Category: Business

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

  • Gold price falls by Rs3,600 per tola to Rs239,400

    Gold price falls by Rs3,600 per tola to Rs239,400

    Gold prices in Pakistan witnessed a significant decrease on Saturday, with the rate of 24-karat gold falling by Rs3,600 per tola. According to the Karachi Sarafa Association, 24-karat gold was priced at Rs239,400 per tola.

    In tandem, the price of 24-karat gold per 10 grammes saw a reduction, now standing at Rs205,247, down by Rs3,086. The decline extended to 22-karat gold, which is now quoted at Rs188,143 per 10 grammes.

    Silver prices also experienced a drop in the domestic market. The rate for 24-karat silver decreased by Rs50, bringing the price to Rs2,750 per tola. Similarly, the price for 24-karat silver per 10 grammes fell by Rs43, settling at Rs2,358.

    On the global stage, spot gold concluded the week at $2,293 per ounce, marking a 1.4 per cent decline over the week. The drop in international gold prices has contributed to the downward trend observed in the local market.

    This decrease in gold and silver prices is reflective of broader economic factors influencing precious metals globally, impacting local market conditions.

  • SBP expected to cut policy rate on Monday

    SBP expected to cut policy rate on Monday

    The Monetary Policy Committee (MPC) of the State Bank of Pakistan (SBP) is scheduled to convene on Monday, June 10, to deliberate on the nation’s monetary policy. This crucial meeting will be closely watched by market participants and economic analysts.

    Following the MPC meeting, the SBP is expected to release its monetary policy statement via a press release later the same day.

    In the most recent MPC meeting held on April 29, the committee opted to maintain the interest rates at a historic high of 22 per cent, marking the seventh consecutive meeting where rates remained unchanged.

    Speculation is rife among market analysts that the SBP may reduce its policy rate by 100 basis points (bps). If this anticipated reduction materialises, it would be the first rate cut in nearly four years, signalling a potential shift in the SBP’s approach after an extended period of stringent measures aimed at combating rampant inflation.

    The MPC’s decision is set to precede the announcement of the federal budget for 2024-25, adding further significance to Monday’s meeting.

    A potential rate cut could indicate a strategic move to stimulate economic growth and provide relief to businesses and consumers alike in the run-up to the new fiscal year.

  • Record high: Overseas workers’ remittances hit $3.24 billion in May 2024

    Record high: Overseas workers’ remittances hit $3.24 billion in May 2024

    In May, overseas workers’ remittances soared by 54.2 per cent compared to the same period last year, reaching $3.24 billion, according to the latest data from the State Bank of Pakistan (SBP).

    This significant increase from $2.1 billion in May last year indicates a substantial boost in remittances.

    Month-on-month, there was a notable 15.3 per cent increase in remittances, totaling $2.81 billion in the previous month.

    Cumulatively, in the 11 months of the fiscal year 2023-24, total remittances amounted to $27.09 billion, showing a 7.75 per cent increase from $25.15 billion received in the same period last fiscal year.

    Saudi Arabia retained its position as the leading contributor, with remittances amounting to $819.28 million, marking a 56.4 per cent increase from the previous year. The UAE followed closely, with remittances of $668.48 million, showing a staggering 99.0 per cent year-on-year increase.

    Remittances from Pakistani workers in the UK surged to $473.22 million, a significant 54.4 per cent increase from the same month last year. Meanwhile, inflows from the USA amounted to $359.55 million, up by 39.8 per cent year-on-year.

    Additionally, remittances from Pakistanis working in EU countries witnessed a substantial 36.4 per cent year-on-year increase, reaching $339.99 million, according to the data provided by SBP.

  • Weekly inflation rises as prices of essential food items increase

    Weekly inflation rises as prices of essential food items increase

    The Weekly Sensitive Price Indicator (SPI) for the Combined Group witnessed a 0.45 per cent increase week over week (WoW) during the week ending June 6, 2024.

    This surge marks a significant 21.69 per cent rise YoY compared to the corresponding period last year, as per data unveiled by the Pakistan Bureau of Statistics (PBS).

    The Combined Index stood at 309.91, showcasing a slight uptick from 308.52 the previous week, and a notable increase from 254.67 recorded a year ago.

    Among the 51 items monitored, the week saw prices of 19 items (37.26 per cent) soar, 14 items (27.45 per cent) witness a decline, while prices of 18 items (35.29 per cent) remained stable. Notable increases were observed in the prices of Onions (33.21 per cent), Tomatoes (15.34 per cent), Bananas (4.93 per cent), Pulse Gram (3.69 per cent), and Potatoes (2.62 per cent).

    Conversely, significant decreases were noted in the prices of Bread (3.02 per cent), Garlic (2.00 per cent), Wheat (-1.99 per cent), Petrol (1.74 per cent), and Pulse Masoor (1.43 per cent).

    The weekly SPI percentage change across income groups revealed a universal uptick, ranging between 0.33 per cent and 0.81 per cent. The lowest income group experienced the steepest weekly rise of 0.81 per cent, contrasting with a 0.33 per cent rise in the highest income group.

    On an annual basis, analysis of SPI changes across income segments indicated a consistent increase, ranging from 15.26 per cent to 25.04 per cent. Yearly SPI for the Lowest Income Group surged by 15.26 per cent, while the highest income group recorded a 19.45 per cent increase.

    In terms of specific commodities, the average price of Sona urea stood at Rs4,746 per 50 kg bag, marking a marginal 1.04 per cent decline from the previous week, yet reflecting a substantial 56.01 per cent increase compared to last year’s prices.

    Meanwhile, the average Cement price reached Rs1,255 per 50 kg bag, showing a 1.40 per cent increase from the prior week and a noteworthy 9.82 per cent surge compared to last year’s prices.

  • SBP-held foreign exchange reserves rise by $15.8 million to $9.11 billion

    SBP-held foreign exchange reserves rise by $15.8 million to $9.11 billion

    The State Bank of Pakistan (SBP) reported a modest increase in its foreign exchange reserves, rising by $15.8 million or 0.17 per cent week-on-week (WoW) to reach $9.11 billion as of May 31, 2024, according to data released on Thursday.

    The central bank did not provide specific reasons for this increment.

    Conversely, Pakistan’s total reserves saw a decline, falling by $99.8 million or 0.70 per cent WoW to $14.22 billion. This reduction was primarily attributed to a significant drop in reserves held by commercial banks, which decreased by $115.6 million or 2.21 per cent WoW, settling at $5.11 billion.

    Since the start of the current fiscal year, the SBP’s reserves have experienced a substantial increase of $4.64 billion or 103.95 per cent.

    This notable rise is largely due to Pakistan securing the International Monetary Fund’s (IMF) Stand-By Arrangement (SBA) of approximately $3 billion by the end of June last year, which facilitated access to additional multilateral and bilateral funding.

    In the current calendar year, the SBP’s reserves have increased by $888.3 million or 10.8 per cent, reflecting a steady improvement in the country’s financial standing.

  • NEPRA announces tariff hike of Rs3.33 per unit for ex-Wapda distribution companies

    NEPRA announces tariff hike of Rs3.33 per unit for ex-Wapda distribution companies

    The National Electric Power Regulatory Authority (NEPRA) has sanctioned an increase of Rs3.3321 per kilowatt-hour (kWh) in the electricity tariff for ex-Wapda distribution companies (XWDISCOs), according to a notification issued on Thursday.

    This tariff adjustment is attributed to fluctuations in fuel charges for April 2024. The increased rate will be itemised separately on consumers’ bills based on the units consumed during that month.

    NEPRA clarified that the revised tariff will apply to all consumer categories except Electric Vehicle Charging Stations (EVCS) and lifeline consumers.

    Previously, the Central Power Purchasing Agency (CPPA), a subsidiary of the Power Division, had requested an additional Rs3.49 per unit to cover the higher fuel costs for April 2024.

    The CPPA-G reported that the actual pooled fuel cost for April 2024 was Rs8.9801/kWh, significantly higher than the reference fuel cost of Rs5.4918/kWh, resulting in a difference of Rs3.4883/kWh.

    “After incorporating the aforementioned adjustments, NEPRA reviewed and assessed a national average uniform increase of Rs3.3321/kWh in the applicable tariff for XWDISCOs on account of variations in the fuel charges for April 2024,” the notification stated.

    Consumers can expect to see this adjustment reflected in their upcoming bills as NEPRA continues to address the variations in fuel costs impacting the electricity sector.

  • Gold price rebounds by Rs2,400 to Rs243,000 per tola

    Gold price rebounds by Rs2,400 to Rs243,000 per tola

    In a notable shift, gold prices in Pakistan surged significantly on Thursday, aligning with an upward trend in international markets.

    The local price of gold per tola (approximately 11.66 grammes) climbed to Rs243,000, marking a substantial single-day increase of Rs2,400.

    Similarly, the price of 10 grammes of gold rose by Rs2,057, reaching Rs208,333. These figures were reported by the All Pakistan Gems and Jewellers Sarafa Association (APGJSA).

    This surge follows a minor decline on Wednesday, when the gold price per tola in Pakistan decreased by Rs400.

    Contrary to the local market trend, the international gold price witnessed a decrease on Thursday.

    According to the APGJSA, the international rate settled at $2,362 per ounce, inclusive of a $20 premium, after experiencing a $30 drop during the day.

    In contrast, silver prices remained stable, with the rate fixed at Rs2,800 per tola.

    It’s noteworthy that back in April, the price of gold in the local market reached an all-time high of Rs252,200 per tola, highlighting the volatility and significant fluctuations in the precious metals market.

  • Budget 2024-25: Pakistan Stock Exchange proposes tax reforms for economic growth

    Budget 2024-25: Pakistan Stock Exchange proposes tax reforms for economic growth

    Pakistan Stock Exchange (PSX) has forwarded a series of significant tax proposals to both the Ministry of Finance (MoF) and the Federal Board of Revenue (FBR) for potential inclusion in the upcoming federal budget for the fiscal year 2024-25.

    These proposed measures are designed to not only bolster revenue but also to incentivise the allocation of resources towards sectors of the economy that are both productive and officially documented. This move is deemed critical for fostering economic growth and generating employment opportunities across Pakistan.

    Notably, PSX has experienced a marked upswing in its performance, largely attributed to recent stability measures implemented within the broader macroeconomic landscape. In the outgoing year alone, the market capitalisation has surged by nearly Rs4 trillion, signifying a substantial boost to economic prosperity.

    Furthermore, foreign investments totaling approximately $132 million have flowed into the country through the stock market since July 2023, underscoring the significance of the stock market in attracting foreign capital.

    It is imperative that both the Ministry of Finance and the FBR carefully evaluate the proposals put forth by PSX to ensure that the stock market remains a vital contributor to economic growth, tax revenues, foreign investment inflows, and the formalisation of the economy. This strategic move is crucial for sustaining the positive momentum witnessed in both the capital market and broader economic recovery efforts.

    PSX stresses the importance of prioritising comprehensive documentation of all economic activities, with capital markets representing one of the most meticulously documented sectors within the economy. A robust capital market ecosystem not only aligns with key economic and social objectives but also serves as a catalyst for expanding the taxpayer base, augmenting savings and investment rates, and mitigating wealth disparities.

    To realise these overarching objectives, investors necessitate a conducive and predictable tax regime. As such, Pakistan Stock Exchange has articulated a range of proposals to the Ministry of Finance and the Federal Board of Revenue, all aimed at fostering a favorable environment for investment and economic growth in the fiscal year 2024-25.

  • Business community seeks budgetary reforms to promote industry growth

    Business community seeks budgetary reforms to promote industry growth

    The business community has called for comprehensive reforms and increased facilities in the upcoming 2024-25 budget to promote industry growth by broadening the tax base.

    According to APP, Ahsan Zafar Bakhtawri, President of the Islamabad Chamber of Commerce and Industry (ICCI), revealed that consultations with the business community have concluded, and their budget proposals have been submitted to the relevant ministry.

    Bakhtawri emphasised the importance of incorporating these proposals into the Federal Budget 2024-25, stating that their implementation would address critical trade and industry issues, enhance business growth, improve government tax revenue, and aid in economic revival.

    He noted that, as in previous years, the ICCI had forwarded its budget recommendations to the Finance Ministry with the expectation of their acceptance.

    He urged the government to engage with the business community and form joint committees at the district level to expand the tax net.

    He also stressed the necessity of enforcing penalties against tax evaders. Furthermore, Bakhtawri suggested that the National Tax Number (NTN) should be mandatory for opening bank accounts and for property and vehicle transactions.

    In a related statement, Karim Aziz, Chairman of the FPCCI Capital Office, echoed these sentiments. Aziz indicated that the chamber had proposed tax reforms to broaden the tax base, aiming to rejuvenate the country’s businesses. He urged the government to consult with all stakeholders in preparing the federal budget.

    Aziz confirmed that the FPCCI had finalised its budget proposals and submitted them to the relevant ministries, advocating for their inclusion in the Federal Budget 2024-25. He reiterated that implementing these proposals would address key trade and industry challenges, facilitate business growth, boost tax revenue, and support economic revival.

    He called for a reformed and simplified taxation system developed in consultation with genuine stakeholders. Aziz also highlighted the need for the upcoming budget to focus on ease of doing business, which would attract much-needed investment and stimulate economic growth.

    Additionally, Aziz stressed the need to enhance exports, reduce imports, and incentivise expatriates to invest in Pakistan.

    The business community’s recommendations reflect a concerted effort to foster an environment conducive to industrial and economic growth, urging the government to consider these proposals seriously in the upcoming budget.

  • Gold price in Pakistan drops by Rs400 per tola despite global surge

    Gold price in Pakistan drops by Rs400 per tola despite global surge

    On Wednesday, the price of gold in Pakistan saw a decrease, with 24-karat gold being sold at Rs240,600 per tola, marking a Rs400 drop per tola. This decline in gold prices reflects a broader trend tied to the reduced purchasing power of consumers.

    The Karachi Sarafa Association reported that the price of 24-karat gold per 10 grammes also fell, reaching Rs206,276, a decrease of Rs343. Similarly, 22-karat gold experienced a drop, now priced at Rs189,086 per 10 grammes.

    While gold prices declined, silver prices remained stable in the domestic market. The price of 24-karat silver stood unchanged at Rs2,820 per tola and Rs2,418 per 10 grammes.

    On the international stage, spot gold traded near $2,331 an ounce, a modest increase of $2.5 or 0.11 per cent from the previous session, reflecting the dynamic nature of global precious metal markets.

    The sustained decrease in local gold prices, despite global fluctuations, underscores the economic challenges faced by consumers in Pakistan, influencing their ability to invest in gold.