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Pakistan Daily Economy Update - 25 November

IM Insights
By IM Insights
2 months ago
Pakistan Daily Economy Update - 25 November

Reserves


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  1. November 25 , 2022 KCCI - eBulletin SBP fails to set up $ 400Mn oil fund SBP has shown its inability to set up a $ 400Mn fund or make advance payments for smooth oil imports due to the thin forex reserves amid the Petroleum Division’s warning that diesel stocks may dry up late next month. The Petroleum Division had sought the central bank’s intervention after foreign banks started demanding up to 8% confirmation charges on LCs for oil imports due to Pakistan’s low credit rating and the talk of default. Source:Local banks were not able to open LCs due to the same reasons. Most of the companies were unable to get permission for the required crude oil imports besides the high cost of confirmation, leading to the low reserves of petroleum products, particularly diesel. Tribune. Unit Value Change Daily 24-Nov PKR PKR 223.92 231.25 0.05% 0.11% KSE-100 index FIPI 24-Nov 24-Nov Pts. $ Mn 42,904 -0.15 0.05% NM** Crude Oil 24-Nov $/bbl 77.95 0.55% Gold 24-Nov $/oz 1,755.4 0.14% Gold (10g) Local 24-Nov PKR 136,710 0.22% Silver 24-Nov $/oz 21.51 -0.58% Govt. expects $ 13Bn in foreign flood aid over three years As the cost of the flood protection plan goes up by almost 51% even without its launch, Pakistan expects about $ 13Bn from international donor agencies and lending partners to finance nearly 80% of the Resilient Recovery and Reconstruction Framework (3RF) over the next 3years. This is part of the estimated financing plan being finalized by the federal govt. in consultation with relevant autjorities in line with postdisaster needs assessed by international aid and UN agencies. About $ 10Bn of the funds are required, of which $ 7.9Bn would be spent in Sindh and $ 2.2Bn in Baluchistan. Dawn. Cotton(KHI)-40 kg 24-Nov PKR 17,897 0.00% Kibor-6M 24-Nov % 15.89 0.02% Forex Reserves 18-Nov $ Bn 7.83 WoW -1.68% Remittances Jul-Oct 22 $ Bn 9.90 -6.18% Petroleum imports fall amid slowing economy Imports of petroleum group dipped 25.94% YoY in Oct’22 as a result of the slowing down of economy coupled with highest-ever inflation. Data compiled by PBS showed the imports of petroleum products declined by 36.67% in value during Oct’22 and 46.86% in quantity. Import of crude oil decreased 22.92% in quantity while the value increased 1.93%. Similarly, LNG imports fell by 37.54% during Oct’22 on a YoY basis. On the other hand, LPG imports jumped 42.13%. In 4MFY23, total oil imports fell 2.31% to $ 6.05Bn, from $ 6.19Bn in 4MFY22. However, exports of petroleum products, as well as petroleum crude, posed growth during Oct’22 from a year ago. Pakistan exported 59,830 tons of petroleum products while the export of petroleum crude stood at 12,127 tons during Oct’22 against no exports in Oct’21. Dawn. Exports* Jul-Oct 22 $ Bn 9.55 1.11% Imports* Jul-Oct 22 $ Bn 21.02 -16.14% Trade Balance* Jul-Oct 22 $ Bn -11.47 26.57% Current Account Foreign Direct Inv. Jul-Oct 22 Jul-Oct 22 $ Bn $ Bn -2.82 0.35 44.51% -52.06% Forex reserves fall by $ 134Mn Total forex exchange reserves held by SBP decreased by $ 134Mn to $ 7.825Bn during the week ended on 18th Nov’22, due to external debt repayment. According to SBP data, the total liquid forex reserves held by the country stood at $13.645Bn as of 18th Nov’22, whereas, net forex reserves held by commercial banks stood at $ 5.819Bn. BR. ‘Expedite privatization transactions’ Senate Standing Committee on Privatization, called upon the Privatization Commission of Pakistan (PCP) to expedite efforts to complete privatization transactions of SOEs. Additionally, the committee was briefed about the privatization of the Convention Center and apprised about the current status of the Pak-China Fertilizer Company. The privatization commission had so far completed 178 privatization transactions and generated privatization proceeds of PKR 7.6Tn which included the privatization of the banking sector, capital markets, telecom and other entities. Tribune. Flood relief operations, reconstruction: ‘Pakistan has received $3.4bn,’ NA body told NA Committee on Foreign Affairs was informed that following the UN Flash appeal, Pakistan has received $ 3.4Bn for flood relief operations and reconstruction. The committee was informed pledges worth $ 270Mn have been made. Of these, $ 170Mn has been converted to firm commitments. It was also informed that Pakistan has received $ 3.4Bn for flood relief operations and reconstruction. BR. Deadlock persists in talks on sugar export Deadlock between the govt. and sugar mills over permission for sugar export continued on 24th Nov’22, as the authorities concerned decided to go for a 3rd party audit of the available