Pakistan Daily Economy Update - 19 September

Transcription

1. Sep . 19, 2017 KCCI - eBulletin GSP plus status: UK announces support for Pakistan At a joint press conference with Pakistani Commerce and Textile Minister, British Minister of State for Trade Policy, Greg Hands announced UK’s support for Pakistan at the EU for continuity of GSP plus scheme till 2023 besides maintaining these preferences on bilateral basis even after Brexit. The visiting Minister said with more than 200Mn consumers, Pakistan is an exciting market for British business. He further said that UK’s export credit agency UKEF is to more than double its support up to £ 400Mn in order to help UK exporters win, fulfill and get paid export contracts and Pakistan's buyer’s access finance to source high quality UK goods and services. UK is also holding a trilateral meeting - China, Pakistan and UK - on CPEC. BR. Bank of China allowed to commence business In a major development, State Bank of Pakistan (SBP) has allowed the Bank of China Ltd. to commence banking business in Pakistan. SBP, has declared "Bank of China Limited" as a scheduled Bank with effect from Sept. 18, 2017. It is a subsidiary of China Central Huijin, the investment arm of Chinese govt. In Pakistan, the bank aims to provide specialized banking services to serve the financing needs of CPEC-related projects by leveraging on its experience and global technology platform. BR. PC rationalizes scope, cost of KCR project Planning Commission has rationalized the scope and cost of Karachi Circular Railway (KCR) project and reduced it from $ 2.58Bn to $1.97Bn. In this regard, a draft summary for Executive Committee of the National Economic Council (ECNEC) at the rationalized cost has been prepared and would be considered in the next meeting of ECNEC. It is now a provincial government project which would be financed by the Chinese government while federal government would provide the underline guarantee. BR. Miftah likely to replace Dar The govt. is likely to appoint Miftah Ismail as Finance Advisor to the Prime Minister. Finance Minister Ishaq Dar has reportedly requested his party leadership to relieve him of his portfolio to enable him to focus on the reference filed against him by National Accountability Bureau (NAB) on Sept. 8, 2017 in compliance with the Supreme Court verdict for possessing wealth beyond known means of income. BR. July-August FDI up 155% Pakistan fetched Foreign Direct Investment (FDI) amounting to $ 457Mn during 2MFY18 compared to $ 179.4Mn in 2MFY17, depicting an increase of 155% where China and Malaysia were the major investors. Year-on-year basis, FDI registered an increase of 148% to $ 234.5Mn in Aug.’17 compared to $ 94.6Mn in Aug.’16. During the period under review, portfolio investment witnessed a downward trend falling by 358%. Portfolio investment stood negative at $ 105.7Mn compared to an investment of $40.9Mn in 2MFY17. Similarly, foreign public investment also declined by $ 49.5Mn.The total foreign investment, comprising FDI, portfolio investment and FPI, surged by 37% to reach $ 301.8Mn during 2MFY18 up from $ 220Mn in 2MFY17. BR. China-nominated managing director for PSX ‘faces opposition’ The Pakistan Stock Exchange (PSX) is facing opposition from some brokers and members over China’s nomination of Richard Morin, a Canadian citizen, as the managing director, suggesting early cracks in the relationship that saw a 40% takeover. A couple of brokers, showing their concern over the proposed appointment, said the Canadian national would unnecessarily cost more to PSX, as he is being appointed at a huge salary and is also being given special perks. Tribune. China signs MoUs worth $ 375Mn for investment in Pakistan Chinese companies from different cities and provinces have expressed their interest in relocating their textile, garment and accessory production units to Punjab, with an expected investment of at least $25 Mn estimated for each unit. Besides marking the participation of over 500 foreign delegates, the 18th International Textile Asia Exhibition also witnessed signing of MoUs worth $ 375 Mn for investment in Pakistan through joint ventures with local companies. Foreign companies have also committed to transfer their technologies, besides buying back Pakistani products after value-addition, which would enhance export and lower Pakistan’s trade deficit with China. The exhibiting countries included Austria, China, Czech Republic, France, Germany, India, Italy, Korea, Taiwan, Turkey, UK and USA among others. Tribune. $ 900Mn ADB loan stuck in red tape Much of the $900 Mn loan, approved by the Asian Development Bank (ADB) for Pakistan almost four years ago despite opposition from the US, is yet to be disbursed because of the bureaucratic red tape and cumbersome procedure adopted by both the lender agency and the borrower. Tribune. \ 113 corporate entities: huge number of non-filers detected Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (NO'17) Gold (OC'17) Gold (10g) Local Silver (OC'17) Cotton(KHI)-40 kg Kibor-6M 18-Sep 18-Sep 18-Sep 18-Sep 18-Sep 18-Sep 18-Sep 18-Sep 18-Sep 18-Sep PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.41 105.80 42,841 53.16 50.35 1,307.1 44,828 17.20 6,430 6.16% Forex Reserves 31-Aug $ Bn 20.39 0.00% 0.00% 0.13% NM** 0.34% -1.71% -0.38% -3.89% 0.83% 0.00% WoW 1.93% YoY 13.18% 11.80% 24.85% -33.52% -210.12% 154.74% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Aug 17 Remittances $ Bn 3.50 Jul-Aug 17 Exports* $ Bn 3.50 Jul-Aug 17 Imports* $ Bn 9.79 Jul-Aug 17 Trade Balance* $ Bn -6.29 Jul-17 Current Account $ Mn -2,053 Foreign Direct Inv. $ Bn 0.46 Jul-Aug 17 Jul-Jun 17 LSM Growth* % 5.60 % 3.41 Jul-Aug 17 Avg. CPI-FY18* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 155 GBP, 12-Sep-17, 142.7 145 135 125 EUR, 12-Sep-17, 125.9 115 105 95 Sep-16 USD Dec-16 GBP 100.0 80.0 60.0 15 18 19 19 6 1 3 7 5 9 3 6 20.0 28 23 28 33 40.0 1 Chinese visas for Pakistanis grew by 19.6% in 2016 Amidst widely circulating complaints from the business community that the government of China has been tightening visa rules for Pakistanis, the Chinese embassy has emphasized that it views growing people-to-people contact as central to the growing relationship between both countries. According to statistics, the visa issuance volume in 2016 rose 19.6% over the previous year, and has a 7.8% growth in 8MFY17 over 8MFY16, which shows that with the promotion of CPEC construction, more and more Pakistanis have visiting to China for trade negotiation and cultural exchanges. Dawn. Top 10 Sources of FDI In Pakistan ($ Mn) 120.0 93 US collaborating in integrated energy planning: Sartaj Minister of Planning and Development has said that support for the development of integrated energy is one of the components of the ongoing Pak-US collaboration in energy sector. He was speaking at the first meeting of the US-supported Steering Committee for Integrated Energy Planning for Pakistan. The US Department of Energy (DoE), is helping develop Pakistan’s integrated energy planning (IEP) as a roadmap to deliver more efficient and reliable energy for the people of Pakistan. Dawn. Abraham Lincol Chart of the Day 48 Water Policy delayed again The approval of National Water Policy, initially finalized in 2002, has been delayed once again even though all the provinces had broadly reached a consensus document. Policy has been taken up for approval at a meeting of the CCI but was dropped at the last moment on the desire of PM Abbasi. Dawn. Sep-17 Source: KCCI Research ; Oanda.com "Government of the people, by the people, for the people, shall not perish from the Earth." 98 Discos passing PKR 131Bn power sector loss on to consumers Electricity distribution companies (Discos) have intended to pass the impact of the inefficiencies in power sector amounting to PKR 131Bn on to power consumers to obviate the re-emergence of the liquidity crisis. They have been planning to pass on the late payment surcharge (LPS) of PKR 62Bn and capacity charges of power houses amounting to PKR 69Bn to the end consumer in the power tariff, and the ministry is also in agreement with Discos to this effect. The News. USD, 12-Sep-17, 105.4 Jun-17 Quote of the Day FBR has detected a huge number of non-filers of income tax returns for Tax Year 2016 in 113 corporate entities having 1,000 plus employees based in Islamabad and Karachi. After scrutinizing the annual statement submitted by the companies, Member IT, FBR came to know that huge number of employees in these companies, whom tax was deducted at source, were unable to file their income tax returns in TY16. BR. NADRA data fails to support broadening of tax base: FBR Tax Reform Implementation Commission (TRIC) has concluded that NADRA’s data is not useful for broadening the tax base. TRIC comprising both private members and FBR team to evolve consensus on points that could be implemented to reform the taxation system of the country. The News. EUR Mar-17 0.0 2MFY17 2MFY18 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