Pakistan Daily Economy Update - 13 March

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1. Mar . 13, 2018 KCCI - eBulletin US renews GSP scheme for Pakistan The US House of Representatives has passed a bill to renew the GSP scheme allowing duty free access for goods from 120 countries including Pakistan for the next three years. The scheme expired on Dec. 31, 2017. The Bill now provides an extension up to Dec. 2020 and the bill will be presented in the US Senate for passage. The utilisation of the scheme is very limited wherein FY16, Pakistan’s GSP exports stood at $ 247Mn, up from $ 180.5Mn in the previous year. GSP-based exports account for 5% of Pakistan’s total exports to the USA. Non-GSP exports to USA stood at $ 3.4Bn during FY17. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 12-Mar PKR PKR 110.40 112.15 -0.14% 0.09% Pts. $ Mn $/bbl 43,411 1.72 61.34 0.93% NM** -0.87% USD-Interbank USD-Open MKT Crude (MY'18) 12-Mar 12-Mar 12-Mar 12-Mar K-Electric stake sale: Delay in approval will hurt investor confidence says Abraaj founder The federal govt’s inability to give regulatory approvals to Shanghai Electric Power for taking over K-Electric would be a huge blow to Karachi’s future and cause a serious dent in investors’ confidence, said the Abraaj Group. The federal govt. is left with only 12 weeks in governance to complete the deal. Abraaj Group founder Arif Naqvi met with government ministers and noted that if the deal fell through, investor confidence would suffer serious deterioration, which may take several years or may be a decade to recover. Pakistani authorities, on their part, have asked the Abraaj Group and Shanghai Electric Power to share the sale-purchase agreement, terming it a requirement under the law. Tribune. Gold (AP'18) Gold (10g) Local 12-Mar 12-Mar $/oz PKR 1,323.6 48,428 -0.01% 0.00% Silver (AP'18) Cotton(KHI)-40 kg 12-Mar 12-Mar $/oz PKR 16.50 7,931 -0.40% 1.38% Kibor-6M 12-Mar % 6.46 $ Bn 18.33 -0.01% WoW -0.46% Govt. to raise gas prices by 5-7% The govt. has decided in principle to increase gas prices by 5-7%, resulting in additional revenue of PKR 18Bn to cover losses of the two gas utilities —SSGCL and SNGPL — with retrospective effect from 2012-13. Meanwhile, SNGPL will be given PKR 6.54Bn through ‘retrospective application of UFG study’ and SSGCL PKR 11.26Bn in the same manner. The ECC of the Cabinet is expected to issue formal instructions to Ogra to make past adjustments in system losses (commonly called unaccounted for gas-UFG) since 2012-13. Dawn. Remittances 2-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Jan 18 Current Account $ Mn -9,156 Foreign Direct Inv. $ Bn 1.49 Jul-Jan 18 Jul-Dec 17 LSM Growth* % 5.55 % 3.84 Jul-Feb 18 Avg. CPI Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -20.85% -48.11% -2.94% CPEC debt liabilities estimated to be around $ 3.3Bn - 4.5Bn per year by 2025 In a report on the state of economy titled "China-Pakistan Economic Corridor Review and Analysis" prepared by the Institute of Public Policy, debt liabilities of the CPEC have been estimated to be around $ 3.3Bn to $ 4.5Bn per year by 2025. The report recommended that the govt. should consider establishing a specific CPEC unit within the framework of Council of Common Interests to manage CPEC with transparency and efficiency. It has also been recommended that policymakers need to take measures such as improve revenue performance at national and provincial levels and reduce PSE losses (3.8% of GDP) and enhance trade competitiveness. BR. SRB’s tax revenue up 16% to PKR 54.2Bn in eight months Sindh Revenue Board (SRB) collected PKR 54.2Bn in 8MFY18 as compared to PKR 46.6Bn in 8MFY17, posting a growth of 16.12%. The provincial revenue board is, however, facing an uphill task of collecting nearly PKR 46Bn in the remaining last 4 months of FY18 in order to achieve the annual target of PKR 100 Bn. SRB surpassed revenue collection target of PKR 78Bn in FY17. The board is planning to pursue cases in tribunals and courts for early disposal as substantial amount is stuck in lingering cases. Besides, the SRB has also started campaign for the recovery of outstanding amount from registered services providers. The News. Distribution companies: recoveries push up circular debt to over PKR 750Bn Power Division Ministry has admitted that governance issues in bill recoveries of Discos have pushed up circular debt to an unsustainable level of over PKR 750Bn and consequently DISCOs have been unable to invest in power infrastructure. The acknowledgement came from the Ministry of Power Division first time in the backdrop of the discussion that lack of investment in transmission lines has been causing frequent tripping and load shedding, especially in remote areas. BR. Pakistan seeks to increase trade with Iran to $ 5Bn by 2021: PM \ In a meeting with Iranian Foreign Minister, Javad Zarif, PM Abbasi has said that Pakistan desires to increase bilateral trade with Iran to $ 5Bn by 2021. Zarif was reaffirmed about Pakistan's desire for enhancing mutually beneficial economic cooperation with Iran including bilateral trade, investments and commercial interaction. BR. Electronic banking transactions post double-digit growth in Oct-Dec Electronic banking transactions posted a double-digit growth in value during 2QFY18 as development of digital payment platforms is attracting users towards cashless payments. SBP said e-banking channels, including real-time online, mobile phone, internet and call centre banking, automated teller and point of sale (POS) machines and ecommerce sites processed 186.7 Mn transactions worth PKR 11.7Tn, up 8.67% in volume and 28% in value during the period. The News. Car sales up 17% to 142,383 units in July-Feb Sales of passenger cars increased 17% to 142,383 units in 8MFY18, as compared to 121,275 units in 8MFY17. Pakistan Automotive Manufacturers Association’s data showed that total car sales decreased 4.5% in February to 19,027 as compared to Jan’17. There has been a high increase in sales of 1,000cc cars, as both WagonR and new variant of Cultus, saw amazing success during the period. The News. Machinery Expo-ITIF Asia 2018 kicks off today Pakistan’s biggest machinery expo, ITIF Asia, is to start today (13th Mar) in Karachi at the Expo Center and will run up to 15th Mar’18 2018. The 3 days of events will include the 17th International Auto, Transport & Logistics Asia, the 17th International Engineering Show and the 17th International Oil & Gas Machinery and Technology Asia Exhibition. The expo will have in attendance more than 350+ Chinese delegates including a high powered delegation of Chinese provincial ministers. It will feature over a 1,000 local and foreign exhibitors and is expected to be attended by more than 85,000 people. Daily Times. Investment summit and expo in Islamabad A saving and investment show” Capital Investment Summit & Expo 2018″ is to be held at the Pak-China Friendship Center Islamabad from March 13-15, 2108. The 3 day event will be a forum for govt. and business leaders to discuss current key investment challenges, as well as suggest roadmap to achieve potential economic growth. The event is supported by Board of investment, Ministry of Finance, Ministry of Overseas Pakistan and Overseas Pakistanis Foundation. Daily Times. KSE-100 index FIPI Forex Reserves Major Currencies 165 GBP, 12-Mar-18, 153.5 155 145 135 EUR, 12-Mar-18, 136.3 125 115 105 USD, 12-Mar-18, 110.6 95 Mar-17 USD Jun-17 GBP EUR Sep-17 Dec-17 Source: KCCI Research ; Oanda.com Quote of the Day "Once you respect yourself, there is no longer any reason to disrespect anyone else. Once you are confident of your own worthiness, the worthiness of others ceases to be an issue." Jonathan Lockwood Huie Chart of the Day BREAK UP OF REMITTANCES RECEIVED BY PAKISTAN (8MFY18) Other Countries, 0.77, 6% Canada, 0.14, 1% Saudi Arabia, 3.26, 25% UAE, 2.84, 22% Australia, 0.15, 1% U.K., 1.79, 14% Qatar, 0.24, 2% USA, 1.71, 13% Bahrain, 0.26, 2% Oman, 0.44, 4% Kuwait, 0.51, 4% Values in $ Bn Malaysia, 0.70, 6% Source: KCCI Research, SBP 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