Business

KSE-100 Index up 1.30pc, dollar grows stronger amid high demand

Published

6 months ago

November 27, 2023

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KSE-100 Index up 1.30pc, dollar grows stronger amid high demand

The stock market continued its movement in upward trajectory on Monday – the first business day of the week – with the benchmark KSE-100 Index jumping 1.13 per cent to a reach a new high, as the prospects of imminent foreign investment got brighter with Caretaker Prime Minister Anwaarul Haq Kakar’s visit to the United Arab Emirates (UAE).

On the other hand, the US dollar was traded at Rs286 in official exchange rate after gaining 63 paisa and for Rs287 in open market with a 50 paisa surge, as the money market hasn’t been able to meet the demand amid low supply.

During his stay, Kakar and his team are expected to sign a number of memorandums of understanding (MoUs) on different subjects including the investment in energy, port operations, waste water treatment, food security, logistics, mining, aviation, and banking and financial services.

By 2:19pm, the KSE-100 Index was recorded at 59,854.25 after moving up by 767.90 points against the previous closing of 59,086.35.

Earlier, a successful review of the $3 billion stand-by arrangement by the International Monetary Fund (IMF) gave a clear message that the government would have to deal with issues like circular debt and reforming the energy sector.

At the same time, privatisation of loss-making state-owned enterprises is also on the cards, pointing to an imminent inflow of foreign investment besides providing the much-needed opportunity to the local investors to explore new ventures.

Foreign investment in sectors like oil and gas, mining, banking, aviation and agriculture means the listed companies will see their stocks moving up for a considerable period after years of undervaluation.

Meanwhile, another factor which will help the market in long-term will be documentation of economy, thus forcing investors to use more traditional and legal means, like the stocks, for earning profits.

Read more: Major changes on the cards for boosting tax-to-GDP ratio to 15pc

Amid a visible and consistent improvement in macroeconomic indicators coupled with an end to the series of rate hikes followed by possible rate cuts, the local investors have already been rushing to the stocks after dwindling property prices and a stronger rupee due to the government action against market manipulators made them think about more profitable avenues.

This trend is making the stock market more and more lucrative for investors when compared with unproductive real estate sector, which first witnessed stagnation and later went into a decline.

Various factors are responsible for this, but the main reason is overinvestment in both commercial and residential properties – considered a safe haven, especially amid the economic turmoil Pakistan is facing.

Moreover, the rising stocks will certainly also discourage investment in safe haven currencies like dollar and assets like gold.

One must recall that Pakistan has one of the worst, if not the worst, ratio of people investing in stocks when compared with the rest of the world. The reason is simple: real estate, gold and safe haven dollar provide an easy way to earn profit.

This mindset has resulted in ignoring the manufacturing as well as research and innovation – the pre-requisites for a developed and sustainable economy – both individual and institutional levels.

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Star Entertainment says Hard Rock-led group weighs bid, shares surge

Published

20 hours ago

May 20, 2024

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Star Entertainment says Hard Rock-led group weighs bid, shares surge

Star Entertainment (SGR.AX), opens new tab said on Monday a consortium led by Florida-based Hard Rock Hotels & Casinos is considering a bid for the cash-strapped Australian firm, sending its shares 20% higher.

A potential takeover by entertainment giant Hard Rock would provide a much-needed financial lifeline to Star, which has been plagued by a regulatory inquiry into its flagship Sydney casino operation and an executive exodus.

Star, which had a market value of A$1.29 billion ($863.66 million) as of Monday’s close, said it has been approached by a consortium of investors which includes Hard Rock Hotels & Resorts (Pacific).

The company said it understands Hard Rock Hotels is a local partner of Hard Rock.

Earlier in the day, Star said it had received “inbound interest from a number of external parties” but flagged none of them had yet resulted in “substantive discussions”.

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Business

Red Lobster seeks bankruptcy protection with $100 mln in financing commitments

Published

21 hours ago

May 20, 2024

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Red Lobster seeks bankruptcy protection with $100 mln in financing commitments

U.S.-based restaurant chain Red Lobster has filed for Chapter 11 bankruptcy protection in a Florida court after securing $100 million in financing commitments from its existing lenders, the company said on Sunday.

The company listed its assets and liabilities to be between $1 billion and $10 billion, according to a court filing.

Red Lobster said its restaurants will be open and operate as usual during the bankruptcy proceedings, and plans to reduce its locations as well as pursue a sale of substantially all its assets.

The restaurant chain also said it has entered into a “stalking horse” purchase agreement to sell its business to an entity formed and controlled by its existing term lenders.

“This restructuring is the best path forward for Red Lobster. It allows us to address several financial and operational challenges and emerge stronger and re-focused on our growth,” said Jonathan Tibus, CEO of Red Lobster.

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Business

BMW imported 8,000 vehicles into US with parts from banned Chinese supplier, Senate report says

Published

21 hours ago

May 20, 2024

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BMW imported 8,000 vehicles into US with parts from banned Chinese supplier, Senate report says

German automaker BMW (BMWG.DE), opens new tab imported at least 8,000 Mini Cooper vehicles into the United States with electronic components from a banned Chinese supplier, a U.S. Senate report released on Monday said.

A report by Senate Finance Committee Chairman Ron Wyden’s staff said BMW imported 8,000 Mini Coopers with parts from a Chinese supplier banned under a 2021 law and that BMW continued to import products with the banned parts until at least April.

BMW Group said in an email it had “taken steps to halt the importation of affected products.”

The company will be conducting a service action to replace the specific parts, adding it “has strict standards and policies regarding employment practices, human rights, and working conditions, which all our direct suppliers must follow.”

Congress in 2021 passed the Uyghur Forced Labor Prevention Act (UFLPA) law to strengthen enforcement of laws to prevent the import of goods from China’s Xinjiang region believed to have been produced with forced labor by members of the country’s Uyghur minority group. China denies the allegations.

“Automakers’ self-policing is clearly not doing the job,” Wyden said, urging the Customs and Border Protection agency to “take a number of specific steps to supercharge enforcement and crack down on companies that fuel the shameful use of forced labor in China.” Customs and Border Protection did not immediately comment.

The report found that Bourns Inc, a California-based auto supplier, had sourced components from Sichuan Jingweida Technology Group (JWD). That Chinese company was added to the UFLPA Entity List in December, which means its products are presumed to be made with forced labor.

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