Day: December 8, 2021

Petrol stocks have risen to new historic highs with enough reserve to meet 26 days of consumption demand in the country, reported Express Tribune.

This development comes as refineries have warned of impending shutdowns due to the Independent Power Producers’ refusal to purchase furnace oil.

According to the report, petrol stocks have reached 26 days of requirement for the first time in Pakistan’s history. While current consumption trends expect consumers to utilize between 21,000 and 22,000 tons of petrol per day, a gas crisis is probable during the current winter season if refineries suspend plant operations as the IPPs refuse to lift furnace oil stocks.

It is pertinent to mention that the country has 600,000 tons of petrol stockpiled due to lower-than-expected demand and uncertain forecasts during winters. Consumer demand of 800,000 tons of petrol had been forecast by the oil industry for November, but consumption was remarkably lower than expected.

A refinery official told a national daily that if the prevailing issue remains unattended, refineries will begin closing down in the next three to four days, potentially disrupting oil and gas supply across the country.

Adding fuel to the fire, Chief Executive Officer Attock Refinery Limited, Adil Khattak, wrote a letter to the Director-General Oil (Petroleum Division), where he contended that the refinery’s supplies had not improved. Therefore, the refinery had no choice but to reduce production due to a lack of demand, and they would be forced to close distillation units one by one, eventually shutting down the entire refinery.

He expressed his dissatisfaction with the fact that large amounts of furnace oil were being imported instead of being acquired from domestic refineries. Regulators were not pressuring IPPs to buy furnace oil from the refineries and instead pressed the refineries to increase production of kerosene oil, he added.

In a separate letter, the CEO of Pakistan Refinery Limited (PRL), Zahid Mir, stated that the refinery’s furnace oil production was 7,109 tons in November 2021, while total procurement was 5,875 tons. Moreover, PRL produced 3,244 tons in December 2021, but there was no need.

He asked the Petroleum Division to look into the situation right away and push the power industry to increase furnace oil usage to reduce pressure on refinery inventories. He emphasized the importance of preventing refinery shutdowns to ensure a continuous supply of petroleum products, as well as supplies of high-speed diesel and motor spirit to oil marketing companies.

Source: Pro Pakistani

Fitch Ratings anticipates further interest-rate hike for Pakistan, stating the country is facing external pressure.

The Hong Kong-based Fitch Ratings, in its latest report, “Fitch Ratings 2022 Outlook: Asia-Pacific Sovereigns”, stated that monetary policies would also remain supportive. “Though we anticipate interest-rate hikes to continue in South Korea and New Zealand as their recoveries solidify, and in “frontier markets” facing external pressures such as Sri Lanka and Pakistan. We anticipate rate hikes later in the year in emerging markets such as India and Indonesia; China to ease; and Japan’s accommodative stance to remain on hold,” it added.

The report noted that APAC sovereigns span the triple-A to triple-C spectrum, across advanced economies such as Australia and Singapore (both AAA), emerging markets such as Indonesia and the Philippines (both BBB), frontier markets such as Mongolia (B) and Pakistan (B-), and economies with fragile external finances such as Sri Lanka and Laos (both CCC). Rating pressures have eased from a year ago, but we retain Negative Outlooks for India and Japan, with high public debt ratios and uncertain trajectories, and the Philippines, which has been especially hit hard by the virus.

Fitch, in its last monthly report, stated that continued adherence to the Intentional Monetary Fund (IMF) Extended Fund Facility (EFF) reform agenda would increase the likelihood of achieving outcomes that would lead Pakistan to positive rating momentum, however, political pressures could test the government’s commitment to reform, particularly if inflation rises from its already high levels.

The rating agency in its report, “Reforms and Financial Support Ease Pakistan Sovereign Risks,” stated that ongoing reforms, if sustained, could create positive momentum for the sovereign’s ‘B-’ rating, which was affirmed in May 2021 with a Stable Outlook.

Source: Pro Pakistani

The Pakistani Rupee (PKR) continued its historic decline against the US Dollar (USD) once again and depreciated by 64 paisas against the greenback in the interbank market today. It hit an intra-day low of Rs. 177.50 against the dollar during today’s open market session.

Today, the local currency depreciated by 0.36 percent against the USD and closed at an all-time low of Rs. 177.43, following its loss of 30 paisas to close at Rs. 176.79 in the interbank market on Tuesday, 7 December.

The local currency has lost 11.01 percent on a calendar-year-to-date basis after recording another historic low today. On a fiscal-year-to-date basis, the Rupee has depreciated by 12.62 percent. Notably, the Rupee has depreciated by 43 percent (Rs. 53.38) since the incumbent government took charge, according to Capital Stake.

Another Rupee Spillover

The Rupee maintains its two-day losing streak against the dollar on the back of a widening trade deficit, amongst many other factors which have increased the demand for the US currency.

The Chairman of the Exchange Companies Association of Pakistan, Zafar Paracha, remarked that the increased demand for the dollar is “dangerous for the currency market.” However, with the issuing of the $1 billion Sukuk bonds, he was optimistic that the dollar’s supply would improve in the market and that its value against the Rupee would eventually diminish.

Paracha also called it a “bad day for Pakistan” since the local currency continued to take big hits regardless of boasting encouraging financial indicators such as Saudi Arabia’s $3 billion deposit, satisfactory forex reserves, positive inward remittances, and liveable foreign direct investments. Briefly commenting on fiscal progress, he lamented the country’s horrid trade deficit and blamed the import bill for motor vehicles for putting considerable pressure on the economy.

Even so, dollar demand has remained high since the beginning of the current financial year. Since July, the US dollar appreciated by 12 percent or Rs. 18.88 against the local currency.

Discussing his viewpoint on the matter with a national daily, the President of the Forex Association of Pakistan, Malik Bostan, opined that the continuous devaluation of the domestic unit could be a result of IMF conditions.

Although the PKR saw slight increases the day before yesterday, courtesy of a $3 billion deposit from the Saudi Development Fund (SDF), the exchange rally rapidly declined when market players learned of the fund’s stringent conditions, Bostan observed.

The former Treasury Head of Chase Manhattan Bank, Asad Rizvi, regarding the local unit’s tumble to another historic low, remarked, “Nervousness prevails in the I/B MARKET, as Rupee hovers around all-time low. It may have understood the logic of [the] supply-demand factor that determines the Rupee’s real value”.

Obviously, in the absence of SBP and with its softer approach, why would PKR stabilize or regain strength, he added.

The PKR maintained its declining trend against the other major currencies as well.

The local unit posted big losses of Rs. 1.26 against the Canadian Dollar (CAD), Rs. 1.07 against the Australian Dollar (AUD), and five paisas against the Pound Sterling (GBP). It also posted losses of 17 paisas against both the UAE Dirham (AED) and Saudi Riyal (SAR) in today’s interbank currency market.

The Rupee also declined against the Euro (EUR) and posted losses of 65 paisas against the eurozone currency.

Source: Pro Pakistani

Muslim Commercial Bank (MCB) has appointed Shoaib Mumtaz as Acting President and CEO. The man who has been associated with MCB for over 15 years will assume the charge on December 21, 2021.

Currently working as SEVP – Group Head Wholesale & International Banking, Shoaib Mumtaz has served various international markets, including in UAE and Bahrain, as the MCB country manager.

Imran Maqbool, the incumbent CEO and President MCB, is going to complete his term on December 20. He has completed his three terms at MCB from 2012 to 2021.

The outgoing president transformed the bank into the most profitable bank of Pakistan in 2018 and 2019. During his term, he successfully expanded the bank operations and maintained the staggering profitability of the bank.

Imran Maqbool’s notable contributions to MCB include the amalgamation and merger of NIB Bank and the establishment of a separate subsidiary for Islamic banking, MCB Islamic Bank. He was one of the highly paid bankers of Pakistan’s banking industry.

He also served as director of various companies including Adamjee Insurance. It is to note that the age for a bank’s CEO and President has recently been restricted to a maximum of 65 years.

Source: Pro Pakistani

The Senate Standing Committee on Finance and Revenue has summoned the Chairman National Accountability Bureau (NAB) for preventing the appointment of the directors in the boards of different companies.

The meeting of the committee was held under the chair of Senator Talha Mahmood in which the matter pertaining to not allowing any accused person appointment in the board of any organization was discussed.

Senator Saleem Mandviwala revealed that the Securities Exchange Commission of Pakistan (SECP), on the directions of the State Bank of Pakistan as well as NAB, is preventing the people from becoming a director of any board of any organization if there is an inquiry pending against it.

The SBP has also rejected the application of credit card of former chairman Senator Farooq H Naik as an inquiry is pending against him.

Upon which, the Chairman Committee said that Parliament is a supreme body and respect of every member is mandatory. He asked the relevant departments to conduct an inquiry into this matter and present the report within 15 days. He also directed the concerned department to furnish details of those persons who were prevented from becoming the directors on the above-mentioned allegations.

Senator Saadia Abbasi said that NAB is harassing her family members in the name of checking bank accounts. My mother died five years ago and now NAB is asking for her accounts information. Besides, the NAB has also sent a questionnaire to one of my relatives abroad upon which the committee chairman senator Talha Mahmood summoned the NAB Chairman to explain this matter.

The committee members have a point of view that the advisor to the PM on Finance should brief about the mini-budget including the state of the economy. The Chairman committee said that the government should formulate the proposals with regard to mini-budget keeping in view the masses’ interest.

The Secretary of Finance informed the members that departments are working on the mini-budget and it would be presented to Parliament after the approval of the federal cabinet.

Source: Pro Pakistani