Pakistan Daily Economy Update - 26 November

Transcription

1. Nov . 26, 2016 KCCI - eBulletin ECC cuts 33% in gas prices for industrial sector The Economic Coordination Committee (ECC) of the cabinet has approved a nearly 33% cut in prices of natural gas. Finance Minister Ishaq Dar has approved reduction of gas price for industry from PKR 600 to PKR400/MMBTU. In accordance with Fertilizer Policy 2001, the industrial sector's gas sale price will also be applicable to fertilizer sector and only for fuel stock. Reduction in gas prices can result in lower unaccounted for gas (UFG) losses in absolute terms for gas marketing companies. The News. CM to head finance commission constituted after a decade The Sindh government has constituted the much-awaited Provincial Finance Commission (PFC), after receiving nominations from the local government ministry. The finance minister, the chief minister himself, would be chairman of the PFC with the minister for the local government as the co-chairperson. The terms of the reference for the PFC would be to determine obligatory and priority expenditure of the local bodies and formulation of a divisible pool for the distribution of resources. This will prepare benchmarks of revenues and expenditures and revenue and expenditure projections for the local governments so that they are consistent with their respective mandates as envisaged by the Sindh Local Government Act, 2013, and their powers to levy and collect taxes. The PFC would also decide criteria and formula for the vertical distribution of resources between the provincial and local government. Dawn . PSX to open bids invited for stake sale next week The Pakistan Stock Exchange (PSX) is scheduled to open on 30th Nov’16 the bids submitted in response to its offer of 40% stake to strategic partners as part of the ongoing demutualization process of the equity market. The deadline for the divestment of PSX stake is 27th Dec’16. Tribune. Trade in services posts over $ 1Bn deficit in 4MFY17 Trade in services has posted a $ 1.10Bn deficit during 4MFY17 owing to lower exports compared with $ 714Mn in the same period of FY16, showing an increase of 54% or $ 385Mn. Pakistan's services sector exports fell by 25%; stood at $ 1.61Bn during period under review against $ 2.14Bn in the corresponding period of last fiscal year. Similarly, services sector imports dropped by 5% reached $ 2.71Bn in 4MFY17 against $ 2.85Bn in the same period of FY16, showing a decline of $ 142Mn. BR. Govt. waives PKR 50Bn off Sindh’s electricity bill The federal govt. has waived off PKR 50Bn outstanding bills of Hesco and Sepco consumers out of PKR 128.5Bn dues. The amount is 40% of the billed amount, showing the extent of relief provided to the consumers. The provincial govt. has already paid PKR 50Bn and it will pay the remaining amount of PKR 27.4Bn in 6 equal monthly tranches. Tribune. CPEC projects: Transmission lines laid ahead of deadline The National Transmission and Despatch Company (NTDC) has announced that it has completed work ahead of schedule on two 500-kilovolt transmission lines under its CPEC projects. The transmission lines are ready to supply power from the 1,200MW re-gasified liquefied natural gas (RLNG) Bhikki power plant and the 1,320MW Sahiwal coal-fired power plant. The cumulative 2,520MW from the two plants will be added to the national grid once they start power generation. Tribune. FBR expects 100% jump in revenue from cement makers Tax authorities are expected to regale a 100% rise in revenue collection from cement manufacturers during FY17 as China-funded infrastructure development projects would boost construction activities. Large Taxpayers Unit, (LTU) Karachi, has projected the collection from cement producers for FY17 at around PKR 12Bn. Its last year’s tax collection amounted to 6Bn rupees. The News Bonus shares: FBR unveils procedure for determination of value FBR has issued a procedure for determination of bonus shares’ value issued by a company, not quoted on the stock exchange, to the shareholders of the company. Through SRO 1085(1)/2016, the FBR has amended Income Tax Rules, 2002. Under section 236N of the Income Tax Ordinance, 2001, every company, not quoted on stock exchange, issuing bonus shares to the shareholders of the company, shall deposit tax, within 15 days of the closure of books, at the rate of 5% of the value of the bonus shares on the first day of closure of books, whether or not the tax has been collected by the company. BR. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 25-Nov PKR 104.82 -0.01% USD-Open MKT 25-Nov PKR 107.10 0.19% KSE-100 index FIPI 25-Nov 25-Nov Pts. $ Mn 43,000 -2.02 0.12% NM** Crude (JA'17) 24-Nov $/bbl 47.96 -0.06% Gold (DE'16) 24-Nov $/oz 1,184 -0.34% Gold (10g) Local 25-Nov PKR 42,942 -1.28% Silver (DE'16) 24-Nov $/oz 16.30 -0.30% Cotton(KHI)-40 kg 25-Nov PKR 6,736 0.00% Kibor-6M 25-Nov % 6.10% -0.01% Forex Reserves 18-Nov $ Bn 23.87 -0.93% Remittances Jul-Oct 16 $ Bn 6.26 -3.82% Exports* Jul-Oct 16 $ Bn 6.43 -6.60% Imports* Jul-Oct 16 $ Bn 15.75 8.01% Trade Balance* Jul-Oct 16 $ Bn -9.32 -21.07% Current Account Avg. CPI-FY17* Jul-Oct 16 Jul-Oct 16 $ Mn % -1,762 3.95 -63.45% WoW YoY Oct-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 175 165 155 145 125 115 95 85 75 Nov-15 Future linked to CPEC, PM tells Turkmen president PM Mr. Sharif and Turkmenistan’s President Mr. Berdimuhamedov met to discuss matters of bilateral interest, including the TAPI gas pipeline and re-establishing air links between their countries. During the meeting, PM told the Turkmen leader that the CPEC would usher in a new era of prosperity in Pakistan and the entire region and TAPI was an important project which would help in meeting the energy needs of its member countries. Dawn. ‘New projects are without proper sewerage, water supply system’ KWSB has raised a concern that they are neither consulted before approval of any project (with water needs) nor does it receive charges from the Sindh Building Control Authority and the cantonment boards to develop infrastructure for water supplies. The city has received no additional supply since 2006 and it currently faces a shortage of 430Mn gallons of water per day (MGD). KWSB managing director has said that studies had shown that the city needed an additional 150MGD after every three years to meet needs of its growing population. Dawn. ADB approves $ 325Mn loan to connect off-grid areas in K-P, Punjab The Asian Development Bank (ADB) has approved $ 325Mn loan to provide electricity to off-grid communities in Khyber-Pakhtunkhwa (K-P) and Punjab. ADB approved the loan under the Access to Clean Energy Investment Program and France is also expected to contribute $ 78.6Mn for this program. Tribune. Feb-16 USD GBP May-16 Aug-16 Nov-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day "When love and skill work together, expect a masterpiece." Customs values on import of used clothes raised The DG Customs Valuation Karachi has revised customs values on the import of second-hand clothes and other items, including leather bags, jackets, belts, shoes, toys and kitchen wares, resulting in 14% increase in prices of such imported items. The revision petition had been filed under section 25-D of the Customs Act, 1969 against customs value determined vide Valuation Ruling No 836/2016 dated 19.4.2016. In the previous valuation ruling, the determined customs values of second-hand worn clothing of Korea origin was determined at $ 0.70/kg which has been now revised downwards at $ 0.62/kg.BR. Furniture makers to get incentives: Dastgir While attending three-day Exhibition of the Pakistan Furniture Council (PFC) at Expo Centre, Commerce Minister has said that the government will provide an incentive package to furniture makers to boost exports as well as improve the quality and design of local handmade furniture on a par with the international standards. However, there are no plans to impose a ban on furniture imports unless the government finds remarkable increase in exports. Dawn. EUR, 25-Nov-16, 110.9 USD, 25-Nov-16, 104.8 105 Thailand enhances offer list to 1750 tariff lines Thailand has enhanced the offer list from 750 tariff lines (items) to 1750 tariff lines and sought an offer from Pakistan during the fifth round of negotiations under Free Trade Agreement (FTA) held on Nov. 16-17, 2016 in Bangkok. On Pakistani side, offer list will similarly be increased to around 1,250 items from earlier 550 items. Pakistan has argued that since Thailand is an advanced country, tariff reduction cannot be at par and has therefore sought more incentives. In this regard, Thailand has suggested Pakistan to implement tariff reduction in 10 years whereas Thailand would implement it in 7 years. BR. PKR 700bn injected into banks SBP injected PKR 700Bn into the banking system on Nov, 25th‘16. Banks have been investing heavily in government papers while the government has also borrowed PKR 847Bn from the central bank since the beginning of the FY17. Govt. currently holds PIBs worth PKR3Tn. The SBP injected PKR 700Bn for 7 days at the rate of 5.81%, which is just 6 paisa higher than the policy rate. The SBP conducted an auction for treasury bills on Nov. 23rd‘16 to raise PKR 289Bn for 3-, 6- and 12-month instruments while the cut-off yield remained almost the same (5.94%) with slight variations for all tenors. Dawn. GBP, 25-Nov-16, 130.5 135 John Ruskin Chart of the Day FX Reserves Vs Current Account Balance 28 26 18.24 24 20 15.65 18 14 21.77 16.75 22 16 24.19 12.60 13.12 18.70 12.43 15.29 11.40 14.14 11.02 12 10 Forex Reserves ($ Bn) 4 2 0 -2 -4 -6 -8 -10 -12 -14 -16 Current Account ($ Bn) (RHS) 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 R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk