Author Topic: Exchange rate weakness & KSE-100  (Read 27080 times)

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Offline MZ

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Re: Exchange rate weakness & KSE-100
« Reply #99 on: June 11, 2018, 10:17:29 PM »
Pakistan Economy

PKR/USD Depreciation Marks a Paradigm Shift in Policy Making
 
·         Pak Rupee (PKR) has depreciated by 3.9% during the day to 121 against the greenback, from last week’s close of 116.5. Historically the local currency has depreciated in spurts, with today’s move being the third one during FY18TD (previous ones being in Dec-17 and Mar-18), taking the cumulative depreciation to 15% over the ongoing fiscal year (compared to flattish performance during FY15-17).
·         We see recent rounds of PKR depreciation as a paradigm shift in policy making since the end of Finance Minister Ishaq Dar’s era who remained rigid on maintaining fixed exchange rates. Lately, policy makers on both fiscal and monetary sides did not oppose currency depreciation as they saw it as a tool for addressing external account vulnerabilities.
·         The currency has continued to depreciate owing to growing pressures from deteriorating external account situation, and central bank allowing flexibility in exchange rates as a go-to tool to address this economic issue since structural policies would take long to bear fruits.
·         Based on this visible change in policy action, we believe that PKR’s implied fair value to policy makers would now be hinged on Real Effective Exchange Rate (REER) rather than Real Bilateral Exchange Rate (RBER) against USD due to structural inefficiencies (export uncompetitiveness and import inelasticity)   translating into growing external account imbalances.
·         Note that after today’s move, we estimate that PKR is undervalued against USD on the basis of RBER, however we estimate it to be overvalued by 7% against USD based on REER.
·         We had so far been projecting PKR to reach 115 by Jun-18 and 120 by Dec-18; however the recent currency moves has overshot both our targets. Eyeing paradigm shift in policy making and continued pressures on external account, we project PKR/USD to depreciate by 7-12% to 130-135 by Jun-19 (FY19 end).
·         We estimate the said changes to raise our inflation forecasts by ~50bps and thus, we also revise our interest rate expectations up by ~50bps – taking Discount Rate to 8.0% by Dec-18 (shown in the table below)

Pakinvestorsguide

Re: Exchange rate weakness & KSE-100
« Reply #99 on: June 11, 2018, 10:17:29 PM »

Offline onlybulls

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Re: Exchange rate weakness & KSE-100
« Reply #100 on: September 29, 2018, 04:19:48 PM »
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« Last Edit: September 29, 2018, 04:38:09 PM by onlybulls »

Offline rashid.Maria

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Re: Exchange rate weakness & KSE-100
« Reply #101 on: September 29, 2018, 05:49:18 PM »
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Dollar touch 127 in open market. MP kab announce honi  hai

Offline Moazzam

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When investing, pessimism is your friend, euphoria the enemy.

Offline Farzooq

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Re: Exchange rate weakness & KSE-100
« Reply #103 on: October 11, 2018, 09:51:04 AM »
FOREX Market Preempting Entry in Another IMF Program?

Weakness in the Pak Rupee

As we write, the Pak Rupee has once again caved in to pressure against the US Dollar, depicting the largest intraday swing of 8.63% to ~135.00 in the interbank vis-à-vis last closing of 124.27. Albeit, we put off any conclusions of settlement in the early hours of FOREX trading so as to identify by day end whether or not the parity has been adjusted by the State Bank of Pakistan (SBP). Although the widening Current Account Deficit (at USD 2.7bn in 2MFY18; +10% YoY) together with depleting reserves (at USD 14.89bn at present vis-à-vis last years high of USD 22.24bn observed in Jan’17) have persistently mounted pressure on the PKR-USD parity, we cite yesterday’s announcement to approach International Monetary Fund (IMF) for a potential bail out package as a possible reason for depreciation of the Pak Rupee. To recall, last major movement in a single day was witnessed in Jul’18 whereby the SBP let slip the PKR against USD by 5.31% DoD to settle at 128.00, due to concerns over the deteriorating external account. However, it had reversed by 3.12% to ~124/USD soon after and had settled at the same level ever since.
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Offline Farzooq

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Re: Exchange rate weakness & KSE-100
« Reply #104 on: May 19, 2019, 11:00:53 PM »
Higher the inflation, higher would be the nominal currency depreciation to bring REER back to 100. In coming months, with high energy prices and new taxes - removal of tax exemptions, inflation may touch double digits. Market is expecting inflation to peak in September. Expect some currency depreciation after that - in November and December.

The market expects parity at 160-165 by December. 
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Offline Farzooq

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Re: Exchange rate weakness & KSE-100
« Reply #105 on: May 19, 2019, 11:03:24 PM »
Devaluation is positive for E&P, textiles and ipps
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Offline nma

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Re: Exchange rate weakness & KSE-100
« Reply #106 on: May 20, 2019, 05:11:14 AM »
Devaluation is positive for E&P, textiles and ipps

Yar Janaza tou nikal gaya hai IPPs ka. Ghanta faida hai investor ko

Offline hizohaib3

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Re: Exchange rate weakness & KSE-100
« Reply #107 on: May 20, 2019, 07:40:44 AM »
high devaluation of rupee and high interest rates are main reasons why investors not entering the stock market

Offline AL-IMRAN

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Re: Exchange rate weakness & KSE-100
« Reply #108 on: May 20, 2019, 11:13:17 AM »
high devaluation of rupee and high interest rates are main reasons why investors not entering the stock market

Market ko choro ek benefit hai high interest rate ka Bank profit bohat accha milega fixed deposit or other savings par for example behbood saving, pension benefit account par.. mazay he mazay ....mazay he mazay...........ek lakh par 17% p.a tak profit mil raha hai to kia bura hai..

Offline Farzooq

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Re: Exchange rate weakness & KSE-100
« Reply #109 on: June 14, 2019, 01:07:31 PM »
US #dollar continues to rise, reaches Rs. 157 in interbank market

Expectations
#Dollar 160 vs #PKR by 30 June. 180 by Dec. Interest Rates 16% by Dec. #PSX #KSE100
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Offline ajeebkhan

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Re: Exchange rate weakness & KSE-100
« Reply #110 on: June 14, 2019, 03:53:43 PM »
US #dollar continues to rise, reaches Rs. 157 in interbank market

Expectations
#Dollar 160 vs #PKR by 30 June. 180 by Dec. Interest Rates 16% by Dec. #PSX #KSE100
And it looks that our PSX our Kse100index would be trading @ 95000 index level ... Heheheh

Offline kamranbutt_dada

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Re: Exchange rate weakness & KSE-100
« Reply #111 on: June 14, 2019, 08:03:42 PM »
US #dollar continues to rise, reaches Rs. 157 in interbank market

Expectations
#Dollar 160 vs #PKR by 30 June. 180 by Dec. Interest Rates 16% by Dec. #PSX #KSE100

Govt already withdrawn tax exemption on 5 exports sectors.
Which sector/company will benefit from this now?

Offline mansoor ahmed

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Re: Exchange rate weakness & KSE-100
« Reply #112 on: June 15, 2019, 08:16:59 PM »
ADB to give 3.4 billion dollars for budgetary support. This will help our foreign reserves. Hafeez sheikh tweeted

Offline Farzooq

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Re: Exchange rate weakness & KSE-100
« Reply #113 on: June 26, 2019, 02:02:43 PM »
US #dollar continues to rise, reaches Rs. 157 in interbank market

Expectations
#Dollar 160 vs #PKR by 30 June. 180 by Dec. Interest Rates 16% by Dec. #PSX #KSE100

162
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Offline DK

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Re: Exchange rate weakness & KSE-100
« Reply #114 on: June 27, 2019, 12:05:23 PM »
US #dollar continues to rise, reaches Rs. 157 in interbank market

Expectations
#Dollar 160 vs #PKR by 30 June. 180 by Dec. Interest Rates 16% by Dec. #PSX #KSE100

162

farzooq bhai inter bank rate for LC today is 165.75

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