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Category: Business

  • Gold price drops for sixth consecutive session, now at Rs238,000 per tola

    Gold price drops for sixth consecutive session, now at Rs238,000 per tola

    Gold prices in Pakistan continued to fall on Saturday, marking the sixth consecutive session of declines. The price per tola (a traditional South Asian unit equivalent to about 11.66 grammes) dropped to Rs238,000, following a single-day decrease of Rs1,600.

    According to the All Pakistan Gems and Jewellers Sarafa Association (APGJSA), the price for 10 grammes of gold also fell, closing at Rs204,047 after a reduction of Rs1,257. This downward trend follows a similar drop on Friday, when the price of gold fell by Rs1,400 per tola.

    While gold prices in Pakistan declined, the international market saw an uptick in gold rates. As per APGJSA, the global price of gold reached $2,301 per ounce (with a premium of $20), registering a gain of $4 during the day.

    Despite this international increase, the domestic market in Pakistan has seen a consistent downward trend. Over the past six sessions, gold prices per tola have dropped by Rs7,000. This decline is significant, considering that just last month, gold reached an all-time high of Rs252,200 per tola in the local market.

    Meanwhile, the price of silver remained stable, with rates holding at Rs2,620 per tola.

    Analysts suggest that the local decline in gold prices may be due to various factors, including market speculation, currency fluctuations, and changes in demand. With international prices showing a slight increase, it remains to be seen whether the downward trend in Pakistan will continue or if the market will begin to stabilise.

    For now, local consumers and investors in gold are watching the market closely, anticipating potential changes in the days ahead.

  • Weekly inflation falls by 1%, but year-on-year rates remain high

    Weekly inflation falls by 1%, but year-on-year rates remain high

    The weekly inflation measured by the Sensitive Price Indicator (SPI) recorded a decrease of 1 per cent for the combined consumption groups during the week ended on May 02, according to data released by the Pakistan Bureau of Statistics (PBS).

    This marks a significant shift as inflation pressures ease for the first time in weeks. The SPI for the current week stands at 316.95 points, down from the previous week’s 320.14 points.

    However, compared to the corresponding week of the previous year, the SPI is up by 24.37 per cent, reflecting the ongoing inflationary trend across various sectors.

    The SPI, calculated with a base year of 2015-16, encompasses 17 urban centers and 51 essential items across all expenditure groups. The index serves as a critical barometer of inflationary trends in Pakistan.

    For the lowest consumption group, earning up to Rs17,732, the SPI decreased by 1.09 per cent, settling at 306.26 points, down from last week’s 309.64 points.

    Similarly, the SPI for consumption groups in the ranges Rs17,732-22,888, Rs22,889-29,517, Rs29,518-44,175, and above Rs44,175 saw decreases of 1.12 per cent, 1.02 per cent, 1.04 per cent, and 0.95 per cent, respectively.

    This broad-based decline indicates a general easing of inflationary pressures across different income groups.

    Price variations across essential items

    Out of the 51 items evaluated by the SPI, the prices of 18 items decreased, 15 increased, and 18 remained stable during the week.

    Items showing decreased prices

    Key items that recorded a notable decrease in their average prices on a week-on-week basis include:

    – Tomatoes: 22.05 per cent decrease

    – Chicken: 8.03 per cent decrease

    – Onions: 7.71 per cent decrease

    – Wheat flour: 6.88 per cent decrease

    – Bananas: 5.25 per cent decrease

    – Diesel: 2.89 per cent decrease

    Items with increased prices

    In contrast, some items saw a rise in their prices. These include:

    – Potatoes: 6.06 per cent increase

    – Salt powder: 0.91 per cent increase

    – Garlic: 0.85 per cent increase

    – Powdered milk: 0.70 per cent increase

    Year-on-year trends

    While the week-on-week numbers showed a decline, the year-on-year comparison paints a more complex picture.

    Certain commodities experienced significant increases over the past year. Notable among them are:

    – Gas charges for Q1: 570 per cent increase

    – Onions: 145.15 per cent increase

    – Tomatoes: 79.43 per cent increase

    – Garlic: 72.46 per cent increase

    – Chilies powder: 71.96 per cent increase

    However, some items witnessed a decrease in average prices over the year, including:

    – Bananas: 37.76 per cent decrease

    – Wheat flour: 23.15 per cent decrease

    – Cooking oil (5 litre): 20.45 per cent decrease

    These figures suggest a dynamic landscape of price fluctuations, with some areas showing improvement while others continue to face inflationary pressures.

    The decrease in SPI for the current week offers a brief respite from the upward inflation trend, but with significant year-on-year increases in many commodities, vigilance remains crucial.

  • Petroleum sales in Pakistan drop to six-month low

    Petroleum sales in Pakistan drop to six-month low

    The sale of total petroleum products in Pakistan fell to 1.1 million tonnes in April 2024, a 6 per cent decrease compared to 1.17 million tonnes in the same month last year.

    According to data released by brokerage house Topline Securities, this is the lowest level recorded in the past six months, reflecting a trend influenced by reduced demand for petrol and furnace oil (FO).

    Despite the overall decline, high-speed diesel (HSD) sales showed a modest improvement, rising by 2 per cent year-on-year, reaching 0.469 million tonnes in April.

    Meanwhile, the sale of MS (petrol) dropped by 9 per cent, totaling 0.53 million tonnes, and FO sales saw a dramatic 59 per cent decrease, settling at 0.03 million tonnes.

    Topline Securities attributed this sharp decline in FO sales to a reduction in power generation from FO-based power plants.

    Month-on-month, petroleum offtake declined by 4 per cent compared to 1.15 million tonnes in March 2024. FO experienced the most significant drop, decreasing by 33 per cent month-on-month in April.

    Looking at the broader picture, the first ten months of fiscal year 2024 saw total petroleum sales drop by 11 per cent year-on-year, totaling 12.443 million tonnes.

    Product-wise data indicate a downturn in all categories, with MS, HSD, and FO offtake settling at 5.83 million tonnes, 5.05 million tonnes, and 0.869 million tonnes, respectively. This represents a decrease of 6 per cent for MS, 4 per cent for HSD, and 53 per cent for FO.

    In terms of individual company performance, Pakistan State Oil (PSO) experienced a 3 per cent decline in offtake year-on-year in April 2024, with a 7 per cent drop in MS sales and a 4 per cent decrease in HSD. FO sales for PSO also fell by 22 per cent.

    However, despite these decreases, PSO’s market share improved from 49 per cent in April 2023 to 51 per cent in April 2024.

    Shell Pakistan Limited (SHEL) recorded a 7 per cent year-on-year decline in sales, with reductions across all product categories.

    Hascol Petroleum Limited (HASCOL) saw a significant 23 per cent year-on-year drop in sales, primarily due to a 42 per cent reduction in MS sales.

    Attock Petroleum Limited (APL) also witnessed an 18 per cent decline in sales compared to April 2023.

  • Gold price drops by Rs1,400 to Rs239,600 per tola

    Gold price drops by Rs1,400 to Rs239,600 per tola

    The price of gold in Pakistan continued its downward trajectory for the fifth consecutive session on Friday, dropping by another Rs1,400 to settle at Rs239,600 per tola.

    This sustained decline has caught the attention of investors and consumers alike, as it indicates a significant cooling of the precious metals market in the country.

    Alongside the decline in the price per tola, the rate for 10 grammes of gold also fell, reaching Rs205,418 after a reduction of Rs1,201 from the previous session.

    This comes after gold in Pakistan had already dropped by Rs900 per tola on Thursday, signalling a broader trend of decreasing gold prices.

    The downward movement in the local gold market aligns with trends observed internationally.

    The international rate of gold decreased on Friday, with APGJSA reporting a drop of $11 per ounce, settling at $2,297 (including a premium of $20).

    This decline in the global market is likely influencing the downturn in Pakistan’s gold prices.

    Interestingly, while gold has seen consistent declines, the price of silver has remained stable, with rates holding steady at Rs2,620 per tola.

    This divergence in the precious metals market raises questions about the underlying factors driving these trends and whether the gold-silver ratio is indicative of broader shifts in market sentiment.

    In the past five sessions, the cumulative decrease in gold prices per tola in Pakistan has reached Rs5,400, marking a significant reduction from the all-time high of Rs252,200 recorded last month.

    The recent volatility has left investors cautious, with many closely monitoring the market for signs of stabilisation or further declines.

    Given the significant fluctuations in the gold market, both local and international factors are likely to play a role in determining future trends.

    The ongoing uncertainties in global economic conditions and changing investor sentiment could further impact gold prices in the coming weeks.

  • SBP-held forex reserves rise by $25 million to reach $8 billion

    SBP-held forex reserves rise by $25 million to reach $8 billion

    The foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by $25 million on a weekly basis, reaching $8 billion as of April 26, according to data released on Thursday.

    Despite this modest increase, the country’s total liquid foreign reserves, including holdings in commercial banks, remained at $13.3 billion, with net foreign reserves held by commercial banks totaling $5.3 billion.

    While the central bank did not specify a reason for the uptick, the slight increase comes after a recent dip.

    Last week, the central bank’s reserves had declined by $74 million, causing them to fall below the $8 billion mark.

    This decline had raised concerns about the stability of Pakistan’s foreign exchange position.

    Meanwhile, Pakistan’s financial stability received a boost from the International Monetary Fund (IMF), which disbursed $1.1 billion in the final tranche of the $3 billion Stand-By Arrangement (SBA) on Tuesday.

    This funding follows approval by the IMF’s Executive Board and is expected to be reflected in the SBP’s reserves for the week ending May 3, 2024.

    Despite these recent inflows, Pakistan faces ongoing challenges in maintaining a robust foreign exchange reserve.

    The country is heavily reliant on external financing, and fluctuations in reserve levels can impact economic stability.

    As the central bank works to stabilise its reserves, the broader economy remains sensitive to changes in external funding and currency exchange rates.

  • Pak Suzuki cuts Swift prices by up to Rs710,000

    Pak Suzuki cuts Swift prices by up to Rs710,000

    Pak Suzuki Motor Company has recently announced a significant reduction in prices for its Swift variants, marking what the company terms a “limited time offer.” The decision comes amidst considerations of prevailing market dynamics.

    According to the official announcement released by the company, effective May 1, 2024, the promotional retail sales prices for Suzuki Swift have been revised.

    Notably, this adjustment aims to make the Swift models more accessible to consumers.

    Under the new pricing scheme, the Swift GL MT is now priced at Rs4,336,000, reflecting a notable decrease of Rs85,000 from its previous rate of Rs4,421,000.

    Similarly, the Swift GL CVT is set to be available at Rs4,560,000, marking a substantial decline of Rs159,000 from its former price of Rs4,719,000.

    The most significant price reduction is observed in the Swift GLX CVT variant, which has seen a substantial drop from Rs5,429,000 to Rs4,719,000, translating to a decrease of Rs710,000.

    Importantly, the revised retail prices include Federal Excise Duty (FED) and Sales Tax, while they exclude Advance Income Tax, as outlined in the official notice.

    This move by Pak Suzuki Motor Company underscores its commitment to adapt to market conditions and provide value to customers through competitive pricing strategies.

  • US Federal Reserve holds interest rates steady for sixth consecutive meeting

    US Federal Reserve holds interest rates steady for sixth consecutive meeting

    The US Federal Reserve has once again left interest rates unchanged, maintaining its current rate at 5.25 per cent to 5.5 per cent.

    This marks the sixth consecutive meeting where the central bank has opted to hold steady, reflecting a cautious approach amid persistent inflation concerns.

    In a statement released by the Federal Open Market Committee (FOMC) on Wednesday, the central bank acknowledged that while inflation has eased over the past year, it remains elevated.

    “In recent months, there has been a lack of further progress towards the Committee’s 2 per cent inflation objective,” the FOMC noted.

    The Committee indicated that it does not plan to reduce the target range until it has greater confidence that inflation is consistently trending towards the 2 per cent goal.

    This stance has kept interest rates at a 23-year high since July last year, suggesting the Federal Reserve’s focus on managing inflation risks.

    The decision to leave rates unchanged aligned with market expectations, which had largely anticipated a rate pause.

    In a related development, the Federal Reserve announced that it would slow its pace of quantitative tightening starting June 1.

    The Fed will reduce the cap on Treasury securities rolling off its balance sheet to $25 billion per month, down from the previous cap of $60 billion. However, the pace of runoff for mortgage-backed securities will remain at $35 billion per month.

    The FOMC’s decision did not significantly alter market expectations for the trajectory of interest rates in 2024.

    The market remains divided on whether a rate cut will occur by September, with about 50/50 odds. As of now, only one rate cut is fully priced in for the entire year.

    It’s worth noting that at the beginning of 2024, the market had priced in an 80 per cent chance of a rate cut starting in March, with a total of six cuts projected throughout the year.

    This shift in expectations underscores the uncertainty surrounding the Federal Reserve’s future policy decisions as it navigates the ongoing challenges of inflation and economic stability.

