Pakistan Daily Economy Update - 26 October

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1. Oct . 26, 2016 KCCI - eBulletin Pakistan ranks among top 10 economies globally: Report Pakistan’s performance in the World Bank Group's Doing Business Report 2017 has improved from 148 to 144 out of 190 countries indicating that the country is now more business friendly for SMEs. In the latest report, Pakistan has been recognized as one of the top ten economies globally making the biggest improvements in their business regulations and not only this, Pakistan is the only South Asian economy to make it to this list. The Nation. Ogra may recommend hike in POL products' prices Ogra is likely to recommend a rise in the petroleum products’ prices by PKR 3 to PKR 5/liter effective from Nov. 1, 2016. As per current international crude oil prices, Ogra is likely to recommend a rise in High Speed Diesel by PKR 5/liter, motor sprit (Petrol) by PKR 3/liter, Light Diesel Oil by PKR 4.5/liter and kerosene oil by PKR 4/liter from Nov. 1. If the govt.'s refuse to raise the prices, it would cost an estimated PKR 5Bn in revenue and would be compelled to lower taxes on petroleum products. BR. Corruption challenge: IMF chief for transparency, accountability Addressing a joint press conference with Finance Minister Ishaq Dar, Christine Lagarde, Managing Director of the IMF has said that corruption, whether real or perceived, harms the economy, foreign direct investment and has a cost on business. The Director advised Pakistan to reduce expenditure and increase revenue collection to bring down its overall debt and debt servicing and added that there are not many options when the country wants to address the issue of debt. BR. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 25-Oct PKR 104.84 0.00% USD-Open MKT 25-Oct PKR 105.80 1.54% KSE-100 index FIPI 25-Oct 25-Oct Pts. $ Mn 40,765 1.70 -0.21% NM** Crude (DE'16) 25-Oct $/bbl 49.40 -2.10% Gold (DE'16) 25-Oct $/oz 1,274 0.82% Gold (10g) Local 25-Oct PKR 44,142 -0.19% Silver (DE'16) 25-Oct $/oz 17.73 0.93% Cotton(KHI)-40 kg 25-Oct PKR 6,575 0.00% Kibor-6M 25-Oct % 6.06% 0.00% Forex Reserves 14-Oct $ Bn 24.46 4.12% 4.70 -5.28% WoW YoY Ministry to discuss issues related with planned KE resale Karachi Electric (KE) is reportedly engaging several influential people as it maintains that new buyers, Shanghai Electric of China, should be extended the same incentives that are available to incumbent owners Abraaj Group of Companies, which is not acceptable to Water and Power Ministry. KE has to pay PKR 68Bn of SSGCL and PKR 48Bn of NTDC besides PKR 5Bn Late Payment Surcharge totaling PKR 121Bn. The Ministry maintains that govt. will not allow resale of KE until outstanding amount is cleared and that new buyers will have to sign new Power Purchase Agreement with CPPA and Gas Purchase Agreement with SSGC. BR. