- Despite widespread concerns across various sectors about the proposed budgetary tax measures for 2024-25, the stock market continued its record-breaking trend for the third consecutive session after the Eid holidays on Thursday. The benchmark KSE 100 index surged to a new all-time high, surpassing 78,000 points.
- APTMA warned that the proposed tax and customs measures in the FY25 budget threaten Pakistan's textile industry and exports. APTMA leaders urged a reconsideration of the Bill to prevent severe industry impacts. Rs 97.6 billion was the export value of readymade garments in May 2024, up 27.7% compared to May 2023.
- The Ministry of Industries and Production, led by Federal Minister Rana Tanveer Hussain, has decided to conduct a third-party audit of fertilizer companies to ascertain their production costs.
- During the first 11 months (July-May) of fiscal year 2023-24, Pakistan imported mobile phones worth $1.621 billion, marking a 213.97% increase from $516.488 million in the corresponding period of the previous fiscal year.
- The Pakistan Tanners Association estimated the collection of about 6,234,700 hides and skins worth over Rs 6 billion during Eid-Ul-Azha helping rural economies and leather and related value-addition operators.
- India's rice export prices reached a nearly three-month high this week due to increased demand and the government's hike in paddy procurement prices. The Indian government raised the purchase price for new-season paddy by 5.4% to 2,300 rupees ($27)/100 kg, which is expected to lead to higher export prices for rice.
AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS
- Eid-Ul-Azha Hides Collection: The Pakistan Tanners Association estimated the collection of about 6,234,700 hides and skins worth over Rs 6 billion during Eid-Ul-Azha. This includes 2,860,000 cow hides valued at Rs 4.29 billion, 165,000 buffalo hides worth Rs 264 million, 3,300,000 goat skins totaling Rs 1.4025 billion, 385,000 sheep skins worth Rs 17.325 million, and 98,700 camel hides valued at Rs 54.285 million. [BR]
- Cotton Market Update: Rates Decrease - The Spot Rate Committee reduced the cotton spot rate by Rs 700/maund due to a sluggish market. Prices for new cotton in Sindh were Rs 18,500-19,500/maund, with Phutti ranging from Rs 8,000-9,000/40 kg. In Punjab, cotton prices were Rs 20,000-20,500/maund, and Phutti prices were Rs 9,000-9,200/40 kg. Significant sales included 3400 bales of Tando Adam at Rs 19,000-19,400/maund, and Polyester Fiber was priced at Rs 367/kg. [BR]
- Gadap Farmers Advocate Dragon Fruit Cultivation: Progressive farmers in Gadap are urging the government to allocate one acre of land to poor farmers for growing dragon fruit. They believe Pakistan's favorable climate conditions could make it a top exporter, proposing incentives such as free land, small solar systems, and borewell facilities to combat unemployment caused by struggling industrial zones in Karachi. [ET]
- APTMA Warns Tax Threat: The All Pakistan Textile Mills Association (APTMA) warned that the proposed tax and customs measures in the FY25 budget threaten Pakistan's textile industry and exports. APTMA leaders urged immediate reconsideration of the Finance Bill to prevent severe industry impacts. [BR] [ET]
- Punjab Government's E-Procurement Initiative: The Punjab government will introduce e-procurement for all departments and entities starting from the next fiscal year to prevent corruption. Chief Secretary Zahid Akhtar Zaman informed administrative secretaries at a conference that manual procurement will cease from July 1. [Dawn]
- Pulses Imports Drop 32.3%: Rs 13.4 billion was the import value of pulses in May 2024, down 32.3% compared to Rs 19.7 billion in May 2023, according to the PBS. [ET]
- Garment Exports Rise 27.7%: Rs 97.6 billion was the export value of readymade garments in May 2024, up 27.7% compared to Rs 76.4 billion in May 2023, according to the PBS. [ET]
ENERGY - WEATHER, WATER & POWER
- Pre-Monsoon Rain Alleviates Water Shortages: Rawalpindi and surrounding areas recently experienced their first pre-monsoon rain, signaling the onset of the flood season from June 15 to August 15. This rain has already caused significant inflows into Rawal, Simli, and Khanpur dams, alleviating anticipated water shortages for Rawalpindi and Islamabad this month. [ET]
- Ministry to Audit Fertilizer Costs: The Ministry of Industries and Production, led by Federal Minister Rana Tanveer Hussain, has decided to conduct a third-party audit of fertilizer companies to ascertain their production costs. This initiative, discussed during a high-level meeting of the Fertilizer Review Committee, aims to promote transparency and equitable pricing within the industry. [BR]
- DISCOs Seek Tariff Hike: In May 2024, despite a 10% decrease in fuel costs for power generation, DISCOs are requesting a Rs 3.41/unit tariff increase through fuel charges adjustment (FCA). This is due to higher capacity charges and lower reference fuel costs, with capacity payments rising as power consumption has declined compared to previous projections. [ET]
- ADB Success: $1.2M Electricity Market Aid: The Asian Development Bank's evaluation found the $1.2 million technical assistance for "Pakistan: Developing an Electricity Market" successful and relevant. It focused on capacity building and policy advice to introduce competitive electricity trading mechanisms, using the Competitive Trading Bilateral Contract Model (CTBCM) developed in prior ADB initiatives. [BR]
- Pakistan Railways Upgrades to High-Quality HSD: Pakistan Railways opts for high-quality High-Speed Diesel (HSD) oil to enhance locomotive performance and safety, addressing concerns about imported fuel quality. Expert Nasir Qureshi emphasizes the critical need for top-grade HSD to maintain efficiency and reduce maintenance costs for PR's advanced locomotives from American and Chinese manufacturers. [BR]
- Sindh Smart Surveillance Launch: Chief Minister Syed Murad Ali Shah inaugurated the Sindh Smart Surveillance System (S4) project on Thursday, aiming to enhance security at major entry and exit points across the province. The system will feature advanced technologies, including facial and number plate recognition, at 40 toll plazas, with 18 located in Karachi, to enable effective monitoring and ensure security. [Dawn]
- Pakistan Steel Mills Closure & Land Use Plans: The PML-N government plans to close Pakistan Steel Mills (PSM) and allow Sindh to use its land for general industrial purposes. They are also considering a new steel mill on the PSM land in collaboration with Sindh, supported by the Special Investment Facilitation Council (SIFC). [ET]
- Pakistan's Mobile Phone Imports Surge: During the first 11 months (July-May) of fiscal year 2023-24, Pakistan imported mobile phones worth $1.621 billion, marking a 213.97% increase from $516.488 million in the corresponding period of the previous fiscal year. In Pakistani rupee terms, the imports totaled Rs 458.472 billion, reflecting a growth of 277.37% compared to Rs 121.491 billion in the same period last year. [BR]
PAKISTAN - ECONOMICS, POLITICS & SECURITY
- Finance Bill 2024: Wealth Disclosure Expanded - The Finance Bill 2024 allows the FBR Commissioner to require individuals to disclose wealth statements, including foreign assets. It also expands best judgment assessments to cover cases where businesses have ceased operations and must file income returns. [BR]
- Stock Market Hits Record High Post-Eid: Despite widespread concerns across various sectors about the proposed budgetary tax measures for 2024-25, the stock market continued its record-breaking trend for the third consecutive session after the Eid holidays on Thursday. The benchmark KSE 100 index surged to a new all-time high, surpassing 78,000 points. [Dawn] [ET]
- APTMA Warns Against Finance Bill: APTMA has informed the FBR that the Finance Bill 2024 imposes excessive financial burdens on textile units, warning that these measures could collapse the sector. The association strongly protested the regressive tax and customs proposals, citing existential threats to Pakistan's textile industry during a meeting with the FBR Chairman. [BR]
- PML-N & PPP Budget Resolution: The differences between PML-N and PPP over the upcoming fiscal year's budget were resolved on Thursday after PPP chief Bilawal Bhutto-Zardari assured Prime Minister Shehbaz Sharif of his party’s support for the finance bill. Information Minister Attaullah Tarar stated that the PPP's minor reservations would be addressed through government talks, with both parties agreeing to cooperate on mutual concerns. [Dawn] [ET]
- Balochistan Budget 2024-25: 25% Salary Increase - Balochistan is set to increase its employees' salaries by 25% in the eagerly-awaited budget presentation for the fiscal year 2024-25 on Friday. Finance Minister Mir Shoaib Nowsherwani will unveil the budget in the provincial assembly, with Governor Balochistan Sheikh Jaffar Mandokhail convening the session on June 21 at 4 pm for this purpose. [ET]
- Criticism of FBR Chairman's Tax Proposals: Federal Board of Revenue Chairman Zubair Tiwana received criticism at the Senate Standing Committee on Finance for proposing tax hikes, particularly on imported electric vehicles. Senators also expressed concerns about increases in taxes for sectors such as cement, telecom, and beverages, highlighting that these measures could deter investment. [Dawn]
- Pakistan's Forex Reserves Up: Pakistan's total liquid foreign exchange reserves rose by $30.8 million last week to reach $14.415 billion as of June 14, 2024, up from $14.384 billion on June 7, 2024. The increase was solely in the State Bank of Pakistan's reserves, which grew by $31 million to $9.135 billion, while commercial banks' reserves fell slightly to $5.280 billion. [BR] [ET]
- FBR Reconsiders Hybrid Vehicle Incentives: The FBR will reconsider incentives for hybrid electric vehicles and penalties for telecoms regarding SIMs of non-filers, following concerns raised at a Senate finance meeting chaired by Senator Saleem Mandviwalla on the 2024 Finance Bill. They also extended the deadline to September 16 for transferring major tax cases to the Appellate Tribunal Inland Revenue (ATIR) for faster resolution. [BR] [Dawn]
INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT
- Israel Genocide: Fears of regional war escalated on Thursday after Hezbollah in Lebanon warned that all of Israel would be targeted in a full-scale conflict, while Israel announced approval for offensive plans against Lebanon. Experts remain divided on the likelihood of broader conflict, particularly as Israel continues its efforts against Hamas in Gaza over the past nine months. [Dawn]
