Pakistan Daily Economy Update - 16 February

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1. Feb . 16, 2017 KCCI - eBulletin 14th ‘My Karachi - Oasis of Harmony’ to begins on April 7 BMG Chairman and former president of the KCCI Mr. Siraj Teli has announced that preparations are in full swing for staging the 14th My Karachi - Oasis of Harmony Exhibition 2016 in a vivid and lively manner, which will start on April 7, 2017 and conclude on April 9, 2017 at the Karachi Expo Centre. Daily Times. Jul.-Jan.’17 FDI up by 10% Foreign Direct Investment (FDI) has posted 10% increase during 7MFY17 as the country fetched $ 1.16Bn compared to $ 1.06Bn in the same period last year. During the period under review, FDI inflows stood at $ 1.46Bn against outflow of $ 297Mn. The portfolio investment witnessed a downward trend declining by 13%. Portfolio investment stood negative at $ 354.7Mn in Jul.-Jan.’17 compared to the outflow of $ 313.7Mn in the corresponding period of last fiscal year. Similarly, foreign public investment surged by 125% to $ 1.02Bn at the end of Jan.’17. BR. Fresh estimates: Census cost soars to PKR 30.24Bn According to the fresh estimates, PKR 30.24Bn would be required for census against the earlier estimates of PKR 14.5Bn. However officials have expressed ignorance about escalation but acknowledged there would be some increase. The international observers from western countries and UN would be invited to observe the process and all focus is on the aspect of lending credibility to the census. There is also punishment and financial plenty for giving wrong information of households during the census. There would be 120,000 people from civil side, other than 200,000 army men, in the census whose first phase would begin on Mar. 15, 2017 and conclude on Apr. 15, 2017. BR. Petrol, HSD prices rise by PKR 1 per litre Finance Ministry has increased petrol prices by PKR 1, from PKR 70.29/liter to PKR 71.29/liter and price of High Speed Diesel from PKR 79.48 per liter to PKR 80.48 per liter starting from Feb. 16, till midnight on Feb. 28, 2017. However, price of kerosene and Light Diesel Oil (LDO) have been kept unchanged at PKR 43.25 and PKR 43.34 respectively. BR. Shanghai Electric’s acquisition: K-Electric deal hangs in balance over pending dues Pakistan has not yet given the National Security Clearance Certificate for the sale of Abraaj Group’s 66.4% stake in KElectric (KEL) to Shanghai Electric Power, owing to a disagreement over almost $ 1Bn dues the utility company does not want to pay to the govt. K-Electric has requested the federal govt. to set aside claims roughly worth PKR 98Bn or about $ 1Bn, according to the Ministry of Finance. Tribune. Transmission line: PPIB board grants approval to LoI issuance The Board of Directors (BoD) of PPIB (Private Power and Infrastructure Board) have granted approval to issuance of Letter of Interest to +660 kV High Voltage DC Matiari-Lahore Transmission Line Project which is being developed by China Electric Power Equipment & Technology Co Ltd (CET) under the CPEC. The $ 1.5Bn project is not only the first transmission line project being developed by the private sector but it will also be the first ever HVDC transmission line in Pakistan. BR. Ex-post facto approval granted to foreign commercial loans Federal cabinet has reportedly granted ex-post facto approval to foreign commercial loans amounting to $ 2.77Bn borrowed by the Government of Pakistan (GoP) from Nov. 26, 2013 to Sept. 20, 2016. The foreign commercial loans are offered with the condition that taxes applicable in Pakistan would not be borne by the lenders. The option available with GoP is then to either bear the cost of these taxes or to grant exemption from such taxes. BR. Only 25% of allocated budget released for water & power sector Out of the PKR 216Bn allocated for 173 projects for the water and power sector, govt. has released only 25% funds of allocated budget for the water and power sector in the current PSDP during 7MFY17. In a meeting of Water and Power Standing Committee, parliamentary panel has been briefed about the budgetary proposals relating to PSDP for the upcoming FY18. The Nation. Economic Indicators List of Indicators Provinces’ property tax revenue doubles to PKR 4.75Bn in July-Dec Property tax collection by the provinces almost doubled to PKR 4.75Bn during 1HFY17 as the govt’s upward revision in real estate values scaled up contribution to national exchequer. The News. Fast-track construction: Neelum-Jhelum project to be launched on 28th The Neelum-Jhelum hydroelectric project will be ready for inauguration by 28th Feb’17. According to the Wapda, work was completed on the left tunnel connection of the Neelum-Jhelum hydroelectric project in Oct’16. The project’s dry run test is scheduled for Dec’17 while the wet test will be undertaken Feb’18 by initiating electricity generation, earning $ 15Mn in revenue. Tribune. Unit Value Change Daily 15-Feb 15-Feb 15-Feb 15-Feb 15-Feb 15-Feb 15-Feb 15-Feb 15-Feb 15-Feb PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.82 107.30 49,214 1.77 53.58 1,234 43,285 17.97 7,218 6.13% 3-Feb $ Bn 22.03 0.01% -0.05% -1.11% NM** -4.27% 0.51% 0.00% 0.17% 0.00% -0.01% WoW -1.80% YoY 0.00% -3.21% 19.32% -20.29% -92.23% Crude (FE'17) Gold (JA'16) Gold (10g) Local Silver (JA'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-Jan 16 Remittances $ Bn 11.15 Jul-Jan 17 Exports* $ Bn 11.69 Jul-Jan 17 Imports* $ Bn 29.11 Jul-Jan 17 Trade Balance* $ Bn -17.43 Jul-Dec 16 Current Account $ Mn -3,585 % 3.85 Avg. CPI-FY17* Jul-Jan 17 Jan-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 Feb-16 GBP, 15-Feb-17, 130.7 EUR, 15-Feb-17, 111.1 USD, 15-Feb-17, 105.0 May-16 USD Aug-16 GBP Nov-16 Feb-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day “The business enterprise has two — and only two — basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs.” Peter Drucker Mari Petroleum makes second gas discovery in Ghotki Mari Petroleum Company Limited (MPCL) has announced its second consecutive discovery of gas deposits in Ghotki district of Sindh. The discovery was made at exploratory well Shaheen-I in the Mari lease area. (Shaheen-I) flowed at a combined rate of 12.334 mmscfd. Tribune No compensation for illegal structures appearing after 2012 Sindh CM has come down hard on the district administration, police and railway authorities for allegedly conniving with those occupying their land and raising illegal structures along the route of KCR. He declared that those found ‘hand in glove’ with the encroachment mafia would be held accountable. While presiding over a meeting for the removal of encroachments from the KCR route to launch the project in September, CM said the people settled on the government land before 2013 would be given compensation, while no compensation would be paid for the encroachments that appeared during or after 2013. Dawn. Date / Period USD-Interbank USD-Open MKT KSE-100 index FIPI Chart of the Day Major Services Imported by Pakistan (6MFY17) Transport 1,723 Travel 799 Other Business Services 789 Govt. Goods and Services 307 Telecommunications, Computer,… 198 Insurance and Pension Services 131 Financial Services 122 Charges for the use of Intellectual… 120 Maintenance and Repair Services 46 Personal, Cultural, and Recreational… 0 6 500 Value in US $ Mn 1,000 1,500 2,000 Source: KCCI Research, SBP Disclaimer Cotton price hits seasonal high Cotton prices on 15th Feb ‘17 hit to a new seasonal high on sustained demand from needy spinners. Tight supply of quality cotton and strong demand pushed prices higher. The world leading’s cotton markets also remained firm with the New York cotton witnessing profit-selling induced by high prices. Indian cotton prices have risen by up to 13% during the past 45 days. 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 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