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Pakistan Daily Economy Update - 26 July

IB Insights
By IB Insights
6 years ago
Pakistan Daily Economy Update - 26 July

Ard, Arif

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  1. Jul . 26, 2017 KCCI - eBulletin Railways offers to transport oil The Pakistan Railways has made an offer to the petroleum ministry to transport oil through its dedicated rolling stock and locomotives in the wake of a strike by tanker owners. Railways Minister has contacted Petroleum Minister and offered the services to transport oil across the country. Dawn. Discos’ consumers: Nepra approves PKR 26Bn refund for Jun.’17 Nepra has approved PKR 26Bn refund for consumers of power Discos by reducing tariff of PKR 2.23 per unit for Jun.’17 under the monthly fuel price adjustment formula. The reduction in tariff will not be applicable on K-E consumers, lifeline consumers and agriculture consumers. BR. PKR 102Bn laundered through ‘gift back arrangement’ In a major development, FBR has issued notices to over 2,785 wealthy Pakistanis who have allegedly laundered PKR 102Bn during the outgoing fiscal year by describing the money as “gift”. Under the existing laws, gifts are exempted from taxes and a large number of such individuals with high net worth are using the option as safe means of transferring income, assets and wealth without contributing to the national revenue. Dawn. ECC rolls over bank loans as circular debt crosses PKR 800Bn As circular debt crosses PKR 800Bn for the first time in the nation’s history, the federal government has agreed to roll over PKR 193Bn worth of loans that it had obtained from commercial banks and OGDC to settle power sector arrears. The ECC of the cabinet approved five separate summaries in an effort to extend repayment period of this principal amount by another two to three years. Of the total amount, PKR 111Bn had been borrowed on four different occasions by power distribution companies, while PKR 82Bn had been raised from OGDC. Tribune. \ Power sector liabilities: fresh sovereign guarantees approved by ECC Value Change Daily Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.40 107.40 45,918 -1.11 48.49 1,249.9 43,628 16.46 6,805 6.14% Forex Reserves 14-Jul $ Bn 20.83 0.00% 0.00% 0.85% NM** 4.41% -0.44% -0.59% 0.10% 0.00% 0.00% WoW -2.88% YoY -3.08% -1.63% 18.67% -36.32% -148.57% 4.58% Jul-Jun 17 Remittances $ Bn 19.30 Jul-Jun 17 Exports* $ Bn 20.45 Jul-Jun 17 Imports* $ Bn 53.03 Jul-Jun 17 Trade Balance* $ Bn -32.58 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 4.16 Jul-Jun 17 Avg. CPI-FY17* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 145 GBP, 25-Jul-17, 137.3 135 125 EUR, 25-Jul-17, 122.8 115 105 95 Jul-16 USD, 25-Jul-17, 105.4 Oct-16 GBP USD USAID provides mango graders worth $ 0.75Mn to farmers USAID, under its US Pakistan Partnership for Agricultural Development Program, has distributed 13 mango graders worth $ 750,000 among the mango farmers to make the product more competitive in international market. The state-of-the-art, custom made, automated mango graders would be utilized for the first time to grade export quality mangoes during the crop season 2017. The Nation. Subsidy boosts fertiliser sales Attractive financial support to farmers in the shape of fertilizer subsidy resulted in higher urea off-take to 1.83Mn tons, showing an increase of 74% during 2nd quarter of 2017 (April-June) compared to the same period last year. The significant jump in local sale this year is also due to the fact that April-June 2016 had recorded the lowest ever second quarter off-take for almost a decade because farmers and dealers delayed their purchases anticipating the subsidy announcement in the budget. Dawn. Apr-17 Jul-17 Source: KCCI Research ; Oanda.com Warren Buffett Chart of the Day 467.4 274.9 214.5 1000 900 800 700 600 500 400 300 200 100 0 675.3 Govt.'s External Loan Financing (FY12 - FY18) 287.2 180.5 SBP eases payment systems SBP has issued “Payment Systems Designation Framework” for smooth operations and better risk management of the payment systems. The State Bank, under the Payment Systems and Electronic Fund Transfer (PS & EFT) Act 2007, is responsible for regulating the payment and settlement systems in Pakistan. The Section 4 of PS & EFT Act 2007 empowers the State Bank to designate a payment system by a written order if it finds it to be necessary in the public interest. The SBP is also empowered to impose penalties, in case the operator of the Designated Payment System is found in non-compliance of the regulations, rules, or standards issued by SBP from time to time. The SBP may suspend/revoke Designation of a Payment System as defined in Section 5 of the PS & EFT Act 2007.BR. Jan-17 "The most important thing to do if you find yourself in a hole is to stop digging." Economic Co-ordination Committee has approved issuance of PKR 110Bn fresh sovereign guarantees to clear the power sector liabilities and extended PKR 82Bn Syndicated Term Finance Facilities. The ECC approved a proposal to restructure the facility by extending the tenure of the facility from 7 to 10 years, including extension in grace period from 3 to 6 years. BR. Govt secures funds from CDNS dormant accounts to cut fiscal deficit Government has wringed PKR 18Bn from dormant accounts of its Central Directorate of National Savings (CDNS) to include the amount into non-tax revenue in a bid to cut the tally of fiscal deficit for the last fiscal year. The amount lying into dormant accounts of CDNS earlier stood at PKR 24Bn, including principal and mark-up piled up during the last several years. Government published advertisements into national dailies and subsequently the claimants came forward to claim PKR 6Bn. Unclaimed amounts, therefore, came down to PKR 18Bn. The News. EUR Quote of the Day 810.7 Petrol crisis hits Karachi amid strike by tanker operators A petrol crisis has hit Karachi, as a large number of fuel stations ran out of their stocks in the absence of supply for the past two days due to an oil tankers’ strike over a number of issues. The strike has for the past two days triggered panic buying from the motorists, forcing a large number of fuel stations to wrap up their business much before the scheduled time. The news about failure of talks between the Ogra and Oil Tankers Owners Association (APOTOA) in the second half of the day created further uncertainty. Dawn. Unit 25-Jul 25-Jul 25-Jul 25-Jul 25-Jul 25-Jul 25-Jul 25-Jul 25-Jul 25-Jul 796.8 971.6 Govt, oil tanker owners fail to find way out After late night consultations with Ogra, the government has decided to offer a major relaxation to oil transporters in terms of an extended schedule for compliance with safety standards for transportation of oil products. Earlier, as the meeting between government officials and oil tanker owners fell through, the All Pakistan Oil Tankers Association (APOTA) announced that they would continue their strike until their demands were met by the government and refused to follow safety standards introduced in 2009. Dawn. Date / Period 727.5 821.4 Pakistan relying on foreign savings for investment: UNDP United Nations Development Program (UNDP), in its latest issue of "Development Advocate Pakistan (DAP) on Financing for Development", has stated that Pakistan is relying on foreign savings to supplement its meagre national savings for investment purposes and therefore, the investment rates is almost one half of those in India and Bangladesh, thus constraining growth. The report further stated that Pakistan's landscape for Financing for Development (FFD) has not been robust and the macroeconomic indicators have shown little improvement. Pakistan's tax collecting capacity is 22.3% of GDP while it is collecting 11%. BR. List of Indicators USD-Interbank USD-Open MKT KSE-100 index FIPI 623.8 662.4 Repatriation of profit and dividend crosses $ 2Bn mark Repatriation of profit and dividend by foreign investors crossed $ 2B mark during FY17, supported by improved economic activities. Capitalizing on the govt.'s liberal policy, foreign investors repatriated some $ 2.11Bn on account of profit and dividend during FY17 compared to $ 1.91Bn in FY16, depicting an increase of $ 197Mn or 10%. The foreign investors transferred $ 1.73Bn on account of returns on FDI compared to $ 1.51Bn in FY16. In addition, the repatriation on FPI declined by $ 24.5Mn to $ 376Mn. Major repatriation has been made from the financial sector, where $ 391Mn were repatriated during the period under review. BR. Economic Indicators 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 External Loans (Budgeted) External Loans (Revised) Source:Source: KCCI Research, MoFSBP KCCI Research, Value in PKR Bn 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