Pakistan Daily Economy Update - 28 October

Transcription

1. Oct . 28, 2017 KCCI - eBulletin GSP Plus termed success story Convener of Treaty Implementation Cell (TIC), Ashtar Ali Ausaf, has claimed that the GSP Plus scheme has proved to be an economic success story for Pakistan with exports to the EU having increased by 38% since 2014. The Convener who is also Attorney General of Pakistan has further said that Pakistan's exports to the EU now make up 33% of the country's global exports with its textile exports having increased by 55%. Recently, Convener TIC, Commerce Minister and others met with Members of European Parliament (MEPs) and the governments of the EU member Brussels, Belgium and Germany for continued support of EU member states for Pakistan's GSP Plus status. However, the EU reportedly has expressed reservations over use and frequency of the death penalty in Pakistan. Pakistan, on its part, has affirmed during the meetings that the list of offences attracting capital punishment was under review, and that effective safeguard mechanisms have been instituted to prevent its misuse. BR. US-Pakistan connectivity through PIA suspended The 56-year old connectivity between Pakistan and United States through PIA has been suspended for an indefinite period. The last flight to US flew in the wee hours of Oct. 28, 2017 (today) to the New York (JFK) with a stopover at Manchester. PIA officials have not ruled out the possibilities behind its suspension in order to provide ''safe space'' to one of the airlines in Pakistan’s private sector. Presently, no local airline has long haul aircraft in its fleet but these airlines could acquire required aircraft on wet lease and enter into the competition with foreign airlines after PIA flight suspension for this route. BR. ADB says possible slowdown in remittances pose economic risks ADB has said that an expected downward trend in remittances to Pakistan from overseas workers pose risks to external sector and household income. Departures of overseas workers from Pakistan to major Gulf destinations such as Saudi Arabia and United Arab Emirates declined in 2016, and remittances from these countries began to decline in early 2017, ADB said in a latest report Asian Economic Integration 2017. The News. Bilateral trade between Pakistan, Italy surges 35% in four years Bilateral trade between Pakistan and Italy has surged around 35% during the last four years owing to duty free access of Pakistani products into the European country under GSP Plus status. Secretary Commerce Younus Dagha said bilateral trade jumped to 1.2Bn Euros in 2016 from 906.96Mn Euros in 2013. Dagha further said that Pakistan is committed to implement the United Nations’ (UN) conventions pertaining to human and labour rights, climate change, narcotics control and corruption. The News. New security units to be set up in Sindh for Chinese working on CPEC projects Sindh Police has decided to establish two more specialized units in Sindh in addition to an existing one for the security of Chinese nationals working in the province on projects relating to CPEC. A meeting chaired by Inspector General of Police A.D. Khowaja also decided to recommend to the provincial government the recruitment of over 1,400 policemen for the new units. Dawn. Pakistan needs responsive governance, says UN official Pakistan must foster a more responsive system of governance to realize the spirit of the 18th Amendment, said Neil Buhne, the UN Resident Coordinator. She was speaking in a conference titled Towards Inclusive Governance And Efficient Institutions For Sustainable Development, organized by Applied Economics Research Centre (AERC). Highlighting several challenges Pakistan was facing, Mr. Buhne said that overall implementation of decentralization process had been slow. Dawn. PM for optimal use of gas in power generation Prime Minister Shahid Khaqan Abbasi has directed greater coordination among Central Power Purchasing Agency (CPPA), Private Power & Infrastructure Board (PPIB) and Pakistan LNG Terminals Limited (PLTL) to ensure availability and maximum utilization of gas for the power sector. The directives came at a meeting held to review power generation and demand supply situation; where projected estimates of power generation and the expected demand in the coming four months starting from Nov.’17 to Feb.’18 were also discussed. BR. China to provide solar equipment to BISP beneficiaries Pakistan and China have discussed the provision of solar energy equipment to BISP beneficiaries in the villages of Sindh and Balochistan. In a meeting between Chinese Economic Counsellor and his team with BISP Secretary, the idea of providing hybrid rice to BISP beneficiaries for better income generation was also discussed. The purpose of the meeting was to discuss the engagement of the Chinese government for future intervention in various initiatives of BISP aimed at graduating underprivileged segments of population out of poverty. The Nation. DFI-declared PMRC to operate in housing sector shortly The federal cabinet has declared Pakistan Mortgage Refinance Company (PMRC) Ltd. as a Development Financial Institution (DFI), which is ready to launch its operations in housing sector shortly. PMRCL was set up as a joint initiative of Government of Pakistan (GoP) and \ commercial banks/DFIs with the technical support of the International Finance Corporation (IFC) and the World Bank as a mortgage liquidity facility. It provided medium and long-term funding to primary mortgage lenders by raising funds from the capital debt market at cheaper rates than the primary mortgage lenders would have been able to access if acting on their own. After granting the status of DFI, the objectives of PRC shall remain same as specified in Memorandum of Association of PMRC. BR. Change Daily 105.41 107.50 41,409 -5.20 52.80 1,265.5 45,300 16.76 6,752 6.17% -0.03% 0.09% 0.00% NM** 1.11% -0.83% -0.38% -0.97% 0.00% 0.00% WoW -0.75% YoY 1.05% 10.84% 22.19% -29.75% -117.29% 56.33% Forex Reserves $ Bn 19.90 20-Oct FY18 Jul-Sep 17 Remittances $ Bn 4.79 Jul-Sep 17 Exports* $ Bn 5.17 Jul-Sep 17 Imports* $ Bn 14.26 Jul-Sep 17 Trade Balance* $ Bn -9.09 Jul-Sep 17 Current Account $ Mn -3,557 Foreign Direct Inv. $ Bn 0.66 Jul-Sep 17 Jul-Aug 17 LSM Growth* % 11.30 % 3.39 Jul-Sep 17 Avg. CPI Discount Rate % 5.75 Sep-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 155 GBP, 27-Oct-17, 139.2 145 135 125 EUR, 27-Oct-17, 123.2 115 105 USD, 27-Oct-17, 106.1 95 Oct-16 USD Jan-17 GBP EUR Apr-17 Jul-17 Oct-17 Source: KCCI Research ; Oanda.com Quote of the Day "Everything in the world may be endured except continual prosperity." Johann Wolfgang von Goethe Chart of the Day Repatriation of Profit on Foreign Investment-By Sector 350 300 250 200 150 5 8 4 10 6 11 12 11 10 21 9 50 35 49 68 100 31 WB predicts rise in oil prices to $ 56 a barrel in 2018 In its October Commodity Markets Outlook Oil report, the World Bank has said that oil prices are forecast to rise to $ 56 a barrel in 2018 from $ 53 this year as a result of steadily growing demand, agreed production cuts among oil exporters and stabilizing U.S. shale oil production. Energy prices much depends on whether oil producers seek to extend production cuts. Prices for energy commodities are forecast to climb 4% in 2018 after a 28% leap this year. BR. Value PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 60 71 Kapco to acquire stake in Hubco for PKR 22Bn Dawood Hercules has finalized a share purchase agreement with Kapco to offload its entire shareholding of 172.58Mn shares (14.9%) in Hubco at PKR 109.86/share. In total, Kapco will acquire 17.4% shares in Hubco. This means that in addition to purchasing a 14.9% stake from Dawood Hercules, Kapco will buy another 2.5% stake in Hubco from other shareholders. The cumulative transaction will be of PKR 22Bn. Dawn. Unit 27-Oct 27-Oct 27-Oct 27-Oct 26-Oct 26-Oct 27-Oct 26-Oct 27-Oct 27-Oct 124 SBP, Philippines’ central bank sign accord SBP has signed an agreement with the Central Bank of Philippines to develop banking relations. SBP Governor Tariq Bajwa and Daniel R. Espiritu, ambassador of Philippines in Pakistan, signed the agreement on bilateral central banking cooperation. The agreement aims to extend bilateral cooperation in banking system, payments, settlements and other areas of mutual interest. Dawn. Date / Period Crude (DE'17) Gold (NO'17) Gold (10g) Local Silver (NO'17) Cotton(KHI)-40 kg Kibor-6M 121 Economic policies not moving in right direction: NA committee The National Committee on Finance has stopped short of demanding the government to declare an economic emergency in the country. However, the committee did observe that economic policies of the government were not moving in the right direction. To develop consensus and seek solution to the current economic situation of the country, Chairman NA Standing Committee of Finance Qaiser Ahmed Sheikh had invited former bureaucrats and key leaders of business community to the meeting. Dawn. List of Indicators USD-Interbank USD-Open MKT KSE-100 index FIPI 268 Fears of a cement glut loom as capacity set to surge. A fear of cement overcapacity, particularly in the southern region, looms large as some producers expect a glut once new investments in the sector begin commercial operations in the next three to seven months. Additional capacity of around 5.35Mn tones is expected in the southern region during 1QFY18 and 2.3Mn tones in 3QFY19. Additional capacity was contracted in the last few years amidst a construction boom as CPEC-related projects drove future demand. Dawn. Economic Indicators 0 July-Sep FY18 (P) FDI Net Jul-Sep FY17(R) FDI Net Value in Mn US$ 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