- Putin's Asian Tour & Security Talks: During his visit to Vietnam, part of an Asian tour, Russian President Vladimir Putin discussed creating a "reliable security architecture" in the Asia-Pacific region. His visit, following a defense agreement with North Korea, is seen as a display of defiance toward the West. Putin received honors and praise from Vietnamese Communist leaders during his stay. [Dawn]
- Global Heat Waves Claim Lives: Deadly heat waves are currently affecting cities across four continents as the Northern Hemisphere begins summer, highlighting the potential for climate change to exacerbate record-breaking heat. Recent record temperatures have led to numerous deaths, with hundreds or possibly thousands reported across Asia and Europe. [Dawn] [ET]
- Stocks Surge on Nvidia's Record High: On Thursday, the S&P 500 and Nasdaq hit record highs boosted by Nvidia's 1.4% gain to an all-time high. Nvidia strengthened its position in semiconductors after securing server orders for Elon Musk's AI startup, pushing shares of Dell up 1.0% and Super Micro Computer up 6.3%. Investors also analyzed economic data and Federal Reserve comments to gauge potential interest-rate cuts. [BR]
- India Rice Prices at 3-Month High: India's rice export prices reached a nearly three-month high this week due to increased demand and the government's hike in paddy procurement prices for the new season. The Indian government raised the purchase price for new-season common rice paddy by 5.4% to 2,300 rupees ($27) per 100 kg on Wednesday, which is expected to lead to higher export prices for rice. [BR]
- Chicago Wheat Futures Decline: Chicago wheat futures fell as harvests progressed and production forecasts rose, easing supply concerns. September soft red winter wheat hit a two-month low. Corn and soybean futures also dropped amid reduced fears of a US crop-damaging heatwave. Trading resumed on CBOT after a holiday, with September wheat down 0.1% at $5.98-1/2 a bushel, reaching $5.97. [BR]
- Fossil Fuel Use, Emissions Hit Record Highs: Global fossil fuel consumption and greenhouse gas emissions reached record highs last year, despite a surge in renewable energy generation, according to an industry report. The Statistical Review of World Energy reported a 1.5 percent increase in fossil fuel consumption and a 2.1 percent rise in emissions compared to 2022. [ET] [Al Jazeera]
- Oil Prices Rise on Inventory Drop: Oil futures climbed on Thursday as US crude inventories fell, prompting expectations for earlier Federal Reserve interest rate cuts amid a softening job market. Brent crude futures rose to $85.61 per barrel, reaching a session high of $85.89, the highest since May 1. US WTI futures for July increased to $82.32 per barrel before expiring. [Dawn]
- Lynching Incident in Madyan, Swat: A man accused of desecrating the Holy Quran was brutally lynched inside Madyan police station, leading to his body being set on fire along with the police station and a vehicle. Eight others were injured in the incident, sparked by allegations that mobilized locals to gather at the station in anger. [Dawn]
- Awaam Pakistan Political Launch: 'Awaam Pakistan', a new political entity, emerged on Thursday with a video on its X account titled 'Awaam Pakistan: Badlein ge nizam' (People of Pakistan: We will change the system). The video showcased concerned citizens raising issues including inflation, gas and electricity shortages, corruption, unemployment, and inadequate schooling for girls. [Dawn]
- ANP President Raises Alarm on Taliban Resurgence: ANP President Senator Aimal Wali Khan voiced concerns about the Taliban's resurgence in Malakand, stating they are mobilizing from Afghanistan's Nuristan province. He noted the TTP's control in southern K-P and warned of their potential expansion northward, suggesting a future coalition government in K-P between TTP and PTI. [ET]
- Data Agro Share Distribution: Data Agro Limited (PSX: DAAG), incorporated in 1992 and converted to a public limited company in 1994, produces and processes agro seeds and delints cotton crops. As of June 30, 2023, it has 4 million shares held by 2,122 shareholders, with 47.7% owned by individuals, 39.99% by directors, the CEO, and their families, 9.87% by Data Enterprises (Private) Limited, and about 1% by NIT and ICP. [BR]
- Opinion: Climate Change, Austerity Policy, & IMF Programme - “It is, therefore, important that the next IMF programme shifts away from over-emphasis on austerity policies because any stable footing of economic growth and macroeconomic stability needs a much-improved economic resilience level against existential threats in the shape of climate change, and likely ‘Pandemicene’ phenomenon.” - By Dr Omer Javed [BR]
- Opinion: An Elephant in the Ecological Room - “Emissions caused by the transport sector, by industrial production processes, and by agriculture, including due to the obsession to produce more animal products, are widely recognised. However, other significant contributors fueling climate disasters are less often acknowledged. The role of conflicts, and that of militaries themselves, is often not discussed when it comes to discussing causes of global warming.” - By Syed Mohammad Ali [ET]
