State Bank of Pakistan’s Open Market Operations (Injection) result dated October 31, 2013

Karachi, October 31, 2013 (PPI-OT): State Bank of Pakistan conducted its Open Market Operations (Mop up) in following contracts on Oct 31, 2013 received & accepted are given below:

A: OMO BIDS
NO     OMO Tenor                  Bids Range         Number of Quotes Offered

1      08-Days (Reverse Repo)     8.49 - 9.00%                 10

B: OMO RESULT
                                                      (Rs. In Millions)
OMO Tenor    Amount            Amount       Rate of Return    Number of Quotes
             Offered           Accepted      Accepted           Accepted
                                             (% p.a.)
08-Days      57,000.00         47,000.00       8.60                06

Total        57,000.00         47,000.00

For more information, contact:
Syed Wasimuddin
Chief Spokesman
State Bank of Pakistan (SBP)
Tel: +9221 3921 2562
Fax: +9221 3921 2563
Email: syed.wasimuddin@sbp.org.pk

Pakistan’s Liquid Foreign Reserves Position of October 31, 2013

Karachi, October 31, 2013 (PPI-OT): The total liquid foreign reserves held by the country stood at $ 9,497.2 million on 25th October, 2013.The break-up of the foreign reserves position is as under: –

i) Foreign reserves held by the State Bank of Pakistan: $ 4,299.4 million

ii) Net foreign reserves held by banks (other than SBP): $ 5,197.8 million

iii) Total liquid foreign reserves: $ 9,497.2 million

For more information, contact:
Syed Wasimuddin
Chief Spokesman
State Bank of Pakistan (SBP)
Tel: +9221 3921 2562
Fax: +9221 3921 2563
Email: syed.wasimuddin@sbp.org.pk

Rivers Flows and Reservoirs Level Report October 31, 2013

Lahore, October 31, 2013 (PPI-OT): The position of the river inflows/outflows and the reservoirs levels today is as under:

Rivers                         Inflows              Outflows                  Remarks
                              (In Cusecs)          (In Cusecs)

Indus at Tarbela                 31300                 40000            Mean flows of 24 hours
Kabul At Nowshera                 8800                  8800            Mean Flows of 24 hrs.
Jhelum at Mangla                  8900                  3000            Mean flows of 24 hours
Chenab at Marala                 12100                 12100            Flows at 0600 hours

Barrages                       Inflows              Outflows                  Remarks
                              (In Cusecs)          (In Cusecs)

Jinnah                           51400                 49400            Flow at 0600 hours
Chashma                          51600                 51000            Mean flows of 24 hours
Taunsa                           53600                 51500            Flow at 0600 hours
Panjnad                           5400                   600            Flow at 0600 hours
Guddu                            59100                 50900            Flow at 0600 hours
Sukkur                           50800                 21100            Flow at 0600 hours
Kotri                            16740                   Nil            Flow at 0600 hours

Reservoirs                   Present Level         Dead Level         Maximum level     Present
(at 0600 hours)             (Above Sea Level)    (Above Sea Level)      (ft.)           Live Storage

Tarbela                       1520.84 Feet         1378.00 Feet        1550.00          4.977 MAF
Mangla                        1210.24 Feet         1040.00 Feet        1242.00          5.037 MAF
Chashma                        646.80 Feet          637.00 Feet         649.00          0.193 MAF

For more information, contact:
Muhammad Abid Rana
Director Public Relations
Water and Power Development Authority (WAPDA)
G-32, WAPDA House, Lahore
Tel: +9242 9920 2633 and +9242 9920 2211 -2033 -2029
Cell: +92333 445 8293
Email: mabidrana@gmail.com

State Bank of Pakistan rates for conversion of Foreign Currency Deposits, Dollar Bearer Certificates, Foreign Currency Bearer Certificates, Special United States Dollar Bonds and profit thereon October 31, 2013

Karachi, October 31, 2013 (PPI-OT): The following rates will be applicable for conversion into rupees of Foreign Currency Deposits, Dollar Bearer Certificates, Foreign Currency Bearer Certificates, Special U.S Dollar Bonds and profit thereon by all banks and for providing Forward Cover on Foreign Currency Deposits (excluding F.E-25 deposits) by the State Bank on November 1, 2013.

