Category: Business

The most important business news, explained in a young, easy to understand way. News that affects young career professionals.

  • Three low-cost housing societies approved for Punjab

    Three low-cost housing societies approved for Punjab

    Mian Muhammad Aslam Iqbal, Punjab’s Minister for Housing and Urban Development, approved the launch of three low-cost housing societies on Thursday.

    This was announced at the 86th meeting of the Punjab Housing and Town Planning Agency (PHATA) board, which was presided over by the Housing Minister, at the agency’s office.

    These housing schemes will offer locals access to high-quality, low-cost homes:

    1. Al-Rasheed Garden, Gujranwala
    2. Al-Noor Garden Residencia, Sangla Hill
    3. Campbellpur Greens, Attock  

    According to The News, a monitoring committee was also formed to oversee the housing developments. The delegates also agreed on the development of pension laws for PHATA workers, as well as other administrative issues.

    Furthermore, in each of the housing complexes, a 20 per cent quota was set aside for the Naya Pakistan Housing Program (NPHP).

    The Minister stressed the need of assisting developers in order to promote a smooth working environment and stated that corruption or dishonesty will not be allowed in his team.

    He went on to say that the NPHP is a key priority for the province administration and that it intends to finish as many housing schemes as feasible in the shortest amount of time.

    Earlier this month, the Housing Minister stated his aim to accelerate the creation of low-cost housing projects, saying, “Low-cost housing schemes should be finished quickly by working day and night.”

    He also stated that a special cell will be established to encourage foreign Pakistanis to engage in the housing business.

  • Pak Suzuki suffers losses of Rs17.23 million due to rising production costs

    Pak Suzuki suffers losses of Rs17.23 million due to rising production costs

    Pak Suzuki Motor Company Ltd. (PSMC) reported its half-yearly results, which were completed on June 30, 2022. The company reported a net loss of Rs17.23 million against a net profit of Rs1.19 billion, according to the automaker’s latest filing on the Pakistan Stock Exchange (PSX).

    According to Mettis Global, the company’s sales revenue climbed 30 per cent YoY, from Rs66 billion to Rs112, 62 billion, mostly due to volumetric growth and pricing increases.

    As a result of growing input costs and the significant depreciation of the local currency, the gross margins during 1HFY22 decreased from 5.98 per cent to 3.74 per cent.

    Regarding the company’s primary expense heads, distribution and marketing costs came in at Rs1.64 billion, up 30 per cent YoY, while administration costs dipped to Rs1.48 billion, up 11 per cent YoY.

    In contrast to Rs866 millionn in 1HFY21, the company additionally received Rs1.56 billion in other income.

    Furthermore, as a result of rising interest rates, finance costs increased by 6.2x YoY, from Rs292 million to Rs1.8 billion.

    The company also paid Rs767.84 million in taxes, which represents an increase of 57 per cent YoY because of the impact of super taxes.

  • US firm to buy Pakistan’s Cloudways for $350 million

    US firm to buy Pakistan’s Cloudways for $350 million

    Cloudways, a Pakistani company that offers small and medium-sized businesses cloud hosting and software as a service (SaaS) capabilities, will be acquired by New York Stock Exchange-listed company DigitalOcean Holdings for $350 million.

    A large amount of the consideration, according to a business statement posted on Wednesday, would be paid over a 30-month period after the transaction closes in September.

    According to DAWN, this will be one of the largest acquisitions in Pakistan’s history due to the hefty amount of the transaction. According to the company, this deal will make workflows simpler for small and medium-sized companies that are seeking less complicated ways to develop and grow their digital operations.

    The projected revenue for Cloudways in fiscal 2022 is more than $52 million, which would indicate a three-year compound annual growth rate of more than 50 per cent.

    Since 2014, DigitalOcean and Cloudways have been strong collaborators. About 50 per cent of Cloudways’ clients are currently powered by DigitalOcean infrastructure.

    Serving a clientele that is both global and expanding, both companies will service more than 124,000 clients who make monthly payments of over $50, or around 84 per cent of the pro forma company’s total revenue.

    For specific small and medium-sized enterprises wishing to outsource their on-ramp to the internet, Cloudways offers straightforward on-boarding and day-to-day management.

    The company assists such organisations in offloading the challenges of cloud infrastructure so they may focus more on managing and growing their operations.

  • Pakistani rupee extends losses, nearing Rs219 against dollar

    Pakistani rupee extends losses, nearing Rs219 against dollar

    After closing at Rs218.38 on Wednesday, the Pakistani rupee (PKR) dropped further versus the US dollar on Thursday morning during the intraday trade.

    As of 11:00am, the rupee depreciated by Rs0.61 or 0.27 per cent against the US dollar to Rs218.99 during intraday trading.

    It is worth noting that the local unit has been witnessing a downward trend since the beginning of this week. PKR fell on Wednesday for the third straight session showing a decline of 0.33 per cent.

    The fall occurs amid news that Pakistan’s cash-strapped economy may receive support from an investment of $3 billion by the Qatar Investment Authority, one of the biggest sovereign funds in the world.

    Oil prices, a crucial factor in determining currency parity, increased on Thursday as supply fears mounted in the wake of delays to Russian exports, the potential for major producers to reduce output, and the partial suspension of a US refinery.

    US West Texas Intermediate crude increased 42 cents, or 0.4 per cent, to $95.31 a barrel, while Brent crude increased 59 cents, or 0.6 per cent, to $101.81 per barrel.

    On Wednesday, the PKR declined by Rs7 for both buying and selling against the USD on the open market, finishing at Rs227 and Rs229, respectively.

  • India forced Twitter to hire agent, reveals former security chief

    India forced Twitter to hire agent, reveals former security chief

    According to a whistleblower statement to US authorities, a former Twitter security head said that the Indian government pressured the social media company to hire a government agent.

    Along with other security breach allegations at Twitter, Peiter “Mudge” Zatko brought up the matter with the US Securities and Exchange Commission.

    According to a redacted version of the lawsuit posted by the Washington Post and confirmed by Zatko’s attorney at Whistleblower Aid, he claimed that Twitter’s lax security measures would have allowed the government agent access to sensitive user data.

    Without going into further detail, a corporate source told Reuters that the claims against the Indian government have already appeared on Twitter.

    Requests for comment from the Indian IT ministry’s representatives were not immediately responded.

    “What we’ve seen so far is a false narrative about Twitter and our privacy and data security practices that are riddled with inconsistencies and inaccuracies and lack important context,” a Twitter spokesperson said in a statement.

    India is engaging in unlawful activities and content on Twitter, according to the company’s management.

    After asking a local court to reverse several government orders to remove content from the social media site and alleging official abuse of authority, Twitter filed a lawsuit against the Indian government in July.

    The case’s next hearing will take place on August 25.

    “The company did not in fact disclose to users that it was believed by the executive team that the Indian government had succeeded in placing agents on the company payroll,” Zatko’s complaint noted.

    According to Washington Post, the National Security Division of the US Justice Department and the US Senate Select Committee on Intelligence have received documentation corroborating Zatko’s assertions.

    CNN claims that these revelations of Twitter’s carelessness represent a serious threat to democracy and national security.

  • PM Shehbaz announces relief for 17 million power consumers

    PM Shehbaz announces relief for 17 million power consumers

    Prime Minister Shehbaz Sharif stated that 17 million of the nation’s electricity consumers would not be required to pay the excessive fuel cost adjustment (FCA) charges that are included in their monthly bills.

    According to Express, the prime minister outlined the rationale behind the FCA and claimed that it had resulted in a substantial increase in power rates for July and August due to high international oil prices.

    He claimed that following discussions with the IMF, PML-N leader Nawaz Sharif, and other coalition leaders, it was decided that 17.1 million energy users would not be required to pay the FCA.

    The remaining 13 million power consumers who are in a better financial situation are also being reviewed by the government, according to PM Shehbaz.

    Later, the PML-N tweeted that the relaxation will only apply to people with low electricity consumption.

    Shehbaz stated that Power Minister Khurram Dastgir will give a thorough explanation of the announcement’s process and how it would actually operate.

    The FCA exception would also apply to tube well users, who the prime minister estimated to number approximately 300,000.

    Earlier, PM Shehbaz also abolished the budget’s fixed tax on traders.

  • Fuel Cost Adjustment: Consumers protest against inflated electricity bills

    Fuel Cost Adjustment: Consumers protest against inflated electricity bills

    Power consumers protested in major cities against the government and power supply companies due to excessive residential and commercial bills that were issued under the pretext of Fuel Cost Adjustment (FCA).

    A number of Lahore residents were seen protesting outside LESCO offices, complaining about the skyrocketing electricity bills, chanting anti-LESCO slogans at Dharam Pura, Begum Kot and Ghazi Road.

    A number of farmers in Jhang also participated in a protest by burning their power bills while obstructing traffic on the Jhang Road. On the other hand, the shopkeepers and locals of Faisalabad organised a sizable protest against FESCO for billing residential and commercial customers for nearly twice the actual cost of electricity.

    PM Shehbaz demands urgent report on inflated electricity bills

    In response to complaints from the public about excessive electricity bills, Prime Minister Shehbaz Sharif ordered the relevant authorities to provide an immediate report to address the issue.

    The premier ordered the concerned officials to present a thorough report with recommendations for resolving consumer complaints against energy bills on an urgent basis.

    What is FCA?

    In addition to criticising the power supply companies, consumers are questioning the FCA charges that take up a significant portion of their monthly bills.

    Understanding the actual fuel cost (the cost of fuel in a month) and the reference fuel cost is crucial for comprehending the fuel price adjustment.

    Simply put, FCA is charged/adjusted in customers’ monthly bills to reflect the actual increase or decrease in fuel prices.

    Based on the price of fuel (such as coal, LNG, or furnace oil) used in the nation’s various energy sources, the total cost of fuel used in the production of electricity in a month (basket fuel cost) is calculated.

    The entire fuel cost for that month is therefore compared to the reference fuel cost at the end of each month, and as a result, the FCA is applied to the power bills after two months.

    The electricity bill will reflect a change in the FCA amount if the total fuel cost for that month exceeds the reference cost, while it will reflect a change in the FCA amount if the total fuel cost is less than the reference cost. We refer to this as a fuel price adjustment.

    How power suppliers calculate FCA?

    Whenever a power plant uses coal, it is possible to estimate how much coal was burnt and at what cost, as well as the total cost of the energy needed to generate the power.

    For instance, if hydel electricity generation has increased, the overall fuel price will reduce; likewise, if gas is consumed more frequently in a month due to its higher price, the fuel price would climb.

    It is also impacted by the rupee’s appreciation or depreciation. This is due to the fact that coal, LNG, and furnace oil are imported, therefore a weakening or strengthening rupee directly affects the cost as a whole.

  • BYKEA hints at launching a car-hailing service

    BYKEA hints at launching a car-hailing service

    The bike taxi and logistics company BYKEA has recently hinted that it will start offering a car-hailing service. Although the company has not publicly announced its plans or informed its regular users, a recent tweet from its official account suggests what it may be up to in the next weeks or months.

    Since BYKEA offers slightly lower costs than its competitors, such as Uber and Careem, it has experienced tremendous growth and popularity among everyday commuters. However, given that petrol prices are so high and that people would rather take inexpensive transportation than spend money on a car, it does not seem like the ideal time to roll out such a service.

    https://twitter.com/bykeapk/status/1561712052577734658?ref_src=twsrc%5Etfw%7Ctwcamp%5Etweetembed%7Ctwterm%5E1561712052577734658%7Ctwgr%5Edd9180fcae0de4b4a46012b47b2b13a878212574%7Ctwcon%5Es1_&ref_url=https%3A%2F%2Fpropakistani.pk%2F2022%2F08%2F22%2Fbykea-to-launch-a-car-hailing-service-soon%2F

    Although it is too early to speculate about BYKEA’s plans, but it is apparent that the ride-hailing company is growing and wants to expand its operations in the country. Considering its latest tweet, “hum 2 se 4 honay walay hain,” makes it obvious that the company is actively formulating a significant strategy.

  • Govt imposes Rs36 billion additional tax on cigarettes, tobacco processing to revive IMF programme

    Govt imposes Rs36 billion additional tax on cigarettes, tobacco processing to revive IMF programme

    The government has issued an ordinance to impose an additional Rs36 billion tax on cigarettes, an additional Rs2 billion tax on the processing of tobacco, and lowered charges on transportation vehicles in order to raise an additional Rs38 billion in taxes.

    According to Geo, tier-1 brand cigarettes may see a price increase of Rs20 to Rs30 each packet, while tier-2 brand cigarettes would see a price increase of Rs10 per packet.

    The government increased the advance federal excise duty (FED) tax on tobacco processing from Rs10 per kg to Rs390 per kg, which will be adjustable.

    In order to secure the restart of a stalled programme and the release of a $1.17 billion tranche under an expanded $7 billion extended fund facility (EFF), Pakistan has moved to impose taxes on cigarettes and tobacco processing just prior to the International Monetary Fund’s (IMF) executive board meeting, which is scheduled to take place in Washington on August 29.

    The government did not apply regulatory duties on luxury goods because they will be imposed through SRO after receiving tariff board approval and perhaps receiving ECC approval.

    The FBR expects to raise between Rs5 and Rs14 billion in tax income through RDs, hence the overall revenue impact could reach between Rs50 and Rs52 billion.

    It appears strange that the government did not implement any taxation measures on the production of sugar-filled beverages, which also harms the health sector.

    According to the ordinance, retailers who do not fall under tier-1 will be charged the tax through their monthly electricity bills at a rate of 5 per cent where the amount of the bill does not exceed Rs20,000 and at a rate of 7.5 per cent where the amount is greater. The electricity supplier will deposit the money that is thus collected directly without deducting it from his input tax.

    Through this move, the government hopes to raise Rs2 billion.

    In contrast, the FED on locally produced cigarettes has increased from Rs5,900/1,000 sticks to Rs6,500/1,000 sticks for tier-1 and from Rs1,850/1,000 sticks to Rs2,050/1,000 sticks for tier-2 cigarettes. The FED on un processed tobacco has increased from Rs10 per kg to Rs390 per kg.