Pakistan Daily Economy Update - 23 August

Transcription

1. Aug . 23, 2017 KCCI - eBulletin Zero-rating regime may be revised The govt. is planning to revise sales tax zero-rating regime for five major export sectors, i.e., textile, leather, surgical, carpets and sports goods under SRO No. 1125 to abolish any indiscrimination between local and imported products under World Trade Organization (WTO) regime. Under this SRO, in five export sectors, imported products are being taxed at the rate of 17% while the local products @ 5%. The FBR is looking at the possibility of enhancing the tax on local products. BR. Ministry again moves ECC over GST rate on HSFO After failing to evolve a consensus on 3% reduction of GST on High Sulphur Furnace Oil (HSFO) being used by IPPs, Water and Power Ministry has again approached the Economic Co-ordination Committee for re-imposition of General Sales Tax (GST) at 17% instead of 20% on HSFO. An increase in GST will result in an increased amount of cash to be paid to the fuel supplier, thereby affecting the cash flow of the IPPs adversely and will also result in a significant increase in the amount of refund claim from the FBR. The settlement of refunds from the FBR usually takes a long time and the IPPs are agitating at this state of affairs as their working capital requirements are significantly enhanced as a consequence. BR. New minister optimistic about export prospects Commerce and Textile Minister Pervaiz Malik has said that the govt. has taken a number of steps to increase exports of the country, which may help decrease the trade deficit in coming months. The steps being taken to decrease the trade deficit includes Prime Minister’s announced trade enhancement package of PKR 180Bn, a total of PKR 20Bn to be spent on the development of the export sector over the next three years under Strategic Trade Policy Framework (STPF) 2015-18 and an additional amount of PKR 6Bn is to be made available to exporters in FY18 under Textile Policy 2014. BR. Pakistan plans $ 1Bn bond issue by November The government has planned a new $ 1Bn bond offering, mostly likely Islamic Sukuk at the end of Oct‘17 or start of Nov‘17 to fund a record high current account deficit and support depleting foreign currency reserves. Preliminary work has just started by the economic managers for the launch of a new international bond within next couple of months. It has not yet been fully decided whether launch will be Sukuk or Eurobond but the decision has been taken that one of either bonds will be sold out to potential investors keeping in view favorable market rate and interest shown by investors for subscription of the bond. The News. No other country may be able to join CPEC before 2020 Islamabad and Beijing are unlikely to welcome other countries (Middle Eastern states, Iran and Central Asian countries) to become part of CPEC before 2020 as they will wait until energy and industrial projects are completed. In a meeting with BOI, Chinese delegates also sought some more incentives from Pakistan, including demanded pieces of land on a 99-year lease, which surprised many Pakistani officials. However, Pakistani officials did not respond, saying only that it would trigger a wave of criticism in the country. Tribune. Private sector’s credit stands at PKR 4.68Tn in July Credit to the private sector’s rose by 19.3% YoY to PKR 4.68Tn on net basis in Jul’17 as appetite of businesses for bank loans continued to increase in Jul’17 as compared to PKR 3.92Tn in in Jul’16 on growing demand of funds mainly in manufacturing sector. The News. Revenue body’s online system underestimates tax liabilities FBR online system has underestimated the tax liabilities during examination of the past income declaration records of taxpayers. The software erroneously prepared 40% less liability in one case. A tax practitioner said the calculation mistake raised many questions over the credibility of the FBR’s online system. The News. Textile exports up 3% to $ 1.0Bn in July Textile exports rose around 3% YoY to $1.0Bn in Jul’17 as the government’s incentive package for the export sector seemed to revive the wilting foreign exchange revenue spinner. Exports of textiles, however, fell 17.34% from $1.21Bn in \ Jun’17. Readymade garment exports posted a major growth of 20.47% YoY to $ 212.5Mn in Jul’17. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 22-Aug 22-Aug 22-Aug 22-Aug 22-Aug 22-Aug 22-Aug 22-Aug 22-Aug 22-Aug PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.41 106.40 41,983 -6.83 47.64 1,285.1 43,628 16.98 6,430 6.15% Forex Reserves 11-Aug $ Bn 19.94 0.00% 0.00 -0.40% NM** 0.00% -0.64% -0.20% -0.09% 0.00% 0.00% WoW -0.31% YoY 16.04% 10.58% 36.74% -55.46% -210.12% 162.81% USD-Interbank USD-Open MKT KSE-100 index FIPI 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-17 Current Account $ Mn -2,053 Foreign Direct Inv. $ Bn 0.22 Jul-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, 22-Aug-17, 135.1 135 125 EUR, 22-Aug-17, 123.8 115 105 95 Aug-16 USD USD, 22-Aug-17, 105.1 Nov-16 GBP EUR Currency management: SBP revises reporting format SBP has announced revision of the monthly reporting format of currency management strategy for banks. Upon successful completion of Phase-I currency management strategy, Phase II strategy is being implemented all over Pakistan with wider scope. The machine rejected banknotes categorized as suspected counterfeit will be surrendered to SBP-BSC for further examination along with the particulars of banknote(s) and name of branch from whose cash the banknote is detected, within 48 hours of detection. BR. Aug-17 Carolyn Rafaelian Chart of the Day YEARLY QUANTUM INDEX OF MANUFACTURING (FY12 - FY17) 139.29 AGP finds PKR 1.3Tn irregularities in power sector The auditor general of Pakistan has reported to found more than PKR 1.32Tn worth of embezzlement, irregularities, recoveries and overpayments by companies and organizations under the Water and Power Ministry during FY17. Submitted to the President and laid before parliament, the AGP report covers only 191 of 263 formations of Wapda and power-sector companies. Dawn. Sukuk rules unveiled: issuer must have investment agent, Shariah advisor: SECP SECP has issued Sukuk (Privately Placed) Regulations, 2017, making mandatory for the issuer who intends to issue Sukuk to appoint an investment agent and engage Shariah advisor. In this regard an SRO 836(I)/2017 has been issued. BR. May-17 Source: KCCI Research ; Oanda.com "I don’t listen, which is the best thing I do." PM assures Sindh govt. of KCR approval PM Abbasi has assured Sindh CM that he would ensure approval of the KCR project by the Ecnec as it has already been included in CPEC projects. The PM gave this assurance when the CM drew his attention towards the KCR which, despite being cleared by CDWP, has been facing red tape during the approval process. Dawn. PSQCA launches operation against factories Pakistan Standard Quality and Control Authority (PSQCA), subsidiary of Federal Ministry of Science and Technology, has launched an operation against factories involved in manufacturing substandard gee, milk, mineral water and other food stuff. It sealed more than 25 factories involved in crime and on the advice of the Punjab Chief Minister stern action is being taken against the owners of the factories. Meanwhile, Chairman of NA Standing Committee for Science and Technology Tariq Bashir Cheema has said that a grand operation against these factories has been started. The Nation. Feb-17 Quote of the Day 131.90 127.89 123.68 117.30 112.41 FY12 FY13 FY14 FY15 FY16 FY17 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