Currency         Rate in Pak Rupee

U.S. Dollar          106.8979

Japanese Yen           1.0877

Pound Sterling       171.3038

Euro                 146.4501

For more information, contact:
Syed Wasimuddin
Chief Spokesman
State Bank of Pakistan (SBP)
Tel: +9221 3921 2562
Fax: +9221 3921 2563
Email: syed.wasimuddin@sbp.org.pk

Ismail Suttar urges Old-Age Benefits Institution authorities for increase in pension amount

Lasbela, October 31, 2013 (PPI-OT): Mr. Ismail Suttar, President LCCI termed the pension disbursed by EOBI to secured employees a meagre amount and urged the Employees” Old-Age Benefits Institutions (EOBI) authorities to increase the same keeping in view the increasing cost of living of today as it is the only support for the private sector employees after retirement.

He put forward this proposal while addressing a Seminar organized by LCCI in collaboration of EOBI on “EOBI Web Application Facilitation System”. Mr. Hassan Junaid, Director EOBI Sindh-Balochistan Zone, Director IT, Mr. Nadeem Iqbal and Assistant Director Mr. Ali Muttaqi also participated in the Seminar.

The Chamber’s Chief welcomed the introduction of EOBI Web Application Facilitation System and congratulated the EOBI for the same. He hoped that through this system the secured employees may directly approach the EOBI online and without any hassle and personal contact with EOBI staff, can get their registration, deposit of contribution and complete other matters pertaining to the same.

He further added that the privilege of this system is its simplicity and safety thus giving a providing a sense of security amongst the private sector employers and employees, which is quite satisfactory for all stakeholders.

Mr. Hassan Junaid (Director EOBI, Sindh and Balochistan) and Mr. Nadeem Iqbal (Director IT, EOBI) while giving this presentation informed that the objective of introducing the system of web application is to maintain the transparency and to facilitate the stakeholders. They further ensured that the EOBI is endeavouring continuously to improve this on-line system in order to further facilitate the employees and the employers.

While appreciating the interest showed by the participants with the proceedings of the Seminar with an intension to provide relief to the retired people, Mr. Ismail Suttar again urged the EOBI to consider substantial increase in the pension, to enable our senior citizens to live a happy life after their retirement.

For more information, Contact:
Muhammad Farhan
Public Relations Officer
Lasbela Chamber of Commerce and Industry
Ground floor, lieda office building, Hub, Dist. Lasbela,
Tel: (0853) 303410, 304461
Fax: (0853) 302431
E-Mail: farhanprolcci@yahoo.com

KASB Securities Limited and Economics Research-Commodities Corner

Karachi, October 31, 2013 (PPI-OT): US Fed portrays optimism over economic recovery

Pressure on crude oil remained and it was seen trading at four months low as US crude stock piles gained significantly. Moreover, crude supplies from one of the largest fields of Libya are likely to start next week.

According to KASB Securities Limited thus, any upside would remain under check due to increasing supply.
Gold prices succumbed to the optimism portrayed by US Fed on economic recovery after retesting highs of US$1,358, which creates a case for winding of monetary stimulus.

 Source: Bloomberg, Reuters 
Key events/data releases 
Time       Currency Impact     Event                       Forecast Previous 
30 October, 2013 Monday 
12:00pm    EUR      Medium    German Retail Sales m/m        0.5%    -0.2% 
8:30am     EUR      Medium    German Consumer Climate        7.3      7.1 
12:45pm    EUR      Medium    French Consumer Spending m/m   0.2%    -0.4% 
5:30pm     USD      High      Unemployment Claims            341k    350k 
1 November, 2013 Monday 
2:30pm     GBP      High      Manufacturing PMI              56.3     56.7 
7:00pm     USD      High      ISM Manufacturing PMI          55.3     56.2 
 

Gold Spot

Technical Strategy: Sell
Gold failed to hold support at US$1,339 which hints that a small rising wedge formation is in play. This could lead to further decline towards US$1,310. KASB Securities Limited thus recommend selling with risk defined above US$1,347 with aforementioned support as the target area.

Silver Spot

Technical Strategy: Sell
Silver in tandem with gold also appears to have lost its lustre at least in the near –term; this is despite a positive chart structure in the medium term. So far in today’s session, the metal price has engulfed previous day gains and hints at further weakness and test of support at US$21.80. Sell with risk defined above US$22.80.

WTI Spot (Crude Oil)

Technical Strategy: Buy
WTI is approaching a support area defined by US$96.00. RSI also appears to be in diverging mood. This could potentially result in a small pullback and test of resistance towards US$97.50. KASB Securities Limited recommend buying with risk defined below US$96.00.

AKD Quotidian about — PSO: Earnings growth amid continuing liquidity problems

Karachi, October 31, 2013 (PPI-OT): Led by irregular interest income of PkR8.2bn from the power sector, PSO posted robust earnings growth of 83%YoY in 1QFY14 (NPAT: PkR7.8bn; EPS: PkR31.6), where AKD Securities upward revise AKD Securities Limited EPS estimate for FY14F by 33% to PkR77/share.

According to AKD Securities Limited however, highlight pending interest payable/receivable post circular debt retirement in Jun’13 as key risks to earnings going forward. Moreover, circular debt build-up during FY14TD has been less than encouraging, where AKD Securities expects liquidity constraints to lead to continued low payouts by PSO going forward.

However, PSO currently trades at a sizable 55% discount to the broader market P/E as compared to an average discount of 32% during FY10-FY12, presenting substantial upside from current levels. That said, AKD Securities highlight sustained energy reforms in the long-term as the only panacea for PSO, resulting in a potential re-rating for the stock. PSO currently provides upside of 23% to AKD Securities Limited revised Jun’14 TP of PkR335/share.

1QFY14 Review: PSO posted robust earnings growth of 83%YoY to PkR7.8bn in 1QFY14 driven primarily by an irregular PkR8.2bn in ‘other income’ booked as penal interest income from the power sector. However, penal interest paid to refineries during the quarter was PkR2.6bn against total penal interest payable of ~PkR14bn. Other highlights of the result include: 1) revenue growth of 11%YoY to PkR307bn on the back of increased MS and FO volumes, 2) 2.6xYoY increase in operating costs to PkR7.3bn due to higher currency devaluation during the quarter resulting in higher foreign exchange losses (PkR3.7bn), and 3) inventory gains of ~PkR2bn due to a sharp spike in crude prices during the quarter.

Circular debt update: As per company management, PSO’s receivables have spiked to PkR134bn at present from PkR77bn at FY13 end – an average monthly increase of PkR15bn post circular debt retirement in Jun’13. This
in recoveries by PSO during FY14F, which should result in continued financing requirements and a tough cash cycle.

Investment Perspective: While AKD Securities expects liquidity constraints to continue to result in low payouts from PSO, AKD Securities stills await potential benefits from the hike in power tariffs among other energy sector reforms going forward, which could warrant a re-rating for the stock, alongside a revision in margins. In this regard, PSO, currently trades at a FY14F P/E of 3.5x, a discount of 55% to the broader market P/E, significantly higher than is despite KAPCO turning to an advance payment mechanism to PSO, where anticipated higher collection post power tariff hikes have fallen short of expectations. In this regard, under-recoveries from the power sector during FY14TD stand at PkR63bn as compared to under-recoveries of PkR27bn in the same period last year.

OMC margin revision expected: PSO has been lobbying aggressively for an upward revision in regulated margins in order to cover rising direct costs and inflationary pressures. While AKD Securities stills await an update in this regard, PSO expects an increase of PkR0.25/litre to PkR0.4/litre (10%- 20%) across the product range shortly. As per AKD Securities Limited estimates, every 10% increase in margins for HSD and MS results in a +5% annualized EPS impact for PSO. Recall, earlier revisions in margins on favourable cash cycle products improves overall cash flows for PSO.

Estimates revision: AKD Securities revises EPS estimates for FY14F and FY15F to by 33% and 6% to PkR77 and PkR81, respectively, after the higher than expected interest income received in 1QFY14. That said, AKD Securities highlights additional irregular income/payments viz ~PkR40bn pending from the power sector as penal interest and PkR11.5bn interest charges payable to refineries as key risks to earnings going forward. Moreover, while AKD Securities continues to monitor circular debt build-up, AKD Securities remains unconvinced of any substantial improvement the average discount of 32% during FY10-FY12 when circular debt was at its peak. While this presents a case for further upside from current levels, clarity on the GoPs conviction to reign in circular debt could stands out as the key long-term trigger.