, analysts expect continued choppiness in the local bourse and recommend a wait-and-watch strategy for retail investors.

Pakistan Moves Toward Full Islamic Banking by 2028: Key Insights from PIAF-SBP Seminar

Khashif Sarfraz
-
0
Pakistan Moves Toward Full Islamic Banking by 2028: Key Insights from PIAF-SBP Seminar

At a recent seminar organized by the Pakistan Industrial Associations Front (PIAF) in collaboration with the State Bank of Pakistan (SBP) and MCB Islamic Banking, speakers emphasized that Pakistan’s economic crisis is largely driven by reliance on interest-based financial systems, urging a return to Islamic financial principles.

Held at the PIAF central office, the seminar aimed to promote Islamic banking awareness, especially in industrial and commercial hubs. The event featured key industry voices, including PIAF Chairman Faheem ur Rehman Saigol and Tariq Riaz, Chief Manager at SBP, with a large turnout from the business community and executive committees of PIAF and the Lahore Chamber of Commerce & Industry (LCCI).

95% of Revenue Consumed by Domestic Debt Payments

Speakers expressed concern that nearly 95% of Pakistan’s national revenue is consumed by domestic debt servicing, highlighting the urgency of transitioning to a Shariah-compliant, interest-free banking model.

Islamic Banking: The Need of the Hour

PIAF Chairman Faheem ur Rehman Saigol declared Islamic banking a vital economic necessity, sharply contrasting it with interest-based capitalist systems. He urged the business community to:

  • Actively understand the rules and benefits of Islamic finance

  • Dispel myths and reservations about Islamic banking

  • Support widespread availability of Islamic banking services

He called on SBP and Islamic banks to:

  • Expand branch networks in key commercial zones

  • Develop customized Islamic financial products for SMEs and manufacturers

  • Bridge the awareness gap among small traders and cottage industry players

Saigol also proposed the creation of a consultative committee with representatives from SBP, Islamic banks, and trade bodies to foster continuous dialogue and feedback.

Pakistan to Go Fully Islamic by 2028

In his keynote, SBP’s Tariq Riaz confirmed that Pakistan’s banking system is set to fully transition to Islamic banking by January 2028. He described Islamic finance as a moral, trust-based system aligned with Islamic values and gaining popularity among:

  • Exporters

  • SMEs

  • Businesses seeking Shariah-compliant funding solutions

He announced that this event was the first of many awareness sessions to support stakeholders during the transition.

Shariah Compliance in Practice

Dr. Naveed Aslam, Head of Shariah Compliance, delivered an insightful talk on the core principles of Islamic banking, answering questions raised by PIAF’s Executive Committee members. The session was organized and overseen by PIAF Secretary Abdul Saboor Sheikh.

Conclusion: Toward a Shariah-Compliant Economic Future

The event concluded on a high note with a unified commitment from SBP, Islamic banks, and the business community to support Pakistan’s transition to Shariah-compliant banking, ensuring a more ethical, sustainable, and inclusive financial system.

Pakistan, World Bank Push for Swift Implementation of New Partnership Framework

Khashif Sarfraz
-
0
Pakistan, World Bank Push for Swift Implementation of New Partnership Framework

Pakistan and the World Bank (WB) have agreed to swiftly develop an implementation framework to ensure effective rollout of the new Country Partnership Framework (CPF) and to solidify a pipeline of development projects over the next two years.

During a meeting between Federal Minister for Economic Affairs Ahad Cheema and Anna Bjerde, World Bank’s Managing Director for Operations (MDO), both sides emphasized the need to enhance operational effectiveness of the existing portfolio and align new support areas with the priorities outlined in the CPF.

Senior representatives from both the Government of Pakistan and the World Bank participated in the strategic dialogue.

Strong Economic Reforms Driving Results

Minister Ahad Cheema underscored Pakistan’s “remarkable economic turnaround” in recent months, attributing it to comprehensive reforms aimed at achieving sustainable macroeconomic stability. He highlighted:

  • Positive performance under the Extended Fund Facility (EFF) with the IMF

  • Improved credit rating from Fitch

  • The government’s unwavering commitment to fiscal discipline and reform

He also appreciated the continuous support and facilitation by the World Bank’s country office, especially acknowledging Najy Benhassine, the outgoing Country Director for Pakistan.

CPF a Model for Other Countries

MDO Anna Bjerde lauded Pakistan’s efforts to engage productively with the IMF and noted encouraging signs of economic recovery. She commended Pakistan’s leadership for steering the preparation of the CPF with a primary focus on human capital development.

Bjerde called the new CPF a “pioneering framework” that could serve as a model for other World Bank member countries.

Key Focus Areas: Energy & Social Protection

Minister Cheema urged the WB to prioritize:

  • Social protection graduation programs for provincial governments

  • Innovative energy solutions to reduce generation costs and enhance affordability

Bjerde assured full WB support and technical assistance in these key areas.

Enabling Private Sector Growth

Both sides agreed that the ongoing WB portfolio should strengthen the foundations for private sector engagement, enabling it to play a more significant role in Pakistan’s development journey.

A Results-Driven Partnership

The meeting concluded on a positive note, with both the Government of Pakistan and the World Bank reaffirming their mutual commitment to a results-driven partnership focused on tangible improvements in the lives of Pakistani citizens.

Rupee Faces Uncertainty Despite Support from Stronger Asian Currencies

Khashif Sarfraz
-
0
Rupee Faces Uncertainty Despite Support from Stronger Asian Currencies

The Indian rupee may open stronger on Friday, supported by broad-based gains in Asian currencies, but doubts remain about the sustainability of any rebound. The 1-month non-deliverable forward (NDF) suggests an opening range of 85.94 to 85.96, compared to 86.0025 in the previous session.

Despite the slight reprieve, the rupee is headed for its third consecutive weekly loss, having fallen over 1.5% in May — placing it among the worst-performing Asian currencies.

In contrast, other regional peers have performed much better:

  • Offshore Chinese yuan: +1%

  • Korean won: +4%

  • Indonesian rupiah and Thai baht: +2% each

The rupee’s underperformance is attributed to dollar outflows, increased hedging, and unwinding of long rupee positions. Adding to concerns, the currency has consistently closed at its intraday low for the past three sessions, highlighting sustained selling pressure.

“The rupee’s recent behaviour has been unusual, to say the least. Like me, I’m sure most didn’t expect to see 86 this quickly,” said a Mumbai-based currency trader.

Although fiscal concerns in the U.S. have dragged the dollar lower, which could offer some support to the rupee, traders remain skeptical about whether this will lead to a lasting uptrend in USD/INR.

“The odds are stacked against the opening move lower sustaining, considering the lack of staying power seen in recent dips,” the trader added.

Asia FX Continues Uptrend

Asian currencies extended their gains on Friday, with traders citing optimism over potential trade and FX agreements with the U.S.. According to MUFG Bank, the rise in U.S. Treasury yields due to fiscal concerns has not impacted the bullish momentum in Asia’s currency markets.

However, MUFG cautioned that this divergence may not last, depending on how tariff policies evolve and whether higher yields start to dampen global growth and investor sentiment.

Gold Set for Strongest Weekly Gain in Over a Month as U.S. Fiscal Woes Boost Safe-Haven Demand

Khashif Sarfraz
-
0
Gold Set for Strongest Weekly Gain in Over a Month as U.S. Fiscal Woes Boost Safe-Haven Demand

Gold prices climbed on Friday and were on track for their best weekly performance since early April, as a weakening U.S. dollar and increasing concerns over America’s fiscal health fueled demand for the precious metal as a safe haven.

As of 0204 GMT, spot gold rose 0.3% to $3,303.92 per ounce, while U.S. gold futures gained 0.2% to $3,303.00.

Bullion has advanced 3% this week, buoyed by a more than 1% decline in the dollar, which is heading for its worst weekly drop since April 7. A softer dollar makes dollar-denominated gold cheaper for holders of other currencies, boosting global demand.

“This week, trade optimism has somewhat given way to worries about the U.S.’s fiscal situation, and the resulting hesitancy towards U.S. assets has put gold back in the frame with investors,” said Tim Waterer, Chief Market Analyst at KCM Trade.

Investor concerns intensified after the Republican-led U.S. House of Representatives passed a sweeping tax and spending bill that aligns closely with President Trump’s economic agenda, adding trillions of dollars to the national debt.

Additionally, weak demand for a $16 billion auction of 20-year U.S. Treasury bonds and a recent Moody’s downgrade of the U.S. credit rating have rattled financial markets, further enhancing gold’s appeal as a store of value.

“Gold can likely maintain its foothold above the $3,000 level while tariff, U.S. debt, and geopolitical tensions remain swirling around financial markets,” Waterer added.

In parallel developments, geopolitical risks remain high. Iran’s Foreign Minister warned of U.S. accountability in case of an Israeli strike on Iranian nuclear sites, following reports that Israel may be preparing for military action.

Other precious metals also posted mixed movements:

  • Silver rose 0.1% to $33.12 an ounce,

  • Platinum firmed 0.4% to $1,084.99,

  • Palladium edged down 0.1% to $1,013.63.

Oil Prices Dip as Strong Dollar and OPEC+ Output Concerns Weigh on Market

Khashif Sarfraz
-
0
Oil Prices Dip as Strong Dollar and OPEC+ Output Concerns Weigh on Market

Oil prices edged lower on Friday amid a stronger U.S. dollar and renewed concerns over potential supply increases by OPEC+, putting pressure on global energy markets.

Brent crude futures declined by 37 cents to $64.07 per barrel, while U.S. West Texas Intermediate (WTI) crude fell 39 cents to $60.81 per barrel as of 0015 GMT.

On a weekly basis, Brent recorded a 2% drop and WTI slipped by 2.7%, reflecting a broader pullback in energy markets.

The U.S. dollar strengthened following the House of Representatives’ approval of President Donald Trump’s tax and spending bill. A stronger dollar typically exerts downward pressure on oil prices, making crude more expensive for non-dollar buyers.

Market sentiment was further dampened by a Bloomberg report suggesting that OPEC+ is considering a fresh output hike of 411,000 barrels per day (bpd) for July. While discussions are ongoing, no final decision has been announced ahead of the group’s June 1 meeting.

Earlier reports from Reuters also indicated that OPEC+ may accelerate planned output increases, raising concerns about oversupply in the second half of the year.

Additional pressure came from a recent surge in U.S. crude inventories, which have grown to levels seen during the COVID-19 lockdowns, according to storage broker The Tank Tiger. This uptick in storage demand signals anticipation of further global supply expansion.

Investors are now closely watching the Baker Hughes U.S. oil and gas rig count, a key barometer of future production trends, due later today.

Gold Prices Decline in Pakistan Following International Market Trends

Khashif Sarfraz
-
0
Gold Prices Decline in Pakistan Following International Market Trends

Gold prices in Pakistan fell on Thursday, mirroring a decrease in the international market. The local price of gold per tola dropped by Rs1,900 to close at Rs347,500, according to data from the All-Pakistan Gems and Jewellers Sarafa Association (APGJSA).

Similarly, the price of 10-gram gold declined by Rs1,629, settling at Rs297,925.

Earlier in the day, gold prices had briefly risen, with the per tola rate reaching Rs349,400 after a gain of Rs6,600. However, this increase was reversed by the end of the session amid downward pressure globally.

On the international front, gold prices also experienced a decline. The rate stood at $1,329 per ounce (with a premium of $20), down $19 from the previous session.

Silver prices in the domestic market also saw a slight decrease. The price per tola dropped by Rs38 to close at Rs3,428.

These fluctuations reflect ongoing volatility in precious metals markets influenced by global economic factors and currency movements.

S&P 500 Slips in Volatile Trading Amid Tax Bill Passage and Rising Treasury Yields

Khashif Sarfraz
-
0
S&P 500 Slips in Volatile Trading Amid Tax Bill Passage and Rising Treasury Yields

The S&P 500 edged lower on Thursday amid choppy trading following the U.S. House of Representatives’ narrow passage of President Donald Trump’s controversial tax bill. The legislation, which passed by a razor-thin margin, is projected to add nearly $3.8 trillion to the federal debt over the next decade, according to the nonpartisan Congressional Budget Office.

