World

Politics

• Australians are facing a terrifying start to the new year, as bushfires rip through popular tourist spots on the country’s southeast coast, forcing thousands of people to take refuge on nearby beaches. Australians are facing a terrifying start to the new year, as bushfires rip through popular tourist spots on the country’s southeast coast, forcing thousands of people to take refuge on nearby beaches.

Idyllic coastal towns packed with tourists planning to ring in 2020 were cast in apocalyptic red on 30^th Dec, as smoke blotted out the sun. In the town of Mallacoota, which lies on the easternmost edge of the state of Victoria and is a well-known family camping spot, around 4,000 people fled to beaches, authorities said.

• Pope Francis has apologized for slapping a woman’s hand to free him from her grip while greeting children and pilgrims in St. Peter’s Square on New Year’s Eve.

The incident occurred as Pope Francis made his way to the Nativity scene in Vatican City. On ist January, the Pontiff apologized before using his New Year’s Day address to denounce violence against women. “I apologize for the poor example yesterday,” he said.

• Tens of thousands of anti-government protesters took to the streets of Hong Kong on New Year’s Day, but the march was later called off after police said bricks and petrol bombs had been thrown.

Police used tear gas briefly Ist January during confrontations with protesters, after what had begun as a largely peaceful event. They said “thugs” had thrown bricks and petrol bombs, set fires, and damaged banks and shops during the demonstration.

• Tesla broke ground on its Shanghai factoryjust under a year ago. Now, it’s producing cars for customers.

Fifteen employees of the electric carmaker become the first customers to receive Model 3s produced in China during a ceremony at the factory on 29^th Dec, according to Tesla. Wang Hao, general manager for Tesla China, said during the event that more cars will be delivered to workers over the next couple of days before other customers begin receiving them next month. The Shanghai plant was built in just 10 months and began trial production in October. The first batch of cars to roll off the assembly line began making their way to Tesla’s dozens of experience centers in China last month; where potential customers were given the opportunity to test drive them. Tesla has been taking orders for Model 3s made in China since October 25.

·Al Qaeda affiliate Al-Shabaab claims responsibility for Somalia truck bombing that killed 85

Al Qaeda affiliate Al-Shabaab has claimed responsibility for a truck bombing in Somalia that killed 85 people outside Mogadishu, the group’s spokesman said. Sheikh Ali Mohamud Rageh, known as Ali Dheere, said 29^th Dec the group had targeted Turkish nationals in a convoy and the Somali troops escorting them. It provided no evidence to support its claim. More than 140 people were wounded and 12 people are still missing in the aftermath of the bombing, which occurred at a popular intersection outside the capital on 27th Dec, according to Somali National News Agency (SONNA). The agency attributed the casualty figures to the country’s National Emergency Committee.

· US air strikes in Iraq and Syria ‘kill at least 18’

The US military carried out air strikes in Iraq and Syria against the Kataib Hizbullah militia group in response to the killing of a US civilian contractor in a rocket attack on an Iraqi military base, US officials said on 28^th Dec. Iraqi security and militia sources said at least 18 militia fighters were killed and more than 50 wounded following three US air strikes in Iraq on the date. At least four local Kataib Hizbullah commanders were among the dead, the sources said, adding that one of the strikes had targeted the militia group’s headquarters near the western Qaim district on the border with Syria. The Pentagon said it had targeted three locations of the Iranian-backed Shia Muslim militia group in Iraq and two in Syria. The locations included weapons storage facilities and command and control locations the group had used to plan and execute attacks on coalition forces, it said.

· British citizens imprisoned in Iran go on hunger strike

A British-Iranian citizen imprisoned for four years has said she will go on hunger strike in solidarity with another dual national being held in Iran. Kylie Moore-Gilbert, a British-Australian academic, started an open-ended hunger strike six days ago in protest at being sentenced to 10 years on espionage charges. She wants at minimum to be moved from solitary confinement to a general ward.

·Sporadic tribal clashes between Arabs and non-Arabs continued on 31^st Dec in Sudan’s West Darfur province, as the death toll climbed to at least two dozen people, some of them burned to death, according to a local aid group working in the area.

Some of the 24 dead were children, said Adam Regal, a spokesman for a local organization that helps run refugee camps in the area. He said at least 17 others were wounded. The clashes, which erupted over the weekend, pose a challenge to efforts by Sudan’s transitional government to end decades-long rebellions in areas like Darfur. Rebel groups from Darfur have now suspended their peace talks with the government in response to the tribal clashes and called for an investigation.

·Jakarta floods: Death toll rises to 21 as thousands flee capital

Tens of thousands of people were evacuated in Indonesia’s capital Jakarta on 2^nd January after flash floods and landslides in the area killed up to 21 people, with more heavy rain forecast, authorities said. The flooding, among the deadliest in years, caused chaos in parts of Southeast Asia’s biggest city with train lines blocked and power outages in some areas. Swathes of Jakarta and nearby towns were inundated after heavy rain fell on December 31st and into the early hours of New Year’s Day.

·Taiwan military chief among eight killed in helicopter crash

Taiwan’s top military chief was among eight people killed on 2^nd January after the Black Hawk helicopter that was carrying them crashed in a mountainous region near Taipei, the defense ministry said. Thirteen people were on board the UH-60M Black Hawk helicopter, with five surviving the crash. Gen Shen Yi-ming, the chief of general staff of Taiwan’s armed forces, was confirmed dead, as were two major generals, a lieutenant colonel, two senior master sergeants, a captain and a major.

· US kills top Iranian general in attack on Baghdad airport

The United States has launched an air strike at Baghdad International Airport, killing a senior Iranian military official, and dramatically igniting tensions in the region. The Pentagon confirmed late on 2^nd January that President Donald Trump had ordered the strike that killed Maj Gen Qassim Suleimani, the head of the Iranian Revolutionary Guards’ elite Quds force.

· Fears of escalation as Iran vows to avenge US killing of general

Tehran on 3^rd January night vowed to avenge the killing of its most senior military commander by US forces, prompting fears that the US and Iran could be veering towards military confrontation in the Middle East. Qassem Suleimani, the head of the Iranian Revolutionary Guards’ elite Quds force, was killed in a targeted US strike as he left Baghdad International Airport early on Friday morning. Speaking from his Mar-a-Lago residence in Florida, US president Donald Trump said Suleimani had been “plotting imminent and sinister attacks on American diplomats and military personnel”. “We took action last night to stop a war. We did not take action to start a war,” he said. However, he warned that he was “ready and prepared to take whatever action is necessary” should American interests be threatened. US secretary of state Mike Pompeo said the operation had disrupted an “imminent attack” by Iran and “saved American lives”, yet he declined to give specific details. “The risk of doing nothing was enormous,” he said. Iran’s supreme leader Ayatollah Ali Khamenei threatened “severe revenge” for the killing of Suleimani. Thousands of protesters took to the streets in Iran after the US strike, with some burning US, British and Israeli flags, and chanting “death to America”.

Economy

· Oil prices surged and most major global stock markets declined on 3^rd January after an Iranian general was killed by US forces in Iraq.

Brent crude, used to price international oils, was $2.10 higher at $68.36 per barrel in London after being up nearly $3 at one point. Benchmark US crude climbed $1.79 to $62.97 per barrel in electronic trading on the New York Mercantile Exchange. In early trading, London’s FTSE lost 0.5% to 7,569.80 and Germany’s DAX tumbled 0.9% to 13,261.09. France’s CAC 40 fell 0.5% to 6,011.07. On Wall Street, futures for the benchmark S&P 500 index and Dow Jones Industrial Average were down 0.8%. Both rose to new records Thursday.

GLOBAL INDICES AS OF 4th January 2020

As compared to 28th December 2019

Global indices as of 4th January 2020
Name	Current Value	Prev. Close
US MARKETS
NASDAQ (Jan 03)	9,020.77	9092.19
EUROPEAN MARKETS
FTSE (Jan 03)	7,622.40	7604.30
CAC (Jan 03)	6,044.16	6041.50
DAX (Jan 03)	13,219.14	13385.93
ASIAN MARKETS
SGX NIFTY (Jan 04)	12,238.00	12248.50
NIKKEI 225 (Dec 30)	23,656.62	23837.72
STRAITS TIMES (Jan 03)	3,238.82	3252.00
HANG SENG (Jan 03)	28,451.50	28543.52
TAIWAN WEIGHTED (Jan 03)	12,110.43	12100.48
KOSPI (Jan 03)	2,176.46	2175.17
SET COMPOSITE (Jan 03)	1,594.97	1595.82
JAKARTA COMPOSITE (Jan 03)	6,323.47	6283.58
SHANGHAI COMPOSITE (Jan 03)	3,083.79	3085.20

 

Global indices as of 28th December 2019
	Current Value	Prev. Close
US MARKETS
NASDAQ (Dec 27)	9,006.62	9022.39
EUROPEAN MARKETS
FTSE (Dec 27)	7,644.90	7632.24
CAC (Dec 27)	6,037.39	6029.55
DAX (Dec 27)	13,337.11	13300.98
ASIAN MARKETS
SGX NIFTY (Dec 28)	12,320.00	12341.00
NIKKEI 225 (Dec 27)	23,837.72	23924.92
STRAITS TIMES (Dec 27)	3,226.53	3222.99
HANG SENG (Dec 27)	28,225.42	27864.21
TAIWAN WEIGHTED (Dec 27)	12,091.59	12001.01
KOSPI (Dec 27)	2,204.21	2197.93
SET COMPOSITE (Dec 27)	1,578.22	1579.03
JAKARTA COMPOSITE (Dec 27)	6,329.31	6319.44
SHANGHAI COMPOSITE (Dec 27)	3,005.04	3007.35

 

Pakistan

Politics

• The PTI-led government, during an emergency meeting of the federal cabinet on ist January, made amendments to the Army Act, according to sources within the cabinet.

The amendments, passed unanimously, were made to the clauses related to the army chief’s tenure and extension. The meeting was presided over by Prime Minister Imran Khan. The government has yet to share details regarding the amendments. According to sources, Defense Minister Pervez Khattak said that the cabinet approved amendments in Section 172 of the Army Act. The amendment bill also includes a suggestion to extend the tenure of all the three services chief, Khattak was quoted as saying. The National Assembly and Senate’s Joint Standing Committee on Defence approved the three bills pertaining to amendments to the Army Act, the Navy Act and the Air Force Act on 3^rd January 2020 afternoon. The bills, pertaining to the tenure of the three services chiefs, were approved unanimously by the committee and will be presented for approval in the next National Assembly, said Pakistan Tehreek-e-Insaf Senator Azam Swati.

• The first Senate session of the year, convened by the government on a 24-hour notice, took place on Wednesday. A regular session of the Senate was last held from Aug 29 to Sept 3.

Former Senate chairman Raza Rabbani while addressing the house raised questions on the amendments proposed by the government to the country’s accountability law. He said the government through the amendments had exempted businessmen, bureaucrats, judges and the military from being proceeded against under the law. “Who is then left? Only you and I are left,” he said, addressing the Senate chairman. “Is the NAB law only there for politicians?” he asked, suggesting that the parliament should be allowed to “try the parliamentarians”.

• The schedule for the much anticipated fifth edition of the Pakistan Super League was released by the Pakistan Cricket Board on Ist Januray, with the series set to take off on February 20.

According to the schedule, the series will run from February 20 to March 22, with all the matches being played on the home ground. A total of 34 matches will be played across 4 venues. On the occasion of the schedule’s release, a countdown clock was placed by the PCB at the entrance to the Gaddafi Stadium in Lahore, where two eliminator rounds as well as the final will be held. The first match will be held at the National Stadium in Karachi which will feature defending champions Quetta Gladiators and two-time champions Islamabad United. The stadium will also feature the series’ sole qualifier match. Of the total 34 matches, 14 will take place in Lahore, nine in Karachi, eight in Rawalpindi and three in Multan.

• The Pakistan Railways (PR) and its huge number of passengers found the year 2019 worst as a number of accidents, including the horrible Tezgam fire tragedy in October, exposed wrong decision-making and incompetence allegedly on the part of the management while dealing with the department’s operations.

“If we recall major happenings in 2019, you may find railways its worst ever as a number of passengers, including the railway employees, died, left incapacitated or maimed. Though the year was really a sad one in view of the worst operational affairs and fatal/non-fatal accidents, the PR top management kept making tall claims of improving the department’s performance,” deplores an official source who said the worst operational affairs in railways remained a matter of grave concern. “Over 100 train-related incidents, including some fatal accidents, took place in 2019. Besides this, 111 incidents of engine failure on the way were reported within first five months of the year alone,” claimed another official source. “At least, 73 passengers lost their lives while over 100 were injured in Tezgam fire incident alone. Similarly, 21 people were killed and about 85 were injured in Akbar Express accident, three drivers lost their lives in Jinnah Express’s Hyderabad accident while some passengers too received injuries in this accident. The driver of Sargodha Express lost his life after the train hit the dumper truck. Besides the aforementioned ones, there are also reports regarding death of some passengers in various accidents,” the source said, adding that the increased number of accidents not only disrupted the PR’s operations badly but also kept stranding a huge number of passengers on the way. Despite reviewing its priorities, Minister for Railways Sheikh Rashid Ahmed didn’t hear the officers opposing the PR passenger train operations on the outdated/dilapidated main and branch lines with decaying coaches/rolling stick, delay in procurement of new coaches and wagons and faulty signaling/interlocking system.“He, most of the time, ignored ground realities and continued making tall claims of running new trains and increasing revenue in his news conferences. He also kept focusing, most of the time.

Economy

• State of Economy in 2019

2019 was a careening year for the economy. At the start of 2019 there was mounting anticipation around the future direction the government was going to adopt as the foreign exchange reserves continued to slide, borrowing from “friendly countries” was in full swing, the IMF negotiations were not moving forward and an announcement of a “mini budget” had been made for later in the month. Confusion prevailed as the market looked for hopeful signs of forceful steps to be taken to control a runaway fiscal deficit that was being plugged with borrowings from the State Bank of Pakistan since banks were also refusing to lend to government despite massive interest rate hikes. In short, the financial markets were stalled as they awaited a decision by the government on how it was going to tackle the twin deficits — fiscal and external. By the time the fiscal year ended, the government had put out among the worst fiscal numbers ever seen in Pakistan’s history, with zero growth in revenue collection and the highest ever fiscal deficit equal to 8.9 per cent of GDP. On the external side, the continuous declines in the foreign exchange reserves continued making it necessary for the country to borrow up to $5 billion from Saudi Arabia and the UAE in short-term deposits. On the domestic side, the situation was even direr. When the government entered office, the total stock of domestic debt was around Rs9 trillion, of which around Rs3tr was borrowed from the State Bank of Pakistan, meaning it was money that was printed to help pay government bills. By January and February, the stock of domestic debt touched Rs11tr, with almost Rs7.5tr of it borrowed from the State Bank. In proportional terms, borrowing from the State Bank accounted for around one-third of total domestic debt in July, 2018, and by early 2019, this proportion had crossed two-thirds. This massive monetization of the deficit became one of the biggest reasons for high inflation, which began its relentless climb in early 2019, and the external borrowing entangled the country in the geopolitical preferences of its creditors – the Gulf Arabs. Yet at the start of 2019, then finance minister Asad Umar preferred to talk of a “home-grown” package of economic reforms to meet the challenges of the twin deficits, and spoke as if the period of adjustment was already over, pointing out that larger borrowing from the private sector was a sign of returning health and inflation and currency depreciations might soon be reaching a plateau.

• Almost all of the international currencies gained against the rupee in 2019 but the biggest appreciation was seen in the British pound which gained over 15 per cent.

The Forex Association Pakistan on Tuesday issued a compiled report showing the devaluation trend of the rupee against major international currencies in interbank market. The US dollar dominates the country’s trade appreciated by 11.5pc during the year. The dollar traded at Rs139 in the interbank on Dec 31, 2018. However, it traded at Rs154.94 on Dec 31, 2019 showing a devaluation of almost Rs16 per dollar or 11.5pc. The open market rate is almost same with slight fluctuations. The dollar was traded as high as Rs164 in the open market during the year but it settled around Rs155 for more than two months. The massive devaluation of the rupee was mainly due to poor foreign exchange reserves of the country, huge current account deficit of about $20 billion and ever-increasing import bill. During the outgoing calendar year, the government was successful in reducing the import bill and bring current account deficit into a surplus in October. Moreover, the country’s reserves also improved and the collective impact resulted in exchange rate stability. The biggest devaluation of the rupee was against the British pound as it lost Rs27 per pound during the year 2019. The pound was sold at Rs177.30 on Dec 31, 2018 but it reached to Rs204.30 as on Dec 31, 2019; a loss of 15.2pc. British pound is the second largest currency that is used in the local market for trading and transactions. Both the US and UK are big providers of remittances after Saudi Arabia. Moreover, the two countries are the biggest investors in the country. The rupee lost heavily against the Euro as it declined by 8.76pc during the year. It was sold at a price of Rs159.80 on Dec 31, 2018 reaching Rs173.80 a year later on Dec 31, 2019. The rupee lost Rs14 per euro this year. There is a common consensus among the financial circle that exchange rate would remain stable in 2020 mainly because of low current account deficit and higher foreign exchange reserves. The country’s total foreign exchange reserves rose to $17.595bn whereas those held by the State Bank of Pakistan also entered double digits after March to reach at $10.9bn.

• The Federal Board of Revenue (FBR) missed revised revenue collection target for the first half year of current fiscal year by a wide margin of Rs287 billion against the target of Rs2.367 trillion despite several measures and double-digit consumer inflation.

The FBR has collected Rs2.080tr during the first half year as against the target of Rs2.367tr projected for the same period, leaving behind a shortfall of Rs287bn. The tax authority estimates to collect another Rs2-4bn in book adjustments. However, the collection during the first half of current fiscal year is 16.95 per cent higher than the Rs1.784tr collected in the corresponding period last year.

• The government on Tuesday increased fuel prices for January, raising the petrol price to Rs116.60 per liter with the increase of Rs2.61, while app­roving the recommendations made by the Oil and Gas Regulatory Authority (Ogra).

A notification issued by the finance ministry says that the new rate for the most widely used fuel consumed in large vehicle engines and generators — High Speed Diesel (HSD) — has been raised by Rs2.25 to Rs127.26 per liter. An official of the state-owned oil company PSO said that January was not the month of heavy consumption of diesel and petrol in the country as there was limited activity in the farm sector while the movement of trucks too was restricted in the wake of occasional fog at highways. Similarly, the price of Light Diesel Oil (LDO) consumed in certain engines used by tube-wells and mills in rural areas has been raised by Rs2.08 to Rs84.51 per liter. While kerosene price has jumped to Rs99.45 per liter with the increase of Rs3.10, its demand increases several times during winter due to shortage of natural gas and the increase in the price of liquefied petroleum gas (LPG).

F.C Exchange Rates of PKR as of 4th January 2020 as compared to 28th December  2019
Countries	PKR rate as of 28th December  2019	PKR rate as of   4thJanuary 2020
U.S.A. $	155.40	155.20
U.K. Pounds	203.50	205.00
Euro	173.00	174.50
Japan Yen	1.44	1.42
Saudi Arabia Rial	41.40	41.30
U.A.E. Dirham	42.35	42.30

Pakistan Stock Exchange Indices

As of 4^th January 2020 2019 As Compared

To 28th December 2019      

 

Position as of 4th January 2020
Symbols	KSE100 Index	PSX-KMI All Shares Index
Advance 126 Curr)	Current 42323.30	Current 20035.58
Decline 213 (High)	High 42835.08	High 20237.11
Unchanged 17 (Low)	Low 42077.45	Low 19958.16
Total Change 356	-157.46	-41.67

Position as of 28th December 2019
Symbols	KSE100 Index	PSX-KMI All Shares Index
Advance 116 (Curr)	Current 40848.53	Current 19309.84
Decline 211 (High)	High 41289.68	High 19584.24
Unchanged 21 (Low)	Low 40726.65	Low 19262.77
Total change 348	-279.26	-194.47