Pakistan Daily Economy Update - 26 January

Transcription

1. Jan . 26, 2017 KCCI - eBulletin CPEC sovereign guarantees may not augur well for budget Sovereign guarantees extended by the federal govt. for CPEC energy and infrastructure projects may have serious implications on the budget as well as on the economy. If the govt. procures electricity from power plants at a higher cost and sells to the people, the difference would be the govt. liability. The govt. would have to increase taxes to pay off the liability through a higher allocation for power subsidy. As many as 14 power generation projects are being implemented under the CPEC with over 7,000MW: 5000MW projects are to be completed by 2018 and the remaining beyond 2018. BR. Payments deal: SBP ‘looking into’ NADRA-MasterCard agreement SBP has decided to look into the agreement between MasterCard and NADRA amid concerns over the mandate of NADRA and security of the national database. NADRA’s decision to enter into a strategic agreement with MasterCard will allow Pakistani citizens to carry out financial transactions and receive govt. disbursements by utilizing their 13-digit CNIC No. Citizens will also be able to use their CNIC to send and receive domestic and international remittances. NADRA has reportedly not taken the requisite regulatory approvals before venturing into an area that does not fall in its jurisdiction, while at the same time it has preferred a company that does not have its servers in Pakistan. However, NADRA officials insist that MasterCard would not have access to its secure database. They said the sender of the money would log in to the NADRA website and feed the receiver’s CNIC number. Then NADRA would send this information to MasterCard for verification. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank 25-Jan PKR 104.85 0.05% USD-Open MKT 25-Jan PKR 107.45 0.05% KSE-100 index FIPI 25-Jan Pts. $ Mn 49,757 -3.79 -0.42% NM** Crude (MA'17) 25-Jan 25-Jan $/bbl 52.89 -0.36% Gold (FE'17) 25-Jan $/oz 1,199 -0.74% Gold (10g) Local 25-Jan PKR 43,328 -0.30% Silver (FE'17) 25-Jan $/oz 16.97 -0.56% Cotton(KHI)-40 kg 25-Jan PKR 7,165 0.76% Kibor-6M 25-Jan % 6.11% 0.00% Pakistan improves corruption ranking on TI index Pakistan has scored a two-point improvement and moved to 116th position in Transparency International’s 2016 Corruption Perceptions Index. According to the Transparency’s annual report, the country secured 32 points out of 100 in 2016 as compared to 30 points in the previous year. The score runs from zero, which is highly corrupt, to 100, which is very clean. India ranked 79 on the list with a total of 40 points. The Nation. 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% Imports* Jul-Dec 16 $ Bn 24.40 10.10% PM stresses on boosting economic ties with Japan Prime Minister Muhammad Nawaz Sharif has said that Pakistan is looking forward to greater levels of cooperation with Japan in areas of trade, investment, infrastructure and energy, calling for initiation of negotiations on the bilateral free trade agreement. Talking to Ambassador Takashi Kurai, the prime minister welcomed Japanese companies to invest in Pakistan to strengthen the industrial sector and produce value-added goods. He said Japan may also consider a three- to four-year exception for Pakistani textiles under its temporary tariff measures to bring Pakistan at par with its competitors that enjoy free access to Japanese market. Tribune. 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% Abraaj Group acquires majority stake in Jhimpir Power The Abraaj Group has announced that it has entered into a definitive agreement to purchase a majority stake in Jhimpir Power Limited from Burj Capital, a renewable power developer, through its funds. Abraaj said its energy professionals focused on investing in clean energy across growth markets would manage the project, through the construction phase to its implementation. It emphasized that the group was keen to continue its active role in addressing the power supply gap in Pakistan, stemming from favorable macroeconomic growth drivers including a rising middle class, urbanization and underinvestment in the energy sector. Tribune. Coca-Cola likely to invest $ 200Mn in Pakistan Coca-Cola Company is contemplating a further $ 200Mn investment on establishing new beverage plants at Faisalabad and Islamabad areas. The company has already invested $ 500Mn during 2016 on the up-gradation of the existing plants. The company intends preferably to establish their units at Special Economic Zones (SEZ). The Nation. Orange Line project: FBR grants duty exemption to Chinese contractor FBR has exempted customs duty on the import of equipment (not manufactured locally) by a Chinese contractor for Lahore Orange Line Metro Train Project. In this regard, an SRO 40(I)/2017 has been issued wherein federal govt. has allowed exemption of whole of customs duty on equipment import, if not manufactured locally, by M/S CR-NORINCO (Chinese Contractor). BR. 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, 25-Jan-17, 131.6 135 125 115 EUR, 25-Jan-17, 112.5 USD, 25-Jan-17, 104.8 105 95 85 75 Jan-16 Apr-16 USD GBP "Avoid negative people, for they are the greatest destroyers of self confidence and self esteem. Surround yourself with people who bring out the best in you ." Imports of oil, food and machinery rise The import bill of oil, machinery and food rose 21% YoY in the 1HFY17 despite drop in global prices. The share of these products increased to 55.4% in Pakistan’s total import bill in from 50.2% a year earlier, putting more pressure on the country’s balance of payments. Official figures issued by the PBS show that machinery imports went up by 41% to $ 5.67Bn. Petroleum imports increased 11.2% year-on-year to $ 4.99Bn in July-Dec‘16. Dawn. SBP sells PKR 39.39Bn worth of PIBs; yields up SBP has sold PKR 39.39Bn worth of long-term Pakistan Investment Bonds (PIBs). The SBP rejected bids in 3 previous actions. The raised amount was lower than the pre-auction target of PKR 50Bn. The central bank has sold PKR 28.98Bn of 3-month debt at 6.4% compared with 6.1% previously. It also sold PKR 1.0Bn worth of 10-year bonds at 7.9%, higher than 7.7% at the previous auction. The Zig Ziglar Chart of the Day Net Foreign Direct Investment Receipts from Top Countries 443.82 500 450 400 17.74 21.70 33.40 38.41 44.63 46.06 77.25 129.11 204.02 Japan Hungary Italy US UK France U.A.E Turkey China Netherlands 350 20.93 24.32 24.62 45.29 55.90 70.38 75.57 81.05 84.40 Two coal-fired power plants to be set up under CPEC A joint venture of Hubco and a Chinese company have announced that they would set up two coal-fired power plants of 1,650MW in Hub (Balochistan) and Thar (Sindh) under CPEC. In this regard, Power Purchase Agreement (PPA) and Implementation Agreement (IA) have been signed between China Power Hub Generation Company, Hubco, Private Power Infrastructure Board (PPIB) and Central Power Purchasing Agency (CPPA) and the two projects will be completed in 2019. BR. Jan-17 Austria Saudi Arabia Switzerland France Italy Egypt U.A.E Hongkong UK China KP, Sindh refuse to contribute to fertilizer subsidy scheme Provincial governments of KPK and Sindh have refused to contribute to continuation of fertilizer subsidy for the remaining six months of FY17 and only Punjab has agreed to contribute its share to the subsidy scheme. The provincial governments of Punjab and KPK were unable to generate estimated budget surplus and only Balochistan and Sindh generated some budget surplus. The provincial governments' expenditures would increase further on account of providing subsidy on fertilizers. BR. Oct-16 Source: KCCI Research ; Oanda.com Quote of the Day $ 951Mn repatriated in July-Dec The repatriation of profits and dividends on foreign investment rose to $ 951Mn in the 1HFY17. SBP has reported that the repatriated amount was less than FDI, which amounted to $ 1,080Mn for the same six-month period. FDI details show a one-time inflow of about $ 450Mn from the Netherlands for the acquisition of Engro Foods. Dawn. Six projects worth PKR 48Bn approved by Ecnec A meeting of the ECNEC has approved six projects, worth over PKR 48Bn, for energy, health and education sectors. The meeting has also approved the project 'Revival of Forestry Resources in Pakistan' under Green Pakistan Program at an estimated cost of PKR 3.65Bn which aims at plantation of indigenous and fast growing local tree species along canal/road sides in Punjab, KPK and Sindh. BR. Jul-16 EUR 300 250 200 150 100 50 462.26 Collaboration: Pak Suzuki to invest in automobile glass manufacturing company Pak Suzuki Motor Company has announced that it intends to invest in a joint venture company that will manufacture automobile glass. The Board of Directors passed the resolution in meeting authorizing the company to make long-term equity investment of PKR 344.4Mn by way of purchase of 34.44Mn ordinary shares of PKR 10 each for setting up Tecno Auto Glass Limited. Tribune. YoY 0 1HFY16 1HFY17 Value in US $ Mn 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