Pakistan Daily Economy Update - 17 June

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1. Jun . 17, 2016 KCCI - eBulletin Positive suggestions of MPs to be accommodated in budget: Dar Finance Minister Muhammad Ishaq Dar has directed the Finance Ministry officials’ to ensure that all the positive suggestions and recommendations received during the Parliamentary debate on budget FY 2016-17 are accommodated in the budget. The budget 2016-17 aims at further strengthening the economy with particular focus on inclusive growth and development of the industrial and agriculture sectors. In this regard, active liaison has also been maintained with different stakeholders including experts, think tanks, chambers of commerce and industries and business community to ascertain their point of view on the budget. The Nation. Economic Indicators Date / Period Unit Value USD-Interbank List of Indicators 16-Jun PKR 104.66 Change Daily 0.07% USD-Open MKT 16-Jun PKR 104.80 -0.10% KSE-100 index FIPI 16-Jun 16-Jun Pts. $ Mn 38,752 7.88 0.50% NM** Crude (JU'16) 16-Jun $/bbl 46.66 -2.79% Govt. to withdraw proposed debt-to-GDP ratio amendments The govt. has decided to expunge the proposed amendments into the fiscal responsibility and debt limitation (FRDL) law that envisaged 50% debt-to-GDP ratio from the finance bill 2016/17. The govt. proposed to exclude the public debt contracted by public sector enterprises and publically guaranteed debt. Under the existing law, the public debt should be not more than 60% of GDP, although it is currently about 65% of the GDP. However, the govt. now proposed to amend this clause as well and sought to reduce the public debt to 60% of the GDP by the end of June 2019. The News. Gold (MY'16) 16-Jun $/oz 1,281.9 -0.90% Gold (10g) Local 16-Jun PKR 42,083 -5.33% Silver (MY'16) 16-Jun $/oz 17.22 -1.80% Cotton(KHI)-40 kg 16-Jun PKR 6,039 0.00% Kibor-6M 16-Jun % 6.12% 0.00% Forex Reserves 10-Jun $ Bn 21.42 0.75% Senate clears corporate restructuring bill The Senate passed the Corporate Restructuring Companies Bill 2016 on 16-June-2016. It had been earlier passed by the National Assembly. The bill provides for the establishment, licensing and regulation of corporate restructuring companies and the manner in which they can carry on business. Dawn. Remittances Jul-May 16 $ Bn 17.84 5.58% Exports* Jul-May 16 $ Bn 19.15 -12.39% 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% Traders urged Pakistan, Afghanistan to resolve Torkham gate issue The shopkeepers and wholesalers of daily commodities in Landikotal and Torkham have urged Pakistan and Afghan govts. to resolve the gate installation issue, as their businesses are going in losses due to the closure of Torkham border for the last four days as 90% of customers are from Afghanistan. The foods and other commodities being made in Pakistan has a good market in Afghanistan and shopkeepers in Marco, Nazyan, Ghanikhel, Dakah, Goroko and Lalpura bazaars visits Landikotal for purchasing items of daily usage worth millions of rupees. The daily sale of a shop in Landikotal was around PKR 0.1Mn before the border was closed however it has come down to PKR 10,000 to 15,000 only. The Nation. Fertilizer companies to bear price cut of PKR 50 per bag In compliance with the government's announced subsidy, the fertilizer manufacturing companies have agreed to partially bear a price cut of PKR 40 to PKR 50 per bag, decreasing the ex-factory (retention) prices to PKR 1,430/bag from PKR 1,480/bag. In the federal budget for 2016-17, government has proposed to reduce the urea bag retail price PKR 350 to PKR 1,400, which would be effective from July 1 vis-à-vis proposed subsidy allocation of PKR 36 billion along with reduction in general sales tax (GST) from 17 % to 5 %. In this instance, just as in the past, the federal and provincial governments would pay the cost of the subsidy, which would be PKR 36 Bn, in equal shares. Daily Times. PKR 3.27/unit cut in power price recommended Central Power Purchasing Authority (CPPA) has recommended reducing price of power for May.’16. The authority has recommended cutting price by PKR 3.27/unit. National Electric Power Supply Company stated that production cost of electricity has decreased after record reduction in price of furnace oil. The Nation. WoW 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, 16-Jun-16, 146.6 155 145 135 EUR, 16-Jun-16, 116.3 125 115 105 95 USD, 16-Jun-16, 103.5 85 75 Jun-15 Sep-15 USD GBP Dec-15 Mar-16 EUR Jun-16 Source: KCCI Research ; Oanda.com Quote of the Day Forex reserves rise to $ 21.41Bn The total liquid foreign reserves held by the country stood at $ 21.42Bn on Jun. 10, 2016 as against reserves of $ 21.26Bn in the preceding week. During the week, SBP's liquid FX reserves increased by $ 83Mn to $ 16.55Bn compared with $ 16.46Bn in the previous week. Similarly, reserves held by the commercial banks were recorded at $ 4.87Bn on Jun. 10, 2016 as against $ $ 4.80Bn last week. The Nation. "It is not the employer who pays the wages. He only handles the money. It is the product that pays the wages." Additional 1,000MW to be imported from Tajikistan Pakistan will import an additional 1,000 megawatts of electricity from Tajikistan outside the Casa-1000 project, a meeting of the Pakistan-Tajikistan Joint Commission on Trade, Economic and Scientific Cooperation agreed. Dawn. Chart of the Day Savings portfolio: Outstanding deposits amount to PKR 9.6Tn Outstanding deposits in the banking system amounted to PKR 9.6Tn at the end of May, up 5.2% from the beginning of 2015-16. According to the SBP, almost half of the increase of PKR 478.4Bn in total deposits during the last 11 months originated from growth in the personal deposits category. Whereas, personal deposits accounted for 50.6% of total deposits in 11MFY16. Tribune. SECP registers 641 companies in May SECP has registered 641 new companies in May, which were 50% higher than the firms registered in same month of the last year. During the 11MFY16, the commission registered 5,626 new companies, an increase of 24% over the corresponding period last year. Around 88% companies have been registered as private limited companies, while around 8% were registered as single-member companies. Whereas, 4% of the companies were registered as public unlisted, association’s not-for-profit and foreign companies. The News. Bahria Town Karachi signs $ 300Mn agreement to revolutionize healthcare sector Bahria Town Karachi, Asia’s largest private real estate developer, and Bait Al Batterjee Medical Company (BAB), a MENA market leader in healthcare facilities, have signed a historic collaboration agreement. Under the agreement, the parties will work together to sign binding definitive agreements at the earliest, which will cover BAB building new state-of-the-art hospitals in Lahore, Karachi and Islamabad, according to a time schedule to be agreed by both parties. Arrangements will be sought with the Middle East Healthcare Company (“MEAHCO”), a subsidiary of BAB, to operate the hospitals under the Saudi German Hospitals Brand. The Nation. Henry Ford BREAK-UP OF BUDGETED FBR TAXES(FY12-FY17) 2.50 2.06 2.00 1.57 1.50 1.00 1.50 1.33 0.74 1.63 1.18 1.76 1.56 1.35 0.98 0.93 0.50 0.00 2011-12 2012-13 2013-14 Direct Taxes Value in PKR Tn 2014-15 2015-16 2016-17 Indirect Taxes Source: KCCI Research, MoF 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