PTCL Group Set to Acquire Telenor Pakistan with IFC Financing

Islamabad, The International Finance Corporation (IFC) has approved financing for PTCL Group's acquisition of Telenor Pakistan, marking a significant development in Pakistan's telecom industry. This move follows a share purchase agreement signaling major shifts in market dynamics and digital infrastructure growth.

According to Pakistan Telecommunication Company Limited, the financing approval from IFC, a World Bank Group entity, will support PTCL Group in acquiring a 100 percent stake in Telenor Pakistan. This transaction, agreed upon on a cash-free, debt-free basis, not only highlights the economic potential in Pakistan but also PTCL Group’s role in advancing the country's 'Digital Pakistan Vision.'

The share purchase agreement, signed in December, signifies a major shift in the telecom sector of Pakistan. With this acquisition, PTCL Group aims to enhance its market position and contribute to the transformation and innovation in the telecom and digital arenas of the country.

The completion of the deal is contingent on the attainment of the necessary regulatory approvals, paving the way for future growth and competition in the telecom sector.

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Currency Rates Fluctuate in Pakistan’s Forex Market

Karachi, The Exchange Companies Association of Pakistan reported slight fluctuations in foreign exchange rates for major currencies including the US dollar, euro, and British pound on April 9, 2024, compared to the previous day.

According to Exchange Companies Association of Pakistan, the buying and selling rates for the US dollar on April 9 were 276.82 and 279.37 respectively, showing a minor decrease from the previous day’s rates of 277.02 and 279.58. The euro experienced a slight increase, with rates moving from 298.34 and 301.06 on April 8 to 298.84 and 301.47 on April 9. The British pound also saw an increase, with buying and selling rates going from 348.21 and 351.39 to 348.65 and 351.84 respectively.

The Japanese yen (JPY), United Arab Emirates dirham (AED), and Saudi riyal (SR) remained relatively stable, with minimal changes in their exchange rates. The interbank rates for the US dollar remained nearly constant at around 277.94 and 278.14.

These minor shifts in currency values reflect the dynamic nature of Pakistan’s foreign exchange market, influenced by various economic and geopolitical factors. The reported exchange rates provide a snapshot of the market movements and are essential for businesses, investors, and financial analysts monitoring the economy's pulse.

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Madina Oil Refinery Limited’s Ratings Upgraded by VIS

Karachi, VIS Credit Rating Company Limited (VIS) has raised the entity ratings of Madina Oil Refinery Limited (MORL) from 'BBB-/A-2' to 'BBB/A-2', reflecting improvements in profitability and capitalization. The medium to long-term rating upgrade signals adequate credit quality with reasonable and sufficient protection factors, while the short-term rating denotes good certainty of timely payment, highlighting the company’s sound liquidity factors and fundamentals.

According to VIS Credit Rating Company Limited, this upgrade, announced on April 9, 2024, follows a previous rating action from February 20, 2023. The revised ratings, with a stable outlook, consider the business risks and performance dynamics of the edible oil sector, particularly the challenges of reliance on imported raw material and competitive market conditions.

MORL, a player in the edible oil refining industry and part of the Madinah Group, has diversified interests in sectors such as sugar, ethanol, power generation, and mass media. The company has recently expanded its operations, including installing a solvent extraction plant and refining capacity for canola oil, which contributed to an improvement in its financial metrics despite a decline in volume offset by price increases.

The rating adjustment acknowledges MORL’s stronger profitability, driven by enhanced gross margins from backward integration into seed crushing and favorable market prices for meal products. The company's capitalization has benefited from these profitability gains, with decreased gearing and leverage alongside comfortable coverage ratios. However, the report notes liquidity constraints due to significant investments in related party shares, necessitating short-term borrowing to manage cash flow.

VIS's analysis highlights the need for MORL to recover invested funds to sustain its liquidity and capital structure, underscoring the importance of financial management in maintaining the improved rating status.

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Madina Oil Refinery Limited’s Ratings Upgraded by VIS

Karachi, VIS Credit Rating Company Limited (VIS) has raised the entity ratings of Madina Oil Refinery Limited (MORL) from 'BBB-/A-2' to 'BBB/A-2', reflecting improvements in profitability and capitalization. The medium to long-term rating upgrade signals adequate credit quality with reasonable and sufficient protection factors, while the short-term rating denotes good certainty of timely payment, highlighting the company’s sound liquidity factors and fundamentals.

According to VIS Credit Rating Company Limited, this upgrade, announced on April 9, 2024, follows a previous rating action from February 20, 2023. The revised ratings, with a stable outlook, consider the business risks and performance dynamics of the edible oil sector, particularly the challenges of reliance on imported raw material and competitive market conditions.

MORL, a player in the edible oil refining industry and part of the Madinah Group, has diversified interests in sectors such as sugar, ethanol, power generation, and mass media. The company has recently expanded its operations, including installing a solvent extraction plant and refining capacity for canola oil, which contributed to an improvement in its financial metrics despite a decline in volume offset by price increases.

The rating adjustment acknowledges MORL’s stronger profitability, driven by enhanced gross margins from backward integration into seed crushing and favorable market prices for meal products. The company's capitalization has benefited from these profitability gains, with decreased gearing and leverage alongside comfortable coverage ratios. However, the report notes liquidity constraints due to significant investments in related party shares, necessitating short-term borrowing to manage cash flow.

VIS's analysis highlights the need for MORL to recover invested funds to sustain its liquidity and capital structure, underscoring the importance of financial management in maintaining the improved rating status.

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VIS Maintains ‘AAA/A-1+’ Rating for Pakistan Mortgage Refinance Company

Lahore, VIS Credit Rating Company Limited (VIS) has reaffirmed the ‘AAA/A-1+’ credit rating for Pakistan Mortgage Refinance Company Limited (PMRC), indicating a stable outlook and high credit quality similar to government securities.

According to VIS Credit Rating Company Limited, the reaffirmation of the ‘AAA’ long-term rating reflects PMRC’s highest credit quality and negligible risk factors, marginally greater than the risk-free Government of Pakistan's (GoP) debt. The ‘A-1+’ short-term rating denotes the highest certainty of timely payment, with outstanding short-term liquidity and safety measures. The previous rating was announced on April 14, 2023.

PMRC, initiated by the State Bank of Pakistan in 2015, operates as the country’s premier mortgage refinance entity, enhancing long-term funding avenues for primary mortgage lenders under both conventional and Islamic financing. The sustained ratings highlight PMRC’s robust shareholding structure, government backing, effective regulatory environment, experienced management, and stringent risk management protocols.

Despite the challenging economic conditions and declining mortgage activities, PMRC's credit risk remains low, supported by prudent risk management and high-quality portfolio indicators. Growth in business and increased yields on investments have led to improved profitability, benefiting from the rising interest rate scenario. PMRC’s liquidity and capitalization are deemed robust, with a substantial portion of its investments in government securities, maintaining the Capital Adequacy Ratio well above regulatory necessities.

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Auto Sales Expected to Dip in March 2024 After February Surge

Karachi, Following an impressive year-on-year growth in February 2024, the automobile industry is set to face a decline in sales for March 2024, with the three major listed auto companies anticipated to report a collective 3% decrease in sales, totaling around 8.09 thousand units.

According to JS Global, Honda Car Africa (HCAR) is predicted to show a significant sales increase due to a low-base effect from plant shutdowns in March 2023 and recent price reductions in March 2024. In contrast, Pak Suzuki Motor Company (PSMC) is expected to see a substantial decrease in sales, with forecasts indicating a 25% and 11% year-on-year decline.

The first quarter of calendar year 2024 (1QCY24) is likely to exhibit a 14% year-on-year sales increase, primarily attributed to the low-base effect following the plant shutdowns in 1QCY23. However, this figure represents a 62% drop compared to the first quarter of calendar year 2022 (1QCY22), highlighting the volatility in the auto sales market.

JS Global notes that despite the current fluctuations, the foundation for sustained demand growth in the automobile sector is not yet solidified. Expectations for the fiscal year 2025 include a potential increase in auto demand, contingent on a pickup in economic activities and reductions in inflation and interest rates, which are crucial for revitalizing the auto market.

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Business Titan Iftikhar Ali Malik Honored for Lifetime of Achievement and Philanthropy

Lahore, Iftikhar Ali Malik a prominent figure in Pakistan's business and philanthropy spheres, was recently honored by the United Business Group (UBG) for his decades-long contributions to the nation's economic and social development. Malik, who has held prestigious positions such as former chairman of UBG, ex-president of SAARC Chamber of Commerce and Industry, and former president of FPCCI, has been a key player in advancing Pakistan's interests both locally and internationally.

According to United Business Group, Malik's journey in bolstering Pakistan's economy spans over 40 years, during which he has been pivotal in initiating significant infrastructure projects like the FPCCI Headquarters in Karachi, and the Lahore Chamber of Commerce and Industry. His efforts have left a lasting impact on the country's industrial, agricultural, and service sectors, with notable achievements such as the introduction of hybrid seeds in agriculture, leading to increased rice production.

Throughout his tenure, especially during challenging times like the COVID-19 pandemic, Malik demonstrated leadership in maintaining the continuity of the SAARC Chamber of Commerce and Industry's activities. His role extended to significant contributions in establishing the SAARC Headquarters in Islamabad and the Islamic Chamber Head Office in Karachi.

The Guard Group, under Malik's leadership, has achieved international acclaim for products like Guard Auto Filters and Guard Rice, marking Pakistan's presence in global markets. His influence and advocacy for Pakistan's potential have also been recognized in forums such as the Economic Cooperation Organization (ECO) and the D-8 Organization for Economic Cooperation.

Malik's career and philanthropic activities have not only driven economic progress but have also served as an inspiration for future generations in the business community and beyond. UBG's acknowledgment of Malik's legacy underscores his standing as a luminary in the realms of business and philanthropy in Pakistan.

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