Pakistan Daily Economy Update - 12 December

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1. December 12 , 2019 KCCI - eBulletin Trade gap narrows 33% Pakistan’s trade deficit dipped 33.04% in 5MFY20 to $ 9.66Bn from $ 14.43Bn in 5MFY19, mainly due to a double-digit fall in imports along with a nominal increase in export proceeds. Imports clocked in at $ 19.21Bn, down 18.41% from $ 23.54Bn, whereas exports grew by 4.79% to $ 9.54Bn from $ 9.10Bn. The Ministry of Commerce estimates that the annual trade deficit may decrease $ 19Bn in FY20 from $ 31Bn in FY19. Dawn. Manufacturing & agri sectors: ADB to continue supporting Pakistan: DG Director General Central West Asia Department, ADB, Werner E Liepach, during a meeting with Planning Minister, Asad Umar, has said that ADB would continue supporting Pakistan in improving its productivity in manufacturing and agriculture sectors. Werner E Liepach said that Pakistani businesses should strive to be more competitive. He said Pakistan is a gateway to Central Asia and there is huge potential available through regional integration. Asad Umar said the process of approval of development projects and disbursement of funds to such projects had been liberalized over last 15 months, and project authorities have been given greater freedom to approve and implement projects. BR. ADB keeps Pakistan’s growth forecast unchanged at 2.8% ADB has kept its growth forecast for Pakistan unchanged at 2.8% for FY20 in its report, seeing a recovery in the economy that reeled from twin deficits in the recent past. It said that the IMF-backed reforms are restoring confidence of foreign lenders, donors and investors to pour in their funds in the economy; however, it is not optimistic about inflation downtrend in near future despite increase in interest rates and appreciation of PKR against the USD. It said that although the higher interest rates opened floodgate of foreign investment in govt. securities, they held down private credit offtake and made bank lending expensive for consumers looking for house and auto financing. The News. ADB mulls $ 2Bn lending for Pakistan’s energy sector ADB is considering $ 2Bn of loan in next 3 years to help Pakistan tackle its energy sector’s structural issues. The loan is in addition to $ 1Bn released as policy-based lending to help the country strengthen its revenue base, and protect the poor against the social impact of the economic crisis. The energy reform program aims to address the underlying causes of circular debt with a focus on improving inadequate tariff and subsidy systems, strengthening energy accounting, and reducing generation costs. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 11-Dec PKR PKR 154.98 154.50 0.00% 0.00% KSE-100 index FIPI Pts. $ Mn 40,531 -0.83 -0.33% NM** Crude (AP'19) 11-Dec 11-Dec 11-Dec $/bbl 59.08 0.00% Gold (MA'19) 11-Dec $/oz 1,466.6 0.00% Gold (10g) Local 11-Dec PKR 72,359 0.00% Silver (MA'19) 11-Dec $/oz 16.63 0.00% Cotton(KHI)-40 kg 11-Dec PKR 9,377 -0.57% Kibor-6M 11-Dec % 13.50 0.01% Forex Reserves 29-Nov FY20 $ Bn 15.99 WoW 2.67% Remittances Jul-Nov 19 $ Bn 9.30 0.18% Exports* Jul-Nov 19 $ Bn 9.55 4.79% Imports* Jul-Nov 19 $ Bn 19.21 -18.41% Trade Balance* Jul-Nov 19 $ Bn -9.67 33.04% -1.47 0.65 73.52% 238.72% 11-Dec Jul-Oct 19 $ Bn $ Bn Jul-Oct 19 Jul-Sep 19 LSM Growth* % % Jul-Nov 19 Avg. CPI Discount Rate % Nov-19 WoW= week, NCCPL, KSE, Sources: KCCI Research, PMEX ** Not Meaningful on week; Current Account Foreign Direct Inv. Imran desires big boost in Pak-Russia ties Underscoring Pakistan’s commitment to commence a new phase in the relationship with Russia, PM Imran Khan has said that PakRussia relations are growing on positive trajectory. Talking to Russian Federation Minister for Trade Denis Manturov, the PM expressed the hope that the two sides would further enhance cooperation in the fields of energy, oil and gas, mineral sector, 215 metallurgy, railways, aviation, IT, agriculture and education. Minister Manturov briefed the PM on the range of subjects discussed 205 during the 6th session of Pakistan-Russia Inter governmental Commission. The Nation. 