Pakistan Daily Economy Update - 21 June

Transcription

1. June .21, 2018 KCCI - eBulletin Uncertainty results in currency plunging to PKR 125 in open-market Speculation and uncertainty over the rupee’s value against the US dollar has pushed its rate up to a record level of PKR 125 in the open market, widening the spread with the inter-bank market. As Pakistan desperately moves to arrest the slide of its foreign exchange reserves, the PKR has lost value in both inter-bank and open markets, with the spread between the two going as high as PKR 3.52. It closed at PKR 121.48 in the inter-bank market. Tribune. FBR pitches tax amnesty scheme to businessmen FBR Chairman Tariq Mahmood Pasha has urged the business community to avail advantage of tax amnesty scheme, terming it the last chance to legalize undeclared assets. Speaking to businessmen, he said the amnesty scheme was focused on the business community therefore, they should derive maximum benefit from it. He remarked that global tax laws were being changed and soon it would become difficult for Pakistanis to hide their assets overseas. He said the amnesty scheme was passed by parliament and therefore, it was difficult to extend its deadline. He said that upon declaring hidden assets by 30th Jun’18, taxpayers would also be facilitated in filing tax returns for this financial year. Tribune. KCCI urges govt. to extend date of amnesty scheme President Karachi Chamber of Commerce and Industry (KCCI) Muffasar Atta Malik has urged the govt. to review the entire foreign exchange situation of the country and accordingly extend the last date for Amnesty Scheme 2018 by at least one to two more months so that maximum number of individuals could benefit from this scheme. Muffasar Malik pointed out that so far, the Amnesty Scheme has not received the kind of response which was being expected, probably due to holy month of Ramadan, which was followed by four consecutive holidays of Eid ul Fitr. With hardly 9 days left and the last three days falling on Friday, Saturday and Sunday, those individuals intending to declare foreign assets under Amnesty Scheme will not be able to do so because of limited time, he said. He urged President Mamnoon Hussain to take cognizance of the situation and issue necessary Presidential Order to extend the Amnesty Scheme. BR. Moody’s downgrades Pakistan’s rating outlook to negative Moody’s Investors Service has downgraded Pakistan’s rating to negative from stable and affirmed the B3 local and foreign currency long-term issuer and senior unsecured debt ratings. The decision to change the outlook to negative was driven by heightened external vulnerability risk as ongoing balance of payment pressures erode foreign exchange buffers. The rating agency expects the govt.’s tax amnesty scheme, due to expire on 30th Jun’18, to have a modest impact of around $ 2-3Bn in foreign exchange inflows. Moody’s said that Pakistan’s foreign exchange reserves have fallen to low levels and in the absence of significant capital inflows, they would not be replenished over the next 12-18 months. The decision to affirm the B3 rating reflects Pakistan’s robust growth potential, supported by ongoing improvements in the energy supply and physical infrastructure, which are likely to raise economic competitiveness over time, it said. Pakistan’s Ba3 local currency bond and deposit ceilings remain unchanged. There has also been no change in the B2 foreign currency bond ceiling and the Caa1 foreign currency deposit ceiling. Dawn. Pakistan’s current account deficit surges 43% to $15.96b Pakistan’s current account deficit, which remains the toughest challenge for economic managers, has shot up by 43% to $ 15.96Bn in 11MFY18, with higher than targeted imports and lower workers’ remittances. As per data released by the SBP, the 11 month deficit stands very close to the full-year’s estimate of $ 16Bn, suggesting that the deficit for full FY18 would swell to around $ 17.5Bn by end of Jun’18. Imports remained exorbitant despite the govt.’s decisions to impose additional regulatory duties on over 300 items while Rupee depreciation by over 15% against the USD in the last six months also proved to be unhelpful. Although workers’ remittances have improved 3% to $ 18Bn, the trend suggests that it would remain lower than the set target of $ 20.7Bn. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 20-Jun 20-Jun 20-Jun 20-Jun 20-Jun PKR PKR 121.47 124.00 -0.22% 0.00% Pts. $ Mn $/bbl 43,003 -2.65 65.44 -1.56% NM** 0.80% 20-Jun 20-Jun $/oz PKR 1,268.1 50,925 -0.55% 0.00% Cotton(KHI)-40 kg 20-Jun 20-Jun $/oz PKR 16.28 8,145 -0.16% 0.00% Kibor-6M 20-Jun % 7.02 $ Bn 16.46 0.01% WoW 0.23% Remittances 8-Jun FY18 Jul-May 18 $ Bn 18.03 YoY 2.95% Exports* Imports* Jul-May 18 Jul-May 18 $ Bn $ Bn 21.35 55.23 15.28% 14.12% Jul-May 18 Trade Balance* $ Bn -33.89 Jul-May 18 Current Account $ Bn -15.96 Foreign Direct Inv. $ Bn 2.48 Jul-May 18 Jul-Mar 18 LSM Growth* % 5.89 % 4.20 Jul-May 18 Avg. CPI Discount Rate % 6.50 May-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -13.40% -43.28% -1.26% USD-Interbank USD-Open MKT KSE-100 index FIPI Crude (AU'18) Gold (JY'18) Gold (10g) Local Silver (JY'18) Forex Reserves Major Currencies 175 155 145 Non-customs paid vehicles: Amnesty Scheme does not cover legalisation: FBR The FBR has issued frequently asked questions (FAQs) regarding Voluntary Declaration of Domestic Assets, Act 2018 & Foreign Assets (Declaration and Repatriation) Act, 2018, which has clarified that the Amnesty Scheme does not cover legalization of non-customs paid vehicles. BR. Circular debt swells PKR 40Bn in just three weeks The country’s circular debt has grown PKR 40Bn in the first three weeks of the current caretaker govt., reaching close to PKR 550Bn. The Senate special committee on circular debt was briefed that it stood at PKR 507Bn on 31st May’18, the last day of the previous govt. The committee discussed debt pile-up, electricity theft and load-shedding. It was informed that the previous govt. had paid PKR 200Bn, but after that no payments were made to reduce circular debt. Tribune. EUR, 20-Jun-18, 140.6 135 125 115 USD, 20-Jun-18, 121.5 105 95 Jun-17 Sep-17 GBP USD EUR Dec-17 Mar-18 Source: KCCI Research ; Oanda.com Quote of the Day FDI drops 26% to $ 238Mn in May 2018 Foreign direct investment (FDI) in the economy dropped by 26% to $ 237.9Mn in May’18, apparently due to political uncertainty ahead of the general elections in Jul’18. According to SBP, FDI slightly decreased 1.3% to $ 2.47Bn in 11MFY18 compared with $ 2.50Bn in 11MFY17. China, which is investing huge in power and infrastructure projects, invested net $ \ 95.6Mn in May’18, followed by Norway, which injected net $ 84.6Mn in the month. The country’s communications sector attracted the single largest net investment of $ 81.6Mn in May’18, followed by the construction sector, which attracted net $ 71.6Mn. Tribune. SECP rolls out new anti-money laundering regulations in line with FATF recommendations The SECP has issued the Anti-Money Laundering and Countering Financing of Terrorism Regulations, 2018. The new rules are in compliance with the Financial Action Task Force (FATF) recommendations, needed to be adopted by the country as a member of the Asia Pacific group on money laundering. The new regulations supersede all earlier notifications which had separate antimoney laundering (AML) and countering financial terrorism (CFT) requirements for financial institutions regulated by the SECP. Tribune. GBP, 20-Jun-18, 160.0 165 "In the business world, the rearview mirror is always clearer than the windshield" Warren Buffett Chart of the Day Net Investment In National Saving Schemes 450 250% 386.08 400 300 267.22 225.71 250 200 150 100 200% 337.06 350 150% 234.94 188.36 89.46 206.98 233.03 100% 207.62 50% 121.11 0% 50 -50% 0 -100% Textile exports increase to $1.204Bn in May Net Investment (PKR Bn) Change in % (RHS) Pakistan’s textile exports clocked in at $ 1.204Bn for May’18, up 28.4% year-on-year and 4.8% month-on-month. PBS data Source: KCCI Research, SBP showed that textile exports amounted to $ 938Mn in May’17 last year and $ 1.15Bn in Apr’18. Cotton yarn exports increased Disclaimer 41.3% in May’18 to $ 130.13Mn while knitwear exports rose 39.2% to $ 258.86Mn. On cumulative basis, textile exports rose This report has been prepared by KCCI Research & Development Cell. The information contained 9.82% to $ 12.34Bn in 11MFY18. The News. 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. Steel prices cross PKR 100,000-per-ton mark The price of steel has crossed the PKR 100,000-per-ton barrier for the first time in the country’s history, after a weaker rupee icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' pushed caused sellers to raise rates. The commodity was previously being sold around PKR 97,000-98,000/ ton. Tribune. understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk