Karachi-listed Amreli Steels Ltd. and Millat Tractors Ltd. suspended operations, citing the impact of devastating floods across Pakistan.
(Bloomberg) — Karachi-listed Amreli Steels Ltd. and Millat Tractors Ltd. suspended operations, citing the impact of devastating floods across Pakistan.
Amreli, the country’s biggest producer of steel bars, told the stock exchange on Wednesday it has shut operations for 20 days as monsoon rains and flash floods have hurt demand. Millat said earlier this week that it has closed its factory until Sept. 16 as the nation’s largest tractor assembly company cannot deliver the vehicles on damaged roads.
The South Asian nation is facing a humanitarian crisis after the highest rainfall in three decades inundated about a third of the country and left more than 1,100 people dead. The shutdowns risk further hurting an economy that only recently secured a bailout from the International Monetary Fund; they could also dampen the rally in Amreli shares, which have surged about 19% over the past month. Millat gained 1.7%, while the benchmark rose 5.5%.
“Flooding has temporarily eroded economic activity,” said Misha Zahid, senior analyst at Karachi-based Arif Habib Ltd. “We believe first quarter of the year ending September would be tough but as water levels come down post next month, sales will post a rebound.”
Even before the floods, Pakistan’s economic growth was forecast to slow to 3%-4% in the year started July 1 from 6% last year. Pakistan’s cement and car sales dropped in July by almost 50% from a year earlier.
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