Pakistan Daily Economy Update - 13 January

Transcription

1. Jan . 13, 2017 KCCI - eBulletin Turkish, Thai teams coming next week to negotiate FTAs High-level delegations of Turkey and Thailand are due to arrive in Pakistan on 17th Jan’17 to negotiate free trade agreements (FTAs) that are likely to be signed in the next 3 months. Trade representatives of Turkey and Thailand are coming to accelerate the process and discuss commodity lists and tariff rates for the FTAs. Tribune. Financial impact of PM's package readjusted The Economic Coordination Committee (ECC) has readjusted financial impact of incentive package for exporter prepared after months of consultative process. The estimated amount of PKR 38.7Bn at 7% duty drawback for garments sector has been slashed to PKR 37.6Bn, PKR 30.3Bn at 6% duty drawback for made-ups has been to PKR 29Bn and PKR 14.1Bn at 4% duty drawback for yarn and grey fabric has been reduced to PKR 12.1Bn. However, the ECC did not change financial impact of PKR 8.8Bn at 5% duty drawback on processed fabric. The total estimated financial impact of PKR 91.9Bn was reduced to PKR 87.5Bn. The amount for non-textile sector remained unchanged at PKR 12.5Bn on basis of various rates ranging from 5% to 7%. BR. Karachi-Gwadar-Muscat ferry service to facilitate travellers: PM In a meeting with Oman’s State Council President, Prime Minister Nawaz Sharif has welcomed the proposal of launching a ferry service between the Pakistani cities and Oman’s capital; saying that Karachi-Gawadar-Muscat ferry service will multiply facilities for the regular travelers. The premier said the ferry service would provide an affordable alternative source of transportation for a large number of people, who travel on these routes on a regular basis. The Nation. Large-scale manufacturing expanded 8% in November Large-scale manufacturing grew 8.02% in Nov‘16 on a YoY basis. With the higher-than-expected growth in LSM, the government is expected to achieve the GDP growth target of 5.7% for FY17. The official industry-specific data shows that food, beverages and tobacco recorded the highest growth of 25.46%, followed by iron and steel products 20.64%, engineering products 18.91%, automobiles 11.35%, electronics 9.82%, non-metallic mineral products 9.51%, pharmaceuticals 9.12%, paper and board 6.25%, fertilisers 4.48%, petroleum products 3.92%, rubber products 1.41%, chemicals 1.37% and textiles 0.23%.Dawn. Sindh E&T collection surpasses target The Sindh Excise and Taxation Department has achieved its half yearly revenue target by recording growth in the collection of different taxes and levies. The department, which collects taxes and levies in six categories, including motor vehicle tax and property tax, collected PKR 26.16Bn in July-Dec, up 17% from a year ago, thus, achieving around 50% of the current year’s enhanced revenue target of PKR 52.61Bn. Dawn. Sindh extends ST exemption on life, health insurance SRB has extended the exemption period for collection of sales tax on services of life insurance and health insurance up to 30th Jun‘17. After getting approval from the provincial government, the SRB issued a notification giving exemption to all life insurance services as are provided or rendered during FY17. Similarly, the SRB has also allowed sales tax exemption on health services rendered to individual persons. However, the group health insurance services given to persons other than individuals will continue to pay the sales tax. Dawn. Afghanistan concerned over ‘sub-standard’ Pakistani products According to an Afghan trade delegation, some Pakistani businesses, especially pharmaceutical exporters, are sending sub-standard products to Afghanistan, which is one of the main reasons why the volume of bilateral trade has declined in recent years. The concern was raised by a Pakistan-Afghan Joint Committee that met with representatives of the Karachi Chamber of Commerce and Industry (KCCI). The committee underscored the need to effectively deal with numerous bottlenecks hindering trade between Pakistan and Afghanistan, which declined to less than $ 1.5Bn in 2015 and continued to go down in 2016. KCCI president Shamim Ahmed Firpo noted that although some measures have been taken to deal with this issue, the situation calls for increasing scrutiny and the installation of modern scanning machines, biometrics and tracking system at Pak-Afghan border. Tribune. Agriculture industry: Foreign companies to participate in Sindh fair According to Sindh Board of Investment (SBI) and Sindh Enterprise Development Fund (SEDF), over 60 exhibitors are going to participate in the sixth edition of the Livestock, Dairy, Fisheries and Agriculture (LDFA) Exhibition and Seminar. The exhibition would be held at the Sindh Agriculture University, Tando Jam on 21-22, Jan’17. A number of foreign investors, foreign companies and international agricultural experts were expected to participate in the LDFA fair. Tribune. Australia to help train 225,000 cotton farmers in Pakistan The Australian govt., Cotton Australia and Better Cotton Initiative (BCI) have together launched a partnership to support the training of approximately 225,000 Pakistani cotton farmers commencing with the 2017 cotton-sowing season. The farmers will be trained in techniques for growing cotton with focus on improved environmental, social and economic benefits in line with the Better Cotton Standard System. The Australian govt. has committed AUD500,000 to this project, which will be supported through the Australian aid program’s Business Partnerships Platform. Tribune. Corporate corner: Pakistan to take part in Heimtextil fair A total of 219 exhibitors will take part from Pakistan in the Heimtextil Fair, Frankfurt and around 55 Pakistani companies are participating in Heimtextil Frankfurt 2017 under Trade Development Authority Pakistan pavilion. This will make Pakistan the 4th largest country at the show behind Germany, China and India. With a strong increase in the number of exhibitors and all indications suggesting that the new furnishing season will be a good one, Heimtextil started on 10th Jan’17 Frankfurt. Tribune. Public debt will touch PKR 19.68Tn, Senate told The govt. has informed the Senate that country’s gross public debt would touch PKR 19.68Tn by the end of FY17 from PKR 14.3Tn in FY13, going up to 66.5% of the GDP as compared to 64% of the GDP in FY13. The net domestic debt increased to PKR 13.17Tn in FY16 from PKR 9.49Tn in FY13 while external debt increased from $ 48.1Bn (PKR 4.8Tn) to $ 57.7Bn (PKR 6.05Tn). Similarly, during the period under review, govt. has paid around $ 12Bn of external debt. The Nation. RLNG-fired projects: ministry withdraws summary on sell-off Water and Power Ministry has withdrawn its summary from the ECC on privatisation of imported RLNG- fired power projects being established in Punjab in public sector. As per decision of the ECC, 3,600MW RLNG-based power plants will be located at Bhikki, Balloki and Haveli Bahadur Shah. Projects at Balloki and Haveli Bahadur Shah are being developed in the public sector through PSDP funding. BR. Cost of NJ project may shoot up further A PKR 404Bn cost of Neelum-Jhelum Hydropower Project is expected to increase further on account of price adjustment, exchange loss and interest. Up till Oct.’16, PKR 46.7Bn have been collected against the surcharge and another PKR 9Bn are estimated during the next one-anda-half-year. The tentative date of completion of the first unit is Feb.’18. BR. PSX continues record-setting streak The stock market saw another record breaking session on 12th Jan‘17 with the KSE-100 index up 145.42 points (0.29%) to close at a new alltime high of 49,517.02. Volume increased by 22% to 563Mn shares, while value declined by 5% to PKR 23.7Bn. Dawn. MoF urged to compel PIA to make payment to PSO PSO has requested the Finance Ministry to compel PIA to clear the outstanding dues of PKR 14.5Bn, saying if payments are not made as per plans, the PSO might not ensure uninterrupted jet fuel supply to PIA. In this regard, PSO officials have written a letter stating that PIA is financially constrained to stop paying to refineries for the jet fuel being supplied to the national flag carrier and in case of any stoppage of jet fuel to PSO by refineries, the PIA will solely be responsible for such breakdown in supply chain. BR. Economic Indicators List of Indicators Date / Period Unit Value Change Daily USD-Interbank 12-Jan PKR 104.84 0.00% USD-Open MKT 12-Jan PKR 108.50 0.09% KSE-100 index FIPI 12-Jan Pts. $ Mn 49,517 -2.49 0.29% NM** Crude (FE'17) 12-Jan 12-Jan $/bbl 53.06 1.65% Gold (FE'17) 12-Jan $/oz 1,196 0.40% Gold (10g) Local 12-Jan PKR 43,200 0.60% Silver (FE'17) 12-Jan $/oz 16.79 0.02% Cotton(KHI)-40 kg 12-Jan PKR 6,950 0.00% Kibor-6M 12-Jan % 6.13% 0.00% Forex Reserves 6-Jan $ Bn 23.20 0.16% 9.46 -2.27% WoW YoY Remittances Jul-Dec 16 $ Bn Exports* Jul-Dec 16 $ Bn 9.91 -3.82% Imports* Jul-Dec 16 $ Bn 24.40 10.10% Trade Balance* Jul-Dec 16 $ Bn -14.49 -22.20% Current Account Avg. CPI-FY17* Jul-Nov 16 $ Mn % -2,601 3.88 -90.97% Jul-Dec 16 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, 12-Jan-17, 127.7 135 125 115 EUR, 12-Jan-17, 111.0 USD, 12-Jan-17, 104.5 105 95 85 75 Jan-16 Apr-16 USD GBP Jul-16 Oct-16 Jan-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "Expert: a man who makes three correct guesses consecutively." Laurence J. Peter Chart of the Day Pakistan's Half Yearly Trade Snapshot 30.0 25.0 22.68 21.92 24.20 21.67 22.25 24.40 20.0 15.0 12.64 12.05 11.20 12.07 10.32 9.91 10.0 5.0 0.0 -5.0 -10.0 -15.0 -11.48 -9.87 -9.03 -12.13 -11.92 -20.0 1HFY12 1HFY13 Exports ($ Bn) 1HFY14 1HFY15 Imports ($ Bn) 1HFY16 -14.49 1HFY17 Trade Balance ($ Bn) 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