Pakistan Daily Economy Update - 23 February

Transcription

1. Feb . 24, 2017 KCCI - eBulletin Tajikistan to join Pakistan road link bypassing Afghanistan Tajikistan is poised to join a separate initiative which will connect Pakistan to Central Asia, bypassing Afghanistan entirely. Tajikistan’s request for inclusion into the Quadrilateral Traffic in Transit Agreement (QTTA), a deal between China, Pakistan, Kyrgyzstan and Kazakhstan for facilitating transit traffic and trade has been approved. The Central Asian state will now become a formal participant once its parliament approves the move. Tribune. Moody’s sees high growth, marks challenges Credit rating agency Moody’s expects Pakistan’s real GDP to expand by 4.9% in FY17 and 5% in FY18. However, it marked the government’s high financing requirements and the country’s weak institutions, high levels of corruption and high susceptibility to unexpected shocks in a turbulent political landscape, as key challenges. Dawn. Textile exports down 1.3% in Jan.’17 The country’s textile exports has witnessed 1.3% decline as it contracted to $ 1.06Bn during Jan.’17 from $ 1.08Bn in the same period last year. In this regard, exports of raw cotton decreased 49.77% to $ 1.07Bn in Jan.’17, cotton cloth declined 3.10% to $ 185.63Mn, yarn other than cotton yarn, decreased 35% to $ 1.260Bn, knitwear dropped 3% to $ 199.65Mn, towels export by 1.4% to $ 63.52Mn, readymade garments fell by 3.6% to $ 202Mn while 100% dip has been observed in exports of cotton carded with no exports recorded in Jan.’17 against $ 24,000 in Jan.’16. However, cotton yarn exports increased by 4.37% to $ 92.71Mn in Jan.’17 from $ 88.82Mn in Jan.’16. BR. PSX to be listed by June Chairman of the stock market’s divestment committee informed that PSX would stand listed on the bourse by the end of June’17. With 40% shares of the PSX already distributed to the original owners the 200-strong stockbroker fraternity and another 40% sold to the Chinese consortium, the remaining 20% shares of the bourse are to be offered to the public in an IPO. Dawn. Suzuki promises $ 660Mn investment, subject to conditions. Suzuki Motor Corporation of Japan has informed the federal government that total investment by Pak Suzuki Motor Company (PSMC) and its vendors will touch $ 660Mn. New entrants to the auto sector will receive certain incentives and benefits for five years under the Auto Policy 2016-21. In a letter to Finance Minister, SMC Managing Officer and Executive General Manager Global Automobile Operations Kinji Saito requested him that the same incentives and benefits must be given to existing players for two years from the start of the mass production of new models. Dawn. Govt. may grant tax exemptions to DPC The govt. is planning to grant exemption from income tax, minimum tax and withholding tax/advance tax to Deposit Protection Corporation (DPC), through Finance Bill 2017-18, which would ensure safety of depositors in the event of failure of a financial institution. The proposal has been floated by the SBP for the upcoming federal budget FY18 and being considered by the Finance Division and FBR. BR. Pakistan, UK firms join hands to offer digital remittance services A leading mobile financial services company has partnered with a UK based global digital money transfer firm “WorldRemit” to attract 5% of total remittance flow to the country. The company has announced incentives like additional cash for the recipients of remittances to make the digital channel catch the market faster and in lesser time. Tribune. Ministry bent upon importing LNG to cut power generation cost Petroleum Ministry is bent upon importing LNG to bring down the electricity generation cost by 17%. In this regard, govt. has decided to allocate 200mmcfd LNG to power sector to run inefficient plants, presently running on furnace oil. However, Water and Power Ministry has proposed limiting the establishment of new LNG-based power plants arguing that plants would have to be run on high-speed diesel and the price differential between the two would have to be picked up by the govt. BR. Nepra to develop upfront tariff for biomass-based power projects Nepra through