- The government raised Rs 716 billion from the Market Treasury Bills auction, exceeding the target of Rs 400 billion, with the highest liquidity placement in a 12-month T-bill at Rs 268.6 billion. The yield on the 6-month paper fell by 5 basis points to 14.343%, while the 3-month cut-off yield was 15.2994%, and the 12-month rate remained unchanged at 13.735%.
- Domestic gold rates reached an all-time high on Wednesday, with prices for 10 grams and one tola hitting Rs 237,654 and Rs 277,200, respectively, up by Rs 1,886 and Rs 2,200 from Tuesday. The surge in local rates is attributed to a $22/ounce increase in world gold prices, now at $2,675/ounce.
- Pakistan and China agreed to prioritize the Karachi-Hyderabad section of the ML-1 railway project following Chinese Premier Li Qiang's visit. A Chinese investment corporation has agreed to provide $1 billion to Pakistan Refinery Limited (PRL) for its upgrade, if the deal remains free of government involvement and repayment is in dollars.
- Pakistan's oil and gas production dropped by 8.0% and 7.0%, respectively, in the first quarter of the fiscal year due to turnarounds and curtailments at major fields like Nashpa and Sui. Despite these declines, local exploration companies made 9 discoveries, including the Razgir and Akhiro-1 wells, while spudding six exploratory and nine development wells.
- The federal government repaid over 1 trillion rupees in domestic debt in the first quarter of FY25, supported by a $1 billion IMF tranche and a Rs 3.4 trillion profit from the SBP. This shift from borrowing to repayment suggests improved fiscal management. The PSX KSE-100 index crossed the 86,000 mark and reached its intra-day high of 86,513.46 points.
- The International Energy Agency (IEA) forecasts that fossil fuel demand will peak by the end of the decade, potentially leading to surplus oil and gas supplies that could boost green energy investments.
AGRI-UPDATES - COMMODITIES, POLICY & DEVELOPMENTS
- Daily Rates: Find the following rates on the hyperlinked titles: [Shipping Intelligence], [Pakistan Stock Exchange], [Kibor International Kibor Rates], [BRIndex100 & BR Sectoral Indices], [Activities of Karachi Port Trust, Port Qasim]
- Cotton Prices Vary Across Regions: Cotton prices in Sindh range from Rs 17,300-Rs 17,700/maund, with Phutti priced between Rs 7,500 and Rs 8,400/40 kg. In Punjab, cotton costs Rs 17,500-Rs 18,000/maund, while in Balochistan, prices range from Rs 17,200-Rs 17,500/maund, and Phutti is priced between Rs 7,800 and Rs 9,000/40 kg. Balochi Cotton is priced between Rs 18,800 and Rs 19,000/maund. [BR]
- SBP Allows Sugar Exports: The State Bank of Pakistan (SBP has allowed banks to facilitate the export of 500,000 tons of sugar, with exporters to Afghanistan required to secure advance payment. The ECC and the Federal Cabinet approved the export, with the quota allocated among provinces: Punjab 64%, Sindh 30%, and KPK at 6%. [BR] [Dawn]
- Domestic Gold Prices Hit Record High: Domestic gold rates reached an all-time high on Wednesday, with prices for 10 grams and one tola hitting Rs 237,654 and Rs 277,200, respectively, up by Rs 1,886 and Rs 2,200 from Tuesday. The surge in local rates is attributed to a $22/ounce increase in world gold prices, now at $2,675, surpassing the previous record set on September 26. [Dawn]
- Kohat Cement Approves Finance, Buyback: Kohat Cement's shareholders have approved a Rs 600 million short-term running finance for Ultra Kraft (Private) Limited to cover working capital needs at a 1.50% mark-up over the three-month KIBOR, starting October 29, 2024. Additionally, Kohat Cement plans to buy back up to 12 million of its own shares, representing 6.13% of total outstanding shares. [MG]
- Naukot Chilli Market Mismanaged: The Naukot Chilli Market in Tharparkar, Sindh, is in disrepair due to mismanagement, leading to unchecked trading and adulteration of chillies in local shops. This poses significant public health risks, particularly for children and the elderly, who are more susceptible to respiratory diseases like asthma and tuberculosis from exposure to chilli dust. [ET]
- Iron & Steel Imports Fall 28%: Rs 34.2 billion was the import value of iron and steel in August 2024, down 28% compared to Rs 47.5 billion in August 2023. [ET]
- Meat Exports Decline 5.7%: Rs 10.7 billion was the export value of meat and meat preparations in August 2024, down 5.7% compared to Rs 11.3 billion in August 2023, according to the PBS. [ET]
ENERGY - WEATHER, WATER & POWER
