Pakistan Daily Economy Update - 9 August

Transcription

1. Aug . 9, 2017 KCCI - eBulletin Pakistan’s reclassification may increase money inflow into the country Index provider Morgan Stanley Capital International’s (MSCI) recent reclassification of Pakistan to emerging markets from frontier markets status is expected to prompt money to flow into the country, The Wall Street Journal said in a dispatch. The newspaper explained that emerging markets are more economically developed than frontier markets and generally are considered less risky by investors. Much more money is invested in funds that track emerging-markets indexes than in those that track frontier-markets indexes. One of the most surprising things is that Pakistani companies are the best-run companies in Asia, it said. Tribune. Dar announces issuance of PKR 26.43Bn sales tax refunds Finance Minister Ishaq Dar has announced the issuance of sales tax refunds of PKR 26.43Bn, including refunds issued in the first phase, involving 10,439 refund payment orders (RPOs), through an electronic system. The minister said that refund payments up to PKR 1Mn were paid on Jul. 15, 2017 whereas payments against RPOs exceeding PKR 1Mn have been issued today (Aug. 8, 2017) well before the announced date. The first refund payments were made through direct electronic transfer to claimants' bank accounts through SBP in Nov.’16. SBP has again been directed for the same to make arrangements in this regard. BR. PBS likely to complete rebasing of inflation indices by next year PBS is all set to complete the exercise of renewing the base year for calculating the key inflation numbers once the census results are finalized. PBS issues three index- the whole sale price index, consumer price index (CPI) and sensitive price index - to gauge movement of prices every week and month. The current base year for comparing prices of goods and services is the FY08. Yet, the base year has become outdated due to shift in consumer preferences and consumption of new products. The News. Ministry disputes size of circular debt’s stock Water and Power Ministry, by redefining circular debt, has refused to acknowledge that the country's energy sector circular debt stock has touched PKR 800Bn. The Joint Secretary (Power & Finance), has said that circular debt is defined as unpaid amount between companies and has nothing to do with loans whether these loans are on the books of PHPL or the companies' own books. The Joint Secretary claimed that circular debt stock stands at PKR 395Bn and that debt stock in PHPL books is around PKR 450Bn. BR. Sindh Govt. ready to finalize new formula for PFC award The Provincial Finance Commission (PFC) of Sindh would be meeting this month to finalise a new formula proposed by the chief minister based on population, backwardness and fiscal performance. The new award, as suggested by the Sindh government, will stress further on backwardness apart from better performance in tax collection and fiscal needs. As the result of the new population census has not been notified, the award would be decided on the basis of the population census held in 1998. Dawn. Sindh arranges 50% funds for K-IV project The Sindh government has arranged funds for the greater Karachi water project K-IV that would provide 260mgd (Mn gallons per day) to Karachi in the first phase by the end of Jun‘18. Funds for this project were to be released by the federal and provincial governments with a 50:50 percent ratio, and finally the federal government has earmarked PKR 9Bn. It would be developed in three phases, two each of 260mgd and one 130mgd in the end. The News. Govt urged to withdraw duty drawback on yarn The value-added textile sectors have urged the government to withdraw the 4% duty drawback on taxes given on yarn exports as it directly benefits their competitors in the world market. In a joint statement, value-added textile sector has pointed out that competition in the world market has become tougher because countries like China and Bangladesh are getting Pakistani yarn at 4% less cost than Pakistani exporters. Dawn. Textile sector against a weak PKR The textile millers have said that increased dependency of textile sector on imported inputs including raw materials, cotton, yarn, fuel and machinery/equipment has added to the cost of production and in such circumstances, depreciation of local currency would further hurt the industry instead of providing it any meaningful relief. The exporters may get some relief in the short term from devaluation of the local currency, but it will not result in a corresponding increase in exports due to higher cost of imported inputs. BR. Abbasi cracks the whip as load shedding returns PM Shahid Khaqan Abbasi has ordered that ongoing projects and conversion of furnace oil-based plants to natural gas must be expedited. The power shortfall exceeded by 5,000MW as demand surged past 23,500MW against maximum supplies of about \ 18,500MW on 8th Aug’17. The shortage happened despite a healthy contribution of about 6,400MW by hydropower plants. Dawn. New ministers get briefing on trade, other matters Commerce Minister Pervaiz Malik and State Minister Haji Muhammad Akram Ansari held a meeting with the heads of different sections and sought a briefing on trade performance and other issues. The Commerce Ministry team headed by Additional Secretary Anjum Asad Amin and Joint Secretaries gave short briefings about export performance which posted a negative growth during last three years - a key concern for the govt. The ministers were also given presentation on trade relations with other countries including the status of PTAs and FTAs. BR. PKR 100 subsidy on each urea bag: notification issued After consultations with the stakeholders, Finance Ministry has issued a notification of PKR 100 subsidy on each urea bag aimed at keeping its price below PKR 1400 per bag for FY18. Federal govt., through the Finance Bill 2017, has reduced the General Sales Tax (GST) rates of different fertilizers to reduce their price after the phasing-out of fertilizer subsidy scheme FY17. The subsidy will be shared by the federal and the provincial governments on 50:50 basis. BR. 500 foreign delegates expected to attend Pharma exhibition The 13th Health Asia & Pharma Asia 2017 International Exhibition & Conferences will be held from 22nd to 24th Aug’2017 at Karachi Expo Centre. Sindh Governor Muhammad Zubair is expected to inaugurate the event. The exhibition is expected to attract more than 50,000 healthcare industry professionals with more than 450 of the world’s leading healthcare suppliers, manufacturers and service providers. Showcasing innovation from professionals and countries in 25 countries, the exhibition will also be attended by over 500 foreign delegates. Tribune. Consulate arranges Pakistani goods expo in Chicago Pakistani textiles, jewelry, furniture and fixtures, LCD lights and real estate products were on display at an exhibition held in Chicago on 6th Aug’17 as part of celebrations marking the 70th anniversary of Pakistan’s Independence. The “Pakistan Trade and Property Show” drew a large number of people, including Chicago-based Pakistani-American business community. Representatives of 35 businesses, who came from Pakistan, also participated. Tribune. PSO profit jumped 77% to PKR 18.2Bn in 2016-17 Pakistan State Oil (PSO) has reported stellar growth of 77% in net profit, which amounted to PKR 18.2Bn (67.08 EPS) for FY17. Its board announced a cash dividend of PKR 15 per share and stock dividend of 20% in addition to the already distributed interim cash dividend of PKR 10 per share. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 8-Aug 8-Aug 8-Aug 8-Aug 8-Aug 8-Aug 8-Aug 8-Aug 8-Aug 8-Aug PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.40 106.80 45,980 -3.63 49.08 1,261.8 43,371 16.44 6,912 6.15% Forex Reserves 28-Jul $ Bn 20.28 0.00% 0.05% -1.05% NM** -0.49% 0.25% 0.20% 1.29% 0.77% 0.00% WoW -0.57% YoY -3.08% -1.63% 18.67% -36.32% -148.57% 4.58% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Jun 17 Remittances $ Bn 19.30 Jul-Jun 17 Exports* $ Bn 20.45 Jul-Jun 17 Imports* $ Bn 53.03 Jul-Jun 17 Trade Balance* $ Bn -32.58 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 2.91 Jul-17 Avg. CPI-FY17* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 145 GBP, 8-Aug-17, 137.2 135 125 EUR, 8-Aug-17, 124.2 115 105 USD, 8-Aug-17, 105.4 95 Aug-16 USD Nov-16 GBP EUR Feb-17 May-17 Aug-17 Source: KCCI Research ; Oanda.com Quote of the Day "When people start telling you that you’re crazy, you just might be on to the most important innovation in your life." Larry Ellison Chart of the Day Pakistan's Trade Snapshot (FY11 - FY17) 60 50 40 30 20 10 0 -10 -20 -30 -40 24.81 23.624 -15.604 24.46 -21.288 25.11 -20.49 53.026 45.826 45.073 44.95 44.912 40.414 23.667 -19.963 44.685 20.787 -22.159 20.448 -23.898 -32.578 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 Exports Imports Values in $ Bn Trade Balance 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