195 Sindh plans to launch Thar Coal Block-VI under CPEC The Sindh govt. has planned to launch Thar Coal Block-VI as a national strategic project under CPEC to develop a coal mine, install a 1,320 MW coal-fired power project, produce gas, urea and diesel. The area of Block-VI is 66.1 KM2 and it contains estimated total coal reserves of 1.4Bn tons. This emerged at a meeting between Energy Minister, Imtiaz Shaikh, and a UK-based company, Oracle, represented by its CEO Naheed Memon. Thar Block-VI was included in CPEC-related 9th Joint Coordination Committee meeting on 5th Nov’19. Dawn. Green Corridor to expedite customs clearance Pakistan and China have reached consensus to expedite clearances of agriculture products under the proposed Green Corridor at Sust and Khunjerab during the 2-day meetings between General Customs Administration of China and Pakistan Customs. The Green Corridor will serve as a fast track customs clearance system exclusively for agricultural products at the Silk Route Dry Port (SRDP) at Sust, Pakistan and Khunjerab Dry Port at Tashkurgan on the Chinese side. It was also stressed that Pakistan Customs will share its experiences of roll out of the Authorized Economic Operation Program (AEOPs) with its Chinese counterparts. Dawn. Rice import: Mexico delegation to visit Pakistan for lifting ban Pakistan is keen on enhancing trade and business interaction with Mexico and investors from both the countries can benefit from the available trade opportunities in the different sectors, said Senate Deputy Chairman Saleem Mandviwalla. He said that Pakistani rice is banned in Mexico since a few years and the recent visit of a parliamentary delegation had paved way for abolishing the \ embargoes on Pakistani rice. Tribune. Corporate sector: SECP introduces ‘Regulatory Sandbox Environment’ SECP has took a major step to facilitate corporate sector by introducing Regulatory Sandbox Environment for companies to conduct limited scale, live tests of innovative products, services, processes, and/ or business models in a controlled environment for a limited period of time so as to assess their viability to be launched on full-scale, and to determine the compatible and enabling regulatory environment that will be conducive for the innovative solutions. Applicants can apply for inclusion in a cohort which is a complete lifecycle of the regulatory sandbox implementation in which a set of applicants enter in order to test their innovation in a specified time. BR. BD firm to import grey fabric Advanced Chemical Industries (ACI), one of the largest Bangladeshi conglomerates, has expressed interest in importing grey fabric and yarn from Pakistani companies, which would help Pakistani companies reclaim Bangladesh’s textile market. TDAP said that a proposal in this regard had been forwarded to the Ministry of Commerce and Textile for further deliberations. The News. State Bank imposes penalties on four banks SBP has imposed monetary penalties worth PKR 192.97Mn on 4 banks- Allied Bank, MCB, Bank of Punjab and HBL for the violations of Customer Due Diligence (CDD) and Know Your Customer (KYC) requirements. Inadequate checking of the customers’ identities and failure to comply with the regulatory requirements by these banks led to this action. SBP’s penalties aim to clamp down on terror financing and money laundering. The penalties come at a time when the govt. is struggling to avoid the international FATF’s black list. The News. Govt raises PKR 138Bn through PIBs The govt. has raised PKR 137.68Bn, out of total bids worth PKR 338.2Bn, through auction of Pakistan Investment Bonds (PIBs). The cut-off yield for 3-year PIBs slightly decreased by 4 basis points to 11.75%, those for 5-year bonds declined 11.19% from 11.45% while yield of 10-year bonds, declined to 10.99% from 11.35%. During FY20, the govt. has remained within or close to the target amount, indicating that it is cautiously trying to reduce the fiscal gap. Dawn. YoY -5.91 10.80 13.25 SBP, PBS* Major Currencies GBP, 11-Dec-19, 203.9 185 175 165 155 145 135 125 115 105 95 Dec-18 USD EUR, 11-Dec-19, 172.0 USD, 11-Dec-19, 155.0 Mar-19 GBP Jun-19 Sep-19 Dec-19 Source: KCCI Research ; Oanda.com EUR Quote of the Day "Business is never so healthy as when, like a chicken, it must do a certain amount of scratching around for what it gets." Henry Ford Airport wise Traffic Flows No. of Passengers-Mn - FY19 Islamabad, 5.14, 26% Lahore, 4.49, 22% Sialkot, 0.65, 3% Total: Faisalabad, 0.36, 2% Quetta, 0.37, 2% 19.99Mn in FY19 Peshawar, 1.40, 7% Multan, 1.00, 5% Karachi, 6.21, 31% Others, 0.37, 2% Source: KCCI Research; CAA Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon Saudi Aramco shares rocket on debut after record IPO information obtained from sources believed to be reliable and in good faith. Saudi Aramco´s shares soared on their debut on the domestic stock exchange, becoming the world´s biggest listed company worth $ Such information has not been independently verified. 1.88Tn after a record-breaking IPO. Aramco had priced the initial public offering at $ 8.53 per share, raising $ 25.6Bn and narrowly icon represents the sole viewpoint of the KCCI R&D Cell, and is eclipsing Alibaba´s IPO of 2014 to become the world´s largest. The News. stated to enrich the readers' understanding of the news item. The