- Pakistan, China Prioritize ML-1: Pakistan and China agreed to prioritize the Karachi-Hyderabad section of the ML-1 railway project and enhance financial cooperation, following Chinese Premier Li Qiang's visit. Both countries praised China's support for Pakistan's fiscal stability and the extension of the bilateral currency swap arrangement. [Dawn]
- Chinese Firm to Fund PRL Upgrade: A Chinese investment corporation has agreed to provide $1 billion to Pakistan Refinery Limited (PRL) for its upgrade, with the condition that the deal remains free of government involvement and repayment is in dollars. PRL has assured the Chinese firm that it will generate the necessary dollars through petroleum exports to repay the loan. [ET]
- Pakistan's Oil, Gas Production Declines: Pakistan's oil and gas production dropped by 8.0% and 7.0%, respectively, in the first quarter of the fiscal year due to turnarounds and curtailments at major fields like Nashpa and Sui. Despite these declines, local exploration companies made 9 discoveries, including the Razgir and Akhiro-1 wells, while spudding six exploratory and nine development wells. [The News]
- Sindh Opposes Indus Water Diversion: Sindh Minister for Irrigation Jam Khan Shoro stated that Sindh will oppose the diversion of Indus River water to new canals and the clearance of Rs 211 billion water projects in Punjab. He also objected to a water availability certificate issued to Punjab by the Indus River System Authority, despite Sindh's dissenting note in January 2024. [Dawn]
- Khanpur Dam Water Declared Unsafe: After contamination issues at Islamabad's Rawal Dam, recent tests have declared the water at Khanpur Dam unsafe for consumption. Official correspondence revealed that development activities near the dam pose a sewage contamination threat, prompting Wapda to inform the Capital Development Authority (CDA) and discuss the issue with the Haripur deputy commissioner. [Dawn]
- IMF Urges 1% GDP Investment in Climate: The International Monetary Fund (IMF) has urged Pakistan to invest 1% of its GDP, over Rs1.24 trillion, annually in climate resilience and adaptation reforms to prepare for extreme weather events like floods. In a special policy advisory, the IMF stated that ongoing reforms under the Extended Fund Facility (EFF) could boost Pakistan's growth by 2% over five years while also reducing inequality. [Dawn]
PAKISTAN - ECONOMICS, POLITICS & SECURITY
- Ruling Parties Seek Consensus on Reforms: During a meeting at Jati Umra, the Sharif family's residence in Lahore, the ruling parties made progress in securing Maulana Fazlur Rehman's support for their judicial reform package. However, they still need cooperation from the PTI to achieve full consensus on the contentious constitutional amendments, which were discussed in detail by the heads of the PML-N, PPP, and JUI-F to address key sticking points and finalize the proposed changes. [Dawn]
- PTI Faces Leadership Crisis Amid Infighting: The Pakistan Tehreek-i-Insaf (PTI) is experiencing a crisis due to infighting among senior leaders, resulting in a lack of clear leadership and rising factionalism. Party loyalists feel abandoned, especially regarding a promised medical examination for Imran Khan, as the government barred his personal physician from entering Adiala jail. [Dawn]
- SCO Leaders Back Belt & Road Initiative: During the 23rd SCO meeting, leaders supported China's Belt and Road Initiative (BRI) despite India's objections and criticized Western sanctions. Indian Foreign Minister Jaishankar attracted attention for his interactions with PM Sharif and subtle criticisms of Pakistan, with reports of a brief cricket discussion with Pakistan's Foreign Minister Ishaq Dar, which Dar did not confirm. PM Sharif and Russian PM Mishustin agreed to enhance cooperation in trade, energy, and education during their meeting at the 23rd SCO CHG meeting. Sharif emphasized Pakistan's commitment to strengthening political and economic ties with Russia. [BR] [BR] [Dawn] [Dawn] [ET]
- FBR Chairman Critiques Amnesty Schemes: FBR Chairman Rashid Mahmood Langrial noted that amnesty schemes undermine the taxation system, with even the wealthiest top 5% not paying taxes. He expressed hope for a 150-200 basis point interest rate reduction and emphasized the need to promote a tax culture while targeting tax evaders instead of long-time taxpayers. [Dawn]
- Federal Government Repays Domestic Debt: The federal government repaid over one trillion rupees in domestic debt in the first quarter of FY25, supported by a $1 billion IMF tranche and a Rs 3.4 trillion profit from the State Bank of Pakistan. This shift from borrowing to repayment suggests improved fiscal management and gradual economic stabilization. [BR] [The News]
- Government Raises Rs 716 Billion via T-Bills: The government raised Rs 716 billion through the auction of Market Treasury Bills, exceeding the pre-auction target of Rs 400 billion, with the highest liquidity placement in a 12-month T-bill at Rs 268.6 billion. The yield on the six-month paper fell by five basis points to 14.343%, while the three-month cut-off yield was 15.2994%, and the 12-month rate remained unchanged at 13.735%. [The News]
- Salaried Class Faces Heavy Tax Burden: Pakistan's salaried class has faced a disproportionate tax burden, paying Rs 111 billion in income tax during the first quarter of the current fiscal year, which is 1,550% more than the taxes paid by favored traders of the ruling party. This amount is nearly Rs 40 billion, or 56%, higher than the same period last year, according to tax authorities. [ET]
- PSX Surges Over 350 Points: The Pakistan Stock Exchange (PSX) rose over 350 points on Wednesday, reaching a record high due to an earnings season rally fueled by reduced political noise and speculation from the Shanghai Cooperation Organization (SCO) summit. Positive corporate earnings and the successful summit contributed to broad-based gains across multiple sectors. As a result, the KSE-100 index crossed the 86,000 mark and reached its intra-day high of 86,513.46 points. [ET]
INTERNATIONAL - MARKET, POLITICS, SECURITY & DEVELOPMENT
- Iran Warns UN of Response to Israel Attacks: Iran's top diplomat has warned UN chief Antonio Guterres that the country is prepared to deliver a "decisive and regretful" response if Israel retaliates for a recent missile attack. This follows Iran's launch of approximately 200 missiles at Israel on October 1, in response to the killings of key allies, including Hamas leader Ismail Haniyeh and Hezbollah leader Hassan Nasrallah. [Dawn]
- Explosion in Nigeria Kills 147: An explosion in northern Nigeria, triggered by crowds collecting fuel from a crashed tanker, has killed at least 147 people. The accident occurred when the tanker overturned in Majiya, Jigawa state, as residents rushed to gather the leaking fuel amid the country's severe economic crisis. [Dawn] [ET]
- Omar Abdullah Sworn in as CM: Omar Abdullah was sworn in as chief minister of India-held Kashmir on Wednesday, the first change in leadership since the BJP revoked the region's special status in 2019. Administered by Lieutenant Governor Manoj Sinha, this marks Abdullah's second term, having previously served from 2009 to 2014. He is the grandson of Sheikh Abdullah and son of Farooq Abdullah, both former chief ministers. [Dawn]
- Gulf Leaders Discuss Middle East Tensions: Gulf leaders, including Saudi Crown Prince Mohammed bin Salman, met with European heads of state in Brussels to discuss ways to defuse escalating tensions in the Middle East. The EU aims to strengthen cooperation with the Gulf Cooperation Council (GCC) on regional conflicts, including those in the Middle East and Ukraine. [ET]
- IEA Predicts Peak Fossil Fuel Demand: The International Energy Agency (IEA) forecasts that fossil fuel demand will peak by the end of the decade, potentially leading to surplus oil and gas supplies that could boost green energy investments. However, the IEA warns of uncertainties due to geopolitical conflicts and upcoming elections in major energy-consuming nations. [ET]
- Tax Fraud Case Uncovers Rs 84 Billion Scam: A significant tax fraud case has led to fake transactions of Rs 84 billion and tax evasion of Rs 14 billion, as revealed by the Federal Tax Ombudsman following a complaint from a retired army officer. The investigation uncovered organized fraud facilitated by FBR IT staff, involving bogus sales tax returns for Rs 81.434 billion in fictitious supplies. [The News]
- Opinion: Net Metering - “In layman’s words, non-solar homes are now paying more since they still rely only on the grid, whereas solar homes save money by generating their own electricity during the day and using the grid as a “power bank” at night. Non-solar households are stuck with the exact capacity costs previously split equitably but with fewer individuals contributing now. In this community, 50 solar homes gain from their investment in solar panels, while 500 non-solar homes bear the cost—literally.” - By Asim Javed [BR]
