Pakistan Daily Economy Update - 23 February

Transcription

1. Feb . 23, 2018 KCCI - eBulletin Terror-financing watchlist: Saudi Arabia joins Turkey, China to block US-led motion Saudi Arabia joined Turkey and China in a move to block a US-led attempt to place Pakistan on an international terror-financing watch list. A US effort to reverse the decision on the motion was under way at a meeting of the Financial Action Task Force (FATF), a secretive international body that monitors countries' efforts to fight terror financing and money-laundering. The US effort, which includes pressure on the Saudis, raises the possibility of a fresh vote on action against Pakistan. Whether Saudi Arabia sticks by Pakistan now is key, with the issue likely to come before the full FATF membership at the plenary meeting. BR. Pakistan’s short-term borrowing rises to $ 1.78Bn in July-Jan The govt.’s short-term borrowing from China and other commercial banks rose sharply in 7MFY18 to fund spending following a slowdown of disbursements from multilateral creditors, as Pakistan secured $ 1.78Bn as short-term commercial borrowings against envisaged estimates of $ 1Bn for the whole FY18. This pace of commercial borrowings suggests that it might cross $ 2Bn mark for the full year. Total disbursements from multilateral and bilateral creditors were $ 6.88Bn in 7MFY18 against set target of $ 8.09Bn for FY18. Further, in view of a possible hike in US treasury rates and its impact on the bond market, the govt. has halted the issuance process of another Eurobond. The News. Shocking spike in July-December external loans The govt.'s reliance on external loans to finance the budget deficit increased by 826% in 1HFY18 to PKR 338.5Bn from PKR 36.5Bn in 1QFY18. Reliance on foreign loans is expected to increase further in 2HFY18 due to an increase in development spending in the remaining tenure of the present govt. ahead of 2018 general elections. BR. Turkmenistan completes its section of TAPI pipeline Turkmenistan has completed construction of the gas pipeline in its section under the Turkmenistan, Afghanistan, Pakistan and India (TAPI) project, following which a ground-breaking ceremony is scheduled to be held at the Turkmen border city of Serhetabat (today) to take the pipeline to Afghanistan. The grand inaugural ceremony would be preceded by a Steering Committee meeting of the project’s participating countries at Mary City in Turkmenistan. PM Abbasi would be participating in the ground-breaking ceremonies of TAPI gas pipeline project, lines of electricity transmission and fibre. Tribune. Loadshedding may return as losses have tripled, warns minister Pakistan will have to bear power sector losses of PKR 360Bn in 2018 — three times greater than those in 2013. Because of increase in the quantum of power generated, Pakistan will have to absorb such huge loss despite 1.2% reduction in system losses, said Minister for Power Awais Ahmed Khan Leghari. He said surplus electricity is now available in the system, sufficient to end loadshedding across the country, but only if there are no losses. The minister is apparently setting the stage for relatively greater loadshedding in the coming seasons after inability of the govt. and its power companies to improve on electricity bills and reduce system losses. Dawn. Power consumers to get PKR 3.24 per unit refund, except for Karachi Nepra has ordered ex-Wapda distribution companies to refund PKR 3.24 per unit to consumers for overcharging them PKR 34Bn in Jan’18. The decision was taken at a public hearing. The relief in electricity rates would not be applicable to agricultural consumers and residential consumers with less than 300 units of monthly consumption. KE consumers would also not benefit from the relief. Dawn. Development schemes: ‘Sindh’s pace of work quicker than last year’ CM Sindh Murad Ali Shah has noted that there has been an improved pace of work on most development schemes during the current fiscal year compared to FY 17, as he presided over the first meeting for the preparation of the FY19 provincial budget. He directed the participants to control non-development expenditures and increase allocations in the social sector such as education and health in the next budget. The CM stressed more focus on water supply so that schemes in the sector are completed as early as possible. Tribune. Ghandhara Nissan likely to resume Datsun car production \ Ghandhara Nissan is likely to get govt. permission for resuming production of cars in Pakistan as the BOI and the EDB have agreed to treat the company’s plan as a Brownfield investment. It will be allowed to import auto parts at lower rates of customs duty for a period of three years. Ghandhara Nissan had been facing difficulties in getting the Brownfield status, but it assured the govt. that the company wanted to make a total investment of $ 200 Mn by reviving the closed plant. Tribune. Brokers barred from obtaining licences for futures advisers The SECP has prohibited securities brokers, duly licensed by the Commission and providing custodial services as integral part of brokerage business model, from obtaining licenses for securities advisers or futures advisers. The SECP issued SRO 253 (I)/2018 to amend Securities and Futures Advisers (Licensing and Operations) Regulations, 2017. According to the revised regulations, no person shall act as or perform the functions of a securities adviser or futures adviser unless such person is licensed with SECP as a securities adviser or futures adviser. BR. Rules notified for e-voting in company polls The SECP has notified the Companies (Postal Ballot) Regulations, 2018, allowing shareholders and board members of companies to cast their votes through postal ballots. For the purposes of e-voting and related matters, a company shall appoint an e-voting service provider subject to the fulfilment of eligibility and other requirements specified under the regulations. The companies would ensure that agenda items of polls are correctly uploaded in the web portal of e-voting service provider and would resolve any grievances of members to enable them to cast their votes through e-voting. Dawn. Reserves decline to $ 18.83Bn Foreign exchange reserves of the country fell by $ 139Mn to $ 18.83Bn during the week ended 16th Feb’18, the SBP reported. Forex reserves have been taking a toll each successive week, posing the risk they could fall below the critical level that requires the country to have forex holdings to cover at least three months’ imports. Reserves held by the SBP dropped by $130Mn to $ 12.70Bn, while those held by commercial banks witnessed a slight fall of $ 9Mn to $ 6.13Mn. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 22-Feb 22-Feb 22-Feb 22-Feb 22-Feb 22-Feb 22-Feb 22-Feb 22-Feb 22-Feb PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 110.40 112.05 43,529 1.20 62.60 1,330.5 48,428 16.56 7,395 6.44 0.00% 0.36% 1.42% NM** 2.42% 0.51% 0.27% 0.61% 0.00% 0.00% WoW -0.74% YoY 3.55% 11.11% 18.92% -24.18% -48.11% -2.94% USD-Interbank USD-Open MKT KSE-100 index FIPI Crude (AP'18) Gold (MA'18) Gold (10g) Local Silver (MA'18) Cotton(KHI)-40 kg Kibor-6M Forex Reserves $ Bn 18.83 16-Feb FY18 Remittances Jul-Jan 18 $ Bn 11.38 Exports* Jul-Jan 18 $ Bn 12.97 Imports* Jul-Jan 18 $ Bn 34.51 Trade Balance* Jul-Jan 18 $ Bn -21.55 Current Account Jul-Jan 18 $ Mn -9,156 Foreign Direct Inv. $ Bn 1.49 Jul-Jan 18 LSM Growth* Jul-Dec 17 % 5.55 % 3.85 Avg. CPI Jul-Jan 18 Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 165 GBP, 22-Feb-18, 154.5 155 145 135 EUR, 22-Feb-18, 136.1 125 115 105 95 Feb-17 USD, 22-Feb-18, 110.7 May-17 GBP USD EUR Aug-17 Nov-17 Source: KCCI Research ; Oanda.com Quote of the Day " It Is Not the Mountain We Conquer, But Ourselves" Edmund Hillary Chart of the Day 900 Net Payments made on Air Transport by Pakistan (Mn $) 800 195 700 600 144 500 400 198 300 200 100 0 162 111 FY14 513 656 109 256 245 FY15 FY16 Passenger FY17 1HFY18 Freight Source: KCCI Research, SBP Disclaimer Agriculture to suffer as Mangla reaches dead level The irrigation system has worsened as Mangla Dam has reached its dead level of 1050 feet, prompting Indus River System 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 Authority (IRSA) to equalise water inflow and outflow from the reservoir. Wwater supply to Punjab has reduced from the dam be reliable and in good faith. Such information has not been independently verified. Dam and to meet the demand of Punjab from Indus River, Irsa members with the 3:1 has allowed the opening of Chasma Jhelum Link canal. Nation. 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