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Pakistan Daily Economy Update - 24 November

IB Insights
By IB Insights
4 years ago
Pakistan Daily Economy Update - 24 November

Ard, Arif, Reserves


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  1. Nov . 24, 2017 KCCI - eBulletin KCCI slams K-E for not passing relief to consumers According to a report published by Karachi Chamber of Commerce (KCCI)’s Research & Development department, over PKR 17Bn are reported to have been accumulated under claw-back formula but the relief has never been passed on to the consumers as KE had taken a stay order from the court against it. The report suggests that now there is a need to shift from monopoly to competition for which Pakistan is yet to allow multiple private electricity transmission and Discos to operate targeting the same consumers through infrastructure sharing. It further emphasize on strengthening control on all the services of the Discos, rationalize all the costs for the consumers, devise a mechanism of reliable third party verification, testing and certifications, and regulate unnecessary time lags and overbilling issues. BR. Multi-Year Tariff of KE: Nepra to hear reconsideration request on Dec. 5, 2017 Nepra has fixed Dec. 5, 2017 to hear reconsideration request filed by Govt. of Pakistan for Multi-Year Tariff (MYT) of KElectric determined by Nepra for period effective from Jul.’16 to Jun.’23. Raising its concerns, KE management has said that determined MYT will turn KE into a loss-making entity with significant cash shortfall over the next seven years which would lead to significant increase in load shedding and technical power outages. BR. Power tariff reduced by PKR 2.23 per unit for ex-Wapda Discos Nepra has accorded a reduction of PKR 2.23 per unit in power tariff for the ex-Wapda distribution companies (Discos) for Oct.’17 under the monthly fuel adjustment formula. This adjustment/relief will be available to the domestic consumers throughout the country except in Karachi and the lifeline consumers. This compensation will be available to consumers in their Nov.’17 bills. The reduction is expected to provide power consumer with a relief of worth PKR 22Bn. The News. Economic corridor: SEZs to boost exports to $ 1.5Bn Special Economic Zones (SEZs) under CPEC would enhance exports by $ 1Bn to $ 1.5Bn per annum in the short-run and boost export prospects in the long-run as well. The Board of Investment (BoI) reportedly handed over feasibility studies of 9 industrial zones to Chinese delegation in the 7th ministerial-level meeting of Joint Coordination Committee (JCC) held on Nov. 21-22, 2017 in Islamabad. The Chinese delegation has accepted the proposal of KP govt. to establish an industrial zone at Rashakai. The Board will provide one window facility within the Zone for facilitation of investors. BR. Govt. searches for new finance minister The govt. has begun searching for a new finance minister a day after ex- Finance Miniter Ishaq Dar is relieved of his portfolio amid mounting headwinds for the economy. Among the names mentioned as possible finance chiefs are Miftah Ismail, an economist who is currently chairman of the country's board of investment, and former finance minister Sartaj Aziz. Others have speculated that Prime Minister Shahid Khaqan Abbasi might run the finance portfolio himself until the next general election, likely in Aug.’18. BR. Pakistan, Philippines may boost trade ties: envoy Speaking at Karachi Chamber of Commerce and Industry (KCCI), Philippines Ambassador Daniel Ramos Espiritu has said that huge area of opportunities exist where Pakistan and Philippine can collaborate to enhance trade and businesses between the two countries. Expressing concerns over meagre trade volume, he said that businessmen are not much aware of the immense opportunities available in Philippines for Pakistanis and for Filipinos in Pakistan. On this occasion, Senior Vice President of KCCI, Abdul Basit Abdul Razzak, was of the view that business communities of the two sides should undertake joint ventures while the Chambers of Commerce of both nations must regularly interact with each other for trade promotion. BR. New law to attract private investment in power distribution sector Minister for Power Division Awais Leghari, in a meeting with the officials of Wapda Hydro Electric Workers Union (CBA), has said that govt. is mulling changes in energy laws to lure private investment in electricity supply to consumers. He said that the new law after amendments in the NEPRA Act will open door for potential private power supply companies and create a healthy competitive environment for better service delivery for the electricity consumers. He further said that govt. is also \ considering to provide incentives for the staff and officers who succeed in reducing the losses to given targets. The News. Foreigners may be allowed to trade in PSX scrips Pakistan Stock Exchange (PSX)’s recommendation for allowing foreigners to trade in PSX stocks is under consideration and a decision would soon be conveyed to the SECP acting chairman Zafar Abdullah. In a meeting between SECP and PSX, members of stock exchange asked the SECP Chief to either allow the resumption of in-house financing or increase in the number of eligible securities in the Margin Trading System (MTS), which currently stands at fewer than four dozen. The declined to allow in-house trading. However, SECP chief said the bourse should draw up a fresh criterion for including more securities in the MTS which would be considered. Dawn. Coal of Thar, gas added to energy mix: PM Prime Minister Shahid Khaqan Abbasi has said that Pakistan is diversifying its energy mix to overcome prevailing energy shortage. Addressing the two days concluding ceremony of Annual Technical Conference on Oil and Gas, the PM said that the govt. has added domestic coal of Thar, gas, and renewable energy to energy mix. The conference was organized by the Society of Petroleum Engineers and Pakistan Association of Petroleum Geo-Scientists that was participated by exploration and production (E&P) companies, service companies, regulatory authorities and academia. As many as 35 exhibitors and 1,500 local and foreign oil and gas experts attended the conference. BR. Oil production rises 8% The country’s average oil production during 4MFY18 went up by 8% year-on-year (YoY) to 87,874 barrels per day. Oil production in Oct.’17 averaged 87,764 bpd marginally up on yearly basis, plus 4% month-on-month. During 4MFY18, average oil production rose on the back of incremental production from Nashpa and additional gas from Mardankhel. In Oct.’17, oil production remained flat on the back of lower flow from Nashpa, Adhi and Makori East fields, cumulatively down 14%YoY. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 23-Nov 23-Nov 23-Nov 23-Nov 23-Nov 23-Nov 23-Nov 23-Nov 23-Nov 23-Nov PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.50 107.60 40,266 -2.17 58.32 1,290.7 46,542 17.07 7,073 6.18% 0.01% 0.28% -0.80% NM** 0.67% -0.07% 0.65% 0.51% 1.54% -0.01% WoW 0.08% YoY 2.27% 10.04% 22.55% -31.24% -121.91% 74.44% USD-Interbank USD-Open MKT KSE-100 index FIPI Crude (JA'18) Gold (DE'17) Gold (10g) Local Silver (DE'17) Cotton(KHI)-40 kg Kibor-6M Forex Reserves $ Bn 19.71 17-Nov FY18 Jul-Oct 17 Remittances $ Bn 6.44 Jul-Oct 17 Exports* $ Bn 7.06 Jul-Oct 17 Imports* $ Bn 19.19 Jul-Oct 17 Trade Balance* $ Bn -12.13 Jul-Oct 17 Current Account $ Mn -5,013 Foreign Direct Inv. $ Bn 0.94 Jul-Oct 17 Jul-Sep 17 LSM Growth* % 8.36 % 3.50 Jul-Oct 17 Avg. CPI Discount Rate % 5.75 Sep-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 155 GBP, 23-Nov-17, 139.9 145 135 125 EUR, 23-Nov-17, 124.5 115 105 95 Nov-16 USD Feb-17 GBP EUR May-17 USD, 23-Nov-17, 105.1 Aug-17 Source: KCCI Research ; Oanda.com Quote of the Day "In talking about a genius, you would not say that he lies; he sees realities with different eyes from ours." Constantin Stanislavski Chart of the Day Pakistan's Remittances Vs. Net FDI (4MFY13-4MFY18) 0.94 4MFY18 4MFY17 0.54 4MFY16 0.72 4MFY15 0.46 4MFY14 0.30 4MFY13 0.25 0.00 6.44 6.30 6.51 6.18 5.28 4.96 1.00 2.00 3.00 FDI Value in $ Bn 4.00 5.00 6.00 7.00 Remittances Source: KCCI Research, SBP Disclaimer Foreign reserves decline by $ 137Mn This report has been prepared by KCCI Research & Development Cell. The The total liquid foreign reserves held by the country stood at $ 19.71Bn on Nov. 17, 2017 as against reserves of $ 19.70Bn in information contained herein have been compiled or arrived at based upon the last week. During the week under review, foreign reserves held by the State Bank of Pakistan decreased by around $ information obtained from sources believed to be reliable and in good faith. 137Mn to $ 13.54Mn from $ 13.67Bn a week earlier. The net foreign reserves held by commercial banks stood at $ 6.17Mn Such information has not been independently verified. icon represents the sole viewpoint of the KCCI R&D Cell, and is compared with $ 6.02Bn in the preceding week. The Nation. stated to enrich the readers' understanding of the news item. The