Pakistan Daily Economy Update - 22 July

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1. Jul . 22, 2017 KCCI - eBulletin Don’t let this moment of opportunity slip away, IMF warns Pakistan Mr. Tokhir Mirzoev, Resident Representative of IMF to Pakistan, has warned that the moment of opportunity earned through the stabilisation programme is a hard-earned opportunity to advance deeper structural transformation of the economy to ensure future stability. He cautioned that present trends could undermine macroeconomic stability if the reforms do not continue. Key trends he pointed towards were widening of the current account deficit and a still vulnerable fiscal framework. He also mentioned that there is a need to rebalance the federal-provincial fiscal relations. Further, there are wide gaps in the devolution of resources and responsibilities to the provinces under the last NFC award. Dawn. MPS today: key policy rate may be kept unchanged SBP will unveil the Monetary Policy Statement on Jul. 22, 2017 (today). In the previous policy announced in May this year, the committee kept the policy rate unchanged at 5.75%. It is expected that SBP will most likely maintain the status quo for next two months as CPI inflation remained in the target at the end of FY17 and is projected to be around 3% for Jul.’17. BR. CPEC: Minister sees crucial FBR role Addressing a Business and Research Seminar on CPEC under FBR’s Directorate of Training and Research (Customs), Planning Minister Ahsan Iqbal has asked the FBR to finalize a detailed plan to ensure its crucial role in CPEC by setting up business-friendly and state-of-the-art documentation system, monitoring and implementation as well as evaluation and assessment mechanism. The Minister said that Customs would have to play a crucial role in CPEC facilitating effective channels for engaging Pakistan in global supply. BR. Money laundering: 200 STRs being investigated Directorate General, Intelligence & Investigation-Inland Revenue (IR) is investigating around 200 Suspicious Transaction Reports (STRs) received from Financial Monitoring Unit (FMU) of SBP, covering high risk areas of money laundering. The agency has highlighted that the proceeds of crime can easily be invested in the stock market for purpose of money laundering as no compliance with AML is required. Currently there is no effective mechanism to check sources of proceeds of an institutional investor. BR. Tahir Mahmood made acting SECP chief The federal govt. has appointed Commissioner Company Law Division, Tahir Mehmood as acting chairman SECP. The incumbent Chairman Zafar Hijazi is unable to perform his duties due to an ongoing investigation against him. As per SECP Act 1997, the senior most commissioner is to be notified as acting chairman. Presently, Tahir Mehmood is the senior most commissioner who is on leave and will join office on Jul. 24, 2017. He has been associated with the SECP since 1989. Prior to his appointment as a commissioner by the federal govt. in Sept.’10, he had been serving as the executive director (enforcement) since Jul.’06. BR. Unclaimed/unpaid dividend: Hub Power asks SECP to explain treatment of interest/profit Hub Power Company has asked the SECP to clarify the treatment of interest/profit earned by the company on unclaimed/unpaid dividend under Unclaimed Shares, Modaraba Certificates, Dividend and Other Instruments Regulations, 2017. The Company contends that the unclaimed shares may not be included in the regulations, as it will have legal complications. BR. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 21-Jul 21-Jul 21-Jul 21-Jul 20-Jul 20-Jul 21-Jul 20-Jul 21-Jul 21-Jul PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.35 107.20 45,294 -1.40 46.96 1,243.4 43,714 16.27 6,752 6.14% Forex Reserves 14-Jul $ Bn 20.83 0.01% 0.00% 0.52% NM** -0.72% 0.21% 0.30% 0.25% 0.00% 0.00% WoW -2.88% YoY -3.08% -1.63% 18.67% -36.32% -148.57% 4.58% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Jun 17 Remittances $ Bn 19.30 Jul-Jun 17 Exports* $ Bn 20.45 Jul-Jun 17 Imports* $ Bn 53.03 Jul-Jun 17 Trade Balance* $ Bn -32.58 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 4.16 Jul-Jun 17 Avg. CPI-FY17* Discount Rate % 5.75 May-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 145 GBP, 21-Jul-17, 136.0 135 125 EUR, 21-Jul-17, 122.0 115 105 95 Jul-16 USD, 21-Jul-17, 104.8 USD Oct-16 GBP EUR Jan-17 Apr-17 Jul-17 Source: KCCI Research ; Oanda.com Quote of the Day Nutrition in Sindh: Pakistan, EU sign € 60Mn financing agreement The govt. and the European Union (EU) have signed a € 60Mn financing agreement for improving nutrition in Sindh. The scope and objective of the agreement is to primarily increase the capacity of the government of Sindh so that it may efficiently implement its nutrition multi-sectoral policy, while providing direct assistance to significantly and rapidly reduce malnutrition in Sindh. Furthermore, this agreement will also align and actively support the ongoing Accelerated \ Action Plan for the Reduction of Stunting and Malnutrition in Sindh. BR. "We all have ability. The difference is how we use it." Charlotte Whitton WB's assistance: K-P to have metallurgical facility soon The govt. plans to set up a marble and granite cutting and finishing facility in KP to impart professional training to workers and generate employment opportunities. The govt. also plans on initiating mineral extraction projects in Chitral and Kohistan through modern techniques and equipment during the current fiscal year. The facilities will be built with financial assistance of the World Bank while it will also assist in constructing roads for transporting minerals from mines to cutting facilities, along with other multilateral donors; the ultimate plan is to establish large-scale metallurgical centres. Tribune. Fish exports up by 21% Pakistan’s fish and fish preparation exports went up by 20% in quantity and 21.35% in value during FY17 due to price increase in world markets and higher landing of the catch. However, the Marine Fisheries Department (MFD) fears that following the suspension of seafood exports to the United States after an inspection visit, other countries may follow suit. Pakistan’s fish and seafood products are already banned in the European Union and Saudi Arabia. Data released by PBS shows that fish exports reached $ 394Mn (152,858 tons) in FY17 as compared to $ 325Mn (127,910 tons) in FY16. Dawn. Imports of food, oil surge The import bill of food, machinery and oil edged up 29% YoY to $ 28.79Bn in FY17, causing a higher-than-expected trade deficit of $ 32.6Bn. The overall import bill ballooned to an all-time high of $ 53Bn in the last fiscal year. The share of these products in the overall import bill increased to 55% from 50% a year ago. Official figures compiled by PBS show imports under the petroleum group increased 30.24% YoY to $ 10.9Bn in July-June. Dawn. Tarbella daily water storage restricted at maximum 1 foot Instead of Indus River System Authority (Irsa), Water and Power Ministry has started the regulation of Tarbella and has restricted Wapda from filling more than one feet of water per day in the reservoir, saying it will endanger the reservoir earlier Irsa and Wapda agreed on SOP regarding the filling of Tarbella dam beyond 1,510 feet. It was agreed that one to five feet, per day, water will be stored in the dam .However, last year only one feet per day was stored in the dam. Resultantly, Tarbella dam was not filled to its maximum level of 1,550 feet. The Nation. Chart of the Day PAKISTAN's IMPORT PAYMENTS CONTINENT WISE (11MFY17) Europe, 13.0% America's, 6.4% Africa, 3.0% Australia & New Zealand, 1.0% Asia, 75.9% 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 R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk