Pakistan Daily Economy Update - 15 April

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1. Apr . 15, 2016 KCCI - eBulletin US promises $ 100Mn fund to propel Pakistan’s SMEs The United States has announced that it will provide a fund of over $ 100Mn for investment in small and medium enterprises (SMEs), which provide a large number of jobs and make a significant contribution to the economy, through the Pakistan Private Investment Initiative. US Ambassador David Hale revealed that the investment would be made in partnership with the Abraaj Group, Indus Basin Holding and JS Private Equity Management. The US Agency for International Development (USAID) has given $ 24Mn for each fund and the Abraaj Group, Indus Basin Holding and JS Private Equity Management will each match or provide more than USAID’s contribution. Tribune. Service exports slump 21% Service exports have dropped 21% to $ 3.43Bn during 8MFY16 from $ 4.32Bn a year earlier, mainly driven by a fall in exports of government services. On the other hand, service imports fell 15% to $ 4.89Bn the period from $ 5.77Bn a year ago. Thus, trade deficit in services increased slightly by 0.66% year-on-year to $ 1.46Bn during 8-month period from $ 1.45Bn. On a monthly basis, service exports fell 68% in Feb’16 compared to Feb’15, according to data of PBS. Dawn. Reserves slip to $ 20.83Bn The country’s foreign liquid reserve fell to $ 20.83Bn for the week ending 8th Apr’16 from $ 20.89Bn in the preceding week, showed data released by the SBP. Of the total reserves $ 16.04Bn were held by the SBP and $ 4.79Bn by the commercial banks. Dawn. Customs proposes 5 to 20% duties on imported goods Pakistan Customs have proposed the FBR to impose 5 to 20% regulatory duties on a number of importable goods to avert the incidences of mis-declaration, which cause revenue losses to national exchequer. As per the Customs, various statutory rates of import duty under the FTA regime provide opportunity to importers to get items cleared under the minimum duty slab. The department advised the FBR to specify same concessionary rate of sales tax on raw materials and goods imported by manufacturers/industrial consumers as well as commercial importers, as it is difficult to check genuine manufacturers at import stage. The News. Govt yet to give Gwadar free port status: minister Minister for Ports and Shipping Kamran Michael has said the government is yet to approve the status of Gwadar as a free port – a much-needed move that will allow duty and tax incentives to local and foreign investors. The ministries of ports, commerce and finance have completed the paperwork related to the rules and regulations of the proposed free port, while the approval from the finance division is awaited. He said the government will adopt Hong Kong port as a model for Gwadar. The News. Deal worth PKR 35Bn signed at IPS A memorandum of understanding (MoU) for PKR 35Bn direct investment in Pakistan was signed on 13th Apr, 2016 at the Express Media Groups’ Express Pakistan Pavilion on the third and final day of International Property Show in Dubai. The MoU was signed between Vertex International Pakistan and the UAE’s famous investor group Colosyss LLC. Under the agreement, a green housing scheme, comprising 500 houses, will be set up. Speaking on the occasion, the participants said the deal will help in the progress of Pakistan and development of its foreign exchange. Tribune-Thur. Saudi Arabia bans shrimp imports from Pakistan Saudi Arabia has banned shrimp imports from Pakistan, a worrying development for the Marine Fisheries Department (MFD) as other countries may follow suit. The ban came in the wake of information circulated by the World Organisation for Animal Health (OIE) regarding emergence of white spot disease in Pakistani shrimp. However, the MFD suspects misunderstanding as Pakistan has yet to start shrimp farming, and entire catch of shrimp consists of open-sea operations. The MFD believes that the disease only occurs in cultured shrimp as the white spot virus does not infect wild shrimp. Pakistan exported about 2,016 tons of seafood (valued at $ 7.49Mn) to Saudi Arabia, including 189 tons of shrimp ($2.175m) in 2015. The country’s overall annual fish and fish preparations’ exports stand at around 140,000 tons, fetching around $ 350Mn. The share of shrimp exports is around 12,000 to 14,000 tons a year. Dawn. NEPRA allows PKR 0.45 per unit cut in K-Electric tariff Nepra has agreed on a reduction of PKR 0.45 per unit in the power tariff for K-Electric consumers on account of fuel price adjustment for Feb’16. Nepra took the decision at a public hearing in response to a petition filed by the K-Electric management that sought approval for a tariff cut of 44.91 paisa per unit because of variation in fuel cost. Tribune. PKR 3,468Mn budget approved for NA Secretariat The Finance Committee of the National Assembly has approved a budget of PKR 3,468Mn for National Assembly Secretariat for FY17. The Committee was informed that there was no variation between the revised estimates and sanctioned budget for the year 2015-2016. Tribune. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 14-Apr PKR 104.69 -0.02% USD-Open MKT 14-Apr PKR 104.69 -0.02% KSE-100 index FIPI 14-Apr 14-Apr Pts. $ Mn 33,768 -4.95 0.36% NM** Crude (MY'16) 14-Apr $/bbl 42.62 -0.37% Gold (MY'16) 14-Apr $/oz 1,227.1 -1.37% Gold (10g) Local 14-Apr PKR 42,128 -0.61% Silver (MY'16) 14-Apr $/oz 16.15 -0.74% Cotton(KHI)-40 kg 14-Apr PKR 5,450 0.93% Kibor-6M 14-Apr % 6.37% 0.00% 8-Apr $ Bn 20.83 -0.24% Remittances Jul-Mar 16 $ Bn 14.16 4.14% Exports* Jul-Mar 16 $ Bn 15.61 -12.92% Imports* Jul-Mar 16 $ Bn 32.52 -4.22% Trade Balance* Jul-Mar 16 $ Bn -16.91 -5.50% Current Account Avg. CPI-FY16* Jul-Feb 16 Jul-Mar 16 $ Mn % -1,859 2.64 4.52% WoW Forex Reserves YoY Apr-16 Discount Rate % 6.00 Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 GBP, 14-Apr-16, 148.2 155 145 135 EUR, 14-Apr-16, 118.0 125 115 105 95 USD, 14-Apr-16, 104.7 85 75 Apr-15 Jul-15 USD Oct-15 GBP Jan-16 EUR Apr-16 Source: KCCI Research ; Oanda.com Quote of the Day “Anyone who has lost track of time when using a computer knows the propensity to dream, the urge to make dreams come true and the tendency to miss lunch.” Tim Berners-Lee Chart of the Day Country Wise Remittance Received by Pakistan (9MFY16) Saudi Arabia 4,337 Dubai 2,122 USA 1,884 U.K. 1,759 Abu Dhabi 953 Other Countries 769 Oman 566 Kuwait 544 Bahrain 327 Qatar 274 Value in $ Mn 0 1000 2000 3000 4000 5000 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 Cement industry plans to invest up to $ 1Bn information obtained from sources believed to be reliable and in good faith. Such According to Pakistan Cement Manufacturers, the cement industry is going to invest from $ 700Mn to $ 1Bn information has not been independently verified. icon represents the sole viewpoint of the KCCI R&D Cell, and is in capacity utilization enhancement. Four companies namely Cherat Cement, Attock Cement, DG Khan stated to enrich the readers' understanding of the news item. The Cement and Lucky Cement have all announced their plans. The Nation.