Pakistan Daily Economy Update - 28 March

Transcription

1. Mar . 28, 2018 KCCI - eBulletin CPFTA-II signing depends on outcome of next round meeting: Dagha Secretary Commerce, Younus Dagha, has said that signing of China-Pakistan Free Trade Agreement (CPFTA) phase II depends on the outcome of next round between the two countries expected to be held on Apr. 2-3, 2018. Most of domestic industry has requested the govt. to defer the CPFTA signing until it finalizes in-house consultations. The Commerce Division is expected to submit the crux of consultations/deliberations with local industry to the PM prior to giving any commitment to the Chinese side. Commerce Ministry has also stated that local industry is appreciative of its effort in trying to address their concerns in phase-II of CPFTA and making the entire process highly transparent. BR. MPS on Mar. 30, 2018: 25bps hike in key policy rate expected State Bank of Pakistan (SBP) will announce the Monetary Policy Statement for next two months on Mar. 30, 2018. The Independent Monetary Policy Committee (MPC) of the SBP will meet for deliberations on key economic indicators to make a decision on policy rate. It is expected that SBP may increase the interest rate by 25bps for Apr-May.’18 to contain the Pak rupee slide impact. Monetary policy announced on Jan. 26, 2018, SBP increased the key policy rate by 25 basis points (bps) to 6% for Feb-Mar.’18. BR. Govt to secure $ 1.5Bn commercial loan in April to shore up reserves The govt. is all set to secure commercial loan of $ 1-1.5Bn from Chinese banks within the next two weeks to shore up the depleting foreign currency reserves. The country has already raised $ 1.77Bn short-term commercial loans from various foreign banks, mainly Chinese, against a target of $ 1Bn for full FY18. With the upcoming transaction, total short-term debt might go close to $ 3Bn mark. The planned short-term loan transactions are intended for two to three years period. Pakistan has already obtained $ 7.6Bn from multilateral and bilateral creditors in FY18. The News. FBR to miss annual tax target by PKR 100Bn Despite showing healthy growth of over 17% in tax collection in consecutive eight months, FBR would miss its annual target by around PKR 100Bn in the ongoing FY18. FBR has estimated that its tax collection will reach PKR 3.90Tn as against the budgeted target of PKR 4.01Tn. The tax machinery has recorded a provisional net revenue collection of over PKR 2.26Tn during 8MFY18 as against PKR 1.92Tn collected during 8MFY17. Finance Ministry has already revised the budget deficit target to 5.5% of the GDP due to downward revision of tax collection target. The Nation. Shanghai Electric re-launches offer for KE’s majority stake Shanghai Electric Power Company Limited (SEPCL) has re-launched its offer to acquire majority stake in K-Electric Limited (KE), a day after the Chinese power giant yet again withdrew its offer owing to the govt.’s failure to announce multiyear tariffs and other approvals. AS per a bourse filing, KE received fresh public announcement of intention (PAI) from Shanghai Electric to acquire up to 66.40% voting shares of the company. The announcement arrives on the heels of a meeting of Shanghai Electric delegation with PM Abbasi where it urged the premier to help accelerate the process of regulatory approval. Abassi guaranteed govt.’s complete earnestness to support the Chinese company with a view to further liberalise power generation and distribution sector in Pakistan. The News. LHC removes duty on more than 700 steel items The Lahore High Court (LHC) has set aside the SRO No 1035 (1)/ 2017 which imposed regulatory duty on imports of over 700 listed items, including hot rolling steel, flat rolled products of alloy steel, tubes, pipes, allow profiles, wire of iron and some dairy products, for being issued without lawful authority. The counsel for the petitioner urged the court that the federal minister is not empowered to approve issuance of notification to impose regulatory duty and this act was illegal, unlawful and without lawful authority, hence, the impugned notification is liable to be quashed. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 27-Mar 115.50 115.15 0.02% 0.13% Crude (MY'18) 27-Mar 27-Mar 27-Mar 27-Mar PKR PKR Pts. $ Mn $/bbl 45,004 -1.82 64.68 -0.18% NM** -1.25% Gold (AP'18) Gold (10g) Local 27-Mar 27-Mar $/oz PKR 1,344.1 50,742 -0.69% 0.94% Silver (AP'18) Cotton(KHI)-40 kg 27-Mar 27-Mar $/oz PKR 16.46 8,038 -1.20% -1.31% Kibor-6M 27-Mar % 6.56 $ Bn 18.08 0.00% WoW -0.88% Remittances 16-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Jan 18 LSM Growth* % 6.33 % 3.84 Jul-Feb 18 Avg. CPI Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -20.85% -50.03% 15.64% Major Currencies 175 GBP, 27-Mar-18, 163.5 165 155 145 EUR, 27-Mar-18, 143.3 135 125 115 USD, 27-Mar-18, 115.3 105 95 Mar-17 USD Jun-17 GBP EUR Sep-17 Dec-17 Source: KCCI Research ; Oanda.com Quote of the Day KCCI finds businesses’ representation in SFA board insufficient KCCI President Muffasar Atta Malik has lashed out at the provincial govt. for limiting the scope of the newly announced Sindh Food Authority (SFA) to the provincial metropolis only. SFA should have covered every nook and corner of Sindh because the food health and hygiene conditions in other cities, towns and villages across Sindh are way too miserable as compared to Karachi city. He also said that apparently SFA has been set up in haste, and it might create problems for businesses and the industrial \ community. SFA’s Board of Governors was headed by the Food Minister himself, and its other members mostly included bureaucrats, while there is provision for only a single representative of the Chamber. SFA’s board should be more balanced; there should be better representation of the business community, which could make it into a more vibrant regulatory authority, he maintained. Daily Times. Budget proposals: stockbrokers seek CGT parity with property Stockbrokers at Pakistan Stock Exchange (PSX) have proposed to the Finance Ministry to rationalize Capital Gain Tax (CGT) on disposal of securities in budget FY19 to make it compatible with CGT on disposal of immovable property. According to their budget proposals, CGT on disposal of securities is excessive. Immoveable properties have become a dumping ground of black money while investment in securities can neither be manipulated nor can be made out of black money. They further lamented that investors in stock market deserve the same treatment as the investors in real estate. By linking the holding period with a particular date (1st of July), securities held for even 4 years 11 months and 27 days do not qualify for zero rate of tax. BR. Carmakers raise prices despite higher localization Honda Atlas Cars Ltd. (HACL) has raised the prices of Honda Civic and City by PKR 100,000 and BRV by PKR 20,000 following devaluation of the rupee against the dollar. It also raised prices in Jan.’18 by PKR 50,000-60,000. Justifying the price rise, a leading Japanese car assembler has anticipated that rates of locally-produced cars would further hike in fear of a further rupee devaluation as they are importing over 55% of their raw material. Dawn. Proposed draft NWP: approval deferred to next CCI meeting The Council of Common Interests (CCI) has deferred approval of proposed draft National Water Policy (NWP) till next meeting for incorporating suggestions from provinces in the policy. A meeting of the CCI, presided over by PM Abbasi and attended by the chief ministers of three provinces and Punjab’s Finance Minister, was given a briefing by Deputy Chairman Planning Commission Sartaj Aziz. He informed the meeting that Pakistan is rapidly becoming a water-scarce country and requires to adopt Integrated Water Resource Management (IWRM) to fulfill the obligations of Sustainable Development Goals (SDGs). BR. Economic Policy Dialogue due next month: Pakistan eyes multi-million-dollar Japan investment deals Pakistan would seek multimillion dollar investment from Japan in dozens of projects, mainly in infrastructure development, as the country prepares for a major economic policy dialogue with Japan before its annual budget in late Apr’18. A high-level economic policy dialogue between Pakistan and Japan is scheduled to be held in Islamabad and a Japanese delegation of senior officials led by a minister is expected to participate. Several federal ministries and almost all the provincial govt.s have sent project proposals seeking Japanese help manpower training in high technology areas and a number of infrastructure-related projects. The News. "Problems always appear big when incompetent men are working on them." William Feather Chart of the Day PA K I S TAN' S AV E R AGE Y E A R LY I N F L ATI ON ( 8M F Y 12 - 8MF Y18 ) 8MFY18 3.84 8MFY17 3.90 2.48 8MFY16 5.45 8MFY15 8.65 8MFY14 8.16 8MFY13 10.79 8MFY12 0 2 4 6 Values in (%) 8 10 12 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