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Nishat Chunian announces partial shutdown of operations



  • Nishat Chunian says it would suspend operations at nearly one-fourth of its spindles.
  • Says will restart spindles as soon as market conditions improve.
  • Textile manufacturer latest to announce suspension of operations.

KARACHI: One of Pakistan’s largest textile companies Nishat Chunian Limited (NCL) has announced a partial shutdown of operations from next month due to the current market conditions, reported The News on Thursday.

In a statement to the Pakistan Stock Exchange (PSX), the textile manufacturer informed that it would suspend operations at nearly one-fourth of its spindles temporarily until the market revamps.

“The company has decided to temporarily close 51,360 spindles after one month due to market conditions. However, the remaining units are operating normally. Company will restart these spindles as soon as market conditions improve,” the stock filing read.

Nishat Chunian has an installed capacity of 219,528 spindles and 2,880 rotors in its spinning division.

The textile manufacturer is the latest to announce operations suspension amid a prevailing economic downtrend in the country. Earlier this month, Kohinoor Spinning Mills Limited (KOSM) also announced the suspension of its operations giving multiple reasons.

“Due to prevailing global and economic downturn, overdue plant maintenance, high cost of production and low price and demand, it is not feasible to operate the production facility,” the KOSM said in a statement.

Pakistan has been facing multiple challenges, including low foreign exchange reserves, lack of foreign inflows, rising debt, energy shortages, and political uncertainty affecting the country’s economy, which is collectively pushing many companies to limit or shut down their operations.

Others companies that have recently announced the suspension of their operations include Indus Motor CompanyPak Suzuki Motor Company Ltd, Bolan Castings Limited and Baluchistan Wheels Ltd. Millat Tractors Limited has also been observing non-production days on Fridays since December 16.

Curbs by the government to reduce the size of its import bill have severely affected the export sector, especially textiles, which hold the lion’s share in the country’s exports. Delays in rebate and rising inflation have also contributed to a decline in Pakistan’s exports in recent months.

In November, the textile exports were down by 19% year on year. The country’s big manufacturing industries, including food, textile, petroleum oil, pharmaceutical and automobiles also reported a drop of 7.75% in October 2022, compared to the same month last year.

Last week, the All-Pakistan Textile Mills Association (APTMA) warned that the country’s textile exports could fall below $1 billion a month from 2023 onwards, seeking government intervention to save the sector from destruction.

“Across the country, the textile industry is currently using less than 50% of its capacity. If corrective action is not done quickly, a very significant number of jobs have already been lost and many more will do so,” APTMA said in a letter written to Prime Minister Shehbaz Sharif.

Pakistan Hosiery Manufacturers and Exporters Association (PHMEA) also expressed serious concerns over a declining trend in textile exports in a statement last month. 

The textile exports had dropped by 1.34% to $5.941 billion during the first four months of July-Oct in the current fiscal year, against $6.021 billion in the same period of last year, the association said.


November inflation to spike on gas price adjustment, dashing slowdown hopes




  • CPI likely to rise to 28.6-29.6% year-on-year in Nov.
  • Inflation rate could register 2.1% month-on-month jump.
  • Weekly SPI on Nov 16 showed 480% surge in gas prices.

KARACHI: Inflation is expected to surge in November, primarily due to a massive hike in gas prices, according to brokerage reports released on Wednesday.

The consumer price index (CPI), which measures changes in the prices of goods and services, is likely to rise to 28.6-29.6% year-on-year in November, up from 26.9% in October.

A report by brokerage firm Insight Securities predicts that the inflation rate will register a 2.1% month-on-month jump, defying earlier expectations of a gradual slowdown from September onwards. Optimus Capital Management estimates that the CPI will increase by 2.9% month-on-month, primarily driven by an 11.6% jump in the housing index due to gas price revision and a 1.6% increase in the food index.

The primary cause behind the expected spike in November inflation is the adjustment of recently imposed fixed charges within the gas tariff structure. The weekly sensitive price index (SPI) inflation released on November 16 showed an astonishing 480% surge in gas prices.

However, a slight respite is expected from a 4.0% decrease in the transport index due to lower average fuel prices in November. The impact of the gas price hike was partially mitigated by the decline in fuel prices and the month-on-month fall in the food commodity adjustment (FCA).

