Pakistan Daily Economy Update - 17 May

Transcription

1. May . 17, 2017 KCCI - eBulletin Five export-oriented sectors Zero rating to continue: Haroon While addressing a pre-budget seminar titled "Budget for Export Growth FY18" organized by the Commerce Ministry, PM’s Special Assistant Haroon Akhtar stated that zero rating for five export-oriented sectors will continue; however there would be a further increase in the cost of doing business for non-filers in the forthcoming budget. Mr. Khan said the FBR’s revenue target for the next year will be over PKR 4Tn, up from the current year’s target of PKR 3.6Tn. He said the issue of refunds will be considered in the next budget. During the seminar, Secretary Commerce Younas Dagha made a few submissions with respect to business community as govt. was contemplating withdrawal of sales tax zero rating facility from FY18 having an expected revenue loss of PKR 15Bn. Dawn/BR. After 4 months, govt withdraws some incentives from textile package The govt. partially withdrew the textile package, announced just 4 months ago to boost exports, and has imposed 4% customs duty and 5% sales tax on import of cotton from July to generate PKR 10Bn in revenue, highlighting inconsistencies in its economic policies. ECC has approved the restoration of import duty and sales tax on import of cotton with effect from 15th Jul’17. Tribune. Development outlay to get major boost With all the signs suggesting a generous increase in development outlay for the upcoming FY18, the govt. has convened National Economic Council (NEC) meeting to approve proposed PSDP and annual plan for the next fiscal year. The NEC meeting has been convened with Prime Minister in the chair with three agenda items: (i) review of annual development plan for FY17 and proposed annual plan for 2017-18; (ii) review of PSDP for FY17 and proposed PSDP for FY18 and; (iii) consideration of progress report of CDWP as well as ECNEC from Apr. 1, 2016 to Mar. 31, 2017. BR. APCC to approve development plan exceeding PKR 2Tn The Annual Plan Coordination Committee (APCC) has finalized a development programme of PKR 2.158Tn for the next year, an increase of 29% over the current year’s PKR 1.675Tn outlay. This indicates massive allocations by federal and provincial governments for development schemes. Overall size of the public sector development programme (PSDP) for FY-18 of the federal government is estimated at PKR 1.00Tn against PKR 800Bn of the current year, an increase of 25%. Dawn. FBR chalking out roadmap to reduce size of black economy In the last meeting of the Tax Reforms Implementation Committee (TRIC), FBR has chalked out a roadmap to reduce the quantum of the underground economy in Pakistan to minimize the size of the black economy by at least 30% in a period of three years. It was recommended in the meeting that a high level committee be set up and an action plan be prepared on a priority basis with measurable and identified issues and actions with specific responsibilities and co-ordination agencies. BR. Effective Jun. 1, 2017: Pakistan officially declared part of MSCI EM Index The much-awaited MSCI 2017 Semi-Annual Classification Review has been announced, whereby Pakistan is now officially a part of the MSCI Emerging Market Index, effective Jun. 1, 2017. Pakistan was previously enlisted in the MSCI Emerging Markets Index until 2008. With the new reclassification coming into effect, Pakistan will have a weight of 0.15% compared to 9.1% in MSCI Frontier Markets. Pakistan's succession into emerging markets will be more favorable given funds tracking EM are worth $ 1.2 - 1.5Tn worldwide. The six companies shortlisted by the MSCI committee for inclusion in the MSCI EM Index include OGDC, HBL, UBL, MCB, LUCK, and ENGRO while other 27 companies have also been shortlisted to make the cut for MSCI Pak small-cap Index. BR. Chinese tech giant Alibaba set to enter Pakistan Pakistan has signed an MoU with the world’s largest e-commerce company, Alibaba, to promote the country’s exports worldwide by Small and Medium Enterprises (SMEs) through e-commerce. Prime Minister Nawaz Sharif and Executive Chairman of Alibaba Jack Ma were present at the signing ceremony. Under the terms of the MoU, Alibaba, Ant Financial and the TDAP has agreed to foster growth of worldwide exports of products by SMEs in Pakistan through e-commerce. Online and offline training programmes for SMEs would also be conducted by Alibaba in a bid to assist enterprises with on-boarding on to Alibaba’s platforms and optimizing exports through e-commerce. Tribune. OICCI says investors cast doubts about sustainability of energy, security Overseas Investors Chamber of Commerce and Industry (OICCI) has raised concerns that foreign investors have doubts about sustainability of energy and security in Pakistan and are giving preference to India over Pakistan. In this regard, key highlights of OICCI’s biannual Business Confidence Survey - Wave 14 suggested a downward trend with Business Confidence Score (BCS) of 13% against 17% in Nov.’16 (Wave-13) and 36% in Apr.’16. The business confidence of OICCI members participating in the said wave 14 was also down by 9% as compared to last Nov.’16 survey. BR. Economic Indicators List of Indicators Value Change Daily PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.85 106.20 51,813 -2.20 48.62 1,236.8 42,857 16.80 7,180 6.15% 5-May $ Bn 20.79 0.01% 0.19% -1.10% NM** -1.00% 0.54% 0.40% 1.33% 0.00% 0.01% WoW -1.00% YoY -2.79% -2.29% 19.88% -40.12% -160.74% Forex Reserves Jul-Apr 17 Remittances $ Bn 15.60 Jul-Apr 17 Exports* $ Bn 16.92 Jul-Apr 17 Imports* $ Bn 43.47 Jul-Apr 17 Trade Balance* $ Bn -26.56 Jul-Mar 17 Current Account $ Mn -6,130 % 4.09 Avg. CPI-FY17* Jul-Apr 17 Mar-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 May-16 GBP, 16-May-17, 135.2 EUR, 16-May-17, 115.6 USD, 16-May-17, 104.7 Aug-16 USD GBP Nov-16 Feb-17 May-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "'A random act of kindness, no matter how small, can make a tremendous impact on someone else's life.” Roy T. Bennett Chart of the Day PSO set to offer branchless banking services PSO’s fuel stations are expected to start offering branchless banking services in the next two months and all outlets on the network would be doing so in the next eight months. It is set to kick-start the business with United Bank Limited’s (UBL) branchless bank, Omni. PSO outlets would offer services such as dealing in cash (debit and credit) with Omni’s customers, receiving payments against utility bills, and opening mobile bank accounts. Tribune. 9,000 Govt. plans to stop using furnace oil, diesel in power production The govt. is designing a plan aimed at slapping ban on the consumption of furnace oil and high-speed diesel in electricity production and permitting only coal and imported gas as fuel in a bid to produce cheap electricity. Under the proposed plan, existing power plants running on furnace oil and high-speed diesel will switch to re-gasified liquefied natural gas (RLNG) and coal. The plan is being framed in the backdrop of consistently high oil import bill of the country and expensive electricity generation. Tribune. 6,000 For advisory services: SECP prescribes new requirement In line with its objectives of promoting good governance practices, ensuring investor protection and having skilled investment advisers, SECP has prescribed certification requirement for all those providing advisory services to capital market customers. Consultants would now be required to obtain the Financial Advisors Certification offered by the Institute of Financial Markets of Pakistan. Tribune. 3,000 CPEC has no grey area, says Abbasi Federal Minister of Petroleum and Natural Resources, Mr. Shahid Khaqan Abbasi Terming uncalled-for and rumors, has ruled out any wrongdoing CPEC agreement. Mr. Abbasi categorically stated that the CPEC agreement is transparent and has no grey areas. Government is trying to maintain the petroleum prices and its priority is to safeguard consumers from the impact of increasing oil prices. He said that in Pakistan, the emphasis on alternative energy is being given and solar energy is being encouraged by declaring its import zero-rated. Dawn. Unit 16-May 16-May 16-May 16-May 16-May 16-May 16-May 16-May 16-May 16-May Crude (JU'17) Gold (JU'17) Gold (10g) Local Silver (JU'17) Cotton(KHI)-40 kg Kibor-6M Ramadan package slashed to PKR 1.6Bn from PKR 2Bn ECC has approved PKR 1.60Bn Ramadan Package after slashing PKR 398Mn from PKR 2Bn allocated in the FY17 budget. A meeting chaired by the Finance Minister Ishaq Dar considered a summary prepared by Ministry of Industries and Production for Ramadan Relief Package 2017 to provide subsidies on 19 commodities for giving relief to the general public. In addition to this relief, Utility Store Corporation (USC) will also reduce prices of over 2,400 other items under different brands from 5% to 10% by obtaining a special discount from vendors/suppliers and reducing its own profit margins. BR. Govt. plans PKR 125-150Bn Ijara Sukuk issue by July The govt. is looking to raise as much as PKR 150Bn by issuing fresh Ijara Sukuk in the domestic market in Jul’17 to help finance its growing budget deficit. The planned 18th Ijara Sukuk would be issued against the assets of M1 motorway Peshawar-Islamabad and M3 Pindi Bhattian to Faisalabad. One of the previously issued Sukuk is maturing next month. The News. Date / Period USD-Interbank USD-Open MKT KSE-100 index FIPI CAR SALES IN PAKISTAN 8,118 8,000 7,411 7,000 4,859 4,753 5,000 3,519 4,000 2,751 2,000 1,000 No of Units Honda Apr'16 Suzuki Apr'17 Toyota Source: KCCI Research, Pama 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