Pakistan Daily Economy Update - 10 January

Transcription

1. Jan . 10, 2017 KCCI - eBulletin Concessions: PM to unveil over PKR 60Bn incentive package for exporters today Prime Minister Nawaz Sharif will announce an incentive package on 10th Jan’17 in order to give a boost to plunging exports, which experts argue will provide only a temporary relief. The prime minister is offering the incentive package on the condition that exports will be increased by at least 5% by the end of FY17. According to the Ministry of Commerce, the incentive package will mainly provide relief on exports of raw and finished goods in the shape of rebate. It will also withdraw regulatory duties on certain imported inputs being used in the manufacturing of goods. The rebate is being offered in the range of 3% to 6% of export value, depending on which production stage a product is. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank 9-Jan PKR 104.83 0.05% USD-Open MKT 9-Jan PKR 104.40 -3.69% KSE-100 index FIPI 9-Jan Pts. $ Mn 49,039 -6.56 0.00% NM** Crude (FE'17) 9-Jan 9-Jan $/bbl 51.86 -3.37% Gold (FE'16) 9-Jan $/oz 1,183 0.95% Gold (10g) Local 9-Jan PKR 42,857 0.10% Silver (FE'17) 9-Jan $/oz 16.59 0.70% July- December: Trade deficit widens to $ 14.5Bn, December exports fall again Pakistan’s trade deficit widened 22.2% or $ 14.5Bn during 1HFY17, the gap in the comparative period of the previous year was $11.9Bn. Exports plunged 3.82% to $ 9.9Bn during 1HFY17, which was $ 394Mn less than the exports made in 1HFY16. Whereas, import bill increased 10.2% to almost $ 24.4Bn in the same period. For fiscal year 2016-17, the govt. has projected that exports would grow to $ 24.75Bn and import bill may remain at $ 45.2Bn by FY17. It had projected $ 20.5Bn trade deficit for the whole fiscal year. Tribune. Cotton(KHI)-40 kg 9-Jan PKR 6,950 0.77% Kibor-6M 9-Jan % 6.13% -0.01% 30-Dec $ Bn 23.16 -0.53% Pakistan has intimated to China its decision: LNG terminal, pipeline early harvest projects Pakistan has intimated its decision to China that Gwadar LNG terminal and Gwadar-Nawabshah pipeline projects should be made part of the CPEC Early Harvest Program. In this regard, request has been made during 4th and 5th Joint Energy Working Group (JEWG). The project foresees 600MMCFD LNG import through Gwadar port. BR. Remittances Jul-Nov 16 $ Bn 7.87 -2.50% Exports* Jul-Dec 16 $ Bn 9.91 -3.82% Imports* Jul-Dec 16 $ Bn 24.40 10.10% Trade Balance* Jul-Dec 16 Japan mulls $ 250Mn investment in Sindh Japan is interested in investing $ 250Mn in small industries sector in the province of Sindh. The economic powerhouse wishes to establish economic zones to develop automobile/motorcycle spare parts and textile industries at Dhabeji and Northern Bypass. Provincial minister for industries and commerce has said that after the improvement of law and order situation, the world is giving importance not only to the province but also the whole country. The News. $ Bn -14.49 -22.20% Current Account Avg. CPI-FY17* Jul-Nov 16 $ Mn % -2,601 3.88 -90.97% CLIS, LIS exempted from WHT payment FBR has exempted Crop Loan Insurance Scheme (CLIS) and Livestock Insurance Scheme (LIS) from payment of withholding tax under section 236 U of the Income Tax Ordinance 2001. In this regard, the FBR has issued an SRO.06 (I)/2016 according to which, the provisions of the section 236U will not apply to an insurance company collecting premium under CLIS and LIS. Both of the schemes are aimed at providing risk cover to mitigate losses in case of natural disasters, ensuring national food security, protecting national economic interests and development of backward/rural areas. BR. Govt. focusing on improving transmission line The govt. is following a compressive strategy to reinforce the existing gas transmission network for which around PKR 3,571Bn will be spent in different phases. An amount of PKR 71Bn will be spent on upgrade of SNGPL and SSGC transmission network across the country during FY17, besides initiating the North-South gas pipeline project worth $ 2Bn and approximately $ 1.5Bn Gwadar-Nawabshah gas pipeline and LNG terminal at Gwadar. According to the Ministry of Petroleum and Natural Resources, SNGPL and SSGL have planned to invest PKR 13.89Bn on transmission projects, PKR 32.73Bn on distribution projects and PKR 24.40Bn on other projects, bringing the total investment of PKR 71.04Bn. Tribune. French assistance sought for power projects French Ambassador to Pakistan Martine Dorance called on Pakistan Wapda Chairman and discussed with him matters relating to mutual cooperation for the development of water and hydroelectric power projects. Underlining the significance of foreign investment, he said projects in both the water and hydroelectric power sectors were offering excellent investment opportunities. He also expressed hope that cooperation between the French Development Agency AFD and Wapda would further strengthen. Tribune. Suki Kinari hydropower project of 870MW achieves financial close The 870MW Suki Kinari Hydropower Project, with the efforts and facilitation of the Private Power and Infrastructure Board (PPIB), achieved its financial close on 9th Jan’17 under the framework of CPEC. Federal minister for water and power has said that Chashma-III nuclear power plant with 340MW generation capacity had become operational and Ch-IV would become operational in Apr’17. The News. 25 uplift projects worth PKR 500Mn launched in city, says Akhtar City Mayor Waseem Akhtar has said that the KMC had initiated 25 new development schemes worth PKR 497.33Mn for the city aimed at restoring the past glory of the country’s cosmopolitan face for the world. He requested the prime minister to announce as big a package for Karachi as the huge metropolis deserved. Dawn. Pakistan must curtail fishing by 50% A comprehensive assessment of Pakistan’s fisheries resources carried out by UN’s Food and Agriculture Organization (FAO) concludes that these resources are very productive but over-exploited and not managed scientifically. The assessment report proposed that fishing should be curtailed by 50%, a measure that will result in doubling of the economic value of the fisheries resources. It also emphasized that regulation of fishing efforts is essential and overfishing needs to be reduced. Dawn. 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, 9-Jan-17, 128.0 135 125 115 105 EUR, 9-Jan-17, 110.4 95 USD, 9-Jan-17, 105.0 85 75 Jan-16 Apr-16 USD GBP Jul-16 Oct-16 Jan-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "It always seems impossible until it's done." Nelson Mandela Chart of the Day F B R T AX CO L L E CT I O N ( 3 M F Y1 7 V S. 3 M F Y1 6 ) 393.43 PKR 400 subsidy on fertilizer withdrawn The federal govt. has withdrawn subsidy of PKR 400 per bag on fertilizer with immediate effect. In this regard, National Foods Security and Research Ministry has issued notification on discontinuation of fertilizer subsidy scheme for FY17 in compliance of the approval of the competent authority. The subsidy was being provided on urea, diammonium phosphate (DAP) and single superphosphate. Secretary National Food Security and Research said that the allocation of PKR 27Bn for the scheme under the FY17 budget has been exhausted. On the other hand, the farming community has lamented the government for withdrawing the subsidy scheme and described the decision as hostile towards farmers and the agriculture sector. BR/Dawn. Jul-Dec 16 360.53 Govt. mulls treating CPEC funds as FDI Pakistan is wrangling over the treatment of Chinese cash flowing in under the $ 55Bn bilateral package, as the money has so far been reflected as loans in the official books instead of FDI, which may create problems for the govt., especially in managing its accounts. So far, work on the $ 16Bn worth of energy and infrastructure projects has begun but the total Chinese FDI during the last one and a half year stood at only $ 750Mn, according to sources in the planning and finance ministries. The govt. believes the FDI should have been far more than this. Compared to $ 750Mn FDI, China gave $ 2.2Bn loans during this period. Tribune. YoY 233.69 21.5% funds released for CPEC-related projects The govt. has released 21.5% (PKR 28Bn) funds by Jan. 6, 2016 for CPEC related projects against budgeted allocation of PKR 130Bn for FY17. CPEC consists of 38 development projects of various sectors including Water and Power, Aviation, Railway, Finance, IT & Telecom, Interior, Port, Shipping & Planning Development divisions and National Highway Authority (NHA). An amount of PKR 26.87Bn has been released for 14 NHA projects, out of the budgeted PKR 117.8Bn, PKR 40Mn have been released for two projects of Finance Division out of the budgeted allocation of PKR 600Mn, PKR 72Mn have been released for two projects IT and Telecom division against budgeted PKR 280Mn. BR. WoW Forex Reserves 239.67 All export-oriented sectors to benefit from package: Dastgir Commerce Minister Khurram Dastgir has stated that all export-oriented sectors would benefit from the trade package including nontraditional exports, which is due to be announced on Jan.10, 2017 (today). The Prime Minister has agreed to a 3% compensatory rebate for yarn/grey fabric, 4% for processed fabrics, 6% for home textile/knitwear and 8% for garments sector. The proposed rebate for raw and semi-raw exports would be around 4% and value-added sectors (garment) 8%, respectively. BR. DIRECT TAX INDIRECT TAX 3MFY16 3MFY17 Value in PKR Bn Source: KCCI Research, SBP, FBR 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