Pakistan Daily Economy Update - 14 February

Transcription

1. Feb . 14, 2017 KCCI - eBulletin State Bank may increase interest rate 50-75bps in second half: Credit Suisse SBP is likely to shun its 10-month long monetary easing stance in the second half of FY17 and raise its key policy rate 50-75 basis points as the govt. may pass on oil and food inflation to consumers. According to Credit Suisse, fiscal constraints would make it difficult for the govt. to defer the pass-through for much longer. The leading global financial service provider said in a report, that YoY CPI (consumer price inflation) is to rise to 5.0-5.5% by Jun’17 (3.6% currently), thereby propelling the central bank to raise policy rates from 5.75% at present. The News. Census likely to cost over PKR 21Bn Finance Ministry is likely to request provinces to share the additional expenditure sought by Pakistan Bureau of Statistics (PBS) for involvement of around 200,000 armed forces' personnel against earlier estimate of 84,000 in the population census starting from Mar. 15, 2017. The expenditure of census is likely to cross PKR 21Bn against the earlier estimate of PKR 14Bn. The PBS has given training to 158,295 people for 168,120 blocks across the country to conduct the exercise. BR. Govt. increases electricity import from Iran for Gwadar Pakistan has increased electricity import from Iran to 100MW from earlier 70MW to feed Gwadar and is also planning to increase the import to 1,000MW, as Islamabad is in negotiations with Tehran in this respect. Islamabad is facing difficulties in making agreements with Iranian banks due to international sanctions on Tehran. Iran is willing to export up to 3,000MW to Pakistan. The News. Nepra awards electricity transmission tariff Nepra has awarded a tariff of PKR 0.3727/KWH to Sindh Transmission and Dispatch Company for transmitting electricity from a Nooriabad power plant to K-Electric’s network. The tariff is applicable for 30 years, and is based on availability factor of 100% with 1.5% non-penalized maintenance outages. The company is setting up an overhead transmission line with a cost of PKR 1.86Bn. The News. Govt. cuts industrial load shedding to zero Govt. brought down electricity outage span for industrial consumers to zero within the past three years. With concerted efforts there has been considerable decrease in load shedding in the country, said Younus Dagha, secretary water and power at a meeting of the Economic Coordination Committee of the cabinet. Tribune. Five regulatory bodies placed under MoIPC control The federal govt. has decided to place five key regulatory bodies under the administrative control of Ministry of Inter Provincial Co-ordination (MoIPC). Through amendment to the Rules of Business, 1973, the federal govt. on Dec. 19, 2016 transferred five regulatory bodies, including NEPRA, Ogra, Pakistan Telecommunication Authority (PTA), Frequency Allocation Board and Public Procurement Regulatory Authority (PPRA) to their line ministries. BR. SBP links wheat subsidy payment to export proceeds SBP has said that payment of wheat export subsidies will be allowed only after full realisation of export proceeds. In accordance with the process, the dealers will forward shipment requests of wheat exporters in the prescribed format. Export of wheat, wheat flour and other wheat products will be allowed until Mar. 15, 2017 to be determined by the filing date. In this regard, SBP has said that export of wheat and wheat flour produced from Oct. 1, 2015 to Jan. 12, 2016 will not be entitled to any cash support or subsidy. BR. ECC approves issuance of sovereign guarantee The Economic Co-ordination Committee (ECC) has decided to provide PKR 30Bn sovereign guarantee to the power sector for settlement of liabilities of distribution companies on account of subsidies. In this regard, Finance Division would extend sovereign guarantee and pick both the principal and interest amount for the loan to be taken by the power holding company. A meeting of the ECC presided over by Finance Minister Ishaq Dar was presented a proposal by the Ministry of Water and Power along with a presentation detailing the performance of the sector as well as subsidy claims and arrears. BR. Power sector receivables soar to PKR 726Bn The country's power sector receivables have soared to PKR 726Bn as of Dec.’16 as compared to PKR 684Bn on Jun. 30, 2016, showing an increase of 6% in just six months. The Discos' collection has registered a 9.5% decline to 486Bn as of Dec. 31, 2016 against billing of PKR 543.70Bn during 6MFY17. BR. Factors such as China slowdown, sour ties with India behind export slide Pakistan's export to regional countries declined partly due to a slowdown in China's growth rate and partly due to souring relations with India that account for declining exports to India and Afghanistan. An analysis of top ten export markets of Pakistan for FY16 shows that Pakistani exports share to the US increased from 15% in FY15 to 17% in FY16 whereas exports to China as a percentage of our total exports declined from 9% in FY15 to 8% in FY16. BR. International exhibition: Pakistani fruit exporters pluck orders worth $ 2Mn Pakistani growers and exporters of fresh fruits and vegetables participating in the ‘Fruit Logistica 2017’ have received an estimated export order of $ 2Mn. At least 40 delegates from 16 fruit-exporting firms attended and displayed their products at the event, one of the most important business and communication arena of international fresh produce trade that is organized in Germany. Tribune. Fresh US drilling capping oil price: Opec Paris renewed drilling by US oil producers is keeping a ceiling on a global crude price recovery, cutting into the impact of deep reductions by other major producers. In its latest oil market report, OPEC has said that its members last month reduced output by 890,000 barrels per day. Production adjustments by Opec and some non-Opec producers supported the market, although gains were capped by increased drilling activity in the US, report highlighted. Dawn. Karachi’s business community urged to invest in mineral sector of AJ&K President of AJK, Mr. Sardar Khan, has urged Business and Industrial community of Karachi to explore the abundant opportunities in AJ&K's mineral sector and set up industrial units in order to provide required expertise and skilled workforce capable of excavating precious and semi-precious gemstones. Exchanging views during his visit to the KCCI, the AJ&K President added that some work was being carried out only to extract precious and semi-precious gemstones but this was not happening on an industrial level. Hence, the business community of Karachi must take advantage of this opportunity. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 13-Feb 13-Feb 13-Feb 13-Feb 13-Feb 13-Feb 13-Feb 13-Feb 13-Feb 13-Feb PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.80 107.20 49,966 2.72 53.38 1,227 43,285 17.83 7,218 6.13% 3-Feb $ Bn 22.03 0.01% -0.09% 0.08% NM** -1.66% -0.60% 0.40% -0.75% 0.00% -0.01% WoW -1.80% YoY 0.00% -3.21% 19.32% -20.29% -92.23% USD-Interbank USD-Open MKT KSE-100 index FIPI Crude (FE'17) Gold (JA'16) Gold (10g) Local Silver (JA'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-Jan 16 Remittances $ Bn 11.15 Jul-Jan 17 Exports* $ Bn 11.69 Jul-Jan 17 Imports* $ Bn 29.11 Jul-Jan 17 Trade Balance* $ Bn -17.43 Jul-Dec 16 Current Account $ Mn -3,585 % 3.85 Avg. CPI-FY17* Jul-Jan 17 Jan-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 Feb-16 GBP, 13-Feb-17, 131.1 EUR, 13-Feb-17, 111.4 USD, 13-Feb-17, 104.9 May-16 USD Aug-16 GBP Nov-16 Feb-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day “Wherever you find a great man, you will find a great mother or a great wife standing behind him -- or so they used to say. It would be interesting to know how many great women have had great fathers and husbands behind them.” Dorothy L. Sayers Chart of the Day PAKISTAN'S TRADE SNAPSHOT (7MFY11-7MFY17) 27.0 26.33 22.55 29.11 25.67 27.23 25.81 25.69 22.0 17.0 13.12 14.70 14.07 13.16 14.14 12.08 12.0 11.69 7.0 2.0 -3.0 -8.0 -13.0 -18.0 -9.42 -13.17 7MFY11 7MFY12 -11.62 7MFY13 Exports -11.11 7MFY14 Imports Values in $ Bn -13.10 7MFY15 -13.59 7MFY16 -17.43 7MFY17 Trade Balance Source: KCCI Research, PBS Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified. icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk