Pakistan Daily Economy Update - 21 January

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1. Jan . 21, 2017 KCCI - eBulletin PSX-China deal like a dream come true: Dar Mr Dar was speaking at a ceremony held to mark the signing of the Sale and Purchase Agreement (SPA) of 40% strategic equity stake of PSX, with a Chinese consortium and local financial institutions has said that the government had established a ‘Pakistan Development Fund’ aimed at financing multibillion dollar infrastructure development projects in the country and would soon be coming to the PSX to mobilize funds, adding that the IFC and others had indicated their interest in participating in the Fund. The PSX also plans to launch infrastructure bonds which would be predominantly used for the CPEC project. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank 20-Jan PKR 104.60 -0.24% USD-Open MKT 20-Jan PKR 107.85 -0.05% Pakistan, China decide to include new projects in CPEC Joint Co-ordination Committee (JCC) has agreed, in principle, to include Keti Bunder Sea Port Development project as well as NaukuridiMashkhel-Panjgur road project (which would connect with M-8 & N-85) in the CPEC portfolio. Furthermore, Pakistan and China have also agreed during the meeting to initiate preparatory work including joint technical and commercial feasibility study for expansion of existing multi-purpose terminal including breakwater and capital dredging of Gwadar Port and East Bay Expressway-II. BR. KSE-100 index FIPI 20-Jan Pts. $ Mn 49,365 -7.66 0.72% NM** 0.17% Crude (MA'17) 20-Jan 19-Jan $/bbl 52.16 Gold (FE'17) 19-Jan $/oz 1,206 0.18% Gold (10g) Local 20-Jan PKR 43,628 -0.49% Govt to introduce tough laws against tax evaders: Dar Tax evaders can no longer hide as the government is going to introduce stricter laws, Finance Minister Mr. Dar warned the business community. He said the $ 57Bn foreign debts were safe because after deducting $ 18Bn FX reserves held by the State Bank, there was $ 39Bn debt which was 4% of the gross domestic product. Dawn. Silver (FE'17) 19-Jan $/oz 17.01 -0.27% Cotton(KHI)-40 kg 20-Jan PKR 7,057 0.00% Kibor-6M 20-Jan % 6.11% 0.00% Companies Ordinance to be presented in joint session of parliament: Dar Finance Minister Ishaq Dar has announced that the govt. would present the Companies Ordinance 2016 in the joint session of the parliament for its approval. In this regard, the Minister said that 'a few people' are opposing this law because it demands companies disclose their assets outside Pakistan however the govt. is determined to get it approved from a joint session of the parliament. BR. Forex Reserves 13-Jan $ Bn 23.19 WoW -0.04% Remittances Jul-Dec 16 $ Bn 9.46 -2.27% Exports* Jul-Dec 16 $ Bn 9.91 -3.82% Dar sees 5% growth rate by fiscal year 2017-end Finance Minister Ishaq Dar has said that with the govt.'s positive measures, all major microeconomic indicators are moving in the right direction and the country's economy will post a 5% GDP rate by the end of FY17. The Minister further said that foreign debt in real terms is lower than previous years as external debt was standing at $ 47Bn in 2013, when the country's foreign exchange reserves were some $ 6Bn, while presently it stands at $ 57Bn with the country's foreign exchange reserves at $ 23Bn. It implies that the country is in a better position to repay the external debt. BR. Imports* Jul-Dec 16 $ Bn 24.40 10.10% Trade Balance* Jul-Dec 16 $ Bn -14.49 -22.20% Current Account Avg. CPI-FY17* Jul-Dec 16 $ Mn % -3,585 3.88 -92.23% Automatic information exchange to start from 2018 Finance minister Ishaq Dar has said that tax evaders will find no place to park their ill-gotten money, as Pakistan will begin automaticexchange of information from next year. As per international agreement with OECD (Organisation of Economic Cooperation and Development), Pakistan will start automatic exchange of information regarding tax evasion from 2018, under which the local authorities would send and receive information. The News. German companies keen to join CPEC: envoy German companies are interested in joining CPEC to improve trade relations. Ambassador Ina Lepel was speaking after a meeting with National Security Advisor Lt General (retd) Nasser Khan Janjua. Lepel said that German companies are keen to join the CPEC to further improve trade relations. The two sides exchanged views on bilateral relations between the two countries and the ways to further strengthen the ties. During the meeting, matters concerning regional security and stability were also discussed. The ambassador shared her experience of working in Pakistan and said that Pakistan and Germany enjoy good educational and economic ties which would pave the way to fight the common challenges. Tribune. SECP body to review bourse in-house financing In consultation with the relevant stakeholders, SECP has constituted a committee comprising of senior market professionals and stakeholders to review the matters of in-house financing and identification of any issues, inefficiencies or hurdles in the existing leverage products. The committee has been mandated to make recommendations for practical and viable solutions to meet the needs of market participants in relation to financing through brokers. The committee held its first meeting on Friday at the SECP’s Karachi office. The News. YoY Jul-Dec 16 Nov-16 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 GBP, 20-Jan-17, 129.3 135 125 115 EUR, 20-Jan-17, 111.8 USD, 20-Jan-17, 104.8 105 95 85 75 Jan-16 Apr-16 USD GBP Jul-16 Oct-16 Jan-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day Textile exports fall to $ 6.15Bn despite recovery in value-added sector Textile exports fell 1.65% to $ 6.15Bn in 1HFY17 despite an improvement in export earnings from value-added sector. Textile value-added sector, accounting for more than half of the industry’s foreign earnings, recorded a surge in exports during 1HFY17. Knitwear exports inched up 0.17% to $ 1.19Bn. Bed wear fetched $ 1.04Bn in exports revenue, up 4.66% year-on-year. Whereas, readymade garments rose 5.87 percent to $ 1.10Bn. In July-December 2016, cotton cloth exports fell 5.57% to $ 1.04Bn, while exports of raw cotton and cotton yarn decreased more than 49 and 7%, respectively. The News. "The handicap of deafness is not in the ear; it is in the mind." Branchless banking transactions fall to PKR 519.8Bn Branchless banking transactions dropped 4.4% in 3QCY16 due to decline in over the counter transactions following delay in government-toperson payments. The value of branchless banking transactions fell to PKR 519.8Bn during July-Sep’16 from PKR 543.6Bn in the previous quarter. Whereas, the BB transactions stood at PKR 526.4Bn in July-Sep’15. Tribune. Chart of the Day Pakistan-Turkey sixth round of talks on FTA next week Pakistan and Turkey’s sixth round of the negotiations on the free trade agreement (FTA) would be held through digital video meeting next week, while the agreement would be signed in Apr’17. The News. CCP tasked to check milk, meat, pulses sectors The Competition Commission of Pakistan (CCP) has been tasked to check the milk and meat sectors against possible cartelization and take corrective measures to control the undeclared monopoly and mitigate any expected rise in prices of pulses. The CCP, in its study released in Aug.’16 on the meat sector in Pakistan, identified ineffective price and quality monitoring at the district level that resulted in high price and low quality of meat that affects both urban and rural consumers. Smuggling of animals to neighboring Afghanistan is also an issue that affects availability at affordable price to domestic consumers. BR. Jazz, Warid consolidate franchise network More than 3rd of the nearly 700 franchise outlets of both Warid and Jazz will shut down as the two entities consolidate their franchise network after a merger last year. Head of communications at Jazz has said that the combined strength of the permanent employees of both Warid and Jazz, including sales center employees, is about 4,000. Over 51Mn customers are being served by a combined support network of more than 400 franchises across the country. Warid customers can also use Jazz scratch cards and Jazz Load to recharge their balance and avail the complete Jazz experience through a network of over 400 franchises and 32 sales centers. Dawn. PKR 1.86/unit cut sought for power consumers Electricity tariffs for all distribution companies (Discos), except K-Electric, are expected to come down by PKR 1.86/unit for the month of Jan‘17 due to higher than justified billing to consumers in December despite cheaper generation cost. According to a petition filed by the CPPA before the NEPRA, distribution companies had overcharged consumers by 23% in December under a presumptive reference tariff. Dawn. Donald Trump became the 45th president of the United States Donald Trump became the 45th president of the United States on 20th Jan‘17 during a time-honored inauguration ceremony that encapsulated the peaceful transfer of power. Trump was the oldest president sworn in for a first term and the first president with no previous diplomatic, political or military executive experience. Daily Times. Marlee Matlin Car Sales in Pakistan 9,500 8,694 8,500 7,467 7,500 6,500 5,500 4,297 4,149 4,500 3,500 2,416 2,500 1,500 500 No of Units 1,028 Honda Cars Dec'15 Suzuki Dec'16 Toyota Source: KCCI Research, PAMA 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