Pakistan Daily Economy Update - 16 August

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1. Aug . 16, 2017 KCCI - eBulletin Mid-term review plan: MoC convenes first meeting of GSP Plus panel today Commerce Ministry has convened first meeting of GSP Plus special committee to develop a comprehensive approach and prepare midterm review plan due on Jan.’18. Presided over by Commerce Minister Pervaiz Malik, the committee will be given a detailed briefing on the actions taken by the govt. with respect to 27 UN Conventions and concerns raised by the Members of EU Parliament and the powerful EU civil society. Both the EU Parliament members and civil society are unhappy at the human rights situation in Pakistan. EU also argues that Pakistan has not given a level playing field to some of its companies despite GSP plus status. The committee has to look into such concerns of the EU prior to the mid-term review. BR. Bank account details: FBR warns taxpayers of fake emails FBR has strictly advised taxpayers and general public not to send their bank account details and passwords to any e-mail received from any e-mail address that is apparently from the FBR. FBR has directed taxpayers to be aware of fraudulent e-mails - phishing scams. BR. Karachi getting PKR 75Bn for uplift projects: governor Sindh Governor has said that the federal government is spending PKR 75Bn on the overall development projects of the metropolis to overcome the pressing problems which have multiplied due to a rapid increase in its population. He said if proper attention had been paid, the situation in the city would have been quite different. The governor said that earlier the federal government had announced for the metropolis a PKR 50Bn project and during his recent visit the PM had announced another PKR 25Bn development project. Dawn. Govt to release PKR 120Bn to ministries for development spending in July-Sept Government will disburse more than PKR 120Bn to ministries and divisions under PSDP during the 1QFY18, meeting around 30% of the annual allocation of PKR 377.9Bn for them. Federal PSDP for FY18 has been estimated at PKR 1,001Bn, out of which PKR 377.9Bn has been earmarked for federal ministries/divisions. Total PSDP size has been estimated at PKR 2,113Bn for FY18. Releases are subject to project-wise information update in project monitoring and evaluation (PME) system. Cases for authorizing releases of funds would only be considered after ensuring that the projects authorized have updated the progress in PME system. The News. IBRD won’t suspend support to projects World Bank’s spokesperson has said that the International Bank for Reconstruction and Development (IBRD) will not suspend financial support to ongoing projects in Pakistan, even if the country becomes ineligible due to failure in meeting the laid down criteria. However, budget support for any country is linked to maintenance of an adequate macroeconomic policy framework, as determined by the World Bank with inputs/assessment from the IMF. Continued decline in foreign exchange reserves is posing a serious threat to Pakistan’s eligibility for getting financial support from IBRD in the coming years. BR. Profit margins of OMCs: Ogra opposed to proposed deregulation Ogra is strongly opposed to the proposed deregulation of profit margins of Oil Marketing Companies (OMCs) and petroleum dealers, fearing that the move will encourage them to form a cartel and fix retail prices at the expense of consumers. In this regard, Ogra has recommended that the govt. continues the existing mechanism which was established to set profit margins of OMCs and dealers based on the Consumer Price Index (CPI). However the final decision would be made at an Economic Co-ordination Committee (ECC) meeting which is yet to be scheduled. BR. Monthly forex returns: ADs told to stop submitting hard copies to SBP-BSC SBP has announced that it is doing away with the submission requirement of hard copies of of summary statements, schedules, Electronic Import Forms, Electronic Forms E, M Forms, R Forms and Inward Remittance Vouchers (IRVs). In this regard, it has been decided to dispense with the requirement for submission through monthly returns to the area offices of SBP-BSC from Aug.’17 onwards. All other terms and conditions on the subject shall remain unchanged. BR. Domestic consumers likely to receive more gas in winter As the ECC is likely to withdraw the allocation of 155mmcfd locally produced gas to a consortium of four fertiliser plants in Punjab (now being run on imported LNG), the government hopes it will be able to enhance supplies to domestic consumers in the upcoming highdemand winter season. However, it is also being suggested that the domestically produced gas should be diverted to public sector power plants, which will reduce electricity load-shedding and bring down consumer tariff as power plants will switch to the cheaper fuel. Tribune. Maple Leaf to raise PKR 4.28Bn in right issue th \ Maple Leaf Cement Factory, the 4 largest cement-maker in Pakistan, has decided to raise PKR 4.28Bn from the Pakistan Stock Exchange (PSX) to partially finance the cost of an additional dry process clinker production line. Its board of directors has recommended to issue 65,966,740 right shares to the existing ordinary shareholders of the company at a price of PKR 65 per share in proportion of 12.50 right shares for every 100 ordinary shares held. Tribune. PKR 63.78Mn approved for Kotri effluent treatment plant The Sindh government has approved PKR 63.78Mn for the completion of the Combined Effl uent Treatment Plant (CET) at Kotri while 5 more such plants at a cost of PKR 11,390Mn will be installed in SITE, Trans-Lyari, Federal B Area/North Karachi, Landhi/ Korangi and Highway SITE Phase II. This was stated at a meeting held at CM House regarding the installation of an effluent treatment plant in compliance with Supreme Court orders. Dawn. Stocks hammered as panic-selling continues Stocks fell sharply on 15 Aug‘17 with the KSE-100 index taking a deep plunge of 1,389 points (3.07%) to close at 43,899.45. Developments over the long weekend further muddled the political atmosphere, spooking investors who decided to take profit. Individuals sold shares worth $ 3.13Mn while mutual funds offloaded equities valuing $ 5.87Mn. However, foreign investors bought shares worth $ 3.2Mn. Dawn. Broadband outage in Site area irks industrialists PTCL’s landline telecommunication system in Site industrial area has collapsed since the recent rain spell. Around 70% services to the industries have been affected whereby the landlines and broadband have gone out of order. The management of PTCL appears negligent toward resolving the issue. No efforts have so far been made by the PTCL officials to rectify the faults. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 15-Aug 15-Aug 15-Aug 15-Aug 15-Aug 15-Aug 15-Aug 15-Aug 15-Aug 15-Aug PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.40 106.80 43,899 3.20 47.86 1,272.3 43,500 16.63 6,698 6.15% 4-Aug $ Bn 20.00 0.01% 0.00 -3.07% NM** 0.40% -0.77% -0.39% -2.58% -2.35% -0.01% WoW -1.38% YoY 16.04% 10.58% 36.74% -55.46% -148.57% 4.58% USD-Interbank USD-Open MKT KSE-100 index FIPI Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-17 Remittances $ Bn 1.54 Jul-17 Exports* $ Bn 1.63 Jul-17 Imports* $ Bn 4.84 Jul-17 Trade Balance* $ Bn -3.20 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 2.91 Jul-17 Avg. CPI-FY17* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 145 GBP, 15-Aug-17, 136.0 135 125 EUR, 15-Aug-17, 123.8 115 105 95 Aug-16 USD USD, 15-Aug-17, 105.4 Nov-16 GBP EUR Feb-17 May-17 Aug-17 Source: KCCI Research ; Oanda.com Quote of the Day "If you will work in co-operation, forgetting the past, burying the hatchet, you are bound to succeed." Muhammad Ali Jinnah Chart of the Day Per Capita Income in Pakistan (FY08-FY17) 1800 1600 1,334 1,274 1,320 1400 1200 1,389 1,514 1,531 1,629 1,053 1,026 1,072 1000 800 600 400 200 0 KTBA demands return forms in MS Excel Tax experts have urged FBR to release the draft return forms for individuals and associations of persons (AoPs) for FY17 in the MS Excel format. Specialists would not be able to check the proposed changes and give feedback without getting the draft forms in the MS Excel (Value in US $) Source: KCCI Research, Economic Survey format. Forms have to be filled out on the Integrated Risk Information System (IRIS) or MS Excel to identify any issues. The last date for the filing of income tax returns by individuals is 31st Aug. The deadline for trading entities and manufacturers or firms with various Disclaimer sources of income is 30th Sep. However, usually these deadlines are extended several times every year. Dawn. 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 China’s debt on a dangerous trajectory, warns IMF sources believed to be reliable and in good faith. Such information has not been independently China’s massive debt is on a “dangerous” path, raising the risk of a sharp slowdown in growth, the IMF warned, urging Beijing to speed verified. icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' up structural reforms. IMF, which has repeatedly warned China over its ballooning debt, said in a new report that the world’s second understanding of the news item. The R&D Dept. bears no responsibility for its correctness or largest economy must turn toward a sustainable growth path. Dawn. accuracy. Contact: res@kcci.com.pk