stock in the country much to the dismay of the mill owners. Tribune. Flood-hit farmers, traders: PMIC sets up PKR 25Mn ‘business revival fund’ Pakistan Microfinance Investment Company (PMIC) has set up a “Business Revival Fund” for flood-affected farmers and entrepreneurs in Sindh by putting up PKR 25Mn grant from its resources. The “Business Revival Initiative” by PMIC will initially cater to the clients served by two PMIC borrowers, Thardeep Microfinance Foundation (TMF) and Safco Support Foundation (SSF). The support will rehabilitate and revitalize livelihoods of 1,000 flood effected families by providing grants to replenish livestock, materials and inventories for small farmers and enterprises. BR. Urea import: ECC tells TCP to explore options ECC of the Cabinet has directed the Trading Corporation of Pakistan (TCP) to explore options for fresh tendering/G2G basis of 40,000 MTs of urea to meet the requirements. BR. List of Indicators Date / Period USD-Interbank USD-Open MKT 24-Nov YoY Jul-Sep 22 LSM Growth* % -0.40 % 25.49 Jul-Oct 22 Avg. CPI Discount Rate % 15.00 Oct-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* **Not Meaningful; WoW= week on week; YoY=Year on Year; Major Currencies 305 295 285 275 265 255 245 235 225 215 205 195 185 175 165 155 145 Nov-21 GBP, 24-Nov-22, 287.9 EUR, 24-Nov-22, 248.3 USD, 24-Nov-22, 230.1 Feb-22 GBP USD May-22 EUR “Success is getting what you want, happiness is wanting what you get.” W. P. Kinsella Sindh govt. has discussed an alternative plan for BRT Yellow Line with World Bank to minimize the cost of the multi-billion project and ensure its timely completion. The two sides agreed to undertake a detailed review of the PC-I and PC-II and alternative proposals for the BRT Yellow Line. Dawn. Pakistan yet to develop infrastructure for 5G launch: GSMA head Pakistan still needs huge investments to develop an enabling environment and the required infrastructure to launch 5G, said Julian Gorman, the head of GSMA Asia-Pacific. He referred to the GSMA intelligence report highlighting that policymakers in Pakistan had an opportunity to accelerate the progress on the Digital Pakistan initiative and lay a strong foundation for 5G launching in the country. Dawn. Current Account Balance ($ Mn) Jul-Oct'21 Over 88,000 tax cases pending in courts Around 88,317 cases, involving an amount of PKR 2.611Tn, had been pending in different courts by the end of Oct’22, according to the FBR data. Of those, 75,021 cases involving PKR 2.382Tn were related to the Inland Revenue Service whereas 13,296 cases involving PKR 229.7Bn were related to the Customs department, according to the data breakdown. Tribune. Kinnow exporters seek govt.’s help All stakeholders in kinnow production and exports have sought the govt.’s assistance in coping with the emerging challenges because of climate change and extreme weather events. Kinnow exports are expected to begin in the 1st week of Dec’22 while the export price has been set at PKR 2,000/maund, according to a notification of the district administration. In order to facilitate exporters, SBP needs to timely issue E-forms and make special arrangements for establishing banking channels, for shipments particularly to the Iranian and Russian markets. Tribune. Jul-Oct'22 Oct'22 -567 FIA launches separate probe into NHA funds misuse FIA launched separate inquiries into ‘suspicious transactions’ of multibillion rupee fund for land acquisition for M6 motorway project in Matiari and Naushahro Feroze. Dawn. Govt. seeks Chinese help to resolve Hubco-CPHGC issue Federal govt. requested the Chinese embassy to arrange a meeting of the Joint Energy Working Group — a forum set up under the CPEC — at the beginning of next week to resolve the conflict between China Power Hub Generation Company Ltd (CPHGC) and the Hub Power Company Ltd (Hubco). Dawn. Nov-22 Source: KCCI Research Quote of the Day \ Revised plans to bring down Yellow Line cost shared with World Bank Mobilink’s bank raises PKR 2Bn Mobilink Microfinance Bank Ltd (MMBL) and JS Bank Ltd, along with syndicate members signed an agreement with respect to the raising of the micro-lender’s Tier-II capital of PKR 2Bn in the form of privately placed term finance certificates (TFCs). According to a press release, the syndicate members include Allied Bank Ltd, Bank Alfalah Ltd, HBL, NBPL, UBL, MCB Bank Ltd, Askari Bank Ltd, Pak Kuwait Investment Company Ltd and Pak Oman Investment Company Ltd. Dawn. Aug-22 -2821 -5305 Source: KCCI Research, SBP Note **Green-colored change in indicators depicts Improvement, whereas Red demonstrates Deterioration **If any member is interested in the procurement of high-tech products in the field of off-shore drilling and recording of siesmic waves, they may contact secretary@kcci.com.pk or SRC “Progress” JSC (a Russian Company) (https://en.samspace.ru/).