Pakistan Daily Economy Update - 25 May

Transcription

1. May 25 , 2016 KCCI - eBulletin Global fund managers eyeing Pakistan Global fund managers are giving a hard look at the Pakistan Stock Exchange (PSX) as it prepares to be upgraded to MSCI Emerging Markets (EM). Major local asset investment and brokerage houses have started to trot the globe to convince world’s top foreign funds of the great opportunity that the inexpensive PSX stocks, providing high yield, presents themselves. At a recent investment conference organized in London by a Pakistani brokerage house, fund managers representing as much as 20% (about $15Tn) of world’s assets under management were present, while representatives of a leading asset management company met fund managers of giant global funds such as Vanguard, Lazard, Morgan Stanley Investment Management in New York; the response was warm and enthusiastic. MD PSX, Nadeem Naqvi who is in London to attend the ‘Renaissance Capital Investment Conference’, says he would be happy with $ 200Mn to $ 250Mn as the initial arbitragers position themselves for the index flows. Dawn. Businesses in Karachi, Punjab should be closed down early: Asif Minister for Water and Power Khawaja Muhammad Asif has said that markets the world over did not remain open till late at night and likewise businesses in Karachi and Punjab should be closed with the approach of evening to reduce loadshedding. He said an early closure of markets, especially in Karachi and Punjab, could help save 1,500MW. Meanwhile, the govt. has reportedly decided to expose the industrial sector to 6-8 hours of loadshedding in the month of Ramazan, probably starting from 7th Jun’16, to provide uninterrupted electricity supply to the masses during Iftar, Taraveeh and Sehri. In addition, the Ministry of Water and Power has asked the provincial governments to ensure the closures of commercial markets and business outlets by 7 pm to save the 1,500MW per day for provision of solace to the masses during the peak hours. However, the finalised plan for load management will be made public just two days proper to the initiation of Ramazan. The News. Govt. to up development budget by PKR 161Bn The govt. has decided to increase federal Public Sector Development Program (PSDP) and provincial Annual Development Plan (ADP) outlay by PKR 161Bn for FY17. The outlay will reach PKR 1,675Bn mark against the current year’s allocation of PKR 1,514Bn. Out of total PKR 1,675Bn, PKR 800Bn will be earmarked for the federal funded projects, while PKR 875Bn will go to the provincial Annual Development Plan. The Nation. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 24-May PKR 104.81 -0.04% USD-Open MKT 24-May PKR 105.60 0.09% KSE-100 index FIPI 24-May 24-May Pts. $ Mn 36,582 -2.25 -0.38% NM** Crude (JU'16) 24-May $/bbl 49.18 2.25% Gold (MY'16) 24-May $/oz 1,227.1 -1.79% Gold (10g) Local 24-May PKR 42,214 0.00% Silver (MY'16) 24-May $/oz 16.21 -1.21% Cotton(KHI)-40 kg 24-May PKR 6,002 -1.49% Kibor-6M 24-May % 6.17% -0.01% Forex Reserves 13-May $ Bn 21.32 2.33% Remittances Jul-Apr 16 $ Bn 16.03 5.18% Exports* Jul-Apr 16 $ Bn 17.32 -12.99% Imports* Jul-Apr 16 $ Bn 36.34 -3.70% Trade Balance* Jul-Apr 16 $ Bn -19.02 -6.68% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-Apr 16 $ Mn % -1,519 2.79 17.71% WoW YoY May-16 Discount Rate % 5.75 10% raise in govt. employees’ pays, pensions likely The govt. is considering different proposals for increasing govt. employees’ salaries in the upcoming budget of FY17. In this Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* WoW= week on week; YoY=Year on Year regard, Finance Minister Ishaq Dar has constituted a committee. The govt. is likely to give up to 10% raise in salaries by merging ** Not Meaningful Major Currencies two adhoc allowances into basic pay. One of the other proposals is to give another ad hoc relief. The Nation. Restoration of zero-rating regime demanded The five export oriented sectors of textile, leather, carpets, sports goods and surgical instruments have demanded restoration of zero-rating regime for the exporters as new taxation in the upcoming budget would not be acceptable to the industry. Initially, the tax rate was fixed at 2% and 3% through SRO 1125 for exporters but now facilitation under SRO 1125 has been partially withdrawn and tax rate 3%, 5% and 17% have been introduced. It is emphasized that original status of SRO 1125 should be restored and maximum facilitation should be provided to five export sectors. The Nation. 175 SECP reduces fee for company formation SECP has substantially decreased the fee for the company formation as well as for the filing of returns being charged under Sixth Schedule to the Companies Ordinance, 1984, effective from May 31, 2016. Through the SRO, SECP has made significant reduction in first slab of the capital fee for new incorporation cases to PKR 1,000 for online and PKR 2,000 for offline submission from PKR 2,500 and 5,000 respectively translating into 60% reduction. SECP has also made significant reduction in filing fee for returns, particularly for small sized entities, by introducing capital based filing fee starting from as low as PKR 250 for online and PKR 500 for offline submission replacing the existing structure of fixed filing fee of PKR 600 and PKR 1500, respectively. The Nation. 115 Loans to private-sector businesses increase 8.8% According to the SBP, loans to private-sector businesses increased by 8.8% over the preceding 12-month period, latest statistics on credit distribution in the economy shows that outstanding loans to private-sector enterprises amounted to PKR 3.27Tn at the end of Apr 2016 after adding PKR 264.7Bn over the preceding 12 months. In contrast, the net credit of scheduled banks to the govt. sector shot up 17.5% to PKR 5.8Tn over the same period. Tribune. Budget 2016-17: Several income tax benefits expected in budget speech Finance Minister Ishaq Dar will announce income tax benefits in his budget speech for promoting industrialization, attracting investment and creating jobs amid the highest unemployment level in years and declining investment. Dar would also extend benefits for listing of companies on the stock exchange, expand the definition of Greenfield projects and offer more incentives for housing finance. Moreover, Dar might announce a 1% increase in tax credit to 2% of the payable tax on creation of 50 new jobs and their registration with the Employees Old-age Benefits Institution. The tax credit will be available for 10 years from the date of establishing a new industrial unit, compared to the current expiry date of 2018, it may be extended to 2019. Tribune. Cotton crop failure caused PKR 200Bn loss Commerce Minister Khurram Dastgir has expressed serious concern over decline of 5.1Mn bales in cotton production during the current season, which caused loss of PKR 200Bn to the national kitty. In this regard, minister has assured the cotton ginners that immediate and solid steps would be taken to control the situation as the country could not afford huge losses and cotton import due to limited resources. The Nation. Pakistan trade caravan makes final stopover at Dushanbe The Pakistan trade caravan has made its final stopover at Dushanbe, Tajikistan, where a large number of visitors witnessed Pakistani products, a statement issued by the Trade Development Authority of Pakistan (TDAP) said. The Trade Caravan is a new brand initiated by the TDAP to make strategic trade inroads into Central Asia. The significance of Dushanbe exhibition was showcasing Pakistan mangoes. Over three tons of mangoes had been brought to Dushanbe by Pakistani mango exporters. The News. SBP revises branch licensing policy The SBP has revised branch licensing policy (BLP) to enhance the outreach of banking facilities, with a focus on rural and underserved areas. The central bank, in a notification, said the provision of financial services in rural and underserved areas was the key priority to balance the distribution of branch network amongst different segments of the country. The SBP has also asked commercial banks to provide their roadmap for opening their branches during the next five years. The News. PTA okays Mobilink, Warid merger The Pakistan Telecommunication Authority (PTA) has approved the merger of Pakistan Mobile Communication Ltd (Mobilink) and Warid Telecom (Pvt) Ltd. This is yet another milestone in the regulatory process and follows the approval granted in Mar’16 by the Competition Commission of Pakistan. The deal remains subject to further regulatory approvals and other customary closing conditions. Dawn. 165 GBP, 24-May-16, 152.4 155 145 135 EUR, 24-May-16, 117.1 125 105 95 USD, 24-May-16, 104.7 85 75 May-15 Aug-15 USD Nov-15 GBP Feb-16 EUR May-16 Source: KCCI Research ; Oanda.com Quote of the Day "Thinkers perish, thoughts don’t." Malcolm Forbes Chart of the Day FDI Trend in the Financial Sector ($ Mn) 2,000 1,800 1,600 1,400 1,200 1,000 800 600 400 200 0 1,865 708 163 314 310 64 193 256 218 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