Pakistani businesses show mixed
Amid Corona Virus, several economies are hit badly. Pakistani businesses aren’t affected to a similar extent
Pakistani businesses show mixed response during corona virus. A number of companies globally have shown significant losses as the pandemic hit the world. The losses are particular to the first quarter of 2020. The first case of Corona Virus appeared in December 2019. Thereby, it has hit the global economy after becoming a pandemic.
A number of companies on NASDAQ and NYSE declared losses in the first quarter. Similarly, companies around the world report loss of revenue, increasing costs of doing business and resulting losses.
However, there is a slight difference in Pakistan’s scenario. A few companies and businesses are showing their rising revenues and profits during the same period.
Globally, only a few industries are showing profits. These industries are mostly related to the technology or healthcare sectors. One such example is of Netflix. It has broken all the records of last 13 years. On the other hand, the supply and grocery chains, banking sector as well as usual businesses are mostly at default.
Yet, there are several Pakistani business organization showing increasing revenues and resulting increase in profits.
Nishat Chunian Power Limited’s profit soared 74% during the quarter ended March 31, 2020. The profit soared by the company is PKR 1.3 billion as the rupee depreciation against the US dollar enhanced return on equity for the firm.
On the other hand, closure of a plant also lent support as the fixed cost of the company fell. Due to lock-down the net sales of the company registered a decline of 1% to Rs 2.81 billion compared to Rs 2.84 billion last year. Yet, the gross profit of Nishat Chunian increases to PKR 1.84 billion as compared to PKR 1.28 billion of last year.
The total expenses of the company almost halved to PKR 33.7 million during lock-down and stay at home orders. Last year, the total administrative expense of company was PKR 65.4 million. The finance cost of the company increased to 37%. Finance cost rises to PKR 510 million from PKR 372 million, says a report.
Bank Alfalah records net profit of PKR 2.821 billion. The Bank’s pre-tax profit and post-tax profit stood at PKR 4.757 billion and PKR 2.821 billion respectively.
On the other hand, the profit for the first quarter of 2020 depicted a decline of 9.6% versus previous year. Moreover, Bank Alfalah also supports 1.5 million beneficiaries under Ehsaas Relief Programme.
The total deposits reported are PKR 755.135 billion, lower than the level of last year December 2019. Further, State Bank of Pakistan is lessening the interest rate but banks are already making profit from customers.
Since interest rates are going down, banks are moving their reserves from saving to current. It entirely increases the profit for banks.
The foreign exchange reserves of State Bank of Pakistan (SBP) increases to 10% on a weekly basis. Today, the foreign exchange reserves of State Bank rose to $12.07 billion with addition of $1.18 billion.
The State Bank attributes the increase to receipt of $1.39 billion from the International Monetary Fund (IMF) under the Rapid Financing Instrument (RFI) to combat corona virus pandemic.
Moreover, foreign currency reserves held by the country saved in banks other than State Bank stands at $18,463 million. Moreover, the net reserves in banks amounts to $6,392.7 million.
Furthermore, the World Bank and Asian Development Bank (ADB) approved the grant of several billion dollars that will for sure increase foreign reserves of Pakistan.
Earlier, China, United Arab Emirates, and Saudi Arabia helped Pakistan to strengthen the foreign reserves. Now, State Bank hopes for holding more foreign reserves in the country.
Link to the State Bank of Pakistan: http://www.sbp.org.pk
Thus, Pakistani businesses show mixed response during corona virus.