Pakistan Daily Economy Update - 16 May

Transcription

1. May . 16, 2017 KCCI - eBulletin PM to seek proposals from businesspeople Commerce Ministry is all set to seek "face to face" export growth proposals from business community for upcoming budget FY18 on May 16, 2017 (today). The country's trade deficit rose to $ 26.55Bn during 10MFY17 with 2.29% decline in exports to $ 16.92Bn from $ 17.31Bn in 10MFY16. Prime Minister's Special Assistant on Revenue Haroon Akhtar Khan is expected to 'listen' to proposals put forth by the business community. The proposals generated during the seminar will be considered for inclusion in the budge 2017-18. Commerce Ministry argues that three major factors causing a decline in exports - notably energy crisis, refunds and currency overvaluation - are not under its control. BR. Goods movement paralysed by carriers' strike in Karachi – Dawn A strike by goods’ carriers, against ban imposed by the Sindh High Court on heavy vehicles’ movement in Karachi, has entered into its 8th day on May 15, 2017 (yesterday), hindering goods’ movement to and from ports and depriving factories of much-needed raw material. About 7,000 to 8,000 containers carrying raw material, imported food and other items travel daily from the Karachi port to Port Qasim, Landhi and Korangi industrial areas (distance of about 35 Km). In this regard, alternative route given by the deputy inspector-general of traffic police has been rejected by the transporters, complaining that it is long and would increase the transportation cost. Dawn. Senate passes companies bill to encourage Corporatization Senate has passed "The Companies Bill, 2017" with an aim to encourage and promote corporatization, in the country based on best international practices. In this regard, Law Minister Zahid Hamid presented the bill in Senate; elaborating on its salient features, he said that it is aimed at ensuring that the procedures of doing business are simplified which would encourage more investment in the country. Furthermore, the bill also provides adequate measures against fraud, money laundering and terrorist financing. The bill has already been passed by the National Assembly. BR. Jul.’16-Apr.’17 FDI up 13% on Chinese inflows According to SBP, Pakistan has fetched $ 1.73Bn as Foreign Direct Investment (FDI) during 10MFY17 compared to $ 1.54Bn in 10MFY16, depicting an increase of 12.7% or $ 195Mn. The total FDI also includes some $ 34.6Mn of privatisation proceeds. During the period under review, FDI inflows stood at $ 2.07Bn against the outflow of $ 337Mn. Most of the investment arrived from China as it contributed some 41% in the total FDI. Month-on-month FDI registered an increase of 17% to $ 132Mn in Apr.’17 compared to $ 113Mn in Apr.’16. BR. PKR 100Bn ST refunds blocked by FBR FBR has blocked PKR 100Bn sales tax refunds and rolled back Refund Payment Order (RPOs) for claims filed by the textile sector from Jul. 1, 2016 onwards. Due to funds’ paucity, Prime Minister's Export Incentive Package is not being implemented, particularly payment of sales tax refunds during the ongoing FY17 as it requires release of PKR 7Bn per month to exporters under different incentives. The RPOs would be eventually reprocessed and verified under the new exercise being carried out by the FBR’s field formations, but the textile industry termed it 'a technique to delay all sales tax refunds payments in 2016-17. BR. Fuel could get expensive as FBR seeks greater sales tax FBR has proposed to enhance sales tax rates on petroleum products, including LNG in the upcoming budget. It aims to maintain a sustained source of revenue generation in the upcoming year and sales tax on petroleum products remains the top revenue generator. FBR has proposed that the standard sales tax rates on motor sprit oil and high-speed diesel may be increased from 17% to 20% for the upcoming fiscal year. The FBR is already charging significantly higher than standard 17% General Sales Tax (GST) on both items. The proposal may end up increasing inflation beyond the projected level, with the World Bank already stating that crude oil prices will surge by 28% in 2017. Tribune. FBR’s WHT collection falls to PKR 10.02Bn in 10 months Withholding tax collection on non-cash banking transactions by non-filers fell to PKR 10.02Bn during 10MFY17 from PKR 10.38Bn in 10MFY16, depicting a 3.5% decline. The drop in revenue collection was due to rise in cash-based transactions and increase in returns filing. The News. Japan wants Pakistan to open CPEC for other countries Japan, Pakistan’s decades’ old business partner, believes that Pakistan should open CPEC for countries willing to be the part of the mega plan. Toshikazu