MediaLine Pakistan

The government is working on a viable gas pricing plan for the fertilizer sector after discovering that producers have not passed on the benefits of subsidized gas to farmers.

The Economic Coordination Committee (ECC) recently emphasized the need to stabilize fertilizer prices and tasked relevant ministries to develop an effective plan in this regard, reported a national daily.

Fertilizer manufacturers collected billions from farmers in Gas Infrastructure Development Cess but failed to deposit these funds in the national exchequer. The Petroleum Division explained that providing gas to fertilizer plants at Oil and Gas Regulatory Authority (OGRA) prices would either burden domestic consumers or require a subsidy from the Finance Division.

The Ministry of Industries and Production noted that subsidies had not resulted in lower urea prices for farmers and called for eliminating distortions in gas pricing. In this reference, the Finance Division refused to endorse further subsidies to cover the price differen
tial.

Previously, the ECC approved running two SNGPL-linked plants from January to March 2024 at Rs. 1,239/mmBtu. The Ministry of Industries proposed extending the operation of Fatima Fertilizer (Sheikhupura) and Agritech until September 30, 2024, at Rs. 1,597/mmBtu, treating the price differential similarly.

The ECC then deferred its decision and instructed authorities to come with a new pricing mechanism for the fertilizer sector. It also directed the Petroleum Division to continue current gas supply arrangements in the meantime.

Source: Pro Pakistani

The Oil and Gas Regulatory Authority (OGRA) has instructed oil marketing companies (OMCs) to pick up more high-speed diesel (HSD) from local refineries to ensure a smooth fuel supply in the upcoming peak harvest season.

HSD uplift had failed to budge despite the notable reduction in smuggled Iranian diesel. In a letter to the OMCs, OGRA highlighted that the harvesting season has led to a substantial surge in diesel sales across Pakistan. The regulator urged coordination from all stakeholders to ensure uninterrupted fuel supply to consumers, reported a national daily.

OGRA directed OMCs to procure more HSD in order to avoid storage issues at refineries and maintain supply during the harvesting season.

Notably, OMCs were against the procurement of large quantities of HSD with rates poised to fall in the upcoming review of fuel prices.

However, recent anti-smuggling measures have improved HSD stocks of OMCs. Currently, OMCs are cautious about uplifting large quantities of HSD, anticipating significant price
cuts to avoid inventory losses.

Oil sector estimates indicate that HSD demand from the formal sector has doubled recently. The first ten days of May saw daily HSD sales jump to around 29,000 tons, nearly double the average of 15,000 tons per day in recent months.

Source: Pro Pakistani

The government has decreased the rates of profit on national savings certificates and schemes by up to 24 bps.

The profit rates have been decreased on Bahbood Savings Certificates (BSC), Defence Savings Certificates (DSC), Pensioner Benefit Account (PBA), Regular Income Certificates (RIC), Shuhada Family Welfare Account (SFWA), and Special Savings Certificates (SSC).

Meanwhile, the rates of profit on Sarwa Islamic Savings Account (SISA) and Savings Account (SA) are unchanged.

The rate of return on RIC has decreased by 12 bps to 14.64 percent, while the rate of return on SSC has been slashed by 10 bps to 15.7 percent.

The profit rate on BSC, PBA, and SFWA is down at 15.36 percent each, while the rate of return on STSC has been revised upwards by 24 bps to 19.24 percent.

The rate of return on Defense Saving Certificates (DSC) was cut down by one bps to 14.39 percent.

Scheme Latest Rate Previous Rate Change (bps)

BSC 15.36% 15.60% -24

DSC 14.39% 14.40% -1

SISA 20.50% 20.50% 0

SITA 1-Year 19.10% 18.54%
+56

PBA 15.36% 15.60% -24

RIC 14.64% 14.76% -12

SAR 20.50% 20.50% 0

SFWA 15.36% 15.60% -24

SSC 15.70% 15.80% -10

STSC 19.24% 19.00% +24

There has been no change in the rates of return on the Saving Account Rate (SAR) and Sarwa Islamic Savings Account (SISA) which currently stand at 20.5 percent each.

Meanwhile, the rate of return on Sarwa Islamic Term Account (SITA) has been increased by 56 bps to 19.1 percent.

Source: Pro Pakistani

Ghazi Fabrics International Limited (PSX: GFIL) has closed its spinning units until further notice, the textile company informed the main bourse on Tuesday.

‘Due to the prevailing economic conditions in the country, increase in power cost and non-availability of quality cotton at an affordable price, it is unable to continue with the production activities. Therefore, the Company has decided to temporarily shut down/close production activities of its Spinning Units till further notice,’ the stock filing stated.

GFIL further mentioned that for the time being, its weaving unit will remain operative. ‘We will continue to monitor the situation for future course of action,’ it added.

The main activities of the Company are textile manufacturing, production of cotton and P.C. yarn, and grey cloth that are marketed both within and outside Pakistan.

Source: Pro Pakistani

MSCI is scheduled to release its results of the May 2024 Semi-Annual Index Review today (ie. May 14, 2024).

The announcement is expected to be made available shortly after 2 AM Pakistan Standard Time (PST) on May 15, 2024.

All changes will be implemented as of June 03, 2024.

Currently, the main Frontier Market Index comprises 20 constituents, including OGDC, MARI, PPL, LUCK, MCB, UBL, ENGRO, HBL, POL, SYS, FFC, HUBC, EFERT, MTL, BAFL, PSO, TRG, BAHL, ILP and SNGP.

Based on the market cap and free float minimum requirement of US$ 114 million and US$ 57 million, respectively, there is a likelihood that 3 companies will be added to the frontier market index, namely FCCL, ATRL, and NBP, Topline Securities said in a brief review.

It is important to highlight that for the May review, the price cut-off of MSCI is ‘any day data of the last 10 business days of Apr 2024’.

Due to this price cut-off methodology, the report wasn’t certain about the addition of CHCC and DGKC as during these cut-off days (Apr 17-30,
2024), their total market cap fell below the required US$ 114 million in a few days, however, there average market during these days remained above the threshold. Hence their inclusion also can not be ruled out.

While, INDU and MLCF also met the criteria last time in the February 2024 review and again fell in criteria this time, however, last time these were not added to the frontier market index. To highlight, MSCI considers various factors i.e. market liquidity, market accessibility, etc. before deciding on the inclusion of any security.

Topline remarked that with likely additions of these along with the KSE 100 performance since January 31, 2024 (+20% USD terms) from February 01 to April 30 vs. flattish performance of the MSCI frontier index, the overall weight of Pakistan will be increased, and will help in getting some foreign inflows.

Source: Pro Pakistani

The price of gold in Pakistan fell by another Rs. 1,200 per tola on Tuesday to settle at Rs. 241,100 per tola.

According to data issued by the Karachi Sarafa Association, the price of gold (24 carats) fell by Rs. 1,200 per tola to Rs. 241,100, while the price of 10 grams also declined.

Yesterday, the price of gold also went down by Rs. 1,200 per tola. The price of gold went up by Rs. 5,500 per tola last week after falling by over Rs. 14,000 per tola over the previous two weeks.

In the international market, spot gold went up by 0.4 percent to $2,344.92 per ounce by 0903 GMT after dropping 1 percent on Monday. US gold futures also increased by 0.3 percent to $2,350.50.

Source: Pro Pakistani