Pakistan Daily Economy Update - 23 November

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1. Nov . 23, 2017 KCCI - eBulletin MPS tomorrow: policy rate may be kept unchanged SBP will unveil the Monetary Policy Statement for next two months on Nov. 24, 2017 (tomorrow). An Independent Monetary Policy Committee headed by Governor SBP Tariq Bajwa will meet at the SBP head office for detailed deliberations on the developments in key macroeconomic indicators and subsequently take a decision on key interest rate. In the previous monetary policy, announced in Sept.’17, the monetary policy committee kept the policy rate unchanged at 5.75%. It is expected that the SBP is most likely to maintain the status quo ahead of challenges on the external front. Pakistan's current account deficit sharply increased by 122% to $ 5.01Bn in 4MFY18 compared to $ 2.26Bn in 4MFY17. BR. Economic Indicators List of Indicators Govt may ban import of furnace oil Amid grim supply challenges following topped up storages, the government is likely to impose an immediate ban on import of furnace oil and ask some of the oil-based power plants to lift some stocks for easing pressure on refineries. This comes at a time the country’s largest refinery – Byco Refinery – was compelled to closed down its major refining plant of 120,000 tons capacity and all other refineries running at sub-optimum capacity and six shipload of furnace oil belonging to the largest oil supplier PSO – lined up for arrival at Karachi. Understanding to this was reached when heads of all the refineries in the country and PSO had a meeting with secretary petroleum. Dawn. Crude (JA'18) Gold (DE'17) Gold (10g) Local Silver (DE'17) Cotton(KHI)-40 kg Kibor-6M PM grants Dar leave of absence Finance Minister Ishaq Dar has reportedly been relieved from his duties with the approval of his three months leave by the Prime Minister Shahid Khaqan Abbasi. Two notifications were issued by the Cabinet Division in this regard. BR. Forex Reserves East Bay Expressway: PM performs groundbreaking Prime Minister Shahid Khaqan Abbasi has performed the groundbreaking of PKR 17Bn, East Bay Expressway and HAS directed that the series of development projects for Gwadar be completed on time to ensure that the port emerges on the world map as a major trade hub. The 19.5km six-lane expressway would ease cargo handling through road and increase connectivity with rest of the country. The project would link Gwadar Port with Makran Coastal Highway and improve logistic transportation of import and export. BR. Logistics industry must prepare for CPEC challenges Port Qasim Authority (PQA) Chairman has said that the government is simultaneously working on a number of mega projects for enhancing the capacity of logistics industry by providing improved connectivity through ports, railways and road network. Speaking at a dinner, organised by Freight Forwarders (PIFFA), Mr Akhtar said that there is a need for legislation for logistics industry. He added that the government is working on fast track to give rail and road connectivity to the Karachi Port for quick movement of cargo/containers from the port area. Dawn. Green Line busway enters final stage, says governor Sindh’s governor has announced that the Green Line busway of the Karachi Metro bus project has entered its final stage and would be completed by Apr or May 2018. Zubair said a plan was being implemented to transform Karachi into a modern city, adding that an effective system of mass transportation would be launched with the completion of the Green Line busway. He also informed the media that China’s state-owned Shanghai Electric Power Company Limited would soon take control of the privatized K-Electric. He said the new management would utilize the KE’s system to the best of its capacity for providing electricity to the metropolis. The News. 115 0.01% 0.00% 0.11% NM** 2.80% 1.16% 0.19% 0.50% 0.00% 0.02% WoW -1.09% YoY 2.27% 10.04% 22.55% -31.24% -121.91% 74.44% GBP, 22-Nov-17, 139.6 135 125 EUR, 22-Nov-17, 123.8 105 95 Nov-16 USD Feb-17 GBP EUR May-17 Aug-17 USD, 22-Nov-17, 105.2 Source: KCCI Research ; Oanda.com Quote of the Day "Begin to be now what you will be hereafter." William James Chart of the Day Banks & Non-banks Holdings of GoP Securities FBR to verify property value declared in returns forms FBR has decided to verify property values declared in returns forms to check untaxed money. The officials said FBR planned to tighten noose around the black money invested in property business by selecting declarations made through annual returns for TY17. The scrutiny process will be launched after the completion of annual returns filing in Dec’17. The News. 608 T-Bills 4,398 18 Ijara Sukuk CCI meeting: Sindh to take up gas suspension issue of PSM The govt. of Sindh is to take up the issue of gas suspension in Pakistan Steel Mills (PSM) to the Council of Common Interests (CCI) scheduled to be held on Nov. 24, 2017(tomorrow) under the chairmanship of Prime Minister, Shahid Khaqan Abbasi. BR. PIA has no plan to sell Roosevelt Hotel, NA panel told A parliamentary panel was informed that the Pakistan International Airlines has no plans to sell the Roosevelt Hotel in New York. The meeting expressed annoyance over the poor performance of the national airline and directed its management to improve the situation. Dawn. Change Daily 105.49 107.30 40,592 -2.91 57.93 1,291.6 46,243 16.99 6,966 6.19% 145 \ Pakistan borrows another $ 500Mn from China Pakistan has obtained yet another foreign commercial loan of $ 500Mn from the Industrial and Commercial Bank of China (ICBC), a move aimed at stopping official foreign currency reserves from slipping to dangerous levels. With the fresh foreign loan that Islamabad contracted on Oct. 11, 2017, total foreign commercial borrowings in the first four months of this fiscal year have crossed $ 1Bn. During 4MFY18, Pakistan has obtained $ 2.3Bn worth of foreign loans, which is equal to 30% of the annual budgetary estimates of $ 7.6Bn. Tribune. Banking business models need review SBP has emphasized the need for a review of the prevailing banking business models to meet the challenges of rapidly changing financial and technological landscape. Mr. Ahmad, Deputy Governor SBP, said that innovations, such as cloud computing, block chain technology, artificial intelligence, machine learning and big data analytics, are set to transform the financial industry in diverse areas from intelligent customer relationship management systems to proactive risk management, fraud detection and prevention. Dawn. Value PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % Major Currencies 155 Paying PKR 122Bn to KPK, Punjab, AJK, Irsa: Wapda bulk tariff increased by PKR 3 per unit Nepra has increased bulk tariff of Wapda by around PKR 3 per unit to PKR 7 from PKR 4.11 per unit to pay PKR 122Bn to KPK, Punjab, AJK and Indus River System Authority (IRSA) during 2017-18. The main reason to increase hydel tariff is to pay Net Hydel Profit (NHP)/ Water Usage Charges (WUC) to KPK, Punjab and AJ&K. The tariff has been fixed at PKR 1.16 per unit for 21 hydropower projects whereas IRSA charges have been fixed at PKR 0.005 per unit, besides different variable charges for different projects. BR. Unit 22-Nov 22-Nov 22-Nov 22-Nov 22-Nov 22-Nov 22-Nov 22-Nov 22-Nov 22-Nov $ Bn 19.70 10-Nov FY18 Jul-Oct 17 Remittances $ Bn 6.44 Jul-Oct 17 Exports* $ Bn 7.06 Jul-Oct 17 Imports* $ Bn 19.19 Jul-Oct 17 Trade Balance* $ Bn -12.13 Jul-Oct 17 Current Account $ Mn -5,013 Foreign Direct Inv. $ Bn 0.94 Jul-Oct 17 Jul-Sep 17 LSM Growth* % 8.36 % 3.50 Jul-Oct 17 Avg. CPI Discount Rate % 5.75 Sep-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Consumers permitted to sell solar power to national grid The Board of Directors (BoD) of Alternative Energy Development Board (AEDB), in its 41st meeting, have allowed consumers to install solar powered panels to generate electricity and sell the same to national grid. Presiding over the meeting of BoD of AEDB, Power Minister Awais Laghari said that allowing certification regulations for solar powered net metering will facilitate consumers to install solar powered panels to generate electricity and sell the same to national grid. He further said that net metering would bring 5,000 to 7,000MW electricity to the national grid. The Nation. Fiscal deficit may soar to 8.5% In an anecdotal survey of economists and analysts, it has been analysed that the country’s fiscal deficit in the ongoing FY18 may reach at 8.5% unless a mini budget is unveiled to meet the growing revenue shortfall coupled with a rising expenditure bill compared to what was budgeted. However sources in the finance ministry have flatly dismissed the possibility of a mini-budget maintaining that it is not under consideration at any level. BR. Date / Period USD-Interbank USD-Open MKT KSE-100 index FIPI 367 1,089 PIB's 2,762 0 *PKR Bn **As on 31Oct'17 1,000 2,000 Non-Banks/Corporates 3,000 4,000 5,000 Scheduled Banks Source: KCCI Research, SBP 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