Pakistan Daily Economy Update - 21 July

Transcription

1. Jul . 21, 2016 KCCI - eBulletin Garbage pickup in Karachi: Sindh government decides to award contract to Chinese company Sindh Chief Minister Qaim Ali Shah has approved to award a garbage lifting contract of the Karachi's three DMCs to a Chinese firm at a cost of $167.33Mn. In this regard, Solid Waste Management Board (SWMB) has issued Letter of Intent (LoI) of two List of Indicators DMCs, South and East, to a Chinese firm where soon; an agreement would be signed with them. The company would be USD-Interbank working for seven years if the concerned DMCs appeared satisfied with their performance. Chief Minister has directed to sign USD-Open MKT an agreement within three weeks and start work within next three months. BR. KAPCO divestment: govt. meets IMF's structural benchmark The govt. is said to have met the structural benchmark set by the IMF during the eleventh review with respect to divestment of govt. shareholding in Kot Addu Power Company Limited (KAPCO). In this regard, Cabinet Committee on Privatisation decided to allow the Privatization Commission to go ahead with the divestment of government's residual shareholding in KAPCO 354,311,133 shares (40.25% of KAPCO's outstanding shares - held through the Wapda. BR. Economic Indicators Date / Period Unit Value Change Daily 20-Jul PKR 104.84 -0.01% 20-Jul PKR 105.30 0.42% KSE-100 index FIPI 20-Jul 20-Jul Pts. $ Mn 39,099 1.81 -0.28% NM** Crude (JU'16) 20-Jul $/bbl 45.70 0.53% Gold (MY'16) 20-Jul $/oz 1,315.3 -1.31% Gold (10g) Local 20-Jul PKR 44,228 -2.10% Silver (MY'16) 20-Jul $/oz 19.45 -2.74% Cotton(KHI)-40 kg 20-Jul PKR 7,272 3.83% 20-Jul % 6.01% -0.02% 8-Jul $ Bn 23.06 -0.10% Remittances Jul-Jun 16 $ Bn 19.90 7.84% Exports* Jul-Jun 16 $ Bn 20.80 -12.11% Imports* Jul-Jun 16 $ Bn 44.76 -2.33% Trade Balance* Jul-Jun 16 $ Bn -23.96 -8.13% Current Account Avg. CPI-FY16* Jul-May 16 Jul-Jun 16 $ Mn % -2,486 2.86 -1.18% FBR begins online sales tax collection Kibor-6M FBR has started collection of sales tax electronically from taxpayers from July 1, 2016. The successful implementation of the project will ensure correct deduction of sales tax. Under the system, from 1st July, 2016 onward the deduction of applicable Forex Reserves rates, 10%, 20% and 100% of the sales tax will be made through this automated system. The system of the all the AGs will be linked with the FBR’s database in order to verify the status and authenticity of the vendor’s STRN. Dawn. FBR, real estate sector make breakthrough FBR and real estate sector has finally made a breakthrough towards devising a formula for valuation of immovable properties under which FBR may introduce a city-wise multiple table/board for fair market values to reduce differentiation between DC rates and actual market values, assessment of capital gains tax (CGT) and withholding tax on the basis of FBR's enhanced values and possible imposition of a fixed tax at the rate of 2% to 5% for regularization of past transactions. BR. Tariff review request: Nepra-ministry relationship goes sour Nepra has rejected a tariff review request of the federal govt. as Water and Power Ministry had sought a review of four items i.e. actual T&D losses, actual revenue loss, Prior Year Adjustment (PYA) and integrated plan. In this regard, Ministry requested Nepra twice to reschedule the hearing. At least, five power Distribution Companies (Discos) have obtained stay orders from courts against Nepra's tariff determinations for FY16 which are yet to be notified despite repeated commitments with the lenders, including the IMF. BR. Petrol price likely to be reduced by PKR 1.30/litre from Aug. 1, 2016 The govt. is likely to reduce the price of petrol by PKR 1.30/litre from Aug. 1, 2016. The summary proposed that the prices of High Speed Diesel (HSD), Light Diesel Oil (LDO), High Octane Blending Component (HOBC) and kerosene oil be slashed. In this regard, price of HSD may be lowered by PKR 1.10/liter while LDO and Hi-Octane may see a reduction of PKR 2.50 and PKR 3/liter. The price of kerosene may go down by PKR 1.20/liter. The final summary of the price cut will be sent to Finance Ministry on Jul. 30, 2016. BR. WoW YoY May-16 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 GBP, 20-Jul-16, 138.0 145 135 EUR, 20-Jul-16, 115.7 125 115 105 95 USD, 20-Jul-16, 105.1 $ 1.3Bn FDI fetched in FY16 Foreign Direct Investment (FDI) has posted a hefty increase of 39% during FY16 with major investment in energy sector. FDI maintained its upward momentum during last fiscal year and overall Pakistan fetched FDI amounting to $ 1.28Bn during Jul.Jun.’16 compared to $ 923Mn in the same period of FY15, depicting an increase of 38.8% or $ 358Mn. During FY16, FDI inflows stood at $ 2.1Bn against the outflow of $ 819.5Mn compared to $ 2.73Bn inflows and $ 1.81Bn inflows in FY15. The lower FDI outflow resulted in over 38% surge in the FDI during last fiscal year. BR. 85 LSM posts 3.45% growth The country’s large scale manufacturing (LSM) sector witnessed a growth of 3.45% during 11MFY16 as compared to the corresponding period of the last year. The Quantum Index Numbers (QIM) of large scale manufacturing industries was recorded at 132.80 points during 11MFY16 as against 128.37 points during 11MFY15, according to the PBS. On year to year basis, the industrial growth decreased 1.49% in May over the same month a year ago, while on month to month basis the industrial growth declined 3.47% in May 2016. The News. “Success is the sum of small efforts – repeated day in and day out.” T-bills worth PKR 404.97Bn SBP has sold market treasury bills (MTBs) worth PKR 404.97Bn in an auction held on 20th Jul, 2016, which is lower than PKR 200Bn original target set by the govt. The yield on six-month benchmark treasury fell to 5.8% as against 5.9% in the previous auction. It sold PKR 227.64Bn worth of 6M. Yield on 12-month paper stood at 5.8%, compared with 5.912% in the previous auction, where it sold PKR 107Bn long-term paper. Tribune. Chart of the Day Saudi company may take Pakistan to international court over steel mill dispute Saudi Arabia-based Al Tuwairqi Holding Company, which had served the govt. of Pakistan with a notice to pay PKR 1Bn in damages because of stalled operations at its steel mill, has threatened to take its case to the international court of arbitration. The management of Saudi-based firm had also engaged ambassadors of Saudi Arabia and South Korea to settle the dispute, but despite efforts the dispute could not be resolved. Tribune. Pakistan eyes $ 2Bn through rice exports Pakistan is estimated to export 4.5Mn tons of rice, fetching approximately $ 2.0Bn for the year 2016/17 as experts pin hopes on higher hybrid production as well as pro-agriculture and pro-export measures announced by the govt. The News. Ecnec Okays projects worth PKR 81.6Bn The Executive Committee of the National Economic Council (Ecnec) has approved 7 development projects with an estimated cost of PKR 81.6Bn. The lender funded project is designed to reduce losses and efficiently balance supply system. About 78% funding for the project would come from the Asian Development Bank (ADB), mostly as commercial loan while little over 22% funds would be arranged by LESCO through consumer tariff. Dawn. By 2020: Plans laid out to help IT exports cross $ 6Bn The govt. and the Pakistan Software Export Board (PSEB) are aiming to cross $ 6Bn in Information Technology exports by 2020, according to the I.T and Telecom State Minister. The minister has said that the goal of crossing $ 6Bn in IT exports and IT enabled services will be achieved by registering new companies, getting their financials documented and by creating new opportunities for entrepreneurs and companies to develop new products and services for export purposes. Tribune. 75 Jul-15 Oct-15 USD Jan-16 GBP Apr-16 EUR Jul-16 Source: KCCI Research ; Oanda.com Quote of the Day Robert Collier Pakistan's Remittance Received by Top 10 Countries Saudi Arabia 5,968 U.A.E. 4,365 U.K. 2,579 USA 2,523 Oman 819 Kuwait 774 Behrain 448 Qatar 381 Australia 194 Canada 175 Value in $ Bn 0 1,000 2,000 3,000 4,000 5,000 6,000 7,000 Source: KCCI Research, SBP 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