Category: Business

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

  • OGRA notifies major gas price hike for November

    OGRA notifies major gas price hike for November

    The caretaker government’s decision to implement a gas price increase of over 172 per cent for non-protected domestic consumers has left many shocked and outraged.  

    Starting on November 1, the revised prices are set to impose a significant financial burden on households already grappling with financial difficulties. 

    According to the notification released by the Oil and Gas Regulatory Authority (OGRA), the new gas prices represent a substantial hike across various consumption levels.  

    For instance, customers consuming 100 cubic metres of gas per month will now be charged Rs1,000, up from the previous rate of Rs400. Those using 150 cubic metres will see their monthly costs rise from Rs600 to Rs1,200. 

    On the other hand, the price for a monthly consumption of 200 mmbtu has increased to Rs1,600 from the previous Rs800, and for users consuming 300 mmbtu monthly, the cost has risen to Rs3,000 from Rs1,100. 

    Moreover, the charge for consuming 400 mmbtu of gas per month has gone up from Rs2,000 to Rs3,500. For those using more than 400 mmbtu per month, the new rate is Rs4,000, up from the earlier Rs3,100. 

    This significant and unexpected price surge is anticipated to have a severe impact on household budgets, especially for low-income families who heavily depend on natural gas for cooking and heating. 

  • NEPRA announces increase in electricity tariff, impacting November bills 

    NEPRA announces increase in electricity tariff, impacting November bills 

    In yet another unsettling development for power consumers already burdened by rising costs, the National Electric Power Regulatory Authority (NEPRA) has announced an increase of Rs0.40 per unit in the electricity tariff.  

    This adjustment, approved by NEPRA in response to the monthly fuel adjustment for September, will result in higher charges on November bills for electricity consumers. 

    It’s important to note that this tariff hike will affect all consumer categories, except for those classified as lifeline consumers and K-Electric users.  

    In October, NEPRA had previously approved a separate increase of Rs1.71 per unit in the electricity tariff, which was attributed to fuel adjustment charges (FAC) for the month of August. This increase was reflected in the bills for October. 

    Additionally, on October 3rd, NEPRA sanctioned a per-unit price increase of Rs 3.28 as part of the quarterly adjustment.  

    This adjustment will entail a recovery of Rs3.28 per kilowatt-hour (kWh) from various consumer categories within power distribution companies (DISCOs) and K-Electric over a six-month period, spanning from October 2023 to March 2024. 

  • Pakistan stock market continues bullish run, nearing 55,000-point mark

    Pakistan stock market continues bullish run, nearing 55,000-point mark

    The Pakistani stock market is expected to surge past 55,000 points, continuing its bullish run at the Pakistan Stock Exchange (PSX). The benchmark KSE-100 Index reached a new historic high of 54,261 points on Wednesday amidst record trading activity.

    Institutional buying drove the index past the 54,000 mark during intraday trading. Maintaining momentum throughout the day, the KSE-100 Index settled at 54,261.42 points, an increase of 525.69 points, or 0.98 per cent.

    Profit-taking erased some gains at the PSX on Tuesday, with the benchmark KSE-100 Index falling by 125 points to settle at 53,735.73 at the end of trading.

    However, buying resumed on Wednesday, particularly among index-heavy sectors such as automobile assemblers,cement, chemicals, commercial banks, oil and gas exploration companies, and OMCs.

    Analysts attribute the bullish trend to expectations of a decline in the policy interest rate in the coming weeks.

    Experts believe that interest rates may come down sooner than expected due to the fall in global oil prices.

    Improved macroeconomic indicators, including a decline in the country’s current account deficit to $8 million in September 2023 (down from $360 million in the same month in 2022) and a drop in CPI-based inflation, have also contributed to the positive sentiment at the bourse.

  • SBP orders bank closures in smog-affected Punjab districts

    SBP orders bank closures in smog-affected Punjab districts

    On Wednesday, the State Bank of Pakistan (SBP) announced the closure of bank branches in Lahore division and certain districts of Punjab severely affected by smog.

    According to a statement issued by the central bank, all banks and Micro Finance Banks (MFBs) are required to keep their branches closed in Lahore Division, including Lahore, Nankana Sahib, Sheikhupura, and Kasur districts, as well as Gujranwala, Hafizabad, Sialkot, and Narowal districts, on November 10.

    This decision was made in accordance with a notification from the Punjab government dated November 8, 2023. The Punjab government declared an “environmental and health emergency” in Lahore and two other divisions from November 9 to 12 to address the smog’s impact.

    According to the notification, all markets, shopping malls, restaurants, cinemas, gymnasiums, schools, and both public and private offices will remain closed for four days in Lahore, Gujranwala, and Hafizabad divisions. Public and private transport to and from these areas will also be restricted.

    Section-144 and health emergencies have been imposed in the Lahore division to control smog, following deteriorating air quality in the region over the past few days. Section 144 has been imposed in Lahore, Kasur, Sheikhupura, and Nankana Sahib districts.

    During environmental and health emergencies, educational institutions, government and private offices, cinemas, parks, and restaurants will remain closed, and markets will be shut on Saturday, as specified in the notification.

  • ‘Special allowance’ announced to assist workers earning below Rs32,000

    ‘Special allowance’ announced to assist workers earning below Rs32,000

    The federal government, in accordance with a notification issued by the finance division, has officially implemented a minimum monthly wage of Rs32,000. 

    The prescribed minimum wage, which is set at Rs32,000, applies to all civil employees of the federal government. 

    This also encompasses civilians who receive their remuneration from Defence estimates, including contingent paid staff and contract employees engaged for civil posts within the basic pay scales, under standard terms and conditions of contract employment.  

    Individuals whose gross monthly salary falls below the newly established minimum wage of Rs32,000 will be entitled to receive the difference as a “special allowance.” 

    It is worth noting that the government had previously announced an increase in financial compensation for individuals hired from the private sector for MP1, MP2, and MP3 positions within the bureaucracy earlier in the same month. 

    The revised minimum wage regulations will be in effect from July 1, 2023. 

  • Honda Atlas extends production suspension amid an ongoing parts shortage

    Honda Atlas extends production suspension amid an ongoing parts shortage

    Honda Atlas Cars (Pakistan) Limited, a subsidiary of Honda Motor Co., Ltd. of Japan, has officially announced a temporary plant shutdown due to supply chain disruptions.

    In line with their communication dated October 30, 2023, the company has made the decision to extend the plant closure from November 8, 2023, to November 9, 2023, as disclosed in their notice to the Pakistan Stock Exchange (PSX).

    The automaker further said that any updates to this plan will be duly communicated.

    The automaker had previously communicated the shutdown of its plant from October 24, 2023, to October 31, 2023, and later extended it to November 7, 2023.

    This decision was attributed to significant inventory levels and disruptions in the supply chain, which have severely affected the company’s production capabilities.

    Earlier this year, Honda Atlas Cars also suspended its production activities from March 9 to May 15, citing adverse economic conditions in the country and government-imposed restrictions on Letters of Credit (LC) issuance.

  • Pakistan’s debt burden surges by Rs14,506 billion in one year

    Pakistan’s debt burden surges by Rs14,506 billion in one year

    Pakistan’s international debt burden has continued its ascent, soaring to a staggering Rs63,966 billion as of the conclusion of August 2023.

    In a recent briefing session focused on the nation’s debt situation, it was disclosed that foreign debt had surged to $24,174 billion by the end of August, while local debt had concurrently reached Rs39,791 billion.

    The data presented during the briefing demonstrated a substantial increase of Rs14,506 billion in total loans over the past year. 

    It’s worth noting that in August 2022, the loan volume was a more modest Rs49,571 billion. During that period, the foreign debt stood at $18 trillion, and the local debt was at Rs32,152 billion.

    Prior to this development, the International Monetary Fund (IMF) had demanded a tax collection plan of Rs6,670 billion from Pakistan by June 2024. 

    An IMF review mission arrived in Pakistan to assess the country’s economic performance during the initial three months of the current fiscal year, spanning from July to September.

    The IMF has insisted on a comprehensive tax collection report from all sectors as part of its projection report. 

    Negotiations for the next $700 million tranche commenced on Thursday.

    According to ARY News, reports indicate that the IMF team has emphasised the importance of the Federal Board of Revenue (FBR) achieving its tax collection revenue targets without any shortfall.

     Furthermore, the IMF team has called for a report from the FBR on the progress of tax cases pending in court.

    The FBR has shared details of one million new taxpayers added to the tax net with the IMF team, and the IMF has requested specific data on tax collection from various sectors. 

  • Punjab CM orders strict enforcement of ‘one-dish’ rule for weddings

    Punjab CM orders strict enforcement of ‘one-dish’ rule for weddings

    Caretaker Chief Minister of Punjab, Mohsin Naqvi, has taken a firm stance on the violation of regulations regarding the number of dishes served and the timing of marriage ceremonies.  

    The CM has instructed the Commissioners and Deputy Commissioners to rigorously enforce these restrictions across the province, including Lahore. These rules specify that only ‘one dish’ can be served, and ceremonies must conclude by 10 pm. 

    Naqvi emphasised that these restrictions should be strictly adhered to without exception, even at farmhouses. He insisted on taking immediate action against any violations and discouraged leniency towards those who failed to comply. 

    Furthermore, the Chief Minister visited the Ghora Chowk Defence Mor flyover project to assess its progress and the construction work.  

    He observed the steel fixing process, interacted with the labourers, and commended their swift work. 

    Naqvi expressed satisfaction with the project’s continuous day-and-night progress and urged the team to maintain high construction quality standards while expediting the work. 

    In addition, the CM praised the security forces for thwarting a terrorist assault on the Mianwali Training Air Force Base.  

    He commended their timely actions, stating that they had defeated the terrorists’ sinister intentions. He paid tribute to these brave soldiers, considering them heroes of the nation, and expressed the nation’s pride in their courage. 

  • IMF review puts pressure on rupee as Pakistan negotiates loan tranche 

    IMF review puts pressure on rupee as Pakistan negotiates loan tranche 

    The Pakistani rupee is anticipated to face continued depreciation against the US dollar in the upcoming week due to heightened demand from importers outweighing the supply from exporters, according to analysts.

    The situation is further complicated by the visit of the International Monetary Fund (IMF) delegation to Pakistan for a review mission, which typically results in increased volatility for the local currency.  

    The IMF’s review discussions with Pakistani authorities are expected to conclude on November 15, potentially leading to the disbursement of a second loan tranche of approximately $700 million from the IMF. 

    In the past week, the rupee experienced a 1.19 per cent decline against the US dollar in the interbank market, closing at 284.31 on Friday, compared to 280.95 at the beginning of the week. Export proceeds have slowed down, impacting the availability of dollars.  

    Additionally, new regulations in the forex market have limited banks’ ability to fund their nostros through buy-sell swaps, leading to higher forward premiums and challenges for importers in processing payments. 

    According to The News, the rupee is expected to stabilise around 285 for the coming week, with occasional fluctuations to 288 per US dollar. A potential recovery is also anticipated once the IMF completes its review. 

    Notably, there have been positive developments, such as a boost in exports to $2.7 billion in October and a decrease in consumer price index inflation from 31.4 per cent to 26.9 per cent.  

    These developments, along with a decrease in the Karachi interbank offered rate, suggest that interest rates have likely peaked in the short to medium term, which has positively impacted equity markets, with the KSE Index reaching an all-time high. 

    Equity traders are also optimistic about the IMF’s discussions with government stakeholders and the announcement of election dates. They are hoping for a resolution on circular debt, which has constrained many profitable companies in the index.