Pakistan Daily Economy Update - 17 June

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1. June 17 , 2021 KCCI - eBulletin State Bank allows fee on interbank fund transfers SBP has allowed banks and other service providers to charge a minimal fee on high-value transactions and has directed banks to provide free of cost digital fund transfer services to individual customers up to, at least, a minimum aggregate sending limit of PKR 25,000 per month per account or wallet. For transactions above the aggregate limit of PKR 25,000 per account in a month, banks may charge individual customers, a transaction fee of no more than 0.1% of the transaction amount or PKR 200. Dawn. Murad says at least PKR 3Tn needed for development of Karachi Sindh CM Syed Murad Ali Shah has said that PKR 990Bn development projects were at different stages in Karachi and now another allocation of PKR 110Bn has been earmarked for new development initiatives in the ADP of FY22. He said that at least PKR 3Tn is required for development of Karachi but the provincial govt. did not have such resources. Dawn. ‘Karachi destroyed through a conspiracy’ Supreme Court has observed that a big conspiracy had been hatched against the people of Karachi and the city has been systematically destroyed. Hearing applications over lack of computerization of revenue record in the province and encroachments of public parks in Karachi, Justice Gulzar Ahmed, directed Board of Revenue to retrieve all encroached govt. lands across the province and restore the lands to its original position within three months. The News. Quitting IMF program not possible now: Tarin Ruling out any disagreement, Finance Minister Shaukat Tarin has said that it is not possible for Pakistan to get out of the IMF program at this time when the economy is reviving. In a testimony before the Senate Standing Committee on Finance he held out an assurance that the language of the proposed section 203-A on powers of taxmen to arrest will be changed and all objectionable things will be removed. Dawn. Coronavirus in Sindh: Minister says people to be fired from jobs for not getting vaccinated People not getting vaccinated for the novel coronavirus in Sindh will be fired from their jobs, Sindh IT Minister Taimur Talpur warned. Not only the mobile SIM cards of those not getting inoculated will be blocked but show cause notices will be issued to these people as well, he said. BR. NA approves Cos (Amend) Bill, 2021 National Assembly has approved the Companies (Amendments) Bill, 2021 to amend certain provisions of Companies Act, 2017, primarily to promote start-ups, business innovation, entrepreneurship and improve general business climate and promote ease of doing business. BR. Govt raises PKR 1.096Tn through T-bills The govt. has raised PKR 1.096Tn through auction of treasury bills and PKR 70Bn through Pakistan Investment Bonds. It raised PKR 388.7Bn against bids of PKR 749Bn for three-month T-Bills at 7.32%. The highest amount of PKR 707.6Bn was raised for 6-month T-bills at 7.6% against bids of PKR 1.11Tn. The smallest amount of PKR 25Mn was raised for 12-month papers at 7.67% against bids of PKR 1.91Tn. Dawn. List of Indicators PKR PKR 156.96 157.25 0.00% 0.16% KSE-100 index FIPI 16-Jun 16-Jun Pts. $ Mn 48,481 -2.17 -0.31% NM** Crude (AP'19) 16-Jun $/bbl 72.15 0.04% Gold (MA'19) 16-Jun $/oz 1,861.4 0.27% Gold (10g) Local 16-Jun PKR 95,850 0.00% Silver (MA'19) 16-Jun $/oz 27.81 0.43% Cotton(KHI)-40 kg 16-Jun PKR 13,182 0.00% Kibor-6M 16-Jun % 7.70 0.00% 4-Jun $ Bn 23.58 WoW 1.22% Remittances Jul-Apr 21 $ Bn 24.25 29.01% Exports* Jul-May 21 $ Bn 22.56 13.96% Imports* Jul-May 21 $ Bn 50.05 22.50% Trade Balance* Jul-May 21 $ Bn -27.49 -30.53% Trade Balance* Foreign Direct Inv. Jul-Apr 21 Jul-Apr 21 $ Bn $ Bn 0.77 1.55 116.60% -32.51% Forex Reserves YoY Jul-Apr 21 LSM Growth* % 12.84 % 8.83 Jul-May 21 Avg. CPI Discount Rate % 7.00 Jul-20 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 235 185 Interprovincial public transport ban lifted Sindh govt. has allowed the resumption of all types of public transport with increased occupancy from 50% to 70% and lifted the two-day ban on interprovincial public transport. The News. Japan concerned at ‘abrupt’ changes in investment procedures Japan is reportedly unhappy with the govt. for what it says abrupt changes in procedures for investment, failure to fulfil agreed commitments and discriminatory treatment against its companies. These concerns were recently conveyed by Senior Deputy Minister for Foreign Affairs, Suzuki Heroshi at 7th Japan Pakistan high-level economic policy dialogue. Japan's priority areas under its "Free and Open Pacific" policy, improvement of economic infrastructure, human security and social infrastructure, peace and stability. BR. Economic growth volatile over past half a century: ADB report The govt. of Pakistan is taking on a wide range of structural reforms - covering consolidating fiscal conditions, strengthening corporate governance of State-Owned Enterprises (SOEs), and improving the investment climate, which are expected to address the chronic balance of payments problems and build more sustained and stable growth, said ADB in its latest report, “Asia’s journey to prosperity policy, market, and technology over 50 years”. BR. Senate body rejects uniform GST rate The senate standing committee on finance has rejected the govt.’s proposals in the finance bill FY22 to apply standard GST rate of 17% on gold, diamonds, precious stones, dairy products, bricks, aircraft, plants and machinery. They added that the govt. has hiked tax rates on 279 items which will make the lives of common citizens more miserable. The News. ECC approves 3Mn tons wheat import for strategic reserves ECC has approved 3Mn tons of wheat import for building up its strategic reverses in the country. ECC further approved $ 17.3Mn for PIA for payment of recurring and one-off liabilities for Roosevelt Hotel New York. The News. Coca-Cola Pakistan to invest $ 50Mn A delegation of Coca-Cola Beverages Pakistan Limited, headed by GM Ahmet Kursad Ertin met with PM Imran Khan and announced an investment of $ 50Mn for a greenfield project the company plans to set up in Haripur district, KPK. This will be the company’s seventh production facility in the country. The News. Change Daily 16-Jun SECP issues draft regulatory framework for digital-only insurers, microinsurers SECP, as part of its agenda to promote digitalisation and encourage innovation in financial services, has introduced draft registration regime for digital-only insurers and dedicated microinsurers, for seeking public comments. The draft framework, proposed through amendments in Insurance Rules, 2017, sets out the registration requirements for entities desirous to operate through digital mode only, and for entities wanting to transact small ticket size insurance i.e. microinsurance. The Nation. Political parties exempted from filing income tax returns, paying taxes The federal govt., through the Finance Bill 2021, had proposed to exempt all registered political parties of Pakistan from the legal obligation of submitting their annual income and wealth record while also declaring their incomes tax-free. However, after receiving inputs from various stakeholders it again decided to tax the income of the political parties. The amendment will remain part of the Bill until dropped at the time of approval of the budget. Tribune. Value 16-Jun 225 Production of home appliances soars Easing of lockdown and rising heatwave have caused a sharp rise in production of home appliances with refrigerators hitting a 32-month high in Apr’21, followed by 19-month high in air conditioners and 22-month in deep freezers. Production of refrigerators during Apr’21 soared to 131,953 units from 6,996 units in Apr’20 and 119,535 units in Mar’21. Production of air-conditioners soared to 62,953 units in Apr’21 as compared to 5,246 \ units in Apr’20 and 35,418 units in Mar’21. Dawn. Unit USD-Interbank USD-Open MKT Increased spending on health, education: Govt to seek fiscal space from IMF Finance Minister Shaukat Tarin has said that he did not agree to the IMF demand of increasing personal income tax to collect an additional PKR 150Bn in FY22 and would explore other options to increase revenue collection. Tarin said he would also seek fiscal space of 1 or 2% from the IMF to increase spending on health and education. BR. Citi Pharma raises PKR 2.32Bn The Citi Pharma book-building process closed on Wed (16th Jun’21) with the company managing to raise PKR 2.32Bn, twice the amount on offer. The general public would be offered 18.1Mn shares — 25% of the total offer size on 23rd - 24th Jun’21 at the strike price of PKR 32 per share, 14.3% higher than the floor price of PKR 28. Dawn. Date / Period GBP, 16-Jun-21, 220.1 215 205 195 EUR, 16-Jun-21, 189.1 175 USD, 16-Jun-21, 157.3 165 155 145 USD Jun-20 GBP Sep-20 Source: KCCI Research ; Oanda.com EUR Dec-20 Mar-21 Jun-21 Quote of the Day “Either you run the day, or the day runs you.” Jim Rohn Sindh FY22 Budget Current Revenue Expenditure Breakup - PKR Bn Employee related expenses 465.76 Grant subsidies and write off loans 232.03 Employee retirement benefits 159.58 Operating expenses 124.61 Repairs and Maintainance 32.38 Physical Assets 30.55 Interest Payments 25.24 Transfers 19.12 0 100 200 300 400 500 Source: KCCI Research, Sindh Finance Dept Note Pakistan Post is being tipped as a key player by the federal govt. in providing quality service to the sellers for shipping their products to Amazon warehouse abroad. Registered sellers are requested to kindly share their company profile and contact details at res@kcci.com.pk.