Pakistan Daily Economy Update - 13 July

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1. Jul . 13, 2016 KCCI - eBulletin Revenue growth cut fiscal deficit to half: Dar Finance Minister Ishaq Dar has said that continuous growth in revenue collection during the past three years has helped in reducing the fiscal deficit to almost half, from 8.8% to 4.45%. Lauding FBR’s efforts on achieving target of PKR 3.10Bn and making surplus collection of PKR 3.41Bn, Finance Minister urged the FBR team to do more for achieving another difficult target of PKR 3.62Bn for FY17. The Minister further said that share of provinces from taxes has increased from PKR 1,200Bn to PKR 1,900Bn during the last three years. The investment to GDP ratio has also increased from 12.6% to 15.6% which would further be enhanced to about 21%. BR. Disposal of audit cases: FBR unlikely to meet commitment with IFIs FBR is unlikely to fulfil its commitment with International Financial Institutions (IFIs) to dispose of 60% of audit cases by Sept.’16 as its field formation is lagging behind from aforesaid audit target. Keeping this in view, the FBR has now directed its field formations to take all necessary measures to dispose of cases selected for income tax audit to fulfil its commitment with IFIs. BR. Vessels acquisition: PNSC offers joint ventures to private sector investors Foreseeing the country's seaborne trade to grow 31% during next four years, Pakistan National Shipping Corporation (PNSC) has offered private sector investors to enter into joint ventures (JVs) with it for the vessels’ acquisition. The national flag-carrier made the offer in the backdrop of govt. having abolished, in FY17 budget, customs duty, general sales tax and withholding tax on the import of ships and other floating craft. Current PNSC fleet comprised modern vessels with dead-weight carrying capacity of 681,806 metric tons, highest ever since its inception. The current national seaborne trade stands at 73Mn tons which is expected to reach 95Mn million tons by 2020. BR. Market abuses in capital market: SECP to seek help from FIA, NAB SECP will seek assistance from other regulatory bodies/entities including Federal Investigation Agency (FIA) and National Accountability Bureau (NAB) etc to detect malpractices and market abuses in capital market for taking joint action against involved persons. According to the Capital Market Development Plan (2016-18) issued by the SECP, the Commission has proposed enhanced collaboration with other regulatory bodies. In this regard, SECP intends to develop procedures which can lead to detection of money laundering practices which may be conducted through the Stock Exchange. BR. Textile Millers reject proposal of allowing TCP to buy lint from ginners Pakistan’s textile millers have deplored the govt.’s consideration to allow the Trading Corporation of Pakistan (TCP) to purchase lint from ginners, saying that it is an ‘imprudent’ approach to support the farmers. They also criticised Textile Ministry for suggesting an indicative price of cotton on the pattern of wheat and intervene through the TCP by directly buying lint from ginners. The Nation. Saudi Arabia largest market for Pakistani workers More than 1.6Mn Pakistanis proceeded to Saudi Arabia from the year 2011-15 for employment purposes, making the country the largest market for Pakistani workers across the world. According to the Ministry of Overseas Pakistanis and Human Resource Development, overall 49.9%, 1.6Mn workers have proceeded to Saudi Arabia during the period. While 1.3Mn people, 38.2% proceeded to the UAE during the same period. Whereas, Oman is the 3rd largest importer of Pakistani manpower and 0.26Mn and 7.6% job seekers have proceeded to Oman during 2011-15. The News. Crude export: Pakistan working on Gwadar-China oil pipeline Pakistan is working on a plan to lay an oil pipeline from Gwadar to China for the export of crude and has given the task to state construction firm Frontier Works Organization. The pipeline will run from Gwadar Port to western China and will allow Beijing to diversify and speed up import of crude oil. The crude oil processed and refined in Pakistan can be exported through the shortest possible Dubai-Gwadar-Urumqi route .This can be achieved by laying an oil pipeline through the energy corridor up to western China via Karakoram Highway and Khunjerab Pass. Tribune. Sindh plans to return property tax for industrial development Sindh govt. has planned to pay property taxes collected from industries back for the industrial development. Provincial Minister for Industries has said that the proposed amendments into the law would be presented before the assembly for its ratification. Leading businessman Zubair Motiwala raised this proposal, saying the tax collected by the Sindh Excise Department should take its service charges for the tax collection and return the collected taxes to the concerned industrial authorities for the development. Another business leader Siraj Kassem Teli said utility companies should be held responsible for their poor performance. Teli urged the minister to take actions against the utility providers. The News. Pakistan Steel stopped from selling scrap In what appeared to be a last blow, the Privatization Commission has stopped Pakistan Steel Mills (PSM) from selling its scrap and product inventory being used to meet day-to-day expenses. The country’s largest industrial unit is already on “zero production heat mode” since its gas supply was drastically cut on June. 10, 2015 (more than 13 months now) while its competitors around the world make roaring business having more than $3Bn steel imports into Pakistan in FY 15-16. Dawn. Investment banks losing ground to commercial ones: SBP The State Bank’s recently issued analytical report on financial sector of Pakistan observed that in the absence of funding sources from commercial banks and limited equity, investment banks have slowly been waning. “The sector is unprofitable and has been operating on the sidelines owing to their inability to compete with the investment banking wings of commercial banks,” said the SBP report. Dawn. Stocks hit all-time high as bull run endures Bulls were in complete command of the stock market on June 12 2016, helping the KSE-100 index rise by 663.66 points, or 1.73%, to an all-time high of 39,031.62. The Pakistan Stock Exchange got renewed momentum on the back of gains witnessed in regional and overseas markets. Intra-day, the index clocked in gains of 701.69 points (1.80%). Trade volume jumped 56% to 248.4 million shares and value surged 49% to PKR 18.5Bn over the previous day. Foreign investors picked up equities in the heavy sum of $ 12.49Mn. Dawn. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 12-Jul PKR 104.84 -0.03% USD-Open MKT 12-Jul PKR 104.85 -0.24% KSE-100 index FIPI Pts. $ Mn 39,032 12.48 2.80% NM** Crude (JU'16) 12-Jul 12-Jul 12-Jul Gold (MY'16) 12-Jul $/bbl 47.22 2.72% $/oz 1,334.3 -1.59% Gold (10g) Local 12-Jul PKR 44,142 1.08% Silver (MY'16) 12-Jul $/oz 20.16 -0.76% Cotton(KHI)-40 kg 12-Jul PKR 6,307 Kibor-6M 12-Jul % Forex Reserves 1-Jul $ Bn 23.08 6.08% Remittances Jul-May 16 $ Bn 17.84 5.58% Exports* Jul-May 16 $ Bn 19.15 -12.39% Imports* Jul-May 16 $ Bn 40.32 -2.74% Trade Balance* Jul-May 16 $ Bn -21.17 -7.28% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-Jun 16 $ Mn % -1,519 2.86 17.71% 6.07% 0.00 0.01% WoW YoY May-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 GBP, 12-Jul-16, 137.8 EUR, 12-Jul-16, 116.1 145 135 125 115 105 95 USD, 12-Jul-16, 104.8 85 75 Jul-15 Oct-15 USD GBP Jan-16 Apr-16 EUR Jul-16 Source: KCCI Research ; Oanda.com Quote of the Day If the highest aim of a captain were to preserve his ship, he would keep it in port forever Thomas Aquinas Chart of the Day 40,000 KSE-100 INDEX 38,000 36,000 34,000 32,000 30,000 28,000 26,000 24,000 22,000 20,000 Source: KCCI Research, SCS Trade 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