Pakistan Daily Economy Update - 4 February

Transcription

1. Feb . 4, 2017 KCCI - eBulletin GST, petroleum levy on kerosene oil, LDO abolished The govt. has abolished General Sales Tax (GST) and Petroleum Levy (PL) on Kerosene Oil (KO) and Light Diesel Oil (LDO), while it has reduced PL on Motor Gasoline from PKR 4/liter to PKR 2.25/liter to pass on the lower international fuel price to domestic consumers. Finance Ministry had revived the mechanism of Price Differential Claims after eight years in a bid to subsidize some of the petroleum products. BR. Chinese firms eye Pakistan amid Beijing's 'Silk Road' splurge Chinese companies are in talks to snap up more businesses and land in Pakistan after sealing two major deals in recent months, a sign of deepening ties after Beijing vowed to plough $ 57Bn into a new trade route across the South Asian nation. A dozen executives from some of Pakistan’s biggest firms told Reuters that Chinese companies were looking mainly at the cement, steel, energy and textile sectors, the backbone of Pakistan’s $ 270Bn economy. Tribune. Attracting interest: Hyundai plans to set up assembly plant in Pakistan Nishat Mills Limited (NML), one of the largest integrated textiles mills in the country has announced that it has resolved to enter into a MoU with Hyundai Motor Corporation (HMC), Korea and Sojitz Corporation, Japan to set up a Greenfield plant to assemble Hyundai vehicles in Pakistan. The joint venture will produce HMC passenger cars and 1-ton range commercial vehicles in Pakistan. However, the project is subject to applicable statutory and regulatory approvals. Tribune. World Bank to provide $ 145Mn in financing to Engro Foods’ buyer The International Finance Corporation (IFC), a member of the World Bank Group, will provide a $ 145Mn worth of financing to Friesland Campina, one of the largest dairy producers in the world, to spur the development of Pakistan's dairy sector. The financing will help the Dutch dairy company acquire 51% of Engro Foods. The financing package includes equity investments of $ 45Mn and a senior loan of $ 100Mn. The Dutch development bank, will also provide up to $ 45Mn to support the acquisition. The News. EFoods’ profit falls to PKR 2.38Bn Profit of Engro Foods Limited declined 24.5% to PKR 2.38Bn (EPS: PKR 3.11) for the year ended 31st Dec’16. The company earned profit of PKR 3.162Bn (EPS: PKR 4.13) in 2015. Engro Foods has also announced a cash dividend of PKR 10/share for the last year of 2016, which includes a one-time special cash dividend of PKR 9/share. The News. Belarus offers support to develop energy, agri sectors Belarus extended its cooperation to develop energy and agriculture sectors of Pakistan and reiterated the country’s resolve to increase the bilateral trade to $ 1Bn within the next 4 years. Belarusian Prime Minister Andrei Kobyakov has said in field of industrial cooperation Belarus can supply ready tractors, automobiles and to consider options for setting up of assembly plants in Pakistan and would share some modern technologies in production, storage and processing of agricultural production in view of the special importance of the country’s agricultural economy. The News. Prime Minister inaugurates 75km section of M-9 Prime Minister Nawaz Sharif has inaugurated one of the first highway sections of planned $ 11.5Bn spending plan on roads intended to expand trade and speed up economic growth. The Prime Minister drove in a convoy down part of the new 75km section of the Karachi-Hyderabad Motorway (M-9) as part of a planned network connecting the southern port city of Karachi to interior cities. BR. Cotton crop recovers to 10.6Mn bales Cotton production has increased 10.6% YoY to 10.63Mn bales this season. During the outgoing fortnight (Jan 15 to Feb 1), cotton output fell 28% to 98,785 bales. Due to short crop, spinners are striving to meet their consumption demand which stands at around 14.5Mn bales. Punjab’s cotton production has risen 17% to 6.849Mn bales this time around. Sindh’s production almost stayed flat at 3.78Mn bales this season. Dawn. Petroleum products register sales surge of 8% Sales of petroleum products surged 8% to 2.05Mn tons in Jan’17 with increased demand coming from growing automobiles and increased CNG prices. However, motor gasoline (MOGAS) and high speed diesel (HSD) sales continued to remain strong during the month. Furnace oil sales were down 2% on YoY basis. In 7MFY17, the aggregate sales of petroleum products stood at 15.17Mn tons, showing a YoY growth of 17%. Tribune. SBP asks banks to rationalize lending rates for agri sector Governor SBP Ashraf Wathra has urged the banks to focus on agri financing as it is a viable business activity. During FY16, banks disbursed agricultural credit of PKR 598Bn which is nearly 100% of the annual target of PKR 600Bn and 16% higher than disbursement of PKR 516Bn made during FY15. During 1HFY17, financial institutions have disbursed PKR 302Bn which is 43% of the indicative target of PKR 700Bn for FY17. BR/Dawn. Country receives $ 27.76Bn in loans, grants in three years The govt. has received $ 27.76Bn in loans and grants from 12 countries and 16 organizations, including $ 6.4Bn from the IMF during 2013 to 2016. The govt. received a total of $ 4.34Bn from 12 different countries, including China, Germany, Oman, UK and USA where $ 1.45Bn were grants while $ 2.89Bn were loans. Similarly, $ 17.02Bn were received from 15 organizations, including ADB, Opec Fund where $ 16.83Bn were loans and $ 188.48Mn were grants. Out of $ 46Bn under CPEC project, $ 35Bn are private investments which are being extended by Chinese govt. to its companies for energy projects and Pakistan will buy electricity from these companies while remaining $ 11Bn are soft loans with 2% interest rate which will be spent on roads and railway projects. BR. ‘Dying’ carpet sector ignored by ministry Commerce Ministry has issued an SRO on Feb. 2, 2017 for drawback of local taxes and levies on non-textile sectors but has ignored the "dying" carpet sector weeks after the announcement of PKR 180Bn incentives package where 6% drawback for the carpet sector had been announced. Similarly, Commerce Ministry has also not mentioned some HS codes of leather tanned in the SRO which fall in the category of leather products. BR. Apple to start making iPhones in India Apple is to start making iPhones in India this year as the company seeks to tap into a booming middle class while sales in China slow. Karnataka’s IT minister said Apple had agreed to assemble its hugely popular phones in the southern state, whose capital Bangalore is India’s technology hub. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (MA'17) Gold (FE'17) Gold (10g) Local Silver (FE'17) Cotton(KHI)-40 kg Kibor-6M 3-Feb 3-Feb 3-Feb 3-Feb 2-Feb 2-Feb 3-Feb 2-Feb 3-Feb 3-Feb PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.79 107.80 49,556 -1.27 53.63 1,216 43,028 17.47 7,218 6.13% Forex Reserves 27-Jan $ Bn 22.44 -0.01% -0.09% -0.22% NM** 0.19% 0.58% 0.00% -0.51% 0.00% 0.00% WoW -3.49% YoY -2.27% -3.82% 10.10% -22.20% -92.23% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Dec 16 Remittances $ Bn 9.46 Jul-Dec 16 Exports* $ Bn 9.91 Jul-Dec 16 Imports* $ Bn 24.40 Jul-Dec 16 Trade Balance* $ Bn -14.49 Jul-Dec 16 Current Account $ Mn -3,585 % 3.85 Avg. CPI-FY17* Jul-Jan 17 Jan-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 Feb-16 GBP, 3-Feb-17, 131.2 EUR, 3-Feb-17, 112.9 USD, 3-Feb-17, 104.9 May-16 USD GBP Aug-16 EUR Nov-16 Feb-17 Source: KCCI Research ; Oanda.com Quote of the Day “Sustained success is largely a matter of focusing regularly on the right things and making a lot of uncelebrated little improvements every day.” Theodore Levitt Chart of the Day 7M FY17 FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 FY05 Pakistan's Foreign Exchange Reserves 17.60 18.14 13.53 5.17 9.10 5.04 6.01 5.01 10.80 4.49 14.78 3.46 12.96 3.79 9.12 3.31 8.58 2.82 13.35 2.30 10.77 2.36 9.80 2.79 4.84 4.96 0.0 1.5 3.0 4.5 6.0 7.5 9.0 10.512.013.515.016.518.019.521.022.524.0 SBP Reserves ($ Bn) Banks Reserves ($ Bn) 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