Pakistan Daily Economy Update - 16 March

Transcription

1. Mar . 16, 2017 KCCI - eBulletin Prime Minister directs early completion of Gwadar projects Prime Minister Muhammad Nawaz Sharif has directed to complete all development projects in Gwadar at the earliest. In this regard, he said that the govt. would allocate an ample amount in the upcoming budget for construction and expansion of dams in Gwadar and its adjoining areas to overcome water shortage. Prime Minister Nawaz Sharif travelled on the newly built 136km long Pasni-Gwadar road to personally inspect the quality and development work which is part of the Makran Coastal Highway project. BR. FBR decides to conduct national survey of retailers FBR has decided to conduct a national survey of retailers to collect information of all retail outlets across the country. In this regard, FBR is planning to prepare a Digital Directory of the retail outlets for which a Geo Tagging and Mapping of the retailers would be carried out. It will include existing business data which will be tagged and mapped along with the marking of the target routes; additional information regarding category and classification will be accurately captured for each entity marked on Google Maps and visual display of distribution network. BR. KCCI chief opposes export of sugar President, Karachi Chamber of Commerce and Industry (KCCI), Shamim Ahmed Firpo has urged govt. to refrain from allowing sugar exports as it will escalate prices in the local markets. The President KCCI said that initially sugar producers seek export permission and later on, ask for subsidies. The current sugar price in local markets is PKR 60/kg, whereas its price in the international market is $ 489/ton-i.e., PKR 50/kg. He said that in order to protect the industry, govt. has already imposed a 20% customs duty and a 20% regulatory duty to discourage import of cheaper sugar. BR. Fiscal Year 2018 current expenditure likely to receive boost Current expenditure is expected to receive a boost in upcoming budget FY18, forecasted to be between PKR 4.31Tn to PKR 4.35Tn and a minimum of PKR 50Mn to be allocated to each parliamentarian for development work in their constituencies. Gencos with an operating capacity of less than 29% would be brought on board through massive subsidies. The increase in federal PSDP maybe higher by PKR 100125Bn. It is also likely that Finance Ministry would enhance reliance on very short term commercial borrowing - at very high rates of return, and issuance of bonds/sukuk internationally again at rates well above the market rate. BR. Govt. proposes PKR 700Bn as PSDP allocation for FY18 The finance ministry has proposed the ministry of planning, development and reforms to allocate PKR 700Bn under the public sector development programme (PSDP) for FY18 as against PKR 655Bn for FY17, up 6.87%. The News. Circular debt in petroleum reaches PKR 272.3Mn: Khaqan The Petroleum Minister Shahid Khaqan has informed the National Assembly that circular debt in petroleum sector has reached PKR 272Mn. He said that receivable from power sector has soared to PKR 231Mn where PIA has to pay PKR 15Mn, while arrears in LNG and SNGPL are around PKR 41Mn. The Minister further said that govt. has instructed the Ministry to ensure uninterrupted supplies to WAPDA, HUBCO and KAPCO to avoid power crisis in the country. However, Ministry could not make timely payments to PSO against supplies which resulted in considerable accumulation of receivables against these entities. The Nation. Circular debt spills over into entire fuel supply chain Power sector circular debt has for the first time spilled massively over into the entire fuel supply chain. Furnace oil stocks in storages stood at more than 800,000 tonnes, the highest in history and enough for 40 days of average consumption due to which refineries are cutting their capacity utilization that will cause shortage of other by-products. On the other side, independent power producers’ claims of over PKR 414Bn, non-payments to oil companies are reported to be in excess of PKR 300Bn, including PKR 270Bn receivables of the PSO alone. Dawn. FBR wants to finish audit process by next month The FBR has launched an auditing drive for a maximum revenue generation to reach the collection target of PKR 3,621Bn for FY17. The tax departments simultaneously launched audit proceeding under various heads of Income Tax Ordinance 2001, Sales Tax Act 1990 and Federal Excise Act 2005. Tax departments are trying to complete the process by Apr’17 in order to give statutory time period to taxpayers before initiating recovery proceedings. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 15-Mar 15-Mar 15-Mar 15-Mar 15-Mar 15-Mar 15-Mar 15-Mar 15-Mar 15-Mar PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.85 106.50 48,306 -6.50 49.55 1,219 42,857 17.30 7,433 6.12% 3-Mar $ Bn 22.15 0.01% -0.23% -0.48% NM** 1.00% 1.73% -0.40% 2.63% 2.21% 0.00% WoW 1.50% YoY -2.52% -3.90% 15.99% -34.33% -90.24% USD-Interbank USD-Open MKT KSE-100 index FIPI Crude (MY'17) Gold (MA'17) Gold (10g) Local Silver (MA'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves Jul-Feb 17 Remittances $ Bn 12.36 Jul-Feb 17 Exports* $ Bn 13.32 Jul-Feb 17 Imports* $ Bn 33.52 Jul-Feb 17 Trade Balance* $ Bn -20.20 Jul-Jan 17 Current Account $ Mn -4,716 % 3.85 Avg. CPI-FY17* Jul-Feb 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 Mar-16 GBP, 15-Mar-17, 128.0 EUR, 15-Mar-17, 111.5 USD, 15-Mar-17, 104.9 Jun-16 USD Sep-16 GBP Dec-16 Mar-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day Govt commits reform for border trade facilitation Commerce Minister while announcing a reform strategy for cross-border movement of goods under the Trade Facilitation Agreement has said that the agreement would help facilitate, simplify and modernize international trade among WTO members. All the reforms that Pakistan committed in category A have already been implemented after the ratification of the agreement. The proposed commitment for reforms mostly related to customs under B and C categories. Dawn. ''To educate a man in mind and not in morals is to educate a menace to society." Border tension costing millions to Kabul, Islamabad The closure of the border between Pakistan and Afghanistan is not only inconvenient but it is costly too. One month closure has resulted in hundreds of thousands of dollars in lost trade, and tonnes of perishable goods have rotted in stranded trucks. Traders says that annual trade target of $ 2Bn has plunged to $ 1.5Bn because of frequent border closures. The real potential, if the two neighbors could get along, is up to $ 4Bn in annual trade. Dawn. Chart of the Day Hubco to divest 40% shares in Thar Energy FFC has been offered 30% strategic shares in Thar Energy Limited by Hub Power, its wholly-owned subsidiary and 10% equity interest in the project to the China Machinery Engineering Company taking its total divestment to 40%. TEL is a 330MW local coal-based power plant located in Thar coal block II. The board of FFC has authorized the company to proceed with negotiations for terms and conditions and execution of definitive shareholders agreement. The total cost of the TEL project is $ 497.7Mn. Dawn. Fed hikes key rate for second time in 3 months The Federal Reserve has raised its benchmark interest rate for the second time in third months and signaled that any further hikes this year will be gradual. The move reflects a consistently solid US economy and will likely mean higher rates on some consumer and business loans. The Fed raised its target for the federal-funds rate by 25 basis points (0.25 % points) to a range of 0.75% to 1.00%. Dawn. Figures indicate rankings 0 0 0 India 0 Disclaimer 0 Enforcing Contracts Paying Taxes Value Trading across Borders Pakistan 0 27 13 Protecting Minority Investors Registering Property 50 Getting Credit 44 26 136 85 82 100 0 172 172 172 157 156 143 169 138 Resolving Insolvency 170 Getting Electricity State Bank sells treasury bills worth PKR 278.4Bn SBP has sold PKR 278.4Bn worth of market treasury bills at the latest auction, while yields remained stable. The central bank sold PKR 138.8Bn worth of 3 months treasury bills at a cut-off yield of 5.94%, unchanged from the previous auction. It sold PKR 139.6Bn of 6-month paper at 5.98%, the same as the previous auction. However, it rejected the bids for the 1-year paper. The raised amount was lower than the target of PKR 350Bn. The News. 150 155 150 141 Dealing with Construction Permits SBP pays PKR 13.16Bn in DAP, urea subsidies SBP has so far paid PKR 4.25Bn for diammonium phosphate (DAP) and PKR 8.90Bn for urea to settle the subsidy claims and the remaining payment cases for FY17 are under the verification process. The govt. had announced subsidy of PKR 300 per bag of DAP and PKR 156/bag of urea fertilizer during FY17. Total subsidy of PKR 27.96Bn was allocated for the entire subsidy scheme, including PKR 17.16Bn for urea and PKR 10.80Bn for DAP phosphate fertilizer on equal sharing of federal and provincial govt. The News. 200 Comparision of Pakistan and India in Ease of Doing Business (2017) 185 Starting a Business $200Mn World Bank loan for renewable energy project WB has initiated the process to approve a credit of $ 200Mn for increasing the installed generation capacity of renewable energy and enhance its development in Pakistan. The project, which will cost $ 300Mn, will also receive a loan of $ 100Mn from the Green Climate Fund. Dawn. Theodore Roosevelt Source: KCCI Research, WB 0 0 0 0 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