Good Morning

Total provisional external inflows from multiple financing sources were $7.381 billion during July-April of fiscal year 2019-20 against the budgeted amount of $12.958 billion for the entire fiscal year which is around 57 percent of the budgeted amount. In a landmark achievement, Power Energy Sukuk-II of Rs200 billion is heavily oversubscribed by an amount of Rs139 billion (70 percent) at a rate of six months KIBOR minus 0.10 percent. The book-running was held on May 18-19 at the PSX. Pakistan has planned to seek $2 billion in six new foreign loans for activities like garbage collection, pension and fiscal reforms, and ending market distortion amid the rapid deterioration of public debt indicators.

Market View: The KSE100 Index gained 353.5 points on Tuesday, ending the session at 34,158.5 points. We expect the market to remain range bound in the upcoming session. However, we might see interest in heavy weight E&P sector, pushing index upwards, as international oil prices are rebounding.

Commodities:

Brent oil (USD/bbl): 34.88 (+0.66% D/D)

WTI Crude oil (USD/bbl): 32.5 (+0.5% D/D)

Gold (USD/oz): 1,754.10 (+0.52% D/D)

National News

External inflows stand at $7.381bn in July-April

Total provisional external inflows from multiple financing sources were $7.381 billion during July-April of fiscal year 2019-20 against the budgeted amount of $12.958 billion for the entire fiscal year which is around 57 percent of the budgeted amount.

https://www.brecorder.com/2020/05/20/598932/external-inflows-stand-at-7381bn-in-july-april/

Rs 200 billion Sukuk-II oversubscribed by 70 percent

In a landmark achievement, Power Energy Sukuk-II of Rs200 billion is heavily oversubscribed by an amount of Rs139 billion (70 percent) at a rate of six months KIBOR minus 0.10 percent. The book-running was held on May 18-19 at the PSX.

https://www.brecorder.com/2020/05/20/598931/rs-200-billion-sukuk-ii-oversubscribed-by-70-percent/

RLNG-fired power plants: Inquiry against IPPs may hamper sell-off process?

Minister for Privatisation Muhammad Mian Soomro has warned the government that an inquiry against Independent Power Producers (IPPs) may hamper privatisation of RLNG-fired power plants, well-informed sources told Business Recorder.

https://www.brecorder.com/2020/05/20/598930/rlng-fired-power-plants-inquiry-against-ipps-may-hamper-sell-off-process/

Pakistan to seek $2b in new loans

ISLAMABAD: Pakistan has planned to seek $2 billion in six new foreign loans for activities like garbage collection, pension and fiscal reforms, and ending market distortion amid the rapid deterioration of public debt indicators.

https://tribune.com.pk/story/2225114/2-pakistan-seek-2b-new-loans/

Rupee falls

KARACHI: The rupee weakened further on Tuesday due to rising demand for the dollars from importers and corporates, dealers said.In the interbank market, the rupee closed at 160.74 against the dollar, compared with Monday’s closing of 160.37.

https://www.thenews.com.pk/print/661037-rupee-falls

ADB okays $300m loan for Pakistan virus relief

ISLAMABAD: The Asian Development Bank on Tuesday approved a $300 million emergency assistance loan for Pakistan to strengthen its health response to the Covid-19 pandemic amid the climate change ministry’s bid to divert some of the funds to non-coronavirus activities.

https://tribune.com.pk/story/2225281/2-adb-okays-300m-loan-pakistan-virus-relief/

PM’s coronavirus package-There will be need for only Rs519bn extra funding: IMF

ISLAMABAD: The International Monetary Fund (IMF) has stated that there will be need for only Rs 519 billion extra funding in the current fiscal year for Prime Minister’s Relief Package of Rs 1.240 trillion for corona-affected sector.

https://epaper.brecorder.com/2020/05/20/1-page/837742-news.html

CDWP approves six projects worth Rs16.11bn

ISLAMABAD: The Central Development Working Party (CDWP) has approved as many as six projects at a cost of Rs16.11 billion, and recommended one project worth Rs25.23 billion to the Executive Committee of the National Economic Council (Ecnec) for approval.

https://epaper.brecorder.com/2020/05/20/7-page/837797-news.html

Pakistan’s investment ratio dips to 15.4%

ISLAMABAD: Investment indicators have worsened further in the second year of Pakistan Tehreek-e-Insaf (PTI) government but savings ratio has improved on the back of improvement in the external account, showed official statistics.

https://tribune.com.pk/story/2225282/2-pakistans-investment-ratio-dips-15-4/

Honda Atlas, Indus Motors resume operations

KARACHI: Honda Atlas Cars and Indus Motor Company have resumed operations after the government eased the nationwide lockdown imposed to check the spread of novel coronavirus COVID-19 in the country, both companies said in separate announcements on Tuesday.

https://www.thenews.com.pk/print/661044-honda-atlas-indus-motors-resume-operations

Moody’s puts top 5 Pakistani banks’ ratings under review

KARACHI: Moody’s Investors Service has put top five Pakistani banks under watch for possible downgrading of their long-term local and foreign deposit and credit ratings, suspecting Islamabad may default on repayment of debt to global “private-sector creditors” which would also weaken the banks’ ability to operate.

https://tribune.com.pk/story/2225125/2-moodys-puts-top-5-pakistanis-banks-ratings-review/

Tax collection from dividends surges 27pc to Rs12bln in July-April

KARACHI: Tax collection from dividends earned on equity rose 27 percent to around Rs12 billion in the first 10 months of the current fiscal year of 2019/20 owing to applicability of uniform taxation on income, source said on Tuesday.

https://www.thenews.com.pk/print/661033-tax-collection-from-dividends-surges-27pc-to-rs12bln-in-july-april

‘Delay in subsidy to deny sales’

KARACHI: Country’s tractor-makers hope the subsidy in the shape of a relief in the sales tax levied on these locally manufactured farming machines would help the industry get back on track, if swiftly implemented, an official said on Tuesday.

https://www.thenews.com.pk/print/661041-delay-in-subsidy-to-deny-sales

International News

Oil prices ease on dim economic outlook despite signs of firmer demand

Oil prices dipped on Wednesday as concerns over the lasting economic fallout from the coronavirus pandemic outweighed signs of improving demand and production cuts by major oil producers.Brent crude futures for July delivery were trading down 11 cents, or 0.3%, at $34.54 per barrel at 0031 GMT.

https://www.cnbc.com/2020/05/20/oil-markets-coronavirus-crude-demand-in-focus.html

Gold steady, firm dollar offsets recession support

Gold prices were steady on Wednesday as a rising dollar offset support for the metal from easing equities and growing concerns of a global recession.Spot gold was unchanged at $1,743.99 per ounce by 0030 GMT, having gained 0.7% in the previous session on recession fears. U.S. gold futures rose 0.2% to $1,748.50.

https://www.cnbc.com/2020/05/20/gold-markets-us-dollar-global-recession-concerns-in-focus.html

Asia Pacific stocks mixed as China keeps benchmark lending rate unchanged

Stocks in Asia Pacific were mixed in Wednesday morning trade as China’s benchmark lending rate was left unchanged.Mainland Chinese stocks edged lower in early trade, with both the Shanghai composite and Shenzhen component down around 0.2%. Hong Kong’s Hang Seng index added 0.34%.

https://www.cnbc.com/2020/05/20/asia-markets-china-loan-prime-rate-coronavirus-currencies-in-focus.html