If enacted, the bill would fulfill key aspects of President Trump’s populist agenda by introducing new tax breaks on tips and car loans, alongside increased military spending. However, experts warn that the bill could significantly undermine efforts to reduce government spending and curb the nation’s mounting debt.

“At a time when reducing debt has been a focus, this bill essentially reverses much of that progress,” said Sam Stovall, chief investment strategist at CFRA Research.

By mid-morning trading, the Dow Jones Industrial Average had slipped 72.70 points (0.17%) to 41,790.95, while the S&P 500 dropped 8.11 points (0.14%) to 5,836.38. The Nasdaq Composite, however, gained 28.91 points (0.15%) to 18,901.55, buoyed by gains in megacap growth stocks.

Among sectors, utilities and energy stocks led declines, each falling more than 1%. Notably, shares of solar energy firms, such as First Solar, fell 4.1% amid expectations that the tax bill will eliminate several green energy subsidies.

Conversely, cloud computing company Snowflake surged 9% after raising its fiscal-year 2026 product revenue forecast. Alphabet also outperformed the market with a 3.4% gain.

Treasury yields remained elevated, with the 10-year note near a multi-month high at 4.606% and the 30-year yield hitting a new 19-month peak. The rise in yields contributed to a broader market selloff earlier in the week, with Wednesday marking the biggest single-day percentage drop for all three major indexes in nearly a month.

Despite recent volatility, U.S. equities have posted solid gains in May. The S&P 500 is up more than 15% since April lows, supported by a pause in tariffs, a temporary U.S.-China trade truce, and subdued inflation data. However, the index remains roughly 3% below its all-time highs.

Federal Reserve Governor Christopher Waller indicated that interest rate cuts could be forthcoming if the tariff situation improves, with traders pricing in at least two 25-basis-point cuts by year-end.

Recent economic data showed steady business activity growth in May and a decline in weekly jobless claims, signaling sustained employment momentum.

On the trading floor, declining stocks outnumbered advancers by a ratio of 3.3-to-1 on the NYSE and 1.82-to-1 on the Nasdaq. The S&P 500 recorded no new 52-week highs but nine new lows, while the Nasdaq posted 20 new highs against 59 new lows.

PSX Sees Sharp Reversal as Profit-Taking Hits After Early Gains

Khashif Sarfraz
-
0
PSX Sees Sharp Reversal as Profit-Taking Hits After Early Gains

The Pakistan Stock Exchange (PSX) experienced a notable reversal on Thursday, with early gains wiped out due to profit-taking by investors.

The KSE-100 Index reached an intra-day high of 120,699.17 points, marking a record, but ultimately closed at 119,153.04, down 778.41 points (0.65%) by market close.

Despite strong bullish momentum earlier in the session, profit-taking pressures saw the market give back its advances. The index had surged from Wednesday’s close of 119,931.46 points, where it rose by 960.33 points (0.81%), supported by active investor participation and optimism surrounding upcoming budget announcements and pro-growth fiscal measures.

Large-cap sectors such as banking, oil, and energy were key drivers behind the initial gains, contributing roughly 480 points to the index. The refinery sector also benefited following the government’s approval of Rs34 billion in dues clearance, paving the way for major plant upgrades.

Top performers on the day included National Bank of Pakistan (+10%), Bank AL Habib (+2.85%), and United Bank (+1.22%). However, pressure on auto stocks, influenced by the IMF-backed tariff relaxation and revised National Tariff Policy, led to declines in shares like Lucky Cement and Standard Chartered.

Trading activity intensified with volumes surging to 667.7 million shares, led by K-Electric at 103.7 million shares. Foreign investors were net sellers, offloading shares worth Rs146.9 million.

Looking ahead, market sentiment remains cautiously optimistic, buoyed by improving macroeconomic indicators. However, investors are expected to remain selective in the lead-up to the FY26 budget announcement scheduled for June 2.

1234...126Page 3 of 126

LATEST

POPULAR POSTS

POPULAR CATEGORY

ABOUT US

Khashif Talks is an educational content platform. It focuses on finance, investment management, financial planning, technology, and creative industries.

Contact us: talks@khashiftalks.com.pk

FOLLOW US

© Khashif Talks | Website by Khashif Sarfraz