Pakistan Daily Economy Update - 21 October

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1. Oct . 21, 2016 KCCI - eBulletin Current account deficit surges by 136% in 1QFY17 SBP has revealed that the country's current account balance has posted a deficit of $ 1.37Bn in 1QFY17 compared to $ 579Mn in 1QFY16, depicting an increase of 136% or $ 789Mn. During last fiscal year, the country's CA deficit declined by 15% to $ 3.13Bn. With services and income surged by 11% or $ 712Mn, combined deficit of goods, services and income reached $ 6.97Bn in 1QFY17 compared to $ 6.26Bn in the same period last year. Similarly, services trade deficit posted an increase of 157% or $ 565Mn, standing at $ 925Mn, with $ 1.14Mn exports and $ 2.06Bn imports. With the current increase, combined deficit of goods, services and income reached $ 6.97Bn in 1QFY17 compared to $ 6.26Bn in the same period of last fiscal year. With $ 10.19Bn imports and $ 5.04Bn exports, the country's goods deficit stood at $ 5.15Bn during 1QFY17 against $ 4.75Bn trade deficit in the corresponding period.BR. Pakistan receives $ 1Bn of Sukuk proceeds With the arrival of Sukuk bond inflows, the country's total liquid foreign exchange reserves reached an all-time high of $ 24.24Bn. According to the SBP, Pakistan has successfully received inflows amounting to $ 1Bn against the auction of Sukuk bonds in the world market, following which the country's forex reserves surged to all-time high. BR. Forex reserves jump to $ 24.4Bn The total liquid foreign reserves held by the country stood at $ 24.46Bn on Oct. 14, 2016 compared to $ 23.49Bn on Oct. 7, 2016. The foreign reserves held by the SBP surged by $ 1.05Bn to $ 19.46Bn up from $ 18.41Bn in the previous week. However, reserves held by banks decreased by $ 82Mn to $ 4.99Bn from $ 5.08Bn in the preceding week. The Nation. Pakistan needs to reform tax system: US Under the umbrella of Trade and Investment Framework Agreement (TIFA) Council, Assistant US Trade Representative (AUSTR) for South Asia Michael J Delaney has said that Pakistan has to reform its tax system, investment policies and dispute resolution mechanism to attract Foreign Directive Investment (FDI) and increase external trade from the rest of the world, including the US. The United States hosted a GSP outreach event with Pakistan business associations immediately following the TIFA Council meeting to increase awareness of the US GSP program among Pakistani exporters. BR. Tax returns: FBR reactivates KIOSKS and TFCS The FBR has reactivated all Tax Facilitation Kiosks (KIOSKS) and Tax Facilitation Centres (TFCS) to facilitate taxpayers in timely filing of their income tax returns. According to the FBR instructions to Large Taxpayer Units (LTUs) and Regional Tax Offices (RTOs), all Chief Commissioners have been requested to ensure that all Tax Facilitation Kiosks (KIOSKS) and Tax Facilitation Centres (TFCS) are immediately operational and reactivated as the last date for filling of income tax return is Oct. 31 2016. BR. Registered taxpayers: FBR seeks bank account numbers In a major move to facilitate business community particularly exporters, the FBR has approached the sales tax registered taxpayers seeking their bank account numbers for direct electronic credit of sales tax refunds into their accounts from Nov.’16. In this regard, FBR has issued requests to the taxpayers for providing IBANs (International Bank Account Numbers) for direct electronic credit of sales tax refund. BR. K-Electric consumers to pay PKR 0.38 per unit more Nepra has agreed to an increase of PKR 0.38 per unit in the tariff of K-Electric consumers on account of higher fuel cost for Jul and Aug’16. K-Electric has informed that over PKR 237.8Mn and PKR 358.7Mn extra were spent on the consumption of fuel in the generation of electricity in July and August respectively. Therefore, the power utility urged NEPRA to increase the power tariff under fuel charges adjustment. On this, the regulatory body approved increase by PKR 0.15 paisa per unit in the tariff for Jul’16 and PKR 0. 