Pakistan Daily Economy Update - 17 February

Transcription

1. Feb . 17, 2018 KCCI - eBulletin Pakistan could face economic pain from return to terrorist financing ‘grey list’ The prospect of Pakistan being placed back on a global terrorist financing watchlist could endanger its remaining banking links to the outside world, causing real financial pain to the economy. The US and its European allies have co-sponsored a motion calling for Pakistan to be placed on a "grey list" of countries deemed to be doing too little to comply with anti-terrorist financing and antimoney laundering regulations, with a decision expected next week when member states of the Financial Action Task Force (FATF) meet in Paris. Being placed on the FATF watchlist carries no direct legal implications, but brings extra scrutiny from regulators and financial institutions that can stall trade and investment and increase transaction costs. The News. Banks’ foreign transaction costs may spike on FATF relisting Banks could see a sharp increase in costs of their foreign transactions if the country is placed on an international terrorismfinancing watchlist, but the SBP sounds sanguine on its well-placed regulations to combat financial crimes. Every financial transaction, especially remittances could go through a stricter monitoring and extra checks, thus increasing banks’ compliance costs related to human resource and automation while also resulting in delays in payments. The News. Abbasi gives go-ahead to PIA, PSM privatization PM Shahid Khaqan Abbasi has given the formal go-ahead for the privatisation of two major yet loss-making state-run entities — PIA and the Pakistan Steel Mills. He granted the related approval while presiding over a meeting of the Cabinet Committee on Privatisation (CCoP). The development takes place at a time when the govt. has expedited the process to privatise state-run entities — including the Civil Aviation Authority (CAA) — a move that has raised eyebrows given that CAA, contributes up to PKR 60Bn to the national exchequer annually. Tribune. PSEs debt swells to PKR 238Bn over reforms absence Debt of the Public Sector Entities (PSEs) has swelled by PKR 237.8Bn to PKR 888.8Bn in 1HFY18 as compared to PKR 651Bn a year ago, showing an increase of 36.5% due to the govt.'s failure to bring reforms in the ailing PSEs. The debt is increasing at rapid pace as ailing PSEs could not meet its expenses due to their heavy losses. The Nation. Debt: Pakistan borrows another $ 500Mn from Chinese bank Pakistan has contracted another foreign commercial loan of $ 500Mn from the Industrial and Commercial Bank of China (ICBC), taking the Chinese financial institution’s contribution to $ 1Bn in just three months. It had also given $ 500Mn in Oct’17. The govt. contracted the loan on 15th Jan’18 at a rate in the range of 4.5%. In Jan’18 alone, the govt. took a total of $ 704Mn worth of new loans, taking foreign borrowings to $ 6.6Bn in 7MFY18. China has emerged as the single largest lender, providing a total of $ 1.6Bn during the period. Tribune. Import of used cars: what has paved the way for reverting ECC decision? A recent development in automotive market has paved the way for reverting ECC's decision regarding import of 3-year-old used cars. The Commerce Division had decided that for all vehicles in new/used condition to be imported, the duty and taxes will be paid out of foreign exchange arranged by Pakistan Nationals themselves or local recipient, supported by bank encashment certificate showing conversion of foreign remittance to local currency. Interestingly, prices of local manufactured cars have increased considerably after this decision. Moreover, more than 7,000 imported cars are being held at different ports. BR. Furnace oil imports resumed After a 3-month moratorium, the govt. has ordered Pakistan State Oil (PSO) to arrange import of 180,000 tonnes of furnace oil for the power sector, particularly for Karachi. The directive came as the country’s largest fuel supplier is struggling to recover around PKR 335Bn receivables mostly from the public sector entities. While the fresh imports are being considered ‘one-off’, PSO has been asked not to entertain any direct import orders from the power companies or the power division and route their request through the petroleum division for formal approval from the cabinet committee on energy. Dawn. Furnace oil-fired plants maintain 75-day cover stocks of fuel: PM PM Abbasi has directed that oil based power plants should maintain 75-day cover stocks of fuel in case of non-availability of RLNG. In this regard, PSO is continuously taking furnace oil receipts from local refineries without fail. Moreover, average consumption of \ PSO supplied HSFO power plants in Jan.’18 is more than 9,000 MT per day. BR. Finance divisions: MoF proposes over PKR 17Bn PSDP for 36 projects Finance Ministry has proposed PKR 17.05Bn PSDP allocation for 10 projects of Finance Division and 26 projects of provincial finance divisions for FY18. Out of the total 36 projects, Finance Division projects of PKR 6.87Bn with foreign exchange component of PKR 4.56Bn has been finalized including Debt Management Strengthening Program at Finance Ministry with the cost of PKR 112.42Mn. An allocation of PKR 9.56Bn has been made for the Greater Karachi Water Supply Scheme (K-IV) project. Seven projects of PKR 3.23Bn have been finalized for Sindh. BR. Three Islamic standards for investments okayed The Securities and Exchange Commission of Pakistan has granted approval to its Islamic Finance Department for the adoption and notification of three more international standards for Sharia-compliant investments. The notified Shariah standards Investment Sukuk, Possession/Qabz and Agency and the Act of an un-commissioned agent/Fodooli. Dawn. Customs launches online solution Pakistan Customs has successfully launched the online solution for duty and tax payment for goods clearance. In this regard, a User Acceptance Test (UAT) of e-payments was conducted where first goods declaration was processed successfully and duty and taxes were paid through the online system. The FBR, SBP, and 1-Link had earlier signed an MoU to develop a mechanism enabling the public to pay FBR taxes and customs duty using internet banking or ATMs. The News. Gulfood Expo 2018 to get a taste of Pakistan With support from USAID, 13 Pakistani agribusinesses will showcase high-quality halal meat, off-season vegetables, and kinnow mandarins at Gulfood Expo 2018 from 18th —22nd Feb’18 in Dubai. Drawing more than 95,000 visitors and 5,000 exhibitors from over 120 countries, the Gulfood Expo is a leading international event for the global agriculture industry. In addition, USAID has organised a four-day market exposure visit for nine Pakistani women entrepreneurs. Daily Times. Pak-UAE property show in April A three-day Pak-UAE property show and international symposium would be held from 26th- 28th Apr’18 at Pak-China Friendship Center in Islamabad to order to promote investment opportunities in real estate and construction industry of the country. The event aims to bring together developers, real estate brokers, private investors and institutions and is likely to be attend by foreign exhibitors and investors. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 16-Feb 110.40 111.55 0.00% -0.27% Crude (MA'18) 16-Feb 16-Feb 16-Feb 15-Feb PKR PKR Pts. $ Mn $/bbl 43,627 5.95 61.44 1.59% NM** 1.42% Gold (MA'18) Gold (10g) Local 15-Feb 16-Feb $/oz PKR 1,354.9 48,685 0.16% 0.09% Silver (MA'18) Cotton(KHI)-40 kg 15-Feb 16-Feb $/oz PKR 16.86 7,502 0.06% 0.00% Kibor-6M 16-Feb % 6.42 $ Bn 18.97 0.00% WoW -1.12% Remittances 9-Feb FY18 Jul-Jan 18 $ Bn 11.38 YoY 3.55% Exports* Imports* Jul-Jan 18 Jul-Jan 18 $ Bn $ Bn 12.97 34.51 11.11% 18.92% Jul-Jan 18 Trade Balance* $ Bn -21.55 Jul-Dec 17 Current Account $ Mn -7,413 Foreign Direct Inv. $ Bn 1.49 Jul-Jan 18 Jul-Nov 17 LSM Growth* % 7.19 % 3.85 Jul-Jan 18 Avg. CPI Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -24.18% -59.08% -2.94% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Major Currencies 165 GBP, 16-Feb-18, 155.7 155 145 EUR, 16-Feb-18, 138.0 135 125 115 105 95 Feb-17 USD, 16-Feb-18, 110.6 May-17 GBP USD EUR Aug-17 Nov-17 Source: KCCI Research ; Oanda.com Quote of the Day "The ability to focus attention on important things is a defining characteristic of intelligence." Robert J. Shiller Chart of the Day Sea Freight Costs paid by Pakistan 3 2.5 2.28 2.38 2.43 2.04 2 1.50 1.5 1.07 1 0.5 0 FY13 FY14 FY15 Figures in $ Bn FY16 FY17 1HFY18 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