Pakistan Daily Economy Update - 20 April

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1. Apr . 20, 2016 KCCI - eBulletin Opening businesses after 8pm to cost three times more The government has come up with an ambitious load management plan during the summer with six-hour outages in urban areas and eight hours in rural areas. Power conservation measures include a plan to close down commercial markets by 8pm that will also help save 1,0001,500 MWs of electricity. Those who will open their businesses after 8pm will have to pay three times as much tariff. Karachi is not included in the load management plan. The News. Informal sector pays below minimum wage: State Bank Pakistan’s informal sector that employs three-fourth of the country’s total labour force has been found the poorest paymaster in the central bank’s survey, lagging much behind the formal sector in terms of minimum wage set by the government. 47.6% of firms in the informal sector pay workers below the minimum wage, while only 17.5% of the formal sector pays below the minimum wage, said the working paper on ‘informal labour markets in Pakistan’, recently released by the SBP. Wage differentials between formal and informal sectors are especially pronounced for white collar workers, said the research paper. According to the SBP, informal firms employ less than 10 people. The News. British Business Centre, KCCI sign MoU to enhance trade A MoU was signed between the British Business Centre, Karachi, and the Karachi Chamber of Commerce & Industry (KCCI), aimed at enhancing trade and economic cooperation between the two countries. The signing of the MoU was witnessed by Dr Ishratul Ebad, governor of Sindh, Mr. John Tucknott, UK deputy-high commissioner in Karachi, and Mr. Siraj Kassim Teli, former President KCCI. The document is aimed at enhancing trade and investment between the United Kingdom and Pakistan through exchange of information and data on economic, industrial and commercial matters as also specific opportunities available in both Pakistan and the UK. The News. TRTA-II Programme concludes The Trade Related Technical Assistance (TRTA-II) Program implemented in Pakistan by the EU, in collaboration with the Ministry of Commerce, has concluded. The aim of the TRTA Programme was to strengthen the capacity of Pakistan to participate in international trade. Minister for Commerce, Engr. Khurram Dastgir Khan in his remarks at the occasion said that the program yielded positive results for the Pakistani business and trade community through its small interventions and provided the much needed knowledge, skills and machinery to the aspiring sectors. Senior management from the International Trade Centre (ITC), UN Industrial Development Organisation (UNIDO) and World Intellectual Property Organisation (WIPO) headquarter also participated in the event. BR. Pakistan, Mauritius to upgrade PTA to Free Trade Agreement Pakistan and Mauritius while noting the importance of economy and trade in boosting bilateral ties agreed to upgrade the existing Preferential Trade Agreement (PTA) to a Free Trade Agreement (FTA) at an early date. During her four-day visit to Pakistan, Mauritius President Ameenah Gurib-Fakim informed President Mamnoon Hussain about the desire of Mauritius to deepen relations with Pakistan which was considered as an important country. She said that her govt. would arrange a “Pakistan week” to mark the forthcoming Independence Day of Pakistan in Mauritius with a view to increase people to people contacts. The president urged Pakistan side to take advantage of the strategic location of Mauritius as a gateway to African continent which was exhibiting a great developmental potential. The Nation. OGRA asks PSO to cancel franchise of expired license holders Ogra has asked PSO to either renew expired explosive licenses or cancel franchise agreements of compressed natural gas (CNG) stations in order to ensure safety of their premises. PSO also accused some of the CNG station operators of defaulting on payments and breaching an agreement by not paying the oil marketing company its monthly share. As a result, PSO’s outstanding receivables from CNG stations increased to around PKR 912Mn by the end of March 2016. Tribune. Neelum Jhelum project on track as 80% work done The 969MW Neelum Jhelum Hydropower project is progressing timely as the civil works of both underground powerhouse and transformers hall are 95.5% and 99% complete and are expected to finish in October 2016. During the visit to the project site, Wapda Chairman has said that overall progress on the project stands at 80%. Tribune. Disclosures of offshore companies: Budget to propose steps: FBR chief FBR Chairman Nisar Muhammad Khan has said that the federal budget 2016-17 would propose measures to plug in loopholes in the taxation system to control tax avoidance after the recent disclosures of offshore companies held by Pakistanis abroad. He also informed the National Assembly Standing Committee on Finance that the FBR is reviewing the whole SRO.1125 relating to the five export-oriented sectors during the budget exercise as the FBR is not satisfied with the tax collection from this SRO. In the budget, most of the budget proposal would be related to direct taxes in order to raise the ratio of direct taxes in overall tax collection of the FBR. BR. FBR looking to milk more taxes The FBR is now looking to find a new prey in order to meet its budgetary target, it has already targeted the dairy sector for a ‘change in the tax structure’ from July onwards. The move is estimated to increase the price of packaged milk by at least PKR 8 per liter. According to the FBR chairman, the FBR will propose that the zero-rating structure of the dairy sector may be converted to an exempted sector. If the government accepts the FBR proposal to abolish zero-rating facility, the milk producers will no longer be entitled to claim refunds for the taxes they pay while procuring inputs. Tribune. Dar for consulting all stakeholders before finalizing recommendations for budget Finance Minister Ishaq Dar chaired a meeting in order to review the progress with regard to revenue side of budget 2016-17. FBR Chairman has apprised the meeting that FBR has initiated extensive consultations with the representatives of various sectors of economy with a view to develop proposals for Finance Bill 2016-17. So far FBR has completed consultation with 24 organizations including SECP, auto industry, marble industry etc. and discussed their proposals for the upcoming budget. The outcome of the consultative process will be submitted to the finance minister in the form of recommendations for budget 2016-17. The Nation. Microfinance Investment Co be operational by July 1: Dar Finance Minister Ishaq Dar has said that Pakistan Microfinance Investment Company should become operational by July 1, 2016. He made these remarks while chairing a meeting to review the preparations regarding the operationalization of Pakistan Microfinance Investment Company. The Nation. LSM sector posts 4.35% growth in eight months According to the data of PBS, Large scale manufacturing sector which accounts for 70% of industrial production has posted a growth of 4.35% during 8MFY16 over a year ago. The LSM sector registered 2.83% growth during month of Feb’16 against the same month of last year. Moreover, the govt. had set challenging growth target of 6% for LSM sector for the ongoing financial year. The Nation. Economic Indicators Date / Period Unit Value USD-Interbank List of Indicators 19-Apr PKR 104.79 Change Daily 0.03% USD-Open MKT 19-Apr PKR 105.30 -0.05% KSE-100 index FIPI 19-Apr 19-Apr Pts. $ Mn 33,730 -2.17 -0.09% NM** Crude (MY'16) 19-Apr $/bbl 43.35 4.66% Gold (MY'16) 19-Apr $/oz 1,250.8 1.42% Gold (10g) Local 19-Apr PKR 42,085 0.10% Silver (MY'16) 19-Apr $/oz 16.95 4.11% Cotton(KHI)-40 kg 19-Apr PKR 5,841 1.87% Kibor-6M 19-Apr % 6.36% 0.00% 8-Apr $ Bn 20.83 -0.24% Remittances Jul-Mar 16 $ Bn 14.16 4.14% Exports* Jul-Mar 16 $ Bn 15.61 -12.92% Imports* Jul-Mar 16 $ Bn 32.52 -4.22% Trade Balance* Jul-Mar 16 $ Bn -16.91 -5.50% Current Account Avg. CPI-FY16* Jul-Feb 16 Jul-Mar 16 $ Mn % -1,859 2.64 4.52% WoW Forex Reserves YoY Apr-16 Discount Rate % 6.00 Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 GBP, 19-Apr-16, 150.2 155 145 EUR, 19-Apr-16, 118.8 135 125 115 105 95 USD, 19-Apr-16, 104.7 85 75 Apr-15 Jul-15 USD GBP Oct-15 Jan-16 EUR Apr-16 Source: KCCI Research ; Oanda.com Quote of the Day “Take up one idea. Make that one idea your life - think of it, dream of it, live on that idea. Let the brain, muscles, nerves, every part of your body, be full of that idea, and just leave every other idea alone. This is the way to success.” Swami Vivekananda Chart of the Day Pakistan's Import of Core Oil Products (Mn Tons) 9.0 8.0 7.0 6.0 5.0 4.0 3.0 2.0 1.0 - Diesel Furnace Oil Crude Petrol Source: KCCI Research ; OCAC Engro Foods posts PKR 1.1Bn profit for three months Disclaimer Engro Foods has reported a net profit of PKR 1.1Bn for 3QFY16 (EPS: PKR 154.92), up 4% from the same three-month period of 2015. This report has been prepared by KCCI Research & Development Cell. The However, revenues shrank roughly 7% on a year-on-year basis to PKR 11.7Bn. Tribune. information contained herein have been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such MCB announces PKR 6Bn earnings MCB Bank has posted a net profit of PKR 6Bn (EPS: PKR 5.5) in 3QFY16, which is down 23.9% from the same three-month period of 2015. information has not been independently verified. icon represents the sole viewpoint of the KCCI R&D Cell, and is MCB Bank also announced a cash dividend of PKR 4 per share. MCB Bank grew its bottom line by 13% because of a credit charge PKR 1.6Bn stated to enrich the readers' understanding of the news item. The it booked in Oct-Dec 2015. Tribune.