Pakistan Daily Economy Update - 19 August

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1. Aug . 19, 2016 KCCI - eBulletin Pakistan's export goal unlikely to be met in absence of action plan Karachi Chamber of Commerce and Industry (KCCI) President Younus Muhammad Bashir has said that the challenging export target of $ 35Bn for 2018, set under the Strategic Trade Policy Framework (SPTF) 2015-18, is difficult to achieve because of a lack of specific plans in the trade policy. He was speaking at a seminar titled “Post-Strategic Trade Policy Framework 2015-18”, organized by the KCCI in association with the US Agency for International Development (USAID). Another issue that he drew attention to was the tax refund claims of billions of rupees which had remained stuck at the FBR, causing liquidity crunch for the exporting industries. To cope with the situation, he suggest putting in place an automated mechanism where tax refunds do not get stuck and traders do not face difficulties. Tribune. Sales tax refunds: instrument for settlement yet to be decided The govt. may clear the payment of pending sales tax refunds; however, the instrument for settlement of refunds has yet to be decided. In this regard, Secretary Finance has stated that Finance Minister Ishaq Dar announced in the budget FY17 that all the pending sales tax refunds till Apr.30, 2016, whose refund payment orders (RPOs) were approved, will be paid by Aug. 31, 2016. He further stated that everything is done in accordance with the commitment of Finance Minister. Furthermore, there is a growing pressure on the govt. as exporters have been pointing out that non-payment of sales tax is one of the factors for a decline in exports. BR. Input tax adjustments: FBR, SRB evolve consensus on revised figures FBR and SRB have developed consensus to submit revised figures of input tax adjustments for data matching so that a mutually agreed figures be finalized on payments of adjusted amounts by both the sides. In this regard, a meeting was held between the SRB team and FBR where they noted that the data of FBR as well as SRB has been maintained by the same agency i.e. PRAL. BR. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 18-Aug PKR 104.71 0.00% USD-Open MKT 18-Aug PKR 106.30 0.00% KSE-100 index FIPI 18-Aug 18-Aug Pts. $ Mn 39,771 2.99 -0.71% NM** Crude (JU'16) 18-Aug $/bbl 48.95 2.81% Gold (MY'16) 18-Aug $/oz 1,351.1 0.27% Gold (10g) Local 18-Aug PKR 46,095 1.09% Silver (MY'16) 18-Aug $/oz 19.74 0.18% Cotton(KHI)-40 kg 18-Aug PKR 7,111 0.00% Kibor-6M 18-Aug % 6.03% 0.01% Forex Reserves 12-Aug $ Bn 22.62 0.12% Remittances Jul-16 $ Bn 13.28 -20.14% Exports* Jul-16 $ Bn 1.48 -7.45% Imports* Jul-16 $ Bn 3.56 5.52% Trade Balance* Jul-16 $ Bn -2.08 -17.20% Current Account Avg. CPI-FY17* Jul-Jun 16 Jul-16 $ Mn % -2,525 4.12 6.79% WoW YoY Jul-16 Discount Rate % 5.75 FBR exempts WHT on import of vehicles to China firms for CPEC Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* FBR has granted withholding tax (WHT) exemption to two Chinese firms on Aug, 18. 2016 on import of special ** Not Meaningful WoW= week on week; YoY=Year on Year purposes motor vehicles for CPEC. The FBR said in notification that the provisions of section 148 of the Income Tax Major Currencies Ordinance, 2001 shall not apply for import of plant, machinery and equipment including dumpers and special purposes motor vehicles imported by the following for construction of Sukkur-Multan section of Karachi-Peshawar 175 Motorway project and Karakorum Highway (KKH) Phase-ll (Thakot to Havellian Section) of CPEC project respectively. 165 Dawn. 155 Sale of imported urea approved by ECC Economic Coordination Committee has approved the sale of imported urea available at PKR 1,310 per 50 kg bag on the recommendations of Finance Ministry. The Cabinet had decided in Jan.’14 to equate imported urea price with domestically purchased urea at PKR 1,786 per 50 kg bag. In this regard, Finance Division has recommended that imported urea price should not be reduced beyond PKR 1,310 per 50kg bag. Similarly, Commerce Ministry has also informed that, the financial implication of current selling price i.e. PKR 1,786 per 50kg bag, is PKR 2.13Bn for current stock up to Jun.’16. BR. Nandipur produces power at cost of PKR 7.25 per unit A parliamentary panel has informed that Nandipur Power Project has produced electricity at a cost of PKR 7.25/unit and that the dual fuel Nandipur Power Plant is producing electricity at a higher cost; however, the cost would be reduced when it would run on gas. The plant is generating 250MW but it also produced 425MW on full capacity on oil. To make the power plant more efficient, a gas pipeline was being laid which would run on LNG in future. BR. Forex reserves rise to $ 22.62Bn Pakistan’s foreign exchange reserves rose to $ 22.62Bn during the week ended on 12th Aug, 2016 compared with $ 22.59Bn in previous week. The foreign exchange reserves held by the SBP registered an increase of $ 56Mn to stand at $ 17.72Bn as against $ 17.66Bn a week earlier. Forex reserves of commercial banks were at $ 4.90Bn, compared with $ 4.93Bn in preceding week. The News. Hopes of Karachi Textile City fetching $ 2Bn in exports fading fast According to the Ministry of Textile Industry, Karachi Textile City was expected to achieve the export target of $ 2Bn and generate 80,000 jobs which has died down after it was proposed to close down the under-developed project. A special committee constituted earlier, headed by the finance secretary and comprised secretaries of the ministries of textile and planning, development and reform, had proposed to the prime minister to shut the project and return the acquired land to the Port Qasim Authority. The committee recommended that after handing over the land to the Port Qasim Authority, outstanding loans against the company must also be shifted to the authority. Tribune. Investment rules for provident fund notified SECP on Aug, 18. 2016 notified the Employees Provident Fund (Investment in Listed Securities) Rules, 2016 aimed at securing the hard-earned money of workers contributing to such funds. The Companies Ordinance, 1984, mandates the maintaining of provident funds by companies. Owing to market dynamics and in order to encourage provident funds to make investments in listed securities to earn better returns, Employees Provident Fund (Investment in Listed Securities) Rules were introduced in 1996. Dawn. GBP, 18-Aug-16, 137.2 EUR, 18-Aug-16, 118.5 145 135 125 115 105 95 USD, 18-Aug-16, 104.7 85 75 Aug-15 Nov-15 USD GBP HBL second quarter profit up 19.5% Habib Bank Limited has announced its net profit up by 19.5% in 2QFY16 amid an increase in its net markup income. HBL has announced a net profit of PKR 6.93Bn (EPS: PKR 4.71) for 2QFY16, as compared to PKR 5.80Bn (EPS: PKR 3.95) in 2QFY15. The bank also announced interim cash dividend of PKR 3.5 a share. The News. May-16 Aug-16 Source: KCCI Research ; Oanda.com Quote of the Day “The most difficult thing is the decision to act, the rest is merely tenacity. “ Amelia Earhart Chart of the Day Credit to Private Sector in Pakistan (FY06 - FY16) FY16 4,042 FY15 3,651 FY14 3,377 FY13 2,976 FY12 2,922 FY11 2,918 FY10 2,749 FY09 2,652 FY08 2,662 FY07 2,295 FY06 SECP places mutual funds returns on its website SECP has uploaded returns of mutual funds, as of Jun 30, 2016, on its official website. The SECP took this initiative to facilitate and encourage investors in making informed investment decisions, a statement issued by the commission said. The summary report contains information about all the categories of mutual funds. Dawn. Feb-16 EUR 1,957 0 1000 2000 3000 4000 5000 Source: KCCI Research, SBP Value in $ Bn 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