Pakistan Daily Economy Update - 19 July

Transcription

1. July 19 , 2019 KCCI - eBulletin PM’s visit to US: Govt uncertain about seeking tariff concessions The govt. is still clueless and indecisive whether it should seek tariff concessions from US authorities or not during the maiden visit of PM Imran Khan, fearing it may prove counter-productive keeping in view of the unpredictability of US President Donald Trump. PM Imran Khan is to leave for US today (19th Jul’19). More importantly, the US is in protectionist mode too. It is feared that the US will try to ensure safe US troops evacuation free of cost from Afghanistan by using the strict IMF program and FATF as a bargaining chip. The News. SECP clarification SECP has strongly refuted news appearing in a section of the press and electronic media attributing any purported action against companies. It said that no crackdown of any sort is being planned or under consideration of the Commission. It also clarified that SECP does not regulate or enforce Income Tax Ordinance, 2001 or the Benami Transactions (Prohibition) Act, 17 and its powers are restricted to offences provided in the SECP Act, 97, and other administered legislation as provided in its Schedule. It also clarified that the powers of search and seizure and forced entry have been part and parcel of the SECP Act, 1997, since the establishment of the Commission. BR. FBR begins probe into export losses from mispricing FBR Chairman Shabbar Zaidi has asked tax officials to identify the export losses caused by mispricing or under-invoicing and to categorize exporters on the basis of their risk profiling. An estimate states that Pakistan incurs more than $ 5Bn in losses a year due to under-invoicing or mispricing in foreign trade and one of the suspected methods is via port cargo. The News. Raise revenue, curb smuggling, Zaidi tells taxmen as govt says FBR chief here to stay FBR Chairman Shabbar Zaidi has said that local markets are flooded with misdeclared imported goods causing huge revenue losses and adversely impacting the existing and future investment in different sectors. Adviser to PM Naeem-ul-Haq said that FBR chairman is here to stay, at least temporarily putting to rest persistent talk of an impending replacement at the tax bureaucracy. The FBR chairman spurred into action following discovery of massive misdeclaration of goods after data from WeBOC-Glo was analysed. The data showed around 62% of total 69,000 goods declarations showed differences in assessed value and declared value of goods. On the other hand, around 21% of misdeclarations were made in weight and quantity. Dawn. Economic Indicators List of Indicators Date / Period SBP designates HBL, NBP and UBL as D-SIBs for 2019 SBP has designated Habib Bank Ltd, National Bank of Pakistan and United Bank Ltd as Domestic Systemically Important Banks (D-SIBs) for the year 2019. Now, these banks will be subject to enhanced supervisory requirements and following higher capital surcharge. BR. Dawood, US-Pak Business Council team discuss trade, investment scope A delegation of US-Pak Business Council called on A.Razak Dawood, PM's Advisor on Commerce to discuss bilateral trade and investment opportunities. Besides Council members, the delegation consisted of representatives of prominent US MNCs including PespsiCo, Uber and Facebook. The advisor urged the delegation to enhance the trade and investment relations between the two countries as the current relations are not at par with the existing potential. The delegation appreciated business friendly environment and showed strong commitment in unleashing new business ventures in Pakistan. BR. Pakistan, France sign MoU to promote trade, investment Ambassador of Pakistan to France, Moin-ul-Haque on (behalf of the Board of Investment of Pakistan) and Christophe Lecourtier (CEO of Business France) have signed a MoU to promote bilateral cooperation in the fields of trade, investment and business between Pakistan and France. The ambassador noted that the agreement would encourage and facilitate the businessmen and investors from both the \ countries to forge closer contacts and partnerships as both the countries would also be able to help and support the businessmen for organizing exhibitions, seminars and business missions. Christophe Lecourtier said that after signing of this landmark agreement, Business France would encourage and motivate French companies to invest in Pakistan and forge business alliances with their Pakistani counterparts. BR. Japanese envoy meets Hammad Azhar Japanese Ambassador, Kuninori Matsuda called on Federal Minister for Economic Affairs Hammad Azhar. The ambassador expressed the intention of his govt. to provide financing support for implementation of high value flagship projects in the areas of sanitation & waste management, clean drinking water and human resource development including health & education, technical assistance and skill development for enhancing productivity in Pakistan's economy. BR. Govt. urged to address the plight of paper merchants Paper Merchants have rejected discriminated highest customs duty, additional customs duty and anomalous tariff on paper and paper board (HS Code 48) in Budget FY20. They said that in the budget speech, Minister of State for Revenue, Hammad Azhar, announced a cut down customs duty on uncoated paper HS Code 4802 to 16% from 20% in order to register decline in prices of copies & books but sadly in the Finance Bill, customs duty and additional custom duty on uncoated paper was jacked up to 27%. BR. KCR’s revival plan hangs in the balance The plan for revival of KCR continues to hang in the balance in spite of the Supreme Court's directives because no stakeholders seem to own this multi-Billion public sector project so far. No stakeholders (federal govt., Sindh govt. and particularly the Ministry of Railway) seem to be least-interested in revival of KCR. Squatters have begun reoccupying the KCR's right of way which was recently cleared by the local administration along with the railways for handover it to the provincial govt. BR. Foreign exchange: SBP reserves jump 12.9% to $ 8Bn Foreign exchange reserves held by SBP jumped by a massive 12.9% on a weekly basis to reach $ 8Bn.The increase came after Pakistan received 1st tranche from the IMF of $ 991.4Mn on 9th Jul’19. Overall, liquid foreign currency reserves stood at $ 15.25Bn. Net reserves held by banks amounted to $ 7.25Bn. Tribune. Value Change Daily PKR PKR 160.03 159.90 0.13% 0.06% 32,310 2.65 -2.04% NM** USD-Interbank USD-Open MKT 18-Jul KSE-100 index FIPI Pts. $ Mn Crude (AP'19) 18-Jul 18-Jul 18-Jul $/bbl 55.68 -1.26% Gold (MA'19) 18-Jul $/oz 1,446.2 1.30% Gold (10g) Local 18-Jul PKR 70,842 0.06% Silver (MA'19) 18-Jul $/oz 16.27 2.19% Cotton(KHI)-40 kg 18-Jul PKR 8,895 0.00% Kibor-6M 18-Jul % 13.94 0.20% Forex Reserves 12-Jul FY19 $ Bn 15.25 WoW 6.94% Remittances Jul-Jun 19 $ Bn 21.84 9.68% Exports* Jul-Jun 19 $ Bn 22.98 -1.00% Imports* Jul-Jun 19 $ Bn 54.80 -9.86% Trade Balance* Jul-Jun 19 $ Bn -31.82 15.33% -13.59 1.74 31.71% -49.96% 18-Jul YoY Jul-Jun 19 $ Bn $ Bn Jul-Jun 19 Jul-Apr 19 LSM Growth* % % Jul-Jun 19 Avg. CPI Discount Rate % May-19 WoW= week, NCCPL, KSE, Sources: KCCI Research, PMEX ** Not Meaningful on week; Current Account Foreign Direct Inv. PM hints at low-cost credit for machinery purchase PM Imran Khan has promised to consider a proposal to offer low-cost credit for the purchase of machinery and equipment to encourage industrial capacity expansion and stimulate new investment in the country. During a meeting with businessmen, the PM responded positively to look into the possibility of creating a credit line to provide loans at a subsidised rate of 6% for purchasing machinery and equipment. Businessmen have already put on hold their expansion and investment plans amid rising interest rates and 215 depreciating currency over the last 1.5 years. Dawn. 1,650 Customs positions transferred, re-deployed FBR’s Customs Wing has re-deployed and transferred 1,650 official positions to meet the challenging revenue target and particularly to control smuggling. In this context, a total of 180 posts in BS-16 have been re-designated while 1,568 posts in BS-16 have been redeployed across Pakistan. The News. Unit -3.51 7.34 12.25 SBP, PBS* Major Currencies GBP, 18-Jul-19, 198.3 205 195 185 175 165 155 145 135 125 115 105 95 Jul-18 EUR, 18-Jul-19, 179.4 USD, 18-Jul-19, 159.6 USD Oct-18 GBP Jan-19 EUR Apr-19 Jul-19 Source: KCCI Research ; Oanda.com Quote of the Day "Keep on going, and the chances are that you will stumble on something. I never heard of anyone ever stumbling on something sitting down." Charles F. Kettering Chart of the Day Budget FY20 Measures (as % of GDP) 1.7 1.8 1.6 1.4 1.2 1 0.8 0.6 0.4 0.2 0 1.2 0.7 0.5 0.5 0.2 0.2 0.1 Source: KCCI Research, IMF Disclaimer This report has been prepared by KCCI Research & Development Cell. The Airspace closure caused over PKR 8Bn loss: minister information contained herein have been compiled or arrived at based upon Federal Minister for Aviation Ghulam Sarwar Khan has said that CAA suffered a loss of PKR 8.5Bn because of airspace restrictions since information obtained from sources believed to be reliable and in good faith. Feb’19 in the wake of Indian aggression. It is a huge loss for overall aviation industry, he said. But this restriction hit India harder than Such information has not been independently verified. Pakistan. The loss of India is almost double. Referring to vision of PM Imran Khan, he said it is govt.’s priority to revamp PIA and increase icon represents the sole viewpoint of the KCCI R&D Cell, and is its fleet to 45 by phasing-in 14 new aircraft gradually by 2025. Dawn. stated to enrich the readers' understanding of the news item. The