Food inflation is attributed to a sharp increase in the prices of perishable items such as onions, tomatoes, potatoes, and eggs, as well as tea. Despite an increase in supply from imports, wheat prices still rose month-on-month, while sugar and cooking oil showed a significant decline during this period, based on weekly SPI data from the Pakistan Bureau of Statistics.

The recently implemented axle load regime, which limits the weight of goods transported by trucks, could put some pressure on the price levels of goods.

The higher October fuel cost adjustment (FCA) demanded at Rs3.5 per kilowatt hour (to be applicable in December) on electricity charges and a second-round impact of gas price increase could keep inflation under pressure. However, the base effect during the second half of the fiscal year is likely to help absorb the impact.

Commodity and energy prices, along with the exchange rate of the rupee against the US dollar, will remain important factors in keeping the CPI under control.

The reports projected the average inflation for the first five months of the fiscal year 2023/24 (July-June) to be 28.5%, compared with 25.2% in the same period last year and with an estimated ending at 19.4% year-on-year in June 2024.

They predicted that the State Bank of Pakistan (SBP) is likely to maintain the interest rate in its upcoming monetary policy committee (MPC) meeting due to the higher-than-estimated inflation in November. However, the SBP could opt to initiate an easing cycle in the first quarter of 2024, given the high base effect in the second half of the fiscal year.

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Petrol price likely to remain unchanged in next fortnightly review




  • Petrol prices to hold steady in next review.
  • Diesel and kerosene prices to decline from Dec 1.
  • Next fortnightly review due tomorrow (Nov 31).

KARACHI: The prices of petroleum products will not see any major change in the upcoming fortnightly review with diesel and kerosene rates expected to go down slightly, according to the industry calculations.

According to a The News report published Thursday, the ex-refinery and ex-depot prices of petroleum products did not register any major fluctuation as global crude prices eased in recent days.

The ex-depot price of petrol, the most widely used fuel in the country, is slightly higher by Rs0.19 per litre to Rs281.53 per litre compared to the current price of Rs281.34, industry officials said.

The ex-depot price of high speed diesel (HSD), used mainly for transport, has been worked out at Rs290.47 per litre for the next fortnight compared to the existing price of Rs296.71 , showing a decline of Rs6.24 rupees per litre.

The ex-depot price of kerosene, used for cooking and lighting in rural areas, has been worked out at Rs202.16 per litre compared to the current price of Rs204.98, indicating a decrease of Rs2.82 per litre.

The ex-depot price of light speed diesel, another variant of diesel, has been worked out at Rs176.18 per litre for the next review against the present price of Rs180.45, registering a decline of Rs4.27 per litre, the report stated.

According to the industry’s working, the estimated exchange adjustment of petrol is zero whereas it is Rs1.80 per litre for HSD.

However, the industry officials said that the prices of petroleum products can change with the exchange loss as the industry did not put the exchange loss figure in its working for the next review.

The country fixes fuel prices on a fortnightly basis after evaluating fluctuating international energy market costs and the rupee-dollar parity to transfer the impact on domestic consumers.

They said global oil prices remained under pressure during November, falling below $75 a barrel in mid-November.

WTI was trading at $76.5 a barrel on November 29, down by nearly 7% as compared to October 29. Brent was down by 5.4% in the past month, trading at $86.35 a barrel, they added.

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Another day, another high: PSX continues bull run as KSE-100 goes past 61,000 points




KARACHI: The Pakistan Stock Exchange (PSX) on Wednesday reached another historic high as the bulls continue to dominate the benchmark KSE 100 index with hopes of the State Bank of Pakistan lowering the policy rate in the coming days. 

Benchmark KSE-100 index at 10:09am. — Screengrab/PSX website
Benchmark KSE-100 index at 10:09am. — Screengrab/PSX website

The benchmark index gained 702, or 1.16%, during the intraday trade and stood at 61,433 points at 10:09am. 

Commenting on the bull run, Head of Research at Pakistan-Kuwait Investment, Samiullah Tariq said that the market was reacting positively because it expects an interest rate cut, a quick International Monetary Fund review and strong profitability of companies. 

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