Pakistan Daily Economy Update - 19 July

Transcription

1. July 19 , 2022 KCCI - eBulletin Political uncertainties push dollar to all-time high above PKR 215 List of SBP reported that the dollar increased by PKR 4.25 against the 15th Jul’22 closing price of PKR 210.95, rising to an all-time high with Indicators a record single-day appreciation in the interbank market. This was observe to be due to fears that the IMF and other sources of USD-Interbank foreign exchange would dry up with a change in the political scenario after PTI’s win in the Punjab by-polls. Dawn. SBP restricts outflow of dollars SBP has started choking the outflow of dollars of small amounts of less than $100,000 to avoid a further dip in the reserves, exposing many factories to the risk of closure and monetary penalties. The restrictive measures by the central bank are part of various capital controls that Pakistan is applying to avert a default-like situation amid a delay in approval and disbursement of $1.12Bn loan tranche by the IMF. The SBP is discouraging imports being made through the Letters of Credit (LCs) and against open accounts like Cash Against Document (CAD) import schemes. The SBP has linked the release of these documents with its permission, delaying import clearance to save dollars. Many industries are now facing shortage of raw material and are on the verge of cutting their production. Tribune. Date / Period ‘Ufone won’t take part in spectrum auction’ PTCL Group president and chief executive Hatem Bamatraf said that Ufone was not interested to participate in the upcoming spectrum auction but demanded the govt. not to ease the conditions, and keep the terms and conditions to be same as 2021. PTCL group revenues had witnessed a growth of 5.7% in 6MCY22 compared to 6MCY21. In the latest three-month period, the company recorded a net loss of PKR 1.5Bn as opposed to a positive bottom line of PKR 1.3Bn a year ago. Dawn. Fiscal consolidation: Economic, political uncertainty to challenge the pace: Moody’s The economic and political uncertainty will challenge the pace of fiscal consolidation in FY23, says Moody’s Investors Services (Moody’s). The rating agency in its latest report “Govt. of Pakistan - B3 negative, Annual credit analysis, overview and outlook”, stated that the credit profile of Pakistan reflects its low fiscal strength, weak institutions and governance strength, heightened external vulnerability risks and elevated political risks, balanced against a large economy and robust growth potential. The social risk in the country is also highly negative, reflecting low household incomes, limited access to quality healthcare and basic services, and ongoing safety concerns in the country that limit investment opportunities. The negative outlook is driven by Pakistan’s heightened external vulnerability risk and uncertainty around the sovereign’s ability to secure additional external financing to meet its needs. Moody’s further stated that the rating could be downgraded if there were further deterioration in Pakistan’s external position that would threaten the govt.’s external repayment capacity and balance of payments stability. BR. Kohala Hydropower Project: PPIB extends due financial close date by 3 years The Board of Private Power & Infrastructure Board (PPIB) has reportedly granted a three-year extension in financial close (FC) date to 1,124MW Kohala Hydropower Project (a CPEC strategic project) on the basis of single Performance Guarantee (PG) as the \ reasons for the delay in achievement of FC were beyond the reasonable control of the project company. The project company, will submit monthly progress report that sets out in adequate detail, the additional actions taken by the project company in achieving the FC in the extended date. BR. SRB extends deadline Sindh Revenue Board (SRB) has extended the last dates of e-depositing of Sindh Sales Tax (SST) and e-filing of tax return for the tax period Jun’22, making it on or before 21st Jul’22 while the taxpayers are now allowed e-filing of their tax returns on or before 25th Jul’22. BR. Value Change Daily USD-Open MKT 18-Jul PKR PKR 215.20 211.75 2.01% 0.71% KSE-100 index FIPI 18-Jul 18-Jul Pts. $ Mn 41,367 0.42 -1.68% NM** Crude Oil 18-Jul $/bbl 99.42 5.49% Gold 18-Jul $/oz 1,710.2 0.09% Gold (10g) Local 18-Jul PKR 114,890 -0.44% Silver 18-Jul $/oz 18.64 -0.25% Cotton(KHI)-40 kg 18-Jul PKR 16,611 6.89% Kibor-6M 18-Jul % 15.69 -0.10% 7-Jul $ Bn 15.61 WoW -0.84% Jul-Jun 22 $ Bn 31.24 6.36% 27.78% 18-Jul Forex Reserves Large-scale manufacturing expands 11.7% in 11MFY22 Pakistan Bureau of Statistics (PBS) reported that large-scale manufacturing (LSM) grew 21.4% YoY in May. However, on MoM basis the LSM shrank by 1.3% in May’22. In the 11MFY22, LSM grew by 11.7% on a YoY basis as per the new base. However, the growth Remittances is calculated at 7.1% in the 11MFY22 based on the old base-2005-06. Dawn. Exports* FY22: Over $ 31Bn record remittances received The country received the highest-ever home remittance inflows of over $ 31Bn during FY22. SBP has reported that home remittances posted some 6.1% growth during FY22. With this increase, inflows of workers’ remittances rose to the highest-ever level in history at $ 31.237Bn at the end of FY22 compared to $29.45Bn in FY21, depicting an increase of $ 1.787Bn. However, overall growth in remittances is lower than FY21, in which the country achieved 27% growth compared to 6% in FY22. MoM basis, home remittances increased by 18% during Jun’22 compared to May’22. Pakistan fetched home remittances amounting to $ 2.76Bn in Jun’22 compared to $ 2.33Bn in May’22, depicting an increase of $ 429Mn. YoY basis, inflows of workers’ remittances also rose by 2% or $ 47Mn in Jun’22 relative to $ 2.714Bn in Jun’21. BR. Unit YoY Jul-May 22 $ Bn 28.85 Imports* Jul-May 22 $ Bn 72.18 44.28% Trade Balance* Jul-May 22 $ Bn -43.33 -57.85% Current Account Foreign Direct Inv. Jul-May 22 Jul-May 22 $ Bn $ Bn -15.20 1.60 -1184.8% -4.91% Jul-May 22 LSM Growth* % 7.10 % 12.15 Jul-Jun 22 Avg. CPI Discount Rate % 15.00 Jul-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 275 265 255 245 235 225 215 205 195 185 175 165 155 145 Jul-21 GBP, 18-Jul-22, 247.5 USD, 18-Jul-22, 211.8 USD Oct-21 GBP Jan-22 EUR Apr-22 5.4 magnitude earthquake jolts parts of country An earthquake measuring 5.4 on Richter scale jolted different parts of Khyber Pakhtunkhwa (KP) and Islamabad on 18th Jul’22. It was measured at a depth of 188kms while its epicenter was 64kms north of Wana in KP, according to the center. BR. Reward points for ABL customers Three organizations — Allied Bank, Euronet Pakistan, and Giift Management Asia PTE entered into a partnership to introduce ‘Enterprise Loyalty Solution’ in the country. Under the agreement, ABL customers will be able to earn and redeem reward points both in domestic and international markets, according to a press release. Dawn. Jul-22 Source: KCCI Research Quote of the Day “Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence” Helen Keller PAKISTAN'S CORE IT EXPORTS IN $(MN) Including Computer Services, Computer Software Sales, Software Cunsultancy Services,Hardware Consultancy Services, etc. 1911 1667 Prime/brand new steel: FBR asked to probe phenomenon of large-scale misdeclarations The Federal Tax Ombudsman (FTO) has directed FBR to investigate the phenomenon of large-scale misdeclaration of prime/brand new steel under the garb of scrap at the import stage, destroying the documented steel manufacturers. FTO has given a deadline of Jul’22 for early submission of the report on the allegations made by large steel producers. BR. Reko Diq copper-gold project: Barrick sets conditions to insulate itself Canadian mining firm Barrick Gold Corporation President Mark Bristow stated that the first phase of Reko Diq copper-gold project will be completed by 2027-28, and the scheme will convert it into a “world-class mine and transform Baluchistan”. Under the project, approximately $ 7Bn investment would be injected in Riko Diq mines for developing gold and copper in two phases. There will be a total $ 4Bn investment in phase-I and $ 3Bn in phase-II and the production will start from FY28. International Finance Corporation (IFC) will provide risk insurance for the execution of this multi-billion-dollar project. Whereas, feasibility studies are underway, however they estimate that 200,000 tons copper per year and 400,000 tons of gold could be found from the site. The share of Pakistan stood at 50% whereby the Baluchistan govt. would start getting royalty as in first they would get $ 5Mn, second year $ 7.5Mn and then until completion of project $ 10Mn/year. BR. EUR, 18-Jul-22, 208.3 1109 896 293 330 216 248 459 493 572 730 Source: KCCI Research, SBP Note If any member is facing any issues pertaining to PakistanAfghanistan investment and trade policies or has project proposals is requested to share the information at secretary@kcci.com.pk for forwarding to the Board of Investment.