Pakistan Daily Economy Update - 15 September

Transcription

1. Sep . 15, 2017 KCCI - eBulletin British trade minister arriving to discuss fresh investments The British trade minister is to arrive on a visit to Pakistan next week to discuss bilateral trade and issues pertaining to fresh UK investments as more companies are planning to pour capital in the wake of CPEC programme, announced the British High Commissioner. Speaking to the business community, the High Commissioner emphasised that long-standing friendly relations between UK and Pakistan were not truly reflected in their economic affairs. He noted that many UK companies are already working in Pakistan while many more are planning to make new investments, particularly in the wake of CPEC. Tribune. ECC decides to constitute body to revisit export package ECC of the Cabinet has decided to constitute a committee with representation from Finance Division, Commerce Division and FBR to undertake a detailed analysis of the impact of the Prime Minister's export package and also propose changes in its scope and coverage. The Commerce Ministry proposed that in order to encourage the market diversification, an additional 2% incentive may be provided for exports to non-traditional markets of Africa, Latin America, non-EU European countries, Commonwealth of Independent States and Oceania. BR. Proposal to allow rupee depreciation opposed by Dar The finance ministry has opposed the proposal to let the Pakistani rupee depreciate, or to expand the scope of the 100% cash requirement before goods are imported, as the country tackles the issue of decreasing foreign exchange reserves. The option to let the rupee depreciate by around 9% or PKR10 against the US dollar was considered during a meeting but the finance ministry remained firm in its policy of keeping the currency strong. This has narrowed down the government’s options to impose regulatory duty on over 500 items that are already subject to heavy tariffs or increase the rates on about 300 tariff lines on imported goods. Tribune. Hascol looks to raise PKR 4Bn for expansion along CPEC Hascol Petroleum Limited is looking to raise close to PKR 4Bn through the country’s stock market, seeking financing for upcoming as well as ongoing expansion projects. Board of directors at the firm has approved the issuance of 24.13 Mn right shares to existing shareholders at PKR 165 per share, which will help the company raise a total of PKR 3.98Bn. The purpose of the rights Issue is to fund upcoming projects including development of storage facilities, retail outlets and lube oil and grease blending plant. The company had also raised PKR 1.41Bn through an IPO of 25Mn shares in Mar’14. Tribune. Balochistan will become country’s richest province: PM PM Abbasi while inaugurating the 300km Kachhi canal project in the Sui area of Dera Bugti has said that the time is not far away when Balochistan will become the most prosperous province of Pakistan, The Kachhi canal project, built at a cost of PKR 80Bn, is expected to irrigate around 72,000 acres of barren land in the Sui tehsil area of Balochistan. Dawn. Sindh drafts law to regulate registration of papers, printing presses, books With the concurrent list abolished in the wake of the adoption of the 18th Amendment to the Constitution, the Sindh government has drafted a law to regulate registration of newspapers, news agencies, printing presses and books that on paper appears to be tougher than the existing laws. The law has reportedly been given a nod by CM and has been handed over to the law ministry for vetting before being submitted to the provincial cabinet for approval. Dawn. Only one-fifth employees of top 54 companies file tax returns FBR has identified 200,906 employees of 54 top companies across the country who vanished from the tax net in the past one year, reflecting poor tax compliance. In the tax year 2016, these employees who constitute 79% of the total employees’ strength did not file their tax returns. FBR has already launched FBR’s Facilitation and Taxpayers Education (Fate) Wing to rope in large public and private sector organizations and companies in its ongoing drive for filing of tax returns. Dawn. Govt cuts borrowing from State Bank by 85% The government has drastically reduced borrowing from the central bank in 2MFY18, causing a slowdown in the contraction of broad money. The government borrowed PKR 115Bn from SBP in Jul-Aug’17, which was just 15% of its borrowing during the same period of 2016-17. During 2MFY17, monetary expansion is negative 0.96% compared to negative 1.6% a year ago. Dawn. Shahbaz bans small coal-fired power plants Punjab CM has approved the decision to impose ban on establishment of small coal power plants across the province to overcome environmental pollution. Addressing a meeting held at Civil Secretariat through video link, the CM said coal power plants of more than 600MW capacity would be established in future, making the use of super critical technology essential for the new units. The News. FBR says misdirected advices cause unnecessary litigations \ Chief commissioner LTU Karachi, has claimed that tax lawyers and practitioners give wrong advices to the taxpayers and that leads to unnecessary litigations and taxpayers should resolve their issues directly (with tax authorities) instead of going for unnecessary litigations. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (NO'17) Gold (OC'17) Gold (10g) Local Silver (OC'17) Cotton(KHI)-40 kg Kibor-6M 14-Sep 14-Sep 14-Sep 14-Sep 14-Sep 14-Sep 14-Sep 14-Sep 14-Sep 14-Sep PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.41 105.43 42,684 7.77 50.18 1,329.8 44,914 17.90 6,377 6.16% Forex Reserves 31-Aug $ Bn 20.39 0.00% -0.26% 0.88% NM** 3.14% 0.54% -0.28% 0.77% -1.65% 0.00% WoW 1.93% YoY 13.18% 11.80% 24.85% -33.52% -210.12% 162.81% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Aug 17 Remittances $ Bn 3.50 Jul-Aug 17 Exports* $ Bn 3.50 Jul-Aug 17 Imports* $ Bn 9.79 Jul-Aug 17 Trade Balance* $ Bn -6.29 Jul-17 Current Account $ Mn -2,053 Foreign Direct Inv. $ Bn 0.22 Jul-17 Jul-Jun 17 LSM Growth* % 5.60 % 3.41 Jul-Aug 17 Avg. CPI-FY18* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies GBP, 12-Sep-17, 139.6 145 135 125 EUR, 12-Sep-17, 125.7 115 105 95 Sep-16 USD Car deals characterized by “own money” excess The country's top auto assemblers have accused investors, commercial banks and dealers of involvement in charging premium (own-money) in the sale of cars. These revelations came from the representatives of auto industry at a meeting on "black marketing in the name of money" convened and presided over by the Industries and Production Minister. Auto assemblers said that they are making each and every effort to ensure delivery of cars on time and in case of delay in delivery over 60 days, they pay 2% in addition to Kibor to customers as per the auto policy. BR. UfG losses proposed by Ogra consultants rejected SNGPL and SSGC have rejected the 7.1% Unaccounted for Gas (UfG) losses proposed by the consultants hired by Ogra but agreed on raising the levels from the existing 4.5%. The current UfG losses of SSGC stood at 13% while that of SNGP were 15% - higher than the losses reported by the two gas utilities at around 9 - 10%. The matter of UfG is under discussion between Ogra and the two gas companies to fix ERR (estimated revenue requirement) for FY18, a decision likely in a couple of days. BR. Reserves up Pakistan’s total liquid foreign exchange reserves amounted to $ 20.58Bn on 8th Sep’17, up $ 198.2Mn or 0.97% from a week ago. Reserves of the SBP increased $ 77Mn to $ 14.75Bn. Net foreign exchange reserves held by commercial banks amounted to $ 5.82Bn on 8th Sep’17, up 2.1% from the preceding week. Dawn. Dec-16 GBP EUR Mar-17 Jun-17 Sep-17 Source: KCCI Research ; Oanda.com Quote of the Day "People who end up as ‘first’ don’t actually set out to be first. They set out to do something they love." Condoleezza Rice Chart of the Day Pakistan, China FTA talks begin; trade imbalance in focus Pakistan and China have started talks to review free trade agreement, focusing on growing trade imbalances between the two neighboring countries. Secretary Commerce Younus Dagha has stressed the need to address balance of trade between the countries and visa issues faced by Pakistani businessmen during the 8th round of FTA’s second phase to review tariff lines and concessions. The News. Currency management State Bank unveils new penalty structure SBP has introduced a new penalty structure for cash processing functions under the currency management strategy. Under the new penalty structure, the SBP will impose fine up to PKR 0.1Mn for noncompliance of instructions under the currency management strategy. The SBP vide FD Circular No.3/2015, dated Aug. 26, 2015 issued the currency management strategy, which envisages transformation of currency management functions from manual to automated environment and revamping the cash processing operations across the banking industry as per international best practices. BR. USD, 12-Sep-17, 105.3 Remittance Received by Pakistan (2MFY11-2MFY18) 3.50 2MFY18 3.09 2MFY17 3.19 2MFY16 3.03 2MFY15 2.64 2MFY14 2.46 2MFY13 2.41 2MFY12 1.72 2MFY11 0.00 0.50 1.00 1.50 2.00 Values in $ Bn 2.50 3.00 3.50 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