Pakistan Daily Economy Update - 15 August

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1. Aug . 15, 2017 KCCI - eBulletin PM announces PKR 25Bn package for Karachi Prime Minister Shahid Khaqan Abbasi, while announcing a package of PKR 25Bn for Karachi and PKR 5Bn for Hyderabad, said the amount is to be spent for developing infrastructure, promoting industries and resolving water and traffic issues. The PM also held a meeting with the business community, including office-bearers of the Karachi Chamber of Commerce and Industry (KCCI). The objectives of the government and those of the business community are the same; if the business community does not grow, the government will not be able to achieve its objectives, he said. Tribune-Sun. Governor House to supervise projects Sindh Governor Mr. Zubair has said that Karachi and Hyderabad special package projects as announced by PM Abbasi on his recent visit to Karachi would be implemented under the supervision of Governor House Project Management Unit. These projects, he said, pertain to developing infrastructure in both cities, particularly to ensure basic facilities in the industrial areas. Dawn-Mon. Took up Sindh’s energy issues with PM: Murad CM Sindh has said that he had a fruitful one-to-one meeting with PM Abbasi on Sindh’s persisting energy issues and a follow up meeting would be held between the two during the premier’s next visit to Karachi. During the meeting between PM Abbasi and CM Shah at the Governor House, the former urged the latter to improve his working relationship with municipal organizations for effective resolution of public issues. Abbasi also pushed Shah to play his due part in improving Sindh’s security affairs, while assuring him that the federal government would extend maximum cooperation for development in the province. The News-Sun. First locally assembled Chinese car rolls out Al Haj FAW Motors has launched its 1,300cc FAW V2 hatchback, the first Chinese passenger car to have been launched in Pakistan. By the end of 2017, the company expects to produce 500 V2 units per month with plans to export right-hand drive cars to China and other international markets eventually. The company aims to increase its production to 15,000 units per annum by 2020 as well as introduce new models. Dawn-Sun. Turkish firms eye more investment in Pakistan Around 15,000 member companies of Anatolian Tigers Businessmen Association (ASKON) are ready to support Pakistani companies and institutions. Mustafa Koca, chairman, ASKON, while addressing the “Pakistan-Turkey Business Opportunities Conference” as the chief guest said that the turkish businessmen are eager to share their experience, knowledge and capital with their Pakistani brothers. The News-Sun. Investors agree to pour PKR 2.25Bn into housing, hotel projects Foreign and local investors have agreed to inject PKR 2.25Bn into the real estate market of Pakistan keeping in view the growing demand for houses and hotels in the country. As per real estate experts, a Canadian company is constructing a chain of 5 hotels named Holiday Express in major cities, including Islamabad and Karachi. Apart from this, an understanding has been reached with a UK-based company for encouraging investment in Pakistan’s property market. Tribune-Sun. Foreigners pulling out investment despite MSCI upgrade Foreign investors are continuously withdrawing their investment from Pakistan's capital market despite its upgradation to MSCI Emerging Market Index. The offshore participants sold out shares worth $ 92.27Mn in the one and half month of FY18 (Jul. 01 – Aug. 14, 2017) as compared to an inflow of $ 10.89Mn recorded in the corresponding period last year. The outflow of Foreign Investors' Portfolio Investment (FIPI) has reached $ 424.21Mn in CY17 from Jan. 01 to Aug. 14, 2017. Foreigners withdrew $ 54.36Mn only in Aug.’17. BR Tue. SBP governor asks banks to lend more to SMEs SBP Governor Tariq Bajwa has asked banks to focus on more financing to SMEs for higher GDP growth. The governor said that there is a need for improving financing to SME and agricultural sector as these two sectors can play a vital role in export enhancement. He further said that agri financing has already increased 80% during the last four years and presently banks have some 57% share in overall agricultural financing demand. BR - Tue. Ogra cuts rate for Sui Southern gas by PKR 10/unit Ogra has reduced the prescribed price for SSGC by PKR 10/unit owing to a series of inadmissible expenditures on system expansion in Balochistan and Sindh, including revenue losses in Karachi on account of law and order problems. The SSGC had secured through a review petition a PKR 4.59/unit increase, over and above the current average prescribed price, with effect from 1st Jul’15, as part of final revenue \ requirement (FRR) for the FY16. Dawn-Mon. Economic Indicators List of Indicators Cost of Hyderabad-Sukkur Motorway project to rise due to delayed start National Highway Authority (NHA) has missed the deadline to begin construction of the Hyderabad-Sukkur Motorway project. The project was proposed to be completed in three years at an estimated cost of PKR 175Bn on build-operate-transfer (BOT) basis and now work is expected to begin in 2018. The NHA Executive Board has approved the procurement process for Hyderabad-Sukkur Motorway and agreed to issue Letter of Intent (LoI) to the China State Construction Engineering Corporation for the project. BR – Sun. Unit Value Change Daily 11-Aug 11-Aug 11-Aug 11-Aug 14-Aug 14-Aug 11-Aug 14-Aug 11-Aug 11-Aug PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.40 106.90 45,288 -2.24 47.67 1,282.2 43,671 17.07 6,859 6.16% 4-Aug $ Bn 20.00 0.00% 0.09% -0.76% NM** -2.56% -0.67% 0.10% -0.12% -0.77% 0.01% WoW -1.38% YoY 16.04% 10.58% 36.74% -55.46% -148.57% 4.58% Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-17 Remittances $ Bn 1.54 Jul-17 Exports* $ Bn 1.63 Jul-17 Imports* $ Bn 4.84 Jul-17 Trade Balance* $ Bn -3.20 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 2.91 Jul-17 Avg. CPI-FY17* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 145 GBP, 14-Aug-17, 136.3 135 125 EUR, 14-Aug-17, 123.9 115 105 USD, 14-Aug-17, 105.0 95 Aug-16 USD Nov-16 GBP EUR Feb-17 May-17 Aug-17 Source: KCCI Research ; Oanda.com Quote of the Day "If we want to make this great State of Pakistan happy and prosperous, we should wholly and solely concentrate on the well-being of the people, and especially of the masses and the poor." Muhammad Ali Jinnah Unscheduled load-shedding resurfaces Unscheduled load-shedding has resurfaced after a shortfall in electricity demand and generation crossed 6,000MW due to suspension of supply from two RLNG-fired power plants, a surge in demand and local problems in Discos. The generation was around 18,000MW whereas demand hovered around 25,000-26,000MW. Discos are not being supplied the required quota due to which unscheduled load is being unleashed in different parts of the country. BR - Sun. PPIB approves processing of coal conversion project Private Power Infrastructure Board (PPIB) has approved processing of 134MW coal conversion project by Saba Power Limited after fulfillment of the applicable prerequisites and receipt of NoC from the Power Purchaser (CPPA). However, the project sponsor would be bound to use 20-30% local coal along with imported coal. The timeframe for the project construction would be 22 months during which the plant would be completely shut down for only the last six months, while it will operate normally for the initial sixteen months. BR Mon. Date / Period USD-Interbank USD-Open MKT KSE-100 index FIPI Chart of the Day Ease of Access to Loans In Pakistan 0 20 40 60 80 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 39 40 41 52 41 53 65 72 90 90 103 100 SBP issues “FFAs of Pakistan” SBP has issued "Flow of Funds Accounts (FFA) of Pakistan" for FY16 which contain a brief description of theoretical framework pertaining to detailed flow of funds, financial, capital accounts and stocks of non-financial corporate, general government and other sectors of 120 Pakistan economy. The data has been transformed into sectoral balance sheets as per guidelines of SNA-2008. BR – Sun. *Higher the figure lower the rankings Source: KCCI Research, GCI **Rankings of Global Competitiveness Index Coal-fired plant relocated to cut transportation cost Disclaimer Siddiqsons Energy Limited (SEL), intending to become the first coal based independent power producer, has decided to relocate its This report has been prepared by KCCI Research & Development Cell. The information supercritical coal-fired power plant to Thar Block-II from a previously planned location of Port Qasim to curtail transportation contained herein have been compiled or arrived at based upon information obtained from cost. Transporting 1Mn tons of coal each year from Thar to Port Qasim is not only impractical and wasteful, but also hazardous. The sources believed to be reliable and in good faith. Such information has not been independently verified. relocation’s decision would, however, suppress the plant’s production capacity. The News-Tue. 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