corporate corner NOT-BY- PROFIT Global ratinG downGrades deter foreiGn investors from investinG in Pakistani market

ISLaMaBaD

NEWS DESK

President/CEO) Acting ZTBL Zahid Hussain acknowledges

Policy makers, Industrial Experts Discuss Localisation for Growth at National Policy Dialogue

Karachi: K-Electric Limited, in collaboration with Nutshell Group, jointly hosted a National Policy Dialogue on Localisation for growth at a local hotel in Karachi. The dialogue addressed the urgent need to explore options for indigenisation and sourcing materials from local avenues for Pakistan to build a resilient economy. As the world’s 4th most populous country, Pakistan’s reliance on imported fuels for its energy needs tends to pose a hurdle for consistent economic growth against commodity shocks. Founder & CEO, Nutshell Group, Muhammad Azfar Ahsan, welcomed the guests and reiterated the dire need for Pakistan to prioritize work on the Charter of Business to enable local businesses to enhance impact through local empowerment. The Dialogue was well attended by the public, private stakeholders and government figures including Senator Dr. Musadik Malik, Minister of State, Ministry of Energy, Mr. Khurram Dastagir Federal Minister for Power, Governor Sindh Kamran Tessori, representing the Government and elaborating on public initiatives. Dr. Malik’s address focused on the need to understand the ground realities as well as the potential and why localization is not a demand but a need. He felt that instead of relying only on one-time solutions, we should strive for a strong indigenous footprint. “We can only become competitive on a global scale when we achieve a local edge. When we talk about localization, we must develop clusters, where several economic activities are taking place in one geographic area.

Finland, Pakistan business communities come together to expand business cooperation

islamabad: Finland-Pakistan Business Council

(FPBC) organized the 10th edition of its legacy Finland Pakistan Business Summit 2023 in Islamabad. This year, the summit primarily focused on expanding cooperation in the energy and education sectors to boost bilateral trade, investment, and exchange of technical expertise for shared growth and development. The summit was inaugurated by the ambassador of Finland to Pakistan, H.E. Mr. Hannu Ripatti, while the former Prime Minister of Pakistan, Shahid Khaqan Abbasi chaired an important session, ‘Future of Energy Landscape in Pakistan’. More than 20 Finnish companies, the majority from the energy and education sectors, participated in the summit, which was also attended by prominent business owners, business representatives, entrepreneurs, and corporate executives from Pakistan.The summit essentially is a networking platform that has facilitated business cooperation between the two countries for more than a decade. It has helped explore business opportunities, share expertise, and help Pakistani businesses use the Finnish corridor to access the enormous markets in the European Union and the Nordic region. The panelists, all acclaimed experts in their respective fields, emphasized the need for Pakistan to replicate the Finnish model in enhancing its reliance on renewable energy and excellence in education, professional training and gender equality for socioeconomic success. They also highlighted the need for Pakistan to facilitate investment and a steady transfer of innovative technologies and technical expertise by realigning its regulatory regime to strengthen its energy and other key business sectors. Speaking at the summit, the ambassador of Finland to Pakistan, H. E. Mr. Hannu Ripatti expressed his pleasure at the level of business cooperation between Pakistan and Finland.

foodpanda Partners with Find My Doctor (FMD) to Offer Free Doctor Consultations to Riders

wRITINGfor Express Tribune, author Faraz Ahmed explains that Pakistan's stock market has been facing a range of challenges for several years, including political chaos, extreme flooding, and geopolitical crises, the latest being the Russian invasion of Ukraine.

Despite hopes of the KSE-100 index crossing 50K or even 60K following the International Monetary Fund (IMF) deal, it has remained stagnant. The lack of a staff-level agreement with the IMF has kept investors on the sidelines, and the recent unprecedented three-notch downgrade by global rating agencies has spooked international investors, resulting in dried-up Foreign Investors Portfolio Investment (FIPI).

The gap between the valuation and price of the stock is widening as the price to earnings ratio of the KSE-100 Index hit 3x, and the dividend yield climbed to 10%. The tough IMF conditionality and political overhang are the two major factors that have contributed to this situation. Inflation is one of the most significant impacts of the IMF conditions on Pakistan's economy. The IMF has pushed the central bank to undertake an incredibly tough monetary policy stance to control inflation which, as per recent figures from the Pakistan Bureau of Statistics (PBS), crossed 40%. This hawkish move by the central bank may be effective in the long run, but it has an adverse short-term impact on the economy, resulting in higher borrowing costs and reduced consumer spending. This is already destroying the bottom line for many leveraged sectors in the stock market such as steel and cement. Both of these sectors widely underperformed the benchmark index last year. The fall in construction activities due to the floods and erosion of buying power has also kept genuine investors in the real estate sector at bay. Similarly, the steel sector faced various headwinds, including the increasing price of raw material and a slowdown in demand due to an economic lull and political instability. Unfavorable effects of the anticipated capacity expansions by cement makers continue to be among the sector's top worries. There are, however, signs of recovery and some interest was generated by investors last month, witnessed by better-than-expected results and falling coal prices.

The pharmaceutical and auto sectors are also badly affected due to strong curbs on imports and issues related to the issuing of Letters of Credit (LCs) for importing raw material such as Completely Knocked Down (CKD) kits for automobiles and Active Pharmaceutical Ingredients (APIs) for drug manufacturers.

On the export side, the textile sector, which was already suffering from a shrinking top line due to the global slowdown, is suffering further from rising energy prices and raw material costs. This has resulted in major shutdowns and massive layoffs in recent times and is likely to aggravate the economic woes of the country even further. On the flip side, there are some beneficiaries of the IMF deal, like the energy sector, where circular debt is projected to rise to Rs2.4 trillion by June 2023.

As per the IMF's directive, a comprehensive Circular Debt Manage-