  • April was Bitcoin’s worst month since late 2022 as investors took profits

    April was Bitcoin’s worst month since late 2022 as investors took profits

    Bitcoin experienced a significant downturn for the third day in a row on Wednesday, capping off its worst monthly performance in April since late 2022.

    This downward trend comes as investors shifted their focus away from cryptocurrencies in anticipation of the Federal Reserve’s upcoming interest rate decision.

    The world’s most traded cryptocurrency fell nearly 16 per cent throughout April as investors cashed in their gains from a recent rally.

    Bitcoin had reached record highs, topping $70,000, but the recent slide has taken the price to $57,055, a 4.7 per cent drop and its lowest point since late February.

    Ether, the second-largest cryptocurrency by market cap, also saw a decline, falling 3.6 per cent to $2,857, its weakest level since February.

    The sharp downturn has pushed bitcoin into bear market territory, with its current price sitting 22 per cent below its March peak of $73,803.

    Despite this, Bitcoin has still achieved a 35 per cent increase so far in 2024 and has doubled its value compared to the same time last year.

    This surge in value was largely driven by significant investments in newly launched exchange-traded funds (ETFs) at the beginning of the year.

    According to Matteo Greco, a research analyst at Fineqia, the recent decline in bitcoin’s price is due to profit-taking by investors who entered the market during the downturns of 2022 and 2023.

    Additionally, ETF investors, who saw their shares appreciate significantly in early 2024, also contributed to the sell-off as they locked in profits.

    Looking at the broader economic landscape, the Federal Reserve is not expected to change interest rates later this week.

    However, a growing consensus among investors suggests that the central bank may refrain from cutting rates altogether in 2024.

    This uncertainty has cast a shadow over interest rate-sensitive assets, including cryptocurrencies, emerging market stocks, bonds, and even commodities. Investors are adjusting their portfolios accordingly.

    The 10 largest U.S. spot bitcoin ETFs have seen their biggest weekly outflow since their inception earlier this year, highlighting the impact of shifting investor sentiment on the cryptocurrency market.

    As the market reacts to both macroeconomic factors and investor behavior, the coming days will be crucial in determining whether this downtrend continues or stabilizes.

  • Mobile SIMs of over 500,000 tax evaders to be blocked under FBR directive

    Mobile SIMs of over 500,000 tax evaders to be blocked under FBR directive

    The Federal Board of Revenue (FBR) has identified 506,671 individuals who have not filed their income tax returns for the 2023 tax year and issued an order to block their mobile phone SIM cards.

    This directive, known as Income Tax General Order No. 01 of 2024, was released on Tuesday, mandating the Pakistan Telecommunication Authority (PTA) and all telecom operators to comply immediately.

    According to the FBR, these non-filers are required to file their income tax returns under the Income Tax Ordinance of 2001. The list of those affected is available on the FBR’s website. Those listed can check to confirm whether their mobile phone service will be disrupted.

    Under Section 114B of the Income Tax Ordinance, the FBR has the authority to take such measures to enforce compliance with tax regulations.

    The PTA and telecom operators must block the SIM cards of the individuals named in the order, and the SIM cards will remain deactivated until the FBR or the respective Commissioner of Inland Revenue restores them.

    The FBR has set a deadline of May 15, 2024, for telecom operators to report their compliance with the order. Failure to meet this deadline could result in further regulatory action.

    The FBR is taking this step to ensure that all those required to file income tax returns do so promptly, contributing to the country’s revenue base.

  • Gold prices fall for third consecutive session, dropping by Rs2,000 per tola

    Gold prices fall for third consecutive session, dropping by Rs2,000 per tola

    Gold prices in Pakistan continued their downward trend for the third consecutive session on Tuesday, mirroring the decline in international markets.

    The price per tola of gold fell by Rs2,000 to settle at Rs241,900, according to data released by the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).

    In the local market, the cost of 10 grammes of gold decreased by Rs1,715, bringing the price to Rs207,390. This marks a notable reduction compared to the previous day’s loss of Rs500 per tola.

    The drop in local gold prices corresponds with a fall in the international market.

    According to the APGJSA, the global price of gold reached $2,316 per ounce, which includes a premium of $20, after a single-day decrease of $19.

    Silver prices also saw a decline, with a reduction of Rs20, bringing the price down to Rs2,630 per tola.

    Over the past three sessions, gold prices in Pakistan have fallen by Rs3,100 per tola, a significant correction from the record high of Rs252,200 per tola earlier this month.

    This continued downward trend suggests a possible easing of demand or adjustments in the international gold market.