Pakistan Daily Economy Update - 16 June

Transcription

1. Jun . 16, 2016 KCCI - eBulletin Roadmap readied to achieve 7% growth rate over the next three years: Dar KSE-100 index passed several landmarks as the news of Pakistan upgrade to MSCI Emerging Market from MSCI Frontier Market Index gave a big boost to investor sentiments where 1,042-point rally helps index settle at record 38,560. After reclassification by the US analytic firm, Pakistan is likely to receive about $ 475Mn foreign portfolio investment in the next one year. Terming it a historic event, Finance Minister Ishaq Dar has said that govt. has chalked out a roadmap for next three years to achieve GDP growth as high as 7%. In this regard, measures will be taken to raise the foreign exchange reserves to $ 30Bn, fix the fiscal deficit below 4% of GDP and maintain the inflation within single digits. Dawn, Tribune, BR. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank 15-Jun PKR 104.59 -0.08% USD-Open MKT 15-Jun PKR 104.90 0.00% KSE-100 index FIPI 15-Jun 15-Jun Pts. $ Mn 38,560 2.72 2.78% NM** Crude (JU'16) 15-Jun $/bbl 48.00 -1.01% Gold (MY'16) 15-Jun $/oz 1,293.5 0.46% Finance Bill: Dar pledges to accommodate recommendations: NA body Finance Minister Ishaq Dar has assured Finance Standing Committee that govt. would accommodate its recommendations in the amended Finance Bill 2016. The recommendations include maintaining zero rating on dairy and milk products; reducing customs duty on phthalic anhydride from 16% to 11%, providing a level-playing field to commercial & industrial importers, exempting agriculture machinery from sales tax and waiving off 10% GST on purchase of tractors; maintaining zero rating on rice export, reviewing increase in tax duty (55 paisa per kg) on Cement Industry; maintaining zero-rating on stationery from sales tax, and their inputs be zero-rated from Customs Duty by placing the items in Chapter 99 of Pakistan Customs Tariff. BR. Gold (10g) Local 15-Jun PKR 44,453 5.84% Silver (MY'16) 15-Jun $/oz 17.54 0.74% Cotton(KHI)-40 kg 15-Jun PKR 6,039 0.00% Kibor-6M 15-Jun % 6.12% -0.01% 3-Jun $ Bn 21.26 -1.57% Remittances Jul-May 16 $ Bn 17.84 5.58% Exports* Jul-May 16 $ Bn 19.15 -12.39% Exporters hold consignments for zero-rating notification Exporters have put a large number of consignments on hold in the hopes of a notification on zero-rating sales tax regime, announced by Finance Minister Ishaq Dar in Budget 2016/2017. Despite prior budget announcement, the Finance Ministry and FBR have not issued any notification for zero-rating of five export sectors. According to the exporters, they were experiencing technical difficulties getting zero rating exemption as the custom authorities were not cooperating with the exporters since no SRO had been issued by FBR in this regard and a large number of export consignments have been withheld by exporters. The News. Imports* Jul-May 16 $ Bn 40.32 -2.74% Trade Balance* Jul-May 16 $ Bn -21.17 -7.28% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-May 16 $ Mn % -1,519 2.82 17.71% Group taxation relief: Govt. under pressure to withdraw proposed restrictions The govt. appears to be under immense pressure to withdraw proposed restrictions on the relief of group taxation which is passed by the National Assembly, may result in delisting of companies from capital markets and could compromise transparency. In budget 2016-17, the federal govt. has proposed to impose restrictions on big businesses, limiting their relief in taxation on inter-corporate dividend income and the right to exchange group’s losses with profits of the subsidiaries. The proposal is aimed at generating over PKR 4Bn in additional taxes for the FBR. However, Finance Minister Ishaq Dar has not yet made any decision whether to withdraw the proposed restrictions. Tribune. Indian cotton: Senate body recommends RD on import Food security and research standing committee has recommended imposition of Regulatory Duty on cotton bale import from India as import of cotton lint from India via Wagha border, despite sufficient stock in the country, would adversely affect cotton growers. Presently approximately 400,000 cotton bales are available in the country. The main reason behind cotton import from India is that India gives subsidies on export of all surplus commodities which is not available to farming community in Pakistan. BR. Finance Bill: SECP, FBR agree on some proposed amendments SECP and FBR have agreed on some proposed amendments in the Finance Bill 2016 to remove anomalies, uniform tax treatment to different sectors, encourage listing of companies and incentives for specific sectors. In this regard, SECP Chairman has said that FBR has proposed the rate of collection of tax by stock exchange on purchase and sale of shares to be increased from 0.01% to 0.02% as per Clause (a) and (b) of Sub-section (1) of Section 233A of the Income Tax Ordinance, 2001. However this proposal has not been floated by the SECP. BR. Eid-related shopping to hit PKR280Bn, say traders Shopkeepers and traders of Karachi are said to be investing over PKR90Bn while those in Lahore are expected to put half of that amount for stocking shops for customers at Eidul Fitr. Traders of Karachi and Lahore expect cumulative Eid sales of more than PKR 70Bn and PKR 35Bn, respectively. Dawn. Textile exports dip by 7.72% The Minister for Commerce, Khurram Dastigir Khan, said that the country's textile exports had witnessed a negative growth of 7.72% during the first ten months of the current fiscal year compared to the corresponding period of last year. Textile exports were recorded at $ 10.39Bn during July-April 2015-16, compared to $ 11.26Bn during JulyApril, 2014-15, according to the data of Pakistan Bureau of Statistics (PBS). Daily Times. Disbursements under youth loans soar to PKR 7.4Bn Banks have made fresh disbursements of PKR 1.02Bn to 895 borrowers on account of Prime Minister's Youth Business Loans (PMYBL) scheme during the 1QCY16. With this addition, the cumulative disbursements under PMYBL climbed to PKR 7.43Bn at the end of Mar.’16, recording a growth of 16% over Dec-15 quarter. BR. ECC puts off decision on award of LNG terminal contract The Ministry of Petroleum and Natural Resources has sought approval of the Economic Coordination Committee (ECC) for the award of second LNG terminal contract to the successful bidder. The 2nd LNG terminal will handle the volume of 600 mmcfd to meet needs of the power plants and help eliminate electricity outages in the country. The company invited proposals and published an advertisement for setting up the 2nd LNG terminal for storage and regasification at Port Qasim. It received 2 bids – one from Pakistan GasPort Limited and the other from Akbar Associates Limited. Tribune. List of Indicators WoW Forex Reserves YoY May-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 GBP, 15-Jun-16, 146.8 155 145 135 EUR, 15-Jun-16, 116.7 125 115 105 95 USD, 15-Jun-16, 103.7 85 75 Jun-15 Sep-15 USD Dec-15 GBP EUR Mar-16 Jun-16 Source: KCCI Research ; Oanda.com Quote of the Day "Live daringly, boldly, fearlessly. Taste the relish to be found in competition – in having put forth the best within you." Henry J. Kaiser Chart of the Day Remittance Received by Pakistan (11MFY16) Saudi Arabia 5,381 U.A.E. 3,926 USA 2,290 U.K. 2,263 Others Countries 1,052 Oman 739 Kuwait 692 Behrain 409 Qatar 343 Australia 172 Canada 149 Ireland 125 Germany West 80 0 Value in $ Mn 1,000 2,000 3,000 4,000 5,000 6,000 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