Pakistan Daily Economy Update - 15 October

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1. Oct . 15, 2016 KCCI - eBulletin ‘Early closing of markets from November 1’ Sindh Chief Minister Syed Murad Ali Shah has taken a decision on 14th Oct 2016 with regards to the closing timings of marriage halls, super markets, and shops. The chief minister decided that the marriage halls have to finish their functions by 10 pm and only one dish would be served from 1st Nov, 2016. "This is an austerity programme and I am going to start it myself. I won't attend the functions where more than one dishes would be served," he said. Dawn. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank 14-Oct PKR 104.74 0.05% USD-Open MKT 14-Oct PKR 105.35 0.05% KSE-100 index FIPI 14-Oct 14-Oct Pts. $ Mn 41,464 3.93 0.13% NM** Traders vow to resist early closure of markets The traders' have announced to resist the decision of Sindh government to close down shopping centers, shops, and wedding halls by 7pm and 10pm, respectively. The provincial government has decided to impose penalty on the violators of this decision. Dawn. Crude (DE'16) 14-Oct $/bbl 50.84 0.00% Gold (DE'16) 14-Oct $/oz 1,259 0.13% Gold (10g) Local 14-Oct PKR 43,628 0.00% Silver (DE'16) 14-Oct $/oz 17.54 0.39% Cotton(KHI)-40 kg 14-Oct PKR 6,548 0.82% Trade deficit shrinks 13.39% to $ 2.31Bn in Sep’16 Pakistan’s trade deficit shrank 13.39% to $ 2.31Bn in Sep’16 over the preceding month as the country’s imports fell 10.92% to $3.85Bn and exports decreased 6.94% to $ 1.54Bn. In 3MFY17, trade deficit widened 29.21% to $ 7.06Bn as exports fell 8.98% to $ 4.68Bn. The country’s imports rose 10.7% to $ 10.61Bn during the 3 months over the corresponding period a year earlier. The News. Kibor-6M 14-Oct % 6.06% 0.00% 7-Oct $ Bn 23.49 -0.50% Remittances Jul-Sep 16 $ Bn 4.70 -5.28% Exports* Jul-Sep 16 $ Bn 4.68 -8.98% Imports* Jul-Sep 16 $ Bn 11.75 10.70% No department being shifted to Lahore: SBP SBP has once again clarified that none of its departments is being shifted to Lahore. However, part of a few functional departments of its subsidiary responsible to undertake operational work are being relocated to Lahore to meet the oversight and logistic requirements for operational efficiency. The Bank has further clarified that selection of Lahore has purely been based on availability of space as none of the other offices, particularly its Islamabad Office, had enough space to accommodate the manpower so relocated. BR. SSGC, SNGPL asked to collect PKR 100Bn more from consumers The govt. has asked the state-run gas utilities to collect a massive PKR 100Bn from gas consumers for financing the capacity enhancement project of the gas pipeline network in the country and create room for LNG transportation. Meanwhile, Ogra increased the price of LNG delivered on ex-ship (DES) basis by around 25 rupees (or $ 0.23) and determined LNG price at $ 8.42/mmbtu for Sep’16, without inclusion of GST. This increase was due to inclusion of ‘cost of supply’ which in dollar terms has been notified at $ 0.26/mmbtu for the month under review. The News. Approved: IMF backs Pakistan’s energy policies The International Monetary Fund (IMF), in its report on Pakistan’s economy has endorsed efforts of the Ministry of Water and Power for improving electricity supply, reducing outages, curbing line losses and tackling the circular debt. Overall recoveries of the power sector stood at 94.3% in 2016 compared to 88% in 2013. Similarly, overall technical and distribution losses were curtailed with a decrease of 1.1% from 19% to 17.9%. Both the increase in recoveries and decrease in line losses translated into a direct cash benefit of PKR 60Bn to the power sector. Tribune. IMF assured of PKR 420Bn cut in uplift funds, mini-budget Pakistan has given assurance to the IMF to slash the development budget by PKR 420Bn and announce mini-budget to restrict the budget deficit to below 3.8% of the GDP during FY17. The country’s consolidated PSDP has been put at PKR 1.26Tn instead of PKR 1.68Bn approved by the parliament for the FY17. The federal PSDP spending for FY17 has been revised to PKR 620Bn against the budgetary allocation of PKR 800Bn, a reduction of PKR 180Bn. The Nation. Pakistan lags behind world in eggs, poultry meat consumption Pakistani poultry sector is producing more than 12,000Mn table eggs per annum but country’s per capita consumption is only 65-70Mn eggs annually. The world average consumption is around 160Mn eggs with developed world consuming as much as 300Mn eggs per capita per annum. Recent nutrition survey results from World Bank revealed that Pakistan is included in countries where severe stunting (43%) in young children is found at alarming level. The Nation. TAPI gas pipeline consortium plans roadshows in November A long-delayed pipeline project from Turkmenistan to Pakistan and India via Afghanistan is in the final stages of financing, and investor roadshows are due to be held in Nov’16. Originating at the giant Galkynysh gas field in Turkmenistan, the $ 10Bn TAPI (Turkmenistan, Afghanistan, Pakistan and India) pipeline, which involves the four countries' own energy companies, would carry 33Bn cubic meters (bcm) of gas a year. The News. Banks approve PKR 1Tn loans for infrastructure development Pakistan’s banks and development finance institutions (DFIs) have approved around 1Tn rupees worth of loans for the infrastructure development during the 2QFY16. The amount grew 29% to PKR 1.05Tn in 4QFY16 over the previous quarter, according to the Quarterly Infrastructure Finance Review, issued by SBP. Banks and DFIs approved PKR 814.2Bn on account of infrastructure finance during the 3QFY16 period. The News. Govt. looking for private partner: National Assembly body briefed about PIA The National Assembly has been informed that govt. is not going to privatize PIA but is seeking a potential private partner to share equally in its profit and loss. The Assembly was further told that PIA's debt servicing includes PKR 2Bn to PKR 2.5Bn in interest payments (and principal as and when due) every month on its borrowings of PKR 100Bn. Similarly, committee was also informed that govt. does not want to privatize PIA because its employees are not in this favor. BR. List of Indicators WoW Forex Reserves YoY Trade Balance* Jul-Sep 16 $ Bn -7.07 -29.21% Current Account Avg. CPI-FY17* Jul-Aug 16 Jul-Sep 16 $ Mn % -1,316 3.88 -1107.34% Sep-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, 14-Oct-16, EUR, 126.3 14-Oct-16, 114.0 135 125 115 105 95 USD, 14-Oct-16, 103.4 85 75 Oct-15 Jan-16 USD GBP Apr-16 Jul-16 Oct-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day “There's no luck in business. There's only drive, determination, and more drive.” Sophie Kinsella Chart of the Day Cars Sales in Pakistan 9,000 8,000 8,089 7,000 6,000 5,000 4,770 4,397 6,977 4,000 2,311 1,939 2,165 1,880 3,000 2,000 1,000 6,878 6,347 7,526 7,338 Cars (1300 and Above cc) Aug-16 Cars (1000 cc) Sep-16 Aug-15 No of Units Cars (Below 1000 cc) Sep-15 Source: KCCI Research, PAMA Source: KCCI Research, Value in $ Bn 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