Investors Celebrate Pakistan's Continuing Economic Recovery
Pakistan's benchmark KSE-100 index hit an all-time high after the announcement of the $7 billion IMF bailout deal today. Economic indicators such as inflation, exports and remittances are also showing significant improvement as well. Speaking to reporters after the IMF deal, the Fund Managing Director Kristalina Georgieva acknowledged progress made by Pakistan. She said "The economy is on the sound path. Growth is up and inflation is down". The KSE-100 index rose in early trade to a record high of 82,905.73 points, before giving up those gains later in the day to close 0.7% down at 81,657. It still represents an annual gain of nearly 100%.
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| Pakistani Stock Market Outperforms Asian Peers. Source: Bloomberg |
Pakistan rupee has remained essentially stable at around Rs. 277 to a US dollar over the last year. Inflation has come down from 37% last year to less than 10% this year. Exports have climbed 10.54% ($2.921 billion) to $30.645 billion during the fiscal year 2023-24 compared to $27.724 billion in the corresponding period of 2022-23. Overseas workers' remittances have surged 44% to $5.94 billion in the first two months (July-August) of the current fiscal year 2024-25, compared to the same period last year. Current account deficit has declined to $681 million in FY24 from $3.275 billion in FY23. The budget deficit for the 2023–2024 fiscal year has been reduced to 6.8% of GDP from 7.7% in the previous year.
The stock market gains are driven primarily by the increasing profitability of the firms making up the index, in addition to improvement in macroeconomic indicators. The companies listed on Pakistan’s KSE-100 Index have reported their highest-ever earnings of Rs1.7 trillion in FY24, marking a 25% year-on-year increase from Rs1.3 trillion in FY23. In US dollar terms, profits after tax (PAT) rose 10% to $5.8 billion during the same period, according to data compiled by brokerage firm Topline Securities. Dividend payouts soared 30% as banking, fertilizer, and cement sectors led growth, according to media reports.
Pakistan has a long tough road ahead to carry out the reforms promised to the IMF in the latest bailout deal. Renegotiating unsustainable IPP (Independent Power Producers) contracts and carrying out long-delayed privatization of state-owned enterprises to reduce major drain on the taxpayers will not be easy, Boosting tax collection is not easy either. Offering incentives for savings, investments and exports while reducing budget deficits is a difficult feat. It will take a lot of fortitude, finesse and political will to get the results to improve the economy. Pakistani leaders' biggest challenge is to find a way to grow the economy to create enough jobs for the country's growing working age population. Failure to do so could cause major social unrest in the nuclear-armed country of 240 million people.
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Gross domestic product rose 3.07% in the three months to June from a year ago, the Pakistan Bureau of Statistics said Monday. That compares with a forecast of 2.7% in a Bloomberg survey of economists and a revised print of 2.36% in the January-March period.
https://www.bnnbloomberg.ca/business/international/2024/09/30/pakistans-economy-expands-307-buoyed-by-imf-loan-lower-rates/
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Pakistan’s economy grew faster than expected last quarter as funds from the International Monetary Fund and lower interest rates buoyed activity.
Gross domestic product rose 3.07% in the three months to June from a year ago, the Pakistan Bureau of Statistics said Monday. That compares with a forecast of 2.7% in a Bloomberg survey of economists and a revised print of 2.36% in the January-March period. For the financial year that ended in June, growth was revised to 2.52% from a reading of 2.38% earlier.
Pakistan was locked in a cycle of overlapping political and economic crisis that drove the nation close to default last year, but funds from multilateral lenders and loans from friendly countries have helped in stabilizing the country.
Foreign exchange reserves have strengthened from previously critically low levels, import and currency restrictions that hurt industrial activity have eased. Inflation has also cooled, helping monetary authority to lower borrowing cost by 450 basis points since June this year.
Last week, the government secured a final approval from the IMF for a fresh $7 billion loan program, that will bring certainty over financing over the next few years. The nation faces about $26 billion in loan repayments in the fiscal year started July.
The agriculture sector expanded 6.76% during the quarter on the back of a bumper wheat crop, while services sector expanded 3.69%, the data showed.
Prime Minister Shehbaz Sharif’s government has pledged to achieve a sustained growth by undertaking structural reforms in the economy. His administration forecasts an expansion of 3.6% in the year through June 2025.
https://money.usnews.com/investing/news/articles/2024-10-01/pakistans-annual-consumer-price-inflation-slows-to-6-9-in-september
ISLAMABAD (Reuters) - Pakistan's annual consumer price inflation slowed to 6.9% in September, data showed on Tuesday, the lowest in more than three years, as the government seeks to implement IMF conditions that many households fear will hit them hard financially.
Annual inflation had slowed the previous month to 9.6%, the first single digit reading in more than three years.
Tuesday's data from the Pakistan Bureau of Statistics also showed that the monthly consumer price index in September stood at -0.5%.
"Due to aggressive monetary tightening, SBP (State Bank of Pakistan) has achieved in bringing inflation below 7% one year ahead of target," said Mohammad Sohail, chief executive officer at brokerage Topline Securities.
Pakistan's central bank has cut interest rates three times this year, saying it is confident that inflation is in check after it previously lifted rates to an all-time high of 22%.
In an economic outlook published last week the finance ministry said it expected annual inflation to decrease to 8-9% in September and October.
The International Monetary Fund approved a $7 billion loan programme for Pakistan last month that includes tough measures such as higher taxes on farm incomes and electricity prices.
The prospect of such moves has spurred concerns among poor and middle-class Pakistanis about higher prices after years of soaring inflation despite the recent downward trends.
By Ryan Cooper, managing editor at The American Prospect, and author of the book "How Are You Going to Pay for That?: Smart Answers to the Dumbest Question in Politics."
No need for expensive imported fuel when your energy is coming from the sun.
https://heatmap.news/economy/pakistan-solar
Pakistan imported a whopping 13 gigawatts of solar panels, mostly from China, in just the first half of 2024, mostly for rooftop installations for homes and businesses. That’s a mind-boggling amount of new solar for a country that only had about 50 gigawatts of installed generation capacity in total in 2023.
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Fuel imports are one of the largest expenses for even prosperous countries. For places like Pakistan, they are a punishing economic drain. Paying for vast amounts of imported coal, gas, and oil in scarce foreign currency is hard enough in good times, but it’s disastrous when one’s currency has depreciated by about 40% over two years.
Dirt cheap solar power could ameliorate or solve many of these problems at a stroke. Panels are now so cheap, even Pakistan can afford to import them by the millions — an expense, yes, but a one-time one. And while solar is inherently intermittent, and therefore not a solution to Pakistan’s reliability problems, batteries are also plummeting in price — down about 90% between 2010 and 2023 — and can help balance out supply. Cheaper batteries also mean cheaper EVs, with (as usual) Chinese models coming out at bewilderingly low prices. And because Pakistanis mostly drive motorcycles (often manufactured domestically) over relatively short distances, electrifying the personal vehicle fleet there will be far cheaper than in America or Europe; vastly smaller batteries require vastly simpler charging infrastructure.
If all goes well, this will free up vast amounts of economic capacity for Pakistan to invest in domestic development. Businesses will have stable, reliable power supplies that will justify more investment. Households will be able to upgrade their insulation, install heat pumps, and generally spend more on things other than energy. The government will be able to upgrade legacy transmission lines to accommodate solar production from the remaining hydro and nuclear plants.
Finally, of course, there is the climate benefit. Pakistan is one of the countries most threatened by climate change. Summer heat waves are bad and getting worse, to the point where murderous wet bulb events are increasingly likely. Catastrophic warming-fueled storms in 2022 caused the worst flooding in the country’s history, inundating about a third of Pakistan’s land area, killing nearly 2,000 people and causing billions of dollars in damages.
In short, a path to economic development will be opened. It is by no means guaranteed, but it will be a heck of a lot easier than trying to dig out from under the debt mountain of the collapsing coal-powered system. Look around the developing world and you’ll find there are a great many nations in similar situations.
@ArifHabibLtd
Tax collection increased by 32% YoY to PKR 1,100bn during Sep’24
Tax collection for the month of Sep’24 increased by 32% YoY to PKR 1,100bn against a target of PKR 1,098bn. On MoM basis, tax collection increased by 38% in Sep’24
During 1QFY25, FBR collected revenue of PKR 2,556bn, up by 25% YoY. The collected amount is PKR 96bn short than the target of PKR 2,652bn.
https://x.com/ArifHabibLtd/status/1840975573146890642
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KSE100 Index recorded its highest-ever closing at 82,722
KSE-100 index went up by 755 points (+0.92% DoD) to close at 82,722 pts.
https://x.com/ArifHabibLtd/status/1841801335013859417
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Arif Habib Limited
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AHL reported that this surge in sales is attributed to rising demand alongside a notable decline in the prices of Motor Spirit (MS) and High-Speed Diesel (HSD), which fell by 20.19% and 20.06% year-on-year, respectively.
https://x.com/ArifHabibLtd/status/1841701062866051564
Petroleum product sales surge 20% in September fueled by increased demand
https://profit.pakistantoday.com.pk/2024/10/02/petroleum-product-sales-surge-20-in-september-fueled-by-increased-demand/
Pakistan's petroleum consumption hits 1.27 million tons, driven by falling prices and robust petrol and diesel offtake
Petrol sales saw a remarkable 22% year-on-year rise, totaling 0.63 million tons in September 2024, up from 0.52 million tons the previous year. Meanwhile, HSD dispatches surged by 25% year-on-year, reaching 0.49 million tons in the same month.
Conversely, Furnace Oil (FO) sales experienced an 18% decline, dropping to 0.07 million tons due to diminished demand for FO in power generation, compared to 0.08 million tons in September last year.
On a month-on-month basis, petroleum product offtake increased by 5% from August’s 1.22 million tons, attributed to lower demand in August due to heavier rainfall.
For the first quarter of FY25, total petroleum product sales fell by 3% year-on-year to 3.68 million tons, compared to 3.81 million tons in the same period last year. While sales of HSD and FO declined, petrol sales remained stable, with volumes recorded at 1.85 million tons for petrol, 1.42 million tons for HSD, and 0.21 million tons for FO.
Company-wise, Pakistan State Oil (PSO) reported an 8% increase in offtake for September 2024, totaling 0.55 million tons. Additionally, HASCOL and Shell Petroleum saw substantial growths of 76% and 17% year-on-year, respectively, while Attock Petroleum Limited (APL) experienced an 8% decline in dispatches.
https://www.globaltrademag.com/maersk-commits-2-billion-to-boost-pakistans-port-and-transport-infrastructure/
As part of this initiative, Pakistan’s Minister for Maritime Affairs, Qaiser Ahmed Sheikh, is scheduled to visit Denmark this month to sign a Memorandum of Understanding (MoU) between Maersk Shipping Company and Karachi Port Trust.
This announcement follows the recent commitment by Abu Dhabi Ports Pakistan CEO, Khurram Aziz Khan, who unveiled a $250 million investment in Karachi Port over the next decade during a meeting with Prime Minister Shehbaz Sharif. Khan also outlined plans for a $130 million investment in a state-of-the-art multipurpose terminal, expected to be completed within two years. Enhancements to the container terminal facility at Karachi Port will include automated gates, an expanded berth, a crane rail track, and additional infrastructure upgrades.
@ArifHabibLtd
Remittances increased by 29% YoY to $ 2.8bn during Sep’24
Remittances by overseas Pakistanis increased by 29% YoY to USD 2.8bn during Sep'24 compared to USD 2.2bn during Sep’23. On MoM basis, remittances decreased by 3%.
In 3MFY25, remittances increased by 39%YoY to USD 8.8bn.
https://x.com/ArifHabibLtd/status/1843884748168478837
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https://tribune.com.pk/story/2501681/pakistan-sees-388-increase-in-remittances-from-overseas-workers
In the first quarter of fiscal year 2025, overseas Pakistanis sent a total of $8.8 billion back to Pakistan, marking a significant increase of 38.8% compared to the same period in fiscal year 2024.
Overseas Pakistanis sent an impressive $2.849 billion back to Pakistan in September 2024, reflecting a notable 29% increase from $2.208 billion in the Septermber 2023, Express News reported. Despite this positive trend, remittances saw a slight decline of 3% compared to August 2024, when the total was $2.943 billion
The average monthly remittances from workers over the three months amounted to approximately $2.92 billion.
Pakistani workers in Saudi Arabia were the largest contributors in September 2024, sending $681.3 million. Although this figure is a 4% decrease from August, it still represents a 27% increase from the $538.3 million sent in September of the previous year.
In contrast, remittances from the UAE showed an upward trend, rising by 4% from August, from $538.4 million to $560.3 million. Year-on-year, this figure jumped significantly by 40%, compared to $399.8 million in September 2023.
Pakistani workers in the United Kingdom sent $423.6 million in September 2024, which was an 11% decrease from August. However, this amount still signifies a 36% increase compared to last year.
https://www.dawn.com/news/1845946
In 1990, Pakistan’s exports-to-GDP ratio was around 14.8pc, which was significantly higher than that of China, India, and Bangladesh. Over the last three decades, these countries have predominantly experienced export-led growth, resulting in increased exports-to-GDP ratios of 19.7pc, 21.9pc, and 13.2pc, respectively, in 2023, as per World Bank data.
Unfortunately, due to flawed economic policies and the misplaced priorities of successive governments, Pakistan has bitterly failed to achieve export-led growth. Particularly during the Nawaz Sharif regime (2013-2017), the dollar exchange rate was artificially capped at Rs100 for four years. This policy made imports cheaper, leading to a surge in imports while exports declined.
In fact, the policy shook the very foundation of Pakistan’s export sector and disrupted the value chains of exportable products. While the intention was to keep inflation in check and to win the country’s next election — a short-term political gain — it came at the expense of long-term export growth. Consequently, Pakistan transitioned to a consumption-based economy, and the business community shifted its investment focus from manufacturing to trading and real estate sector.
The government, however, continued to collect taxes and duties on imports — a hassle-free method of tax collection and boosting revenue — without acknowledging that it came at the cost of a massive current account deficit. As a result, Pakistan’s export-to-GDP ratio decreased from 12.2pc in 2013 to 8.2pc in 2017, according to World Bank data.
Now, with the exception of some niche markets, Pakistan is struggling to increase its exports. The manufacturing sector feels incapacitated in maintaining its competitiveness in global markets due to a high policy rate of 20.5pc, electricity costs three times higher than those in neighbouring countries, and, to top it all off, frequently changing trade policies and tax regimes.
Historically, our manufacturing sector, particularly the textile sector, has relied on the government’s subsidies and incentives, which have hindered productivity, product diversification, and product quality improvements to the level needed to compete in global markets.
As the government withdraws these tax-related concessions and other incentives due to the financial crisis, manufacturers and exporters openly state that they will relocate their businesses to other countries, offering better incentives and a business-enabling environment.
However, amidst these economic challenges, the business environment, and current government policies, agriculture and information and communication technology (ICT) are the two sectors that can be relied upon for export growth, even during the current economic stabilisation phase.
Agriculture and IT are relatively less capital-intensive and do not require significant energy inputs. Their electricity needs can be efficiently met through solar power for offices and tube wells. Moreover, contrary to manufacturing, their turnaround period is in months, not years.
These sectors also offer another significant advantage: unlike the manufacturing sector, they are not heavily reliant on imports. Consequently, when they export, there is no corresponding considerable increase in imports.
https://www.fairobserver.com/podcasts/the-quick-take-on-how-remittances-affect-economies/#
While they provide crucial income for families and boost the national balance of payments, remittances can be a double-edged sword. They can lead to currency overvaluation, making a country’s exports less competitive on the global market. They can reduce labor participation in the domestic sector, causing workers to opt for more lucrative jobs abroad.
Pakistan relies on remittances to manage external debt and finance deficits. This dependency makes the country vulnerable to external economic shocks. If the flow of remittances were to decrease due to a global economic downturn or changes in immigration policies in host countries, Pakistan could face severe financial challenges.
Remittances are also associated with higher consumption and imports. This trend could lead to a situation where the economy relies more heavily on remittances to maintain consumption levels, potentially limiting investment in productive sectors that drive long-term growth and job creation.
Learning from Israel’s example
Nasir Khilji, a retired senior US Treasury economist, emphasizes the importance of managing these inflows effectively. Nations that receive large amounts of remittances must avoid relying on cash inflows by undertaking structural reforms and investments to diversify the economy and increase labor productivity.
In recent decades, Israel has had similar experiences with remittances. The country directed remittance funds toward infrastructure and technology development. This skillful management helped Israel avoid the trap of dependence. It allowed the Israeli economy to grow, leading to positive economic outcomes.
Countries like Pakistan could follow suit by creating incentives for investment in productive sectors and developing financial products targeted at expatriates. Moreover, they need to implement structural reforms to ensure that the economy does not become overly dependent on remittances. This includes diversifying the economy, improving the business environment, and investing in human capital to increase labor productivity and participation.
As developing economies progress, effectively harnessing these financial resources can be a powerful tool to drive long-term growth and maximize the benefits of the incoming cash while mitigating its potential downsides.
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*Macroeconomic indicators in Pakistan show signs of significant improvement during FY25-todate*
* With Sep’24 recording a 44-month low inflation of 6.9%, average inflation in 1QFY25 dropped to 9.2% (compared to 29.0% in 1QFY24), driven by lower food prices, high base effect, and reduced global commodity prices.
* As inflation eased, the policy rate was lowered to 17.5% by the end of Sep'24, leading to a substantial drop in money market yields across all tenors, which now range between 12-15%, down from last year's peak of 23-25%. This marks the lowest level since 3QFY22.
* External account improved as the current account deficit declined, supported by exports reaching USD 7.9bn, the sixth highest quarterly figure in 1QFY25.
* SBP foreign reserves increased to USD 10.8bn —the highest since Apr'22. This rise in reserves has played a crucial role in stabilizing the PKR against the USD, which slightly appreciated by 0.23%.
https://x.com/ArifHabibLtd/status/1845002219650781359
https://www.scmp.com/news/china/diplomacy/article/3282458/chinas-li-qiang-vows-upgraded-pakistan-economic-corridor-first-visit-islamabad
Premier Li Qiang reiterated China’s pledge to upgrade a multibillion-dollar economic corridor with Pakistan and deepen joint counterterrorism efforts with its military as he arrived in Islamabad on Monday.
Li, who is on his first visit to the South Asian country as premier, will be attending a Shanghai Cooperation Organisation heads of government meeting in the Pakistani capital during his four-day trip.
“China is willing to work with Pakistan, focusing on establishing an upgraded version of the CPEC,” Li told Pakistani Prime Minister Shehbaz Sharif on Monday, according to the Chinese foreign ministry.
The China-Pakistan Economic Corridor (CPEC) is a flagship project under Beijing’s Belt and Road Initiative, with more than US$65 billion pledged for projects in Pakistan as of 2022.
Formally announced in 2013, the 3,000km (1,864-mile) route of infrastructure projects aims to connect landlocked western China to the Arabian Sea via Pakistan’s deep sea Gwadar Port.
Earlier, Li and Sharif inaugurated the Beijing-funded New Gwadar International Airport in a televised virtual ceremony.
The Chinese premier described the airport as a key facility for the Gwadar Port to become a regional connectivity hub and an important symbol of the further deepening of the construction of the CPEC.
Gwadar lies on the southwestern coast of the Pakistani province of Balochistan, near the Iranian border, where there has been a long-running insurgency.
“We aim to accelerate the construction of major projects in areas such as railways, roads and ports, and strengthen industrial integration,” Li said.
He also pledged to “deepen practical cooperation in agriculture, mining, information technology and energy, ensuring that the results of China-Pakistan cooperation benefit the people more broadly”.
Sharif said that the Gwadar International Airport marked “another symbolic representation” of the friendship between Pakistan and China, and the new facility would “fully unleash the hub functions” of Gwadar Port, bringing “unprecedented” development opportunities to Pakistan.
Later in the day, Li met Pakistani military leaders, telling them that China hoped to deepen counterterrorism cooperation towards jointly safeguarding peace and stability.
Military leaders present at the meeting were Chairman of the Joint Chiefs of Staff Committee of the Pakistan Army Sahir Shamshad Mirza, Chief of Army Staff Asim Munir, Chief of Naval Staff Naveed Ashraf and Chief of Air Staff Zaheer Ahmad Babar.
Pakistan has sought to bolster security for thousands of Chinese workers in Pakistan following a surge in militant violence targeting Chinese nationals and Chinese-funded belt and road megaprojects.
Security fears spiked ahead of Li’s visit, after a deadly attack on Chinese nationals near Jinnah International Airport in the southern city of Karachi.
Two Chinese workers were killed and several others were injured in the attack claimed by the separatist militant group Baloch Liberation Army, a group that has targeted Chinese interests in Pakistan before.
Li told Sharif: “We hope that Pakistan will continue to provide a favourable business environment for Chinese enterprises and fully ensure the safety of Chinese personnel, institutions, and projects in Pakistan.
“China firmly supports Pakistan’s counterterrorism efforts and is willing to actively promote counterterrorism cooperation, helping Pakistan to strengthen its counterterrorism capacity building.”
Sharif once again expressed “deep condolences” for the Chinese victims in the latest attack and pledged to “make every effort to apprehend the perpetrators” and enhance counterterrorism measures.
https://www.scmp.com/news/china/diplomacy/article/3282458/chinas-li-qiang-vows-upgraded-pakistan-economic-corridor-first-visit-islamabad
Premier Li Qiang reiterated China’s pledge to upgrade a multibillion-dollar economic corridor with Pakistan and deepen joint counterterrorism efforts with its military as he arrived in Islamabad on Monday.
Li, who is on his first visit to the South Asian country as premier, will be attending a Shanghai Cooperation Organisation heads of government meeting in the Pakistani capital during his four-day trip.
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Li’s visit is the latest high-level exchange this year as China and Pakistan mark the 73rd anniversary of the establishment of diplomatic relations.
Sharif visited China in June for a five-day trip that included a meeting with President Xi Jinping. A joint statement following the meeting also pledged to build “an upgraded version” of the CPEC, with the new phase featuring the key themes of “growth, livelihood, innovation, green, and openness”.
Islamabad has implemented strict security measures for the 23rd Meeting of the SCO Council of Heads of Government starting on Tuesday.
SCO is a regional economic and security bloc largely driven by China and Russia that has seen its remit grow in the two decades or so since its formation.
All 10 SCO members, including China, Russia, India and Iran will be attending the two-day meeting under the chairmanship of Pakistan. The annual meeting focuses on the trade and economic agenda of the organisation.
by Mukta Joshi
US-based Hindu American Foundation has laundered Modi gov’t’s track record on minorities, championed its interests.
https://www.aljazeera.com/features/2024/10/15/who-is-lobbying-for-indias-modi-government-on-capitol-hill
15 Oct 2024
On a Wednesday morning in September 2022, a lobbyist reached out to a congressional staffer in Washington, DC. He wanted to set up a meeting on behalf of his client to discuss some human rights concerns in Pakistan and a newly introduced resolution in the United States House of Representatives regarding religious minorities in India.
During the meeting a few weeks later, the client made an appeal: Could the congressional office where the staffer worked back a ban on sustainment packages for F-16 fighter jets sold to Pakistan due to that country’s alleged persecution of its Hindu minority?
This client was not a foreign government or a defence policy think tank. It was a domestic nonprofit called the Hindu American Foundation.
The staffer was taken aback. Despite being familiar with the group and its advocacy on behalf of Hindus in the US, the staffer did not expect it to be so deeply involved in geopolitics.
The Indian government at that time had been publicly pushing back against a $450m F-16 package for Pakistan. India’s defence minister had expressed concerns about itto his US counterpart, and the external affairs minister had openly disparaged the US government for the package.
“In that moment”, the staffer said, “it became clear to me that the Hindu American Foundation was acting on behalf of the Indian government.”
The foundation, also known as HAF, emerged two decades ago as a voice for the Hindu community in the United States. It wasn’t formed to champion the Indian government.
But since Narendra Modi became prime minister in 2014, HAF has ramped up its political activities in favour of the Indian government, which is led by Modi’s Hindu nationalist Bharatiya Janata Party (BJP).
It has emerged, despite its claims of “nonpartisanship”, as an effective advocate of the BJP, attempting to influence the US government through meetings with members of Congress to push for the passage of multiple pieces of legislation on critical aspects of US foreign policy related to India.
Its founders, board members and a parallel political action committee – the Hindu American PAC – have made significant contributions to the election campaigns of legislators who have in turn supported HAF’s lobbying efforts on these issues.
Throughout this time, HAF has maintained a cosy relationship with the Modi government. It has acted in the US to counter the Modi government’s critics, collaborated with the Indian embassy on events and programmes, and corresponded with the embassy on sensitive matters.
Yet in public, HAF distances itself from the Indian government and the BJP. It vehemently refutes allegations that it acts on their behalf, reiterating that its members are merely Hindus engaged in the US political process and calling any allegations of government collusion “dual loyalty slurs”.
HAF appears to be treading a fine line. Its activities in favour of the Indian government, coupled with its continued collaboration with the Indian embassy, raise questions as to whether it should register as a foreign agent under the Foreign Agents Registration Act (FARA) of 1938.
Registration as a foreign agent is required any time an entity represents the interests of a foreign principal before any agency or official of the US on the principal’s behalf.
The definition of a foreign agent in US law includes “any person who acts … at the order, request, or under the direction or control, of a foreign principal … and who directly or through any other person engages within the United States in political activities for, or in the interests of such foreign principal.”
by Mukta Joshi
US-based Hindu American Foundation has laundered Modi gov’t’s track record on minorities, championed its interests.
https://www.aljazeera.com/features/2024/10/15/who-is-lobbying-for-indias-modi-government-on-capitol-hill
Registration as a foreign agent is required any time an entity represents the interests of a foreign principal before any agency or official of the US on the principal’s behalf.
The definition of a foreign agent in US law includes “any person who acts … at the order, request, or under the direction or control, of a foreign principal … and who directly or through any other person engages within the United States in political activities for, or in the interests of such foreign principal.”
“Lobbying for specific foreign policy issues would clearly qualify as ‘political activities’ under FARA,” said Benjamin Freeman, director of the Democratizing Foreign Policy programme at the Quincy Institute think tank. “The threshold in the statute is merely doing work at the ‘request’ of a foreign principal,” he added.
But HAF is not registered under FARA, even though it has pushed the BJP government’s agenda before members of the US government.
“The mere fact that our positions overlap with those of a foreign principal is not enough to show that we are a foreign agent,” Mat McDermott, HAF’s senior director of communications, said in an email. “HAF is not affiliated with the Indian government or the BJP in any manner.” (HAF’s full response to Al Jazeera can be read here.)
One of the first political activities undertaken by HAF took place in 2005 when the US Department of State denied Modi a visa after interreligious violence erupted while he was chief minister of the Indian state of Gujarat. HAF issued a statement condemning the decision, calling it the product of a “coordinated campaign” by the Indian left-wing and their US supporters to vilify Modi and the BJP.
“It was obviously a horrible chapter in Indian history. But you just have this focus on Hindu violence, but not Muslim violence,” Suhag Shukla, executive director of the Hindu American Foundation, told this reporter in an interview.
“All of a sudden, [the narrative] shifts to ‘Hindus are dangerous and violent, and they’re anti-Muslim.’ It’s definitely compiling and compounding the negative portrayals of India.”
This was HAF’s first foray into Indian politics. In the years that followed, it largely focused its attention on domestic advocacy for Hindu causes.
In May 2005, HAF and other Hindu groups proposed more than 117 edits to California textbooks that tackled India and Hinduism.
In 2007, the group rallied around a House resolution that for the first time would recognise the festival of Diwali. In 2008, it launched the Take Back Yoga campaign to promote and publicise the Hindu roots of yoga.
However, 2013 marked a noticeable shift in HAF’s lobbying efforts on Capitol Hill in favour of Modi, the prime ministerial candidate for the BJP in the upcoming Indian national elections.
Gaining ground
HAF on its website says it is politically agnostic and nonpartisan. Its status as a nonprofit bans it from making donations to candidates.
Its board members and executives, however, are on the board of the Hindu American Political Action Committee (HAPAC).
“There is no functional overlap between these two independent organizations nor meaningful communication. It is common and completely within the confines of US 501(c)(3) law for members of nonprofit boards to also serve on boards of political action committees in their personal time,” McDermott said.
Although the two groups are not officially affiliated with each other, all but two board members of HAPAC are part of HAF in some capacity.
HAPAC has spent nearly $200,000 on campaign contributions since it began making donations in 2012.
Donors to HAPAC over the years include many of HAF’s board members, such as co-founder Mihir Meghani and his family members.
by Mukta Joshi
US-based Hindu American Foundation has laundered Modi gov’t’s track record on minorities, championed its interests.
https://www.aljazeera.com/features/2024/10/15/who-is-lobbying-for-indias-modi-government-on-capitol-hill
Meghani was also a co-founder of the Hindu Students Council, an organisation affiliated with the BJP. He was HAF’s top donor, according to its 2018 tax disclosures in Florida. He donated more than $500,000 that year.
Shekar Reddy, a trustee of the Global Hindu Heritage Foundation, was the second-largest donor. In 2022, that group was found to be raising money for the demolition of “illegal” Christian churches in India.
Like Meghani and Reddy, other affluent Hindu Americans have contributed to political campaigns through HAPAC. These include Ramesh Bhutada, an industrialist who has pledged more than $1m to Hindu organisations and causes, including HAF, through his family foundation.
Bhutada is also a director of Sewa International and former vice president of the Hindu Swayamsevak Sangh. Both organisations, which operate in the US, are part of the “Sangh Parivar”, a group of organisations affiliated with the Rashtriya Swayamsevak Sangh (RSS), which is the ideological fountainhead of the BJP.
These political donations have helped rally support for Hindu and Indian geopolitical causes.
HAF’s founders and donors have also campaigned for political candidates.
“Ro Khanna is running for the US Congress against Mike Honda. Honda wrote a letter asking the State [Department] to deny Modi a visa,” Mihir Meghani wrote in a 2013 email on a Google group.
“It is imperative that as Indians and Hindus that we support Ro. As part of my commitment, I have given the maximum donation of $5,200 to only [two] candidates this year – Tulsi Gabbard and Ro Khanna, and I hope that you will give your maximum support to him as well.”
Meghani did not respond to multiple requests for an interview sent via email and the social media platform X.
Making way for Modi
Even before Modi was officially announced as the BJP’s prime ministerial candidate in September 2013, the tide was turning in his favour. The Brookings Institution think tank called him India’s most admired and most feared politician, and a number of opinion pieces about his popularity featured prominently in US and international media.
But at the same time, the Hindu-Muslim riots in his state remained a dark stain on Modi’s record.
In 2013, Representative Joseph Pitts, a Republican from Pennsylvania, introduced a resolution reaffirming the US government’s decision to not grant Modi a visa. According to an unnamed congressional staffer who spoke to India’s Outlook magazine: “Each office who signed the resolution received a visit from HAF … HAF is not promoting Modi, but they are trying to undermine anyone in Washington who is critical of Modi.”
On May 26, 2014, Modi was sworn in as prime minister. Soon after, his visa ban was lifted.
The first term
HAF stepped up its pro-Modi activities once he was elected prime minister in 2014. In 2016, it organised a conference call with Representative Keith Ellison, a Democrat from Minnesota and one of the 25 lawmakers who had sought a ban on Modi’s visa, “to clarify his contested record over legislation regarding India”, according to the India Post. The call included a number of organisations, including the Vishwa Hindu Parishad of America, a US-based nonprofit.
It also featured a man named Bharat Barai.
Barai, who would later sponsor a fundraiser for HAF and register as a foreign agent on behalf of the consul general of India, “specifically asked Ellison about his diatribe against Narendra Modi and happenings in Gujarat”, India Post reported. He offered to travel to Washington to talk to Ellison’s staff to give them a “clear picture” of how Modi handled the riots.
by Mukta Joshi
US-based Hindu American Foundation has laundered Modi gov’t’s track record on minorities, championed its interests.
https://www.aljazeera.com/features/2024/10/15/who-is-lobbying-for-indias-modi-government-on-capitol-hill
On a cloudy Sunday afternoon in June 2017 in Washington, DC, the Indian embassy organised a welcome reception for Modi. More than 70 volunteers helped out at the event. Some were from the Washington Leadership Program, a nonprofit dedicated to placing South Asian students in congressional internships. Others were from the Hindu Swayamsevak Sangh, the international arm of the BJP’s ideological parent. The rest were from HAF.
“Congrats to HAF, HSS and WLP leadership for the coordination efforts,” Roopal Shah, one of the coordinators of the event, wrote in an email addressed to the volunteers. “Grateful to the Embassy and to the Indian Government for allowing us to be a part of this event.”
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McDermott denied that HAF had ever collaborated with the Indian embassy for Modi’s visits “in any specific way”.
He maintained that HAF would welcome leaders of any Indian government regardless of party affiliation.
The BJP has no shortage of allies in the US. One of them, the Overseas Friends of BJP, a registered foreign agent, has the stated objective of “projecting a positive and correct image of India and its people in the US and foreign media and correcting any distortions in the media’s reporting of current events taking place in India”.
While this is the Overseas Friends of the BJP’s stated purpose, it is also a strikingly accurate description of HAF’s activities.
In February 2017, as the Modi government was being criticised for fanning religious ethnonationalism and fomenting violence against religious minorities in India, HAF wrote to the US Commission on International Religious Freedom. It requested the retraction of its report on the persecution of Indian religious minorities. It also requested the commissioners to engage with HAF’s leaders “regarding the Commission’s continued misrepresentations of India’s religious diversity, legal system, and political dynamics”.
In July 2018, alongside the start of Modi’s re-election campaign, HAF released a policy statement at a Capitol Hill briefing. It detailed the ways in which the government of India had provided “unprecedented religious accommodations to its religious minority population”.
HAF’s report provided a robust defence of Modi’s policies and denied widespread reports that minorities were being persecuted.
But it denied having acted in collaboration with the Indian government.
“We have different members of HAF staff who probably have relationships with members of the Indian government,” McDermott said. “But there are no weekly, monthly or yearly calls. There is no coordination whatsoever.”
