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Top 5 News Affecting Pakistan Stock Market this week

Pakistan Stock Exchange ended on a negative note. The trading session reached to 49,300.90. The leaders were the engineering and the commercial bank’s stocks.

What will be the top five new that will affect the stock volume?

Will Nawaz Government get stabilize after Panama Scandal?

Probably one of the biggest controversies of the Nawaz government so far, the Panama Leaks. After the Supreme Court verdict, it was a sigh of relief for investors as Nawaz Sharif is still the Prime Minister.

Another controversy that was in the news this week was the Dawn leaks report. According to the most recent report, the army rejects Prime Minister Office statement on Dawn report.  In this statement, four different recommendations are given to enquire the planted story published in Dawn on 6th October 2016.

After Panama, will it another scandal that affects the confidence level of the investors?

Ups and Down in Textile sector

In Pakistan Textile sector positive change is recorded in Value added textile products in the month of March 2017. The profit margin in the value added products increased by 68.63% as compare to the last month of February 2017. According to an industry representative, the Prime Minister Nawaz Sharif export package has started giving positive impact. With this news, the investors will continue to show their confidence at some of the major textile giants like Ibrahim Textile, Masood Textile etc.

Not very often you will hear the losing profitability of the textile powerhouse, the Nishat mills limited. The company gross profit lower by 15% after the nine months ended FY17 .The reason for the decline is the higher distribution cost and the lower income. According to a company correspondent, the company is receiving lower rates from its weaving, dyeing and home textile products.  Certainly, these financial figures will impact the investor’s confidence at Nishat Mills limited.

Pakistan State Oil High in Financial Highlights

PSO announced its earnings after the end of 9MFY17. The company announced its cash dividend of Rs10. Last two quarters (2Q and the 3Q) was the key boosters to revenue. The reason behind the revenue of the PSO is the increase in the HSD and the gasoline volumetric sales. On the other side, the drop in the furnace oil volume affected the top line growth. Other than the sale revenue, company earned from interest income and the lower finance cost.

But one thing that will increase the concern of the company investors is the circular debt. The company will rely on the short term burrowing to meet the circular debt. Consequently, the finance cost will increase and affect the company’s net income.

Pakistan Stock Exchange will facilitate the Small medium Enterprises.

PSX has signed a Memorandum of Understanding with SMEDA and Islamabad Chamber of Commerce & Industry. This MOU will help the SME’s to access equity finance. The PSX will launch board for the SME’s. A company with the paid-up capital of not less than Rs 25 million and not more than 200 million is eligible to get listed on SME board. This platform will not only increase the financial needs but will also enhance the corporate structure.

On the other side, the PSX will protect the investors. There will be a lock-in period on the share of the sponsors. The listed SME has to retain their entire shareholding for one year. In next two years, 25% paid up capital will retain to protect the investors. It will be a good chance to invest in the SME’s with full protection from the PSX.

GlaxoSmithKline as healthy as ever!

The largest Pharmaceutical Company in Pakistan showed impressive performance in the first three months of the year 2017. The cost was on the higher side but still, net margin was healthy. The bottom line increased by 18% over the last year. The reason for the strong performance was the sale of antibiotics, dermatology and respiratory products. Being consumer product, the company selling and marketing cost increased by 13% as year on year.

Moving on, the company also has a separate listed company called GlaxoSmithKline Consumer Healthcare Pakistan Limited. This entity also reported sales of RS 1,650 million and profit in the first-ever quarter result.

About Emaad Qureshi