23 paisa per unit for Aug’16. Tribune. Rise in charges to affect Karachi Port’s competitiveness The removal of capping on port tariffs by the Karachi Port Trust has pushed up port charges, making it costlier than Port Qasim by 15%, shipping agents and port users claimed. With the increase in port tariff, the average impact hovers around 66% on tariff of large containers ships and around 50% on tanker port charges. Dawn. SECP takes measures to facilitate corporate sector SECP, in order to facilitate registration of companies, has been introducing various facilitative measures from time to time. According to a statement released by the commission, SECP has made drastic reductions in registration fee for small companies and filing fee of companies with small capital base. SECP provides complimentary certified true copy of company formation documents and other statutory returns to the companies upon its registration. The time of incorporation has been reduced from minimum 4 hours to 2 hours under Fast Track Registration System. Daily Times. PSX to extend financing through Islamic modes In order to facilitate such investors/financiers who are interested to extend financing through Islamic modes, Pakistan Stock Exchange has planned to launch Islamic Financing System (IFS). In this regard, NCPL has issued a draft concept paper to introduce Islamic Financing for shares in securities market for the consultation of market participants. According to the proposed IFS, financing may be provided by a securities broker to its customer using its own funds or by an Islamic Financing Institution (IFI) to a securities broker and its customers. Daily Times. Nestlé Pakistan reports operating profit of PKR 16Bn Nestlé Pakistan boosted its overall earnings by 27.8 % for the nine months period, ending on Sep 30th, 2016. The company witnessed an overall increase in its total revenue by almost PKR 7.2Bn. Nestlé Pakistan's operating profit increased by PKR 2.4Bn to PKR 16Bn as compared to the same period last year. Additionally, its EPS have increased from PKR 169.41/share to PKR 216.47/share. In the area of sales, Nestlé Pakistan's revenue stood at PKR 84.3Bn, 9.27% higher as compared to the same period last year. Daily Times. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 20-Oct PKR 104.75 0.06% USD-Open MKT 20-Oct PKR 105.50 0.00% KSE-100 index FIPI 20-Oct 20-Oct Pts. $ Mn 41,546 -3.66 1.52% NM** Crude (DE'16) 20-Oct $/bbl 50.62 -1.99% Gold (DE'16) 20-Oct $/oz 1,265 -0.32% Gold (10g) Local 20-Oct PKR 44,314 0.78% Silver (DE'16) 20-Oct $/oz 17.49 -0.90% Cotton(KHI)-40 kg 20-Oct PKR 6,629 0.00% Kibor-6M 20-Oct % 6.06% 0.01% Forex Reserves 14-Oct $ Bn 24.46 4.12% Remittances Jul-Sep 16 $ Bn 4.70 -5.28% Exports* Jul-Sep 16 $ Bn 4.68 -8.98% Imports* Jul-Sep 16 $ Bn 11.75 10.70% Trade Balance* Jul-Sep 16 $ Bn -7.07 -29.21% Current Account Avg. CPI-FY17* Jul-Sep 16 Jul-Sep 16 $ Mn % -1,368 3.88 -136.27% WoW YoY Sep-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 175 165 155 145 GBP, 20-Oct-16, EUR, 127.4 20-Oct-16, 113.8 135 125 115 105 95 USD, 20-Oct-16, 103.8 85 75 Oct-15 Jan-16 USD Apr-16 GBP Jul-16 Oct-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day “Individual commitment to a group effort - that is what makes a team work, a company work, a society work, a civilization work.” Vince Lombardi Chart of the Day 15 Pakistan's Quaterly Trade Comparison (1QFY13 1QFY17) 12.52 11.18 10.85 10.66 11.73 10 6.71 6.19 6.02 5.16 4.68 5 0 -5 -4.67 -4.47 -6.50 -10 1QFY13 1QFY14 Exports ($ Bn) 1QFY15 Imports ($ Bn) -5.50 1QFY16 -7.05 1QFY17 Trade Balance ($ Bn) Source: KCCI Research, SBP Attock Cement’s profit surges 44% year-on-year Attock Cement Pakistan Limited (ACPL) has reported net earnings of PKR 691Mn (EPS: PKR 6.03) in 1QFY17, up 44% compared Disclaimer with PKR 481Mn (EPS: PKR 4.20) in 1QFY16. Tribune. 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. HBL records PKR 25.75Bn profit in nine-months Habib Bank Limited (HBL) has recorded a profit of PKR 25.75Bn (EPS: PKR 17.47) in 9MCY16. The bank also announced a third icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' quarter dividend of PKR 3.50/share (35%), which is in addition to an already-paid cash dividend of PKR 7. The News. understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk