Pakistan Daily Economy Update - 26 August

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1. Aug . 26, 2016 KCCI - eBulletin 'CPEC to make Pakistan regional manufacturing hub' Prime Minister Muhammad Nawaz Sharif has said that CPEC will make Pakistan a regional manufacturing hub and very attractive market for Foreign Direct Investment (FDI) as it comprised major infrastructure, energy and communication projects. In a meeting with President KOC Group Turkey Fatih Kemal Ebiclioglu along with delegation, the Prime Minister further said that Pakistan's outlook for attracting FDI is continuously improving and the improvement in security situation has enhanced Pakistan's position as an attractive destination for FDI in the last three years. BR. Pakistan, Thailand: Fourth round of FTA talks to begin in September According to the Ministry of Commerce, the next round of negotiations between Pakistan and Thailand for finalizing the draft of a free trade agreement (FTA) will take place in the 2nd week of Sep, 2016. This will be the 4th round of talks to finalize the modalities of tariff reduction and will be held in Islamabad between Sep 6-8, 2016. The two sides have agreed to sign the FTA after a detailed assessment of the markets in both the countries. Tribune. FBR sets Aug. 31, 2016 deadline for salaried tax return FBR has asked salaried tax payers to file their income tax returns this year by Aug 31st, 2016 a deadline which has only three working days and set to expire in next 5 days. The revenue body issued income returns forms for the tax year 2016 for individuals and Association of Persons (AOPs). According to the FBR’s issued SRO 792(I)/2015 the deadline for the filing of income tax return for salaried persons is August 31. While for the AOPs and companies, falling in special account year is 30th Sept, 2016 and for corporate entities the last date is Dec 31st, 2016. The News. UAE firm inks PKR 153Mn acquisition deal with IFSC The UAE-based EFG Hermes Frontier Holdings LLC has acquired majority shares of Invest and Finance Securities Limited (IFSC) at more than PKR 153.12Mn. EFG, a wholly-owned subsidiary of EFG-Hermez Holding Company, has bought up to 10.20Mn shares of the local brokerage firm. The transaction would materialize after all the regulatory approvals required. BR. Forex reserves reach $ 23Bn Pakistan’s foreign exchange reserves surged to $ 23.08Bn during the week ended on 19th Aug, 2016 against $ 22.62Bn a week ago. The foreign exchange reserves held by the SBP registered an increase of $ 467Mn to stand at $ 18.18Bn, compared with $ 17.72Bn in previous week. Reserves of commercial banks inched down to $ 4.89Bn against $ 4.90Bn. The News. $ 5.3Bn paid in debt servicing in FY15-16 Pakistan paid $ 5.3Bn in debt servicing during the FY15-16, as compared to $ 5.417Bn in the preceding fiscal year. Though the total amount was slightly less, the interest paid during FY15-16 rose to $ 1.33Bn while the repayment of principal amount decreased to $ 3.97Bn. The interest and principal paid in FY14-15 were $ 1.17Bn and $ 4.24Bn, respectively. Dawn. SAARC states call for economic union A shift from the South Asian Free Trade Area (Safta) to South Asian Economic Union (SAEU) was emphasized at the inaugural session of the Eighth Saarc Finance Secretaries Meeting here on 25, Aug. 2016. Finance Secretary Waqar Massoud Khan, who was elected as the new chairman of Saarc Finance Secretaries meeting, said considerable progress has been made in some areas under the group’s ambit but many issues still need prioritized attention by the national governments. Dawn. Govt finalizes subsidies on urea and DAP After the lapse of two months, the government has finally chalked out a formula to provide fertilizer subsidy to endconsumers, reducing the price of urea by PKR 390 on a bag and that of diammonium phosphate (DAP) by PKR 300. The Ministry of Food Security and Research has issued a notification (dated Aug, 23. 2016) in this regard after the price module was finalized by the finance ministry. The price of a 50-kilogram urea bag will now drop to PKR 1,400 from the existing PKR 1,790, whereas the price of DAP will come down to PKR 2,558 from PKR 2,858. Dawn. Cheap imports worry local manufacturers Local manufacturers expressed concerns over cheap imports mainly from China rendering many Pakistani industries out of business while anti-dumping cases are not being processed as the National Tariff Commission (NTC) has been non-functional since 2009. A meeting of local manufacturers held under the aegis of Organisation for Advancement and Safeguard of Industrial Sector (Oasis) – belonging to various sectors decided to form an alliance of all the industries whose cases were pending at the NTC and urge for speedy processing of dumping cases. The participants suggested the government to appoint commission members without any delay as domestic industries were facing huge losses due to cheap imports flooding local markets. Dawn. Sindh to push for implementation of labor laws Sindh govt. has decided to push the federal capital to implement the labor laws for keeping up the benefits under the generalized scheme of preferences (GSP) plus status of the European Union (EU). The provincial govt. will take up the matter with the federal govt. as some of the conditions are related with the federation. However, there are still some concerns about the transfer of the labor-related matters to the provincial domain. The News. Anti-money laundering cell set up at DG I & I Headquarters In a major move to carry out investigations related to Anti-Money Laundering Cases under Anti-Money Laundering Act, 2010, a dedicated Anti-Money Laundering Cell has been set up at the Directorate General Intelligence & Investigation Headquarters, FBR. The Anti-Money Laundering Cell under Section 24 of the Anti-Money Laundering Act, 2010 has been established, with immediate effect, along with the appointment of Investigation Officers (IOs). BR. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 25-Aug PKR 104.80 0.02% USD-Open MKT 25-Aug PKR 106.10 0.00% KSE-100 index FIPI 25-Aug 25-Aug Pts. $ Mn 39,792 -3.21 0.72% NM** Crude (JU'16) 25-Aug $/bbl 17.36 -62.88% Gold (MY'16) 25-Aug $/oz 1,320.4 -0.14% Gold (10g) Local 25-Aug PKR 44,828 0.00% Silver (MY'16) 25-Aug $/oz 18.49 -0.11% Cotton(KHI)-40 kg 25-Aug PKR 7,272 0.00% Kibor-6M 25-Aug % 6.03% -0.01% Forex Reserves 19-Aug $ Bn 23.08 2.02% Remittances Jul-16 $ Bn 13.28 -20.14% Exports* Jul-16 $ Bn 1.48 -7.45% Imports* Jul-16 $ Bn 3.56 5.52% Trade Balance* Jul-16 $ Bn -2.08 -17.20% Current Account Avg. CPI-FY17* Jul-Jun 16 Jul-16 $ Mn % -2,525 4.12 6.79% WoW YoY Jul-16 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 GBP, 25-Aug-16, 138.6 EUR, 25-Aug-16, 118.3 145 135 125 115 105 95 USD, 25-Aug-16, 103.8 85 75 Aug-15 Nov-15 USD Feb-16 GBP May-16 Aug-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day “If you want to succeed you should strike out on new paths, rather than travel the worn paths of accepted success.” John D Rockefeller Chart of the Day LSM Constituent Growth during FY16 Automobiles Fertilizers Non Metallic Mineral Chemicals Leather Rubber Pharmaceuticals Food, Beverages & Tobacco Textile Paper & Board Electronics Coke & Petroleum Iron & Steel Engineering Wood 16.11% 13.81% 10.02% 8.13% 7.76% 7.16% 6.54% 0.92% 0.42% -1.58% -1.68% -2.59% -9.26% -14.43% -65.83% -80.0% -60.0% -40.0% -20.0% 0.0% 20.0% 40.0% Source: KCCI Research, PBS Value in % terms 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