The Overseas Friends of BJP did not respond to an interview request submitted through its website.
by Mukta Joshi
US-based Hindu American Foundation has laundered Modi gov’t’s track record on minorities, championed its interests.
https://www.aljazeera.com/features/2024/10/15/who-is-lobbying-for-indias-modi-government-on-capitol-hill
Angana Chatterji, a scholar at the University of California at Berkeley, pointed out that while people of Hindu descent may experience racism, Hinduphobia is not a contemporary movement or a rising concern like that of Islamophobia. “Hinduphobia acts to align diasporic Hindu majoritarian campaigns with those of Hindu nationalists in India,” she said.
In September 2021, HAF led a campaign against an academic conference called “Dismantling Global Hindutva” and used social media posts, mass emails, petitions and news releases to portray it as an attack on Hindus. “Hindutva,” meaning “Hinduness” is a Sanskrit term used for the Hindu supremacist ideology.
“It’s an academic exercise to critique, maybe even to deconstruct, but dismantling is very squarely a political activity,” HAF’s Shukla told The Washington Post.
The campaign and resulting backlash quickly snowballed with the scholars scheduled to speak receiving a barrage of online hate messages, even death and rape threats.
A 2022 study traced patterns in users of Twitter, now known as X, whose tweets and retweets featured specific hashtags, retweets, bots, and the frequency of their tweets and retweets over time and linked HAF to an online network of far-right Hindu groups and the BJP that targeted the conference. The study found Shukla to be the “largest individual amplifier of attacks” against the event.
While the conference did ultimately take place, many participants withdrew out of fear. HAF was credited for its efforts.
“Dismantling Global Hindutva was publicised to be a thunder, but ended up in a whimper, thanks to [the] efforts of @HinduAmerican [and] other Hindu groups,” Ram Madhav tweeted. Madhav is a member of the National Executive of the RSS.
He did not respond to a request for comment.
Before the conference, HAF conducted an online event. Shukla received an audience question, which she quickly summarised.
“Someone has asked if we have informed the government of India about this particular situation,” Shukla said, referring to the conference. “We have.”
The “situation” in question that HAF had informed the government of India about, McDermott clarified in the email, was that the conference “was being falsely promoted as having official backing or endorsement of the 60+ universities listed, when in fact it didn’t”.
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Textile exports increased by 18% YoY during Sep'24
Textile exports increased by 17.6% YoY (-2.4% MoM) to USD 1.6bn during Sep’24. During 3MFY25, exports increased by 9.3% YoY to USD 4.5bn.
https://x.com/ArifHabibLtd/status/1846967653568504037
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Arif Habib Limited
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Trade balance detailed update
Trade deficit increased by 24% YoY to USD 1.8bn during Sep’24
During Sep’24, exports stood at USD 2.8bn (+15% YoY | +3% MoM). Imports during the month remained at USD 4.7bn (+18% YoY | +4% MoM). During 3MFY25, trade deficit also increased by 5% YoY to USD 5.5bn.
https://x.com/ArifHabibLtd/status/1846966925337022951
https://x.com/ArifHabibLtd/status/1846966925337022951
https://x.com/arifhabibltd/status/1843884748168478837?s=43&t=Uy6jyUH6DlEyIPi6Mq6AGQ
https://www.arabnews.com/node/2575998/pakistan
Initial investment layout of $8-13 billion expected to surge to $30 billion, says state media
China is a major ally and investor in Pakistan that has pledged over $65 billion in various projects
ISLAMABAD: The China Asia Economic Development Association (CAEDA) will invest up to $13 billion in a free trade zone in Pakistan in the next five years, state broadcaster Radio Pakistan reported on Sunday.
As Pakistan reels from a prolonged economic crisis that has seen its foreign exchange reserves fall to critically low levels and its currency deteriorate significantly, Islamabad has sought to attract foreign investment from regional allies such as China and the Middle East to bolster its fragile economy.
The South Asian country set up the Special Investment Facilitation Council (SIFC) last year to attract foreign investment in economic sectors such as mining, agriculture, tourism and others. The SIFC is a hybrid civil-military body formed to fast-track investment-related decisions.
“China Asia Economic Development Association (CAEDA) will make an investment of 13 billion dollars in free trade zone of Pakistan in the next five years,” Radio Pakistan said.
“The initial layout of this investment is between 8 to 13 billion dollars while it is expected to reach 30 billion dollars,” it added.
The free trade zone is aimed at catering to Pakistan’s domestic needs and those of the global market, Radio Pakistan said. It added that a duty-free shopping mall is also part of the zone where international goods will be available for Pakistani citizens.
The state broadcaster said CAEDA has also sent 20 fishing boats to Pakistan with an investment of $500 million.
“Supported by Special Investment Facilitation Council, a delegation of the Association discussed agreements with Ministries of Energy and Health regarding refined petroleum products, solar power grid connection and investments in pharmaceuticals,” it said.
China is a major ally and investor in Pakistan that has pledged over $65 billion in investment in road, infrastructure and development projects under the China-Pakistan Economic Corridor (CPEC) project. CPEC is a part of the Belt and Road Initiative, a massive China-led infrastructure project that aims to stretch around the globe.
Chinese investment and financial support since 2013 have been key for Pakistan’s struggling economy, including the rolling over of loans so that Islamabad is able to meet external financing needs at a time its foreign reserves are low.
Though time-tested allies, recent security challenges have put a slight strain on Pakistan’s ties with China. Separatist and religiously motivated militants have attacked Chinese projects in Pakistan over recent years, killing Chinese personnel.
Earlier this month, a suicide blast claimed by the separatist Balochistan Liberation Army (BLA) killed three people in Pakistan’s southern port city of Karachi, including two Chinese nationals, who were targeted in the attack.
Five Chinese workers were killed in a suicide bombing in March, which was the third major attack on Chinese interests in Pakistan in a week.
China has called on Islamabad to ensure security for its citizens in Pakistan. The South Asian nation has in turn sought to ease Chinese fears, vowing to provide fool-proof security to its citizens living and working in the country.
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Country posted monthly Current Account surplus of USD 119mn in Sep’24 (Highest surplus after Apr'24)
The country posted a Current Account surplus of USD 119mn (surplus after 5 months) for the month of Sep’24 compared to a deficit of USD 218mn during Sep’23 and a surplus of USD 29mn during Aug'24.
During 1QFY25, the country’s deficit decreased by 92% YoY to USD 98mn compared with a deficit of USD 1,241mn during the same period last year.
https://x.com/ArifHabibLtd/status/1848325288666476750
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Imports and Exports Breakup
https://x.com/ArifHabibLtd/status/1848392364211228988
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Pakistan Key Statistics Sep’24
https://x.com/ArifHabibLtd/status/1848357133193986350
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Technology exports went up by 42% YoY during Sep’24 to USD 292mn
During Sep’24, technology exports went up 42% YoY | -2% MoM to USD 292mn contributing 44% to the overall services.
https://x.com/ArifHabibLtd/status/1848325449233166624
https://www.bloomberg.com/news/articles/2024-10-15/funds-tread-back-to-pakistan-local-bonds-as-economy-stabilizes
Pakistan's short-term local government bonds are set for their first annual inflow from foreign investors in five years, buoyed by high yields and a stable rupee in an improving macroeconomic environment.
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UED5VWKGU65RTR4H4XEKN2RP3M.jpg
Funds Return to Pakistan Local Bills as Economy Stabilizes
bnnbloomberg.ca
(Bloomberg) -- Pakistan’s short-term local government bonds are set for their first annual inflow from foreign investors in five years, buoyed by high yields and a stable rupee in an improving macroeconomic environment.Net overseas inflows into Treasury bills rose to $875 million in 2024, according to State Bank of Pakistan’s latest data from Monday. That’s a turnaround from four straight years of outflows totaling $1.4 billion.Pakistan’s success in stabilizing its cash-strapped economy is bearing fruit, with investors more confident on its ability to pay debt, thanks largely to the International Monetary Fund’s support. The nation’s treasury bills yield about 16% to 17%, among the highest in Asia.“Investors see a stable currency and high rates that is attracting them to Pakistan,” said Suleman Rafiq Maniya, an independent wealth manager in Karachi. In a sign of the nation’s growing appeal, JPMorgan Chase & Co. led a group of foreign investors in a visit to the country last month. Finance Minister Muhammad Aurangzeb discussed fixed-income investment opportunities with the group, assuring them of the government’s support in facilitating their investment.
The nation’s foreign reserves have increased to the highest in more than two years after an approval by the IMF for a new $7 billion loan package last month.Pakistan’s other assets have performed as well. The benchmark stock index has risen 73% in the past 12 months, making it the world’s best performer. Dollar bonds have delivered returns of nearly 40% this year, according to data compiled by Bloomberg.The treasury bills are still a decent investment option while the upside for government bonds is limited, Clifford Lau, portfolio manager at William Blair Investment Management wrote in a note last week after visiting Pakistan.