Isomura, consul general of Japan in Karachi has said that at the moment, only Chinese and Pakistani companies can undertake projects in CPEC; if these restrictions are removed many private businesses in Japan may be interested in investing. He said Japan is Pakistan’s partner since long and 82 Japanese companies are already operating in Pakistan. The News. Economic Indicators List of Indicators Unit Value Change Daily 15-May 15-May 15-May 15-May 15-May 15-May 15-May 15-May 15-May 15-May PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.84 106.00 52,388 -1.81 49.11 1,230.2 42,685 16.58 7,180 6.14% 5-May $ Bn 20.79 0.03% -0.05% 1.23% NM** 1.91% 0.17% 0.00% 1.05% 0.00% -0.01% WoW -1.00% YoY -2.79% -2.29% 19.88% -40.12% -160.74% Crude (JU'17) Gold (JU'17) Gold (10g) Local Silver (JU'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-Apr 17 Remittances $ Bn 15.60 Jul-Apr 17 Exports* $ Bn 16.92 Jul-Apr 17 Imports* $ Bn 43.47 Jul-Apr 17 Trade Balance* $ Bn -26.56 Jul-Mar 17 Current Account $ Mn -6,130 % 4.09 Avg. CPI-FY17* Jul-Apr 17 Mar-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 May-16 GBP, 15-May-17, 134.9 EUR, 15-May-17, 114.5 USD, 15-May-17, 104.5 Aug-16 USD Nov-16 GBP Feb-17 May-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” China, Pakistan to upgrade 1,600kms of railway lines Beijing and Islamabad have agreed to jointly upgrade the 1,600km railway linking southern and northern Pakistan as part of a move to push forward construction of CPEC. The deals includes the construction of the Havelian land port on the Karakoram Highway that connects Pakistan and Kashgar in China’s Xinjiang Uygur autonomous region. The Havelian land port will serve as a transfer station where goods shipped from trucks to trains after the planned China-Pakistan railway connecting Gwadar Port and Kashgar is completed. Tribune. Thomas A. Edison Chart of the Day Expressway on East Bay of Gwadar: Ecnec accords approval to loan signing ECNEC has given approval for signing an interest-free loan of $ 168Mn with China for the construction of Expressway on East Bay of Gwadar. In this regard, project’s actual cost will be determined after a bidding process, which will take place among the Chinese companies duly recommended by the Chinese govt. Revised PC-I will be submitted for seeking approval of the CDWP /Ecnec later, if cost increases by more than permissible limit of 15% of the original cost. Gwadar’s East Bay envisages construction of 18.98km four-lane divided expressway with embankment for 6 lanes structures integrating Gwadar Port with the Makran Coastal Highway as well as with its free zone and future container terminals. BR. 3,500 Water releases regulations changed by Irsa Indus River System Authority (Irsa) has changed water releases regulations after increase in level of Tarbela from 65,000 cusecs to 100,000 cusecs with immediate effect. According to Irsa, it is now providing 90,000 cusecs to Punjab, 100,000 cusecs to Sindh, 6800 cusecs to Balochistan and 3100 cusecs to KP, adding that indents of provinces are being met. Irsa has further stated that with the increase in inflows and outflows in Tarbela, hydel generation will also increase. BR. 1,000 8,000MW to be added by March: Abid Minister of State for Water and Power Abid Sher Ali has said that 8000MWs of electricity will be added to national grid by Mar.’18. The Minister has further said that 1200MWs will be added to the system in the current month. In this regard, State Minister has further stated that uninterrupted power supply will be ensured during Sehar and Iftar in the holy month of Ramazan. The Nation. -1,000 Tariffs for solar, wind power projects set to fall further The govt., spurred by falling prices of modern technologies, has approved a policy shift for renewable energy tariffs and from now on it will hold competitive bidding to bring down the tariff rate for the relief of power consumers. Sponsors of new solar and wind power projects who will approaching Nepra for the announcement of reference tariff, will be asked to participate in a bidding process for the award of tariff. Earlier, the tariff mechanism for renewable energy projects was based on the cost-plus formula, which was later changed to upfront tariff. This system is now being further upgraded, which will requiring competitive bidding. Tribune. Date / Period USD-Interbank USD-Open MKT KSE-100 index FIPI FOREIGN INVESTMENT IN PAKISTAN (10MFY1310MFY17) 3,000 2213.33 2,500 1773.66 2,000 1,500 500 860.43 799.48 1537.83 1733.31 963.83 589.65 219.42 0 -500 -404.27 10MFY13 10MFY14 FDI 10MFY15 FPI 10MFY16 10MFY17 Foreign Investment Source: KCCI Research, SBP Values in $ Mn 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