its suo motu powers has decided to develop upfront tariff for biomass-based power projects. For this purpose, the regulator has prepared a proposal for the stakeholders, according to which tariff for 1-10 years has been proposed at PKR 7.23/unit, 11-30 years PKR 5.75/ unit, levelized tariff, PKR 6.98/unit whereas the proposed tariff for 16-60 years is PKR 6.74/unit and its levelised tariff at PKR 6.68/unit. BR. Govt ‘shelves’ LNG-based Muzaffargarh power project The government’s bid to set up a major LNG power project has scheduled for electricity generation by March 2018 on a war footing has failed to take off due to zero investor response. The government had announced on Oct 28 last year that it was inviting bids for a 1,200-megawatt LNG-based power project at Muzaffargarh as a contingency to ‘ensure load shedding-free Pakistan by 2018’. PPIB spokesperson confirmed that no bids were received for the project. Dawn. Foreign reserves stand at $ 21.9Bn The total liquid foreign reserves held by the country stood at $ 21.93Bn on Feb. 17, 2017 compared to $ 21.82Bn a week earlier. During the week, reserves held by the SBP increased by $ 35Mn to $ 17.03Bn from $ 16.99Bn in the preceding week. Similarly, net foreign reserves held by commercial banks stood at $ 4.90Bn compared to $ 4.83 in the previous week. The Nation. City industries threaten strike over Sepa notices Industries in the 7 industrial estates have threatened to go on strike if the Sepa does not withdraw notices for compliance with the Sindh Environmental Protection Act 2014. They argued that plants were set up before 2014 when the Sindh Environmental Protection Act was enacted, therefore there was no question of setting up of these plants on an individual basis. They further said that Sindh government had already allocated funds in the budget 2016-17 for environmental protection and waste water management, therefore, the federal government should also contribute its share to the cost of effluent treatment plans. Dawn. ECC approves $ 25Mn for National Disaster Risk Management Fund The Economic Coordination Committee (ECC) of the Cabinet under the chairmanship of Finance Minister Ishaq Dar has approved allocation of $ 25Mn for National Disaster Risk Management Fund (NDRMF) and to exempt withholding tax on dividends to the Transmission Line project in accordance with the recommendation tabled by regulator Nepra, especially belonging to public sector for making investments inside the country. The Asian Development Bank (ADB) has also shown an indicative assistance of $ 1.2Bn as loan for this fund. The News. Corporate results: Byco Petroleum reports PKR 180Mn profit for half year Byco Pakistan Petroleum Limited has reported a consolidated net profit of PKR 180.04Mn (EPS: PKR 0.18) in 1HFY17. The oil marketing company had booked a net loss of PKR 448.77Mn (EPS: PKR 0.46) in 1QFY16. Tribune. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (AP'17) Gold (MA'17) Gold (10g) Local Silver (MA'17) Cotton(KHI)-40 kg Kibor-6M 23-Feb 23-Feb 23-Feb 23-Feb 23-Feb 23-Feb 23-Feb 23-Feb 23-Feb 23-Feb PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 104.85 107.30 49,062 -1.97 54.36 1,250 42,772 18.25 7,272 6.13% Forex Reserves 17-Feb $ Bn 21.93 0.00% 0.00% 0.16% NM** 1.49% 0.96% -1.38% 1.38% 0.00% 0.01% WoW 0.48% YoY -1.86% -3.21% 19.32% -20.29% -90.24% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Jan 17 Remittances $ Bn 10.95 Jul-Jan 17 Exports* $ Bn 11.69 Jul-Jan 17 Imports* $ Bn 29.11 Jul-Jan 17 Trade Balance* $ Bn -17.43 Jul-Jan 17 Current Account $ Mn -4,716 % 3.85 Avg. CPI-FY17* Jul-Jan 17 Jan-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 Feb-16 GBP, 23-Feb-17, 130.5 EUR, 23-Feb-17, 110.5 USD, 23-Feb-17, 104.6 May-16 USD GBP Aug-16 Nov-16 Feb-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "If you can't fly then run, if you can't run then walk, if you can't walk then crawl, but whatever you do you have to keep moving forward." Martin Luther King, Jr. Chart of the Day Top Cotton Producing Countries (2016) 7000 6000 5000 4000 3000 2000 1000 0 In Thousand Metric Tonnes Source:KCCI Research, Worldatlas 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