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KSE100 Index recorded it's highest - ever closing at 86,467
KSE-100 index went up by 409 points (+0.5%), closing at all time high level of 86,467.
https://x.com/ArifHabibLtd/status/1848686739965043044
https://www.bnnbloomberg.ca/business/international/2024/10/22/pakistan-says-debt-reprofile-talks-with-china-are-encouraging/
(Bloomberg) -- Pakistan is getting a promising response from China over its request to lengthen maturities for Belt and Road Initiative loans, according to its finance minister, signaling potentially more breathing room for the nation that has been squeezed by costly past borrowing.The South Asian nation is looking to increase the maturities for debt taken to build power plants and “create enough space” to lower electricity prices, Muhammad Aurangzeb said in an interview in Washington. Electricity prices have tripled for some people in Pakistan in the past few years and surpassed house rent for some.“We have just started that discussion and the response is encouraging,” Aurangzeb said Tuesday on the sidelines of the annual meetings of the International Monetary Fund and World Bank. “These are early days in terms of those negotiations. The former JPMorgan Chase & Co. banker discussed debt with Chinese officials during a visit to the country in July. Pakistan is seeing a period of stability after securing a new $7 billion loan program from the IMF. It has also seen partners including China roll over debt of $16 billion from a total of about $26 billion due in the current fiscal year that started in July. The government also plans to initiate discussions on obtaining additional financing from the IMF through its climate resiliency fund, he said.Having gone through 25 loan programs over half a century, the South Asian nation must institute durable reforms in the key areas of tax collection, energy sector and state-owned enterprises to end a cycle of indebtedness, the finance minister said separately at an IMF forum later in the day.
“We’ve had so many programs. We’ve had boom and bust cycles,” Aurangzeb said. “We do not have a choice but to ensure that we continue with the structural reforms.” He added that the government knows it has no business being in business and that it must provide an enabling environment to support the private sector. It also aims to shrink government costs by cutting the number of ministries and closing 150,000 federal positions.To boost tax revenue, Pakistan will target sectors including retail and agriculture that have opposed previous attempts at taxation. The nation’s provinces will move forward on legislation on the agriculture side by January and aim to start collection by July, the finance chief said in the interview with Bloomberg.The country has been a flagship destination for China’s Belt and Road Initiative of lending to developing countries that helped the nation end its decades-long electricity blackout issues. Now its seeking to extend the maturity of debt for nine power plants built by Chinese companies under the multibillion-dollar economic corridor. Pakistan’s period of stability has seen consumer price increases decelerate to the lowest in almost four years. Pakistan’s short-term local government bonds are set for their first annual inflow from foreign investors in five years, buoyed by high yields and a stable rupee. The benchmark stock index has risen 70% in the past 12 months, making it the world’s best performer.Pakistan’s central bank has cut its benchmark interest rate for three consecutive meetings by 450 basis points to 17.5% from a record 22%. The next meeting on Nov. 4 may see the central bank reduce the policy rate, said Aurangzeb.
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KSE-100 index hits record high, surpasses 88,000 Mark
oThe KSE-100 Index surged by 1,751 points (+2.01%) today, closing at a historic high of 88,946 points. This marks the fifth-largest one-day points gain in the index's history.
oThe remarkable performance brings the index's CY24TD gain to an impressive 42.4%, and MoM gain of 9.7%.
https://x.com/ArifHabibLtd/status/1849420372111687855
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As of Sep’24, Pakistan's Debt-to-GDP ratio has dropped to 65.7%, marking its lowest level since Jun’18. The Domestic Debt-to-GDP ratio is at 43.1%, while the External Debt-to-GDP ratio stands at 22.7%.
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https://x.com/ArifHabibLtd/status/1856013052644061281
https://www.brecorder.com/news/40330236
Pakistan’s trade deficit significantly decreased by 31% to $1.5 billion in October 2024 as compared to the same month of the previous year, data released by the Pakistan Bureau of Statistics (PBS) showed on Friday.
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Pakistan’s remittance inflow at $3.05bn in October 2024, up 24% year-on-year - Markets - Business Recorder
https://www.brecorder.com/news/40331410
On a month-on-month (MoM) basis, the inflow in October was 7% higher when compared to $2.86 billion in September 2024.
During 4MFY25, remittances went up by nearly 35% YoY to $11.8 billion as compared to $8.8 billion in 4MFY24.
Experts credit the increase in inflows to the stability of the exchange rate, a narrowing gap between open and inter-bank market rates, increase in digital payment channels and a rise in the number of workers relocating abroad, especially to GCC countries.
“These stronger inflows will help Pakistan maintain PKR stability and contain the current account deficit,” said Mohammed Sohail, CEO Topline Securities, in a note.
Home remittances play a significant role in supporting the country’s external account, stimulating Pakistan’s economic activity as well as supplementing the disposable incomes of remittance-dependent households.
@ArifHabibLtd
*Trade deficit decreased by 26% YoY to USD 1.6bn during Oct’24*
During Oct’24, exports stood at USD 3.0bn (+11% YoY | +5% MoM). Imports during the month remained at USD 4.6bn (-6% YoY | -1% MoM).
During 4MFY25, trade deficit also decreased by 4% YoY to USD 7.1bn.
https://x.com/ArifHabibLtd/status/1857441100337664363
@ArifHabibLtd
As of Sep’24, Pakistan's Debt-to-GDP ratio has dropped to 65.7%, marking its lowest level since Jun’18. The Domestic Debt-to-GDP ratio is at 43.1%, while the External Debt-to-GDP ratio stands at 22.7%.
https://x.com/ArifHabibLtd/status/1856013052644061281
https://www.dailynewsegypt.com/2024/11/14/pakistan-stock-exchange-surpasses-93000-points-signalling-economic-optimism/
The Pakistan Stock Exchange (PSX) 100 Index has crossed the 93,000-point mark, marking a new milestone for the country’s economic prospects. The surge in the index reflects growing investor confidence and a positive outlook for Pakistan’s economic future.
The PSX 100 Index crossing the 93,000-point mark represents a new chapter of economic optimism for Pakistan, reflecting investor confidence and resilience.
This historic milestone indicates that Pakistan is on an upward trajectory for economic stability and growth, inspiring trust among local and international investors.
“This historic milestone indicates that Pakistan is on an upward trajectory for economic stability and growth, inspiring trust among local and international investors,” said the Pakistan Stock Exchange in a statement, highlighting the significance of the milestone.
With the PSX reaching record highs, Pakistan is attracting foreign investment, strengthening its capital markets, and setting the stage for sustained economic growth.
The impressive rise in the PSX showcases Pakistan’s untapped economic potential, underscoring an era of modernization and innovation in key industries.
As Pakistan’s stock market booms, sectors such as technology, banking, and manufacturing are benefiting, creating opportunities and employment across the country.
The record-breaking performance of the Pakistan Stock Exchange aligns with the government’s economic reforms, affirming that structural improvements are fostering a stable, investor-friendly environment.
“The impressive rise in the PSX showcases Pakistan’s untapped economic potential, underscoring an era of modernization and innovation in key industries,” said the Pakistan Stock Exchange statement. “This reflects the government’s commitment to creating a favourable environment for business and investment.”
By reaching this historic peak, Pakistan is proving itself to be a promising frontier market, drawing interest from institutional investors worldwide.
The bullish PSX trend reflects growing investor confidence in Pakistan’s infrastructure, energy, and technology sectors, all of which are set to drive future economic expansion.
“By reaching this historic peak, Pakistan is proving itself as a promising frontier market, drawing interest from institutional investors worldwide,” said the Pakistan Stock Exchange.
The PSX’s performance highlights Pakistan’s transformation into a competitive and resilient economy ready to seize new opportunities on the global stage.
With the stock market on an upward trend, Pakistan is better positioned to finance mega-projects in infrastructure and energy, key drivers of sustainable economic growth.
The PSX symbolizes Pakistan’s commitment to reform, attracting investment, and laying the groundwork for a vibrant economic future.
“The PSX symbolizes Pakistan’s commitment to reform, attracting investment, and laying the groundwork for a vibrant economic future,” said the statement.
The continued strength of the Pakistan Stock Exchange is expected to encourage further investment and drive economic growth, demonstrating the country’s potential for a strong and prosperous future.
https://www.dawn.com/news/1873376
KARACHI: Despite internet disruptions and firewall issues, Pakistan’s IT exports rose 35 per cent to $1.21bn during July-October 2024-25.
Nasheed Malik of Topline Securities said exports have risen due to IT export companies’ growing client base globally, especially in the Gulf Cooperation Council (GCC) region, relaxation in the permissible retention limit increasing it from 35pc to 50pc in the Exporters’ Specialised Foreign Currency Accounts, and exchange rate stability encouraged IT exporters to bring a higher portion of profits back to Pakistan.
IT exports surged 39pc year-on-year and 13pc month-on-month to $330m in October.
These monthly IT exports in October 2024 are higher than last 12-month average of $287mn. This is the 13th consecutive month of YoY IT export growth, starting from October 2023, he said.
He said the MoM increase in IT exports is due to a higher number of working days in October (23) compared to September (20). Export proceeds per day were recorded at $14.3mn for October 2024 versus $14.6mn in September 2024.
Pakistani IT companies are actively engaged with global clients. He added that leading IT companies recently attended Oslo Innovation Week 2024 and the Pak-US Tech Investment Conference.
According to a Pakistan Software Houses Association (P@SHA) survey, 62pc of IT companies maintain specialised foreign currency accounts.
Nasheed said a major development in FY25 was SBP adding a new category of Equity Investment Abroad (EIA), specifically for export-oriented IT companies. IT exporters can now acquire interest (shareholding) in entities abroad utilising up to 50pc proceeds from specialised foreign currency accounts.
https://arynews.tv/pakistans-textile-export-climbs-to-6-146-billion/
ISLAMABAD: Textile exports witnessed an increase of 10.44 percent during the first four months of the current financial year (2024-25) as compared to the corresponding period of last year, Pakistan Bureau of Statistics (PBS) reported.
The textile exports from the country were recorded at US $ 6,146.105 million during July-October (2024-25) against the exports of US $ 5,565.058 million during July-October (2023-24).
The textile commodities that contributed in trade growth included cotton cloth the export of which increased by 5.25 percent to $ 679.427 million from $ 645.535 million while the export of knitwear surged by 18.69 percent to $ 1,759.991 million from $ 1,482.862 million.
The other commodities that witnessed growth in trade included bed wear, the export of which rose by 13.17 percent to $ 1,069.690 million from $ 945.181 million, towels by 5.47 percent to $ 356.461 million from $ 337.987 million, tents, canvas, and tarpaulin up by 7.02 percent to $ 40.412 million this year compared to the exports of $ 37.763 million last year.
Similarly, the export of readymade garments grew by 25.40 percent to $ 1,358.890 million from $ 1,083.679 million, art, silk and synthetic textile rose by 12.26 percent to $ 131.614 million from $ 117,241 million, made up articles (excl. towels and bed wear) increased by 12.46 percent to $ 263.777 million from $ 234.555 million while the export of other textile materials surged by 7.48 percent to $ 252.630 million from $ 235.054 million.
The textile commodities that witnessed negative trade growth included cotton yarn, the exports of which declined by 45.49 percent, from $ 407.564 – million to $ 221.759 million whereas the export of raw cotton dipped by 100 percent from 23.346 million to zero export during the months under review.
Meanwhile, year-on-year basis, the textile exports witnessed an increase of 13.11 percent during October 2024 as compared to the same month of last year. The textile exports from the country during October 2024 were recorded at US $ 1,625.782 million against the exports of US $ 1,437.287 million in October 2023.
On a month-on-month basis, the textile exports from the country however witnessed a nominal decrease of 1.30 percent during October 2024 as compared to the exports of $ 1,604.856 million recorded in September 2024, according to the data.
Aurangzeb says market forces are determining exchange rate
https://www.brecorder.com/news/40336408
KARACHI: Finance Minister Muhammad Aurangzeb on Saturday said the inflows of workers’ remittances are expected to hit an all-time high of $35 billion in the current fiscal year 2024-25, compared to $30.25 billion registered in FY24.
Talking to media persons at the Overseas Investors Chamber of Commerce and Industry (OICCI) in Karachi, the finance minister said state-owned entities (SOEs) are costing the national exchequer a loss of Rs2.2 billion per day.
“We have sustained losses to the tune of Rs6 trillion in the last 10 years, which comes to around 50% of the revenue collection target set at Rs12.9 trillion for FY25,” he said.
Investment, growth and credit safety: Aurangzeb pledges robust insolvency regime
Aurangzeb believed that the government sees controlling these losses through privatisation.
“Privatisation, liberalisation and deregulation are the way forward.”
The former banker shared that foreign companies operating in Pakistan have sent profit and dividends worth $2.2 billion in May-June 2024, clearing the entire backlog of the repatriation.
“Now there is no restriction on sending the repatriation from the Ministry of Finance and State Bank of Pakistan (SBP). This is now up to commercial banks to facilitate the foreign companies in continuing to send profit and dividends without any delay,” he maintained.
Pakistan moving on path of economic stability: Aurangzeb
Answering a query, Aurangzeb said the rupee-dollar parity depends on the demand and supply of the greenback in the market, while market forces are determining the exchange rate instead of the government.
Aurangzeb said the government has prioritized inviting Foreign Direct Investment (FDI) in export-led projects and increasing exports to achieve sustainable economic growth.
“Whenever our economy hit 4% growth rate, the issues of widening current account deficit (CAD) and balance of payment arise, as we are running an import-led economy,” he said.
The finance minister, however, did not respond to the question of when Pakistan would surpass the 4% growth rate.
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Remittances increased by 29% YoY to $ 2.9bn during Nov’24
Remittances by overseas Pakistani's increased by 29% YoY to USD 2.9bn during Nov'24 compared to USD 2.3bn during Nov’23. On MoM basis, remittances decreased by 5%.
In 5MFY25, remittances increased by 34%YoY to USD 14.8bn.
https://x.com/ArifHabibLtd/status/1866091692006244359
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Pakistan's remittances climb by 33.6% to $14.8 billion
https://arynews.tv/pakistans-remittances-climb-by-33-6-to-14-8-billion/
ISLAMABAD: The workers’ remittances increased by 33.6 percent during the first five months of the current fiscal year as compared to the corresponding period of last year, according to latest data of State Bank of Pakistan (SBP) released on Monday.
The remittances reached to US$ 14.8 billion during July-November 2024-25 as against the remittances of US$ 11.1 billion received during July-November 2023-24.
On year-on-year basis, workers’ remittances during November 2024 recorded an inflow of US$ 2.9 billion, posting an increase of 29.1 percent as compared to same month of last year.
Remittances inflows during November, 2024 were mainly sourced from Saudi Arabia ($729.2 million), United Arab Emirates ($619.4 million), United Kingdom ($409.9 million) and United States tof America ($288.2 million).
On December 6, he State Bank of Pakistan (SBP) witnessed a surge in the foreign exchange reserves with a reported increase of $620 million.
The State Bank of Pakistan in a statement said that “the total foreign reserves of Pakistan surged to US$16.62 billion supported by recent Asian Development Bank (ADB) loan transfer, while the SBP reserves crossed $12 billion as of November 29, 2024.”
According to the SBP, the total liquid foreign exchange reserves held by the central bank, increased by $620 million to $12,038.3 million after the official inflow of $500 million from ADB.
The SBP has received $500 million from Asian Development Bank (ADB) for the Climate Change and Disaster Resilience Enhancement Program (CDREP) as a policy-based loan to support disaster risk reduction and resilience in Pakistan
https://www.arabnews.com/node/2582359/business-economy
Market closed at 916.43 points up, or 0.84%, to stand at 109,970.38 points from the previous close of 109,053.95
State Bank has slashed interest rates by 700 basis points in four consecutive meetings since June, bringing rate to 15%
ISLAMABAD: The Pakistan Stock Exchange (PSX) crossed 110,000 points during intraday trade on Monday to settle at 109,970.38 points at closing, amid strong liquidity available in the market and on the hopes of an interest rate cut next week, analysts said.
The benchmark KSE-100 index closed at 916.43 points up, or 0.84%, to stand at 109,970.38 points from the previous close of 109,053.95. The stock exchange had gained more than 1,000 points to reach 110,264 points at noon on Monday. This was the 9th consecutive session when shares at the market traded in green.
Analysts credit the rally to strong liquidity available with mutual funds as investors convert from fixed-income instruments to equities amid a reduction in interest rates.
“The longevity of the rally will likely depend on delivery of structural reforms such as efforts to broaden the tax net, energy reforms, state-owned enterprises,” Raza Jafri, chief executive officer of the Karachi-based EFG Hermes brokerage house, told Arab News.
“So far the government appears committed to delivering reforms which is positive, but eventually the talk will have to translate into action.”
Pakistan slashed interest rates by 250 basis points in November to help revive a sluggish economy, amid a major drop in the annual inflation rate. The State Bank has already slashed interest rates by 700 basis points (bps) in four consecutive meetings since June, bringing the rate to 15%.
According to a poll conducted by Topline Securities, 71% of participants expect the central bank will announce a minimum rate cut of 200bps at the upcoming Monetary Policy Committee meeting on Dec. 16.
Ahsan Mehanti, CEO of Arif Habib Corporation, attributed the bullish trend at the PSX to falling lending rates and speculation about another major policy rate cut by the central bank this week.
“Rupee’s stability on surging foreign exchange reserves and upbeat economic indicators played a catalyst role in the record surge at market,” he added.
Annual consumer inflation also slowed to 4.9% in Pakistan in November, lower than the government’s forecast, largely due to a high base a year earlier. It cooled from 7.2% in October, a sharp drop from a multi-decade high of nearly 40% in May 2023.
https://profit.pakistantoday.com.pk/2024/11/15/pakistans-textile-exports-surge-10-in-4mfy25/
Overall, the country’s total exports for the 4MFY25 period amounted to $10.889 billion (provisional), marking a 13.55% rise from $9.590 billion in the corresponding months of the previous year. Exports in October 2024 reached $2.984 billion, reflecting a 5.22% increase from $2.836 billion in September 2024, and a 10.97% rise compared to $2.689 billion in October 2023.
The textile sector continued to lead the export growth, with textile group exports increasing by 13.11% in October 2024, totaling $1.625 billion compared to $1.437 billion in October 2023. On a month-on-month (MoM) basis, textile exports saw a slight 1.30% rise from $1.604 billion in September 2024.
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Pakistan records $349mn current account surplus in October 2024 - Markets - Business Recorder
https://www.brecorder.com/news/40333045
Overall, the figure takes Pakistan’s current account to a surplus of $218 million in the first four months of the current fiscal year (4MFY25), in contrast to a massive deficit of $1.528 billion in the same period of the previous fiscal year.
Breakdown
In October 2024, the country’s total export of goods and services amounted to $3.711 billion, up nearly 12% as compared to $3.327 billion in the same month of the previous year
Meanwhile, imports clocked in at $5.558 billion during October 2024, a jump of nearly 7% on a yearly basis, according to SBP data.
Worker remittances clocked in at $3.052 billion, an increase of 24% as compared to the previous year.
Low economic growth along with high inflation have helped curtail Pakistan’s current account deficit with an increase in exports also helping the cause. A high interest rate and some restrictions on imports have also aided the policymakers’ objective of a narrower current account deficit.
4MFY25
In 4MFY25, the country’s total export of goods and services amounted to $13.11 billion. Whereas, imports clocked in at $22.43 billion during the period, according to SBP data.
The country’s worker remittances clocked in at $11.85 billion, an increase of nearly 35% as compared to $8.79 billion in same period last year.
The current account is a key figure for cash-strapped Pakistan which relies heavily on imports to run its economy.
A widening deficit puts pressure on the exchange rate and drains official foreign exchange reserves, while the situation reverses vice versa.
Additionally, it noted that rupee had gained 2pc this year and is considered “among the best-performing emerging-market currencies”, propelled by the International Monetary Fund (IMF) loan programme and remittances.
Previously, Finance Minister Muhammad Aurangzeb had also talked about increasing remittances in high spirits. He had said the country expected about $35bn inflows through remittances during the current fiscal year.
https://www.dawn.com/news/1879315
Pakistan received $11.85bn remittances during July-Oct, making an average of $2.962bn per month. The country received $3.052bn in October and $2.859bn in September, showing a higher trend of remittances.
The country received $30.25bn in FY24, witnessing a decline of 13.3pc compared to the preceding year.
“The currency reforms do seem to have boosted remittances,” said John Ashbourne, emerging-market economist at BMI, a Fitch Solutions company in London, told Bloomberg, adding that the increase might be due to more remittances now being sent via official channels.
Financial experts believe the higher remittances result from exchange rate stability and a crackdown against illegal trading of currencies.
The report also highlighted that the country has been implementing tough economic measures under the IMF’s guidance.
“The crackdown on the unofficial dollar trading may have helped move some of the transactions to the official banking channels,” Bloomberg noted, adding that it “contributed to foreign-exchange reserves rising to over $12 billion by end-November, the highest since March 2022”.
“The Federal Investigation Agency raided offices of money changers, arrested people and also deployed security officials in plain clothes at money exchanges in its efforts that started over a year ago,” the report added.
Meanwhile, Zafar Paracha, general secretary of the Exchange Companies Association of Pakistan, estimated that the size of the illegal dollar market had fallen at least 20pc in the past two years, with as much as $10bn going into formal banking channels.
https://blogs.worldbank.org/en/peoplemove/in-2024--remittance-flows-to-low--and-middle-income-countries-ar
Officially recorded remittances to low- and middle-income countries (LMICs) are expected to reach $685 billion in 2024. The true size of remittances, including flows through informal channels, is also believed to be even larger. The growth rate of remittances in 2024 is estimated to be 5.8 percent, significantly higher than 1.2 percent registered in 2023
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The top five recipient countries for remittances in 2024 are India, with an estimated inflow of $129 billion, followed by Mexico ($68 billion), China ($48 billion), the Philippines ($40 billion), and Pakistan ($33 billion) (figure 1). In smaller economies, remittance inflows represent very large shares of gross domestic product (GDP), highlighting the importance of remittances for funding the current account and fiscal shortfalls. Topping the list is Tajikistan (45 percent of GDP), followed by Tonga (38 percent), Nicaragua (27 percent), Lebanon (27 percent), and Samoa (26 percent) (figure 2).
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The recovery of the job markets in the high-income countries of the Organization for Economic Co-operation and Development (OECD), following the onset of the COVID-19 pandemic, has been the key driver of remittances. This is especially true for the United States where the employment of foreign-born workers has recovered steadily and is 11 percent higher than the pre-pandemic level seen in February 2020 (see figure 3). By contrast, the employment level of native-born workers has recovered to the same level as before the pandemic. A similar pattern is seen in the case of Hispanic workers, which is a key factor for the strength of remittance flows to the Latin America and the Caribbean region.
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By region, remittance flows to South Asia is expected to register the highest increase in 2024, at 11.8 percent (figure 4), driven mainly by continued strong flows to India, Pakistan, and Bangladesh. Remittances to the Middle East and Africa is estimated to have increased 5.4 percent, primarily due to rebounded flows to Egypt, compared with a 14.6 percent decline in 2023.
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It is notable that remittances have continued to outpace other types of external financial flows to low- and middle-income countries. Remittances have even surpassed FDI significantly (figure 5). The gap between remittances and FDI is expected to widen further in 2024. During the past decade, remittances increased by 57 percent, while FDI declined by 41 percent. Remittances will likely continue to increase because of enormous migration pressures driven by demographic trends, income gaps, and climate change. Therefore, countries need to take note of the size and resilience of remittances and find ways to leverage these flows for poverty reduction, financing health and education, financial inclusion of households, and improving access to capital markets for state and nonstate enterprises.
Arif Habib Limited
@ArifHabibLtd
The KSE100 2025 forward PE ratio of 5.9x is still substantially below the 10-year average P/E of 8.2x.
This discount signals a sharp undervaluation of the index, suggesting that the market has 40% room for appreciation to 153k points when it aligns closer to historical valuation multiples.
https://x.com/ArifHabibLtd/status/1870368354730389748
https://www.dawn.com/news/1879463
ISLAMABAD: The textile and clothing exports increased 10.51 per cent in the first five months of the current fiscal year, Pakistan Bureau of Statistics data showed on Tuesday.
After contracting 3.09pc in the first month of 2024-25 in July, the textile exports maintained a bullish trend with robust growth of 13pc in August, 17.92pc in September, 13.11pc in October, and 10.81pc in November, respectively.
Many experts believe it would take a lot of struggle for the sector to compete with regional rivals due to the implementation of harsh taxation measures in the current fiscal year. However, the disruption in supply from Bangladesh has also boosted demand for Pakistani garments.
Textile and clothing exports have been static for the last two years despite having a $25 billion installed capacity due to structural issues, according to textile players.
Pakistan Notches Best Stock Rally Since 2002 on Growth Momentum
https://finance.yahoo.com/news/pakistan-notches-best-stock-rally-055344203.html
Pakistani stocks recorded their biggest annual gain in 22 years, outperforming nearly all markets worldwide as economic conditions improve and traders bet on more interest-rate cuts.
The South Asian nation’s benchmark KSE-100 Index rose about 84% this year. That makes the index the second-best performer in local currency terms among the more than 90 tracked globally by Bloomberg.
Country watchers expect the boom to continue next year, bolstered by likely more cuts in borrowing costs and easing inflation, while a loan program from the International Monetary Fund helps to stabilize the economy. Pakistan’s economy expanded more slowly than expected last quarter, but has broadly recovered from 2023 when it narrowly escaped a default.
“This year was all about the return of domestic mutual funds to the market following a much steeper cut in rates than expected,” said Bilal Khan, head of international equity sales at Arif Habib Ltd. “Next year, we will see notable inflows from foreigners as investors will not be able to ignore allocating to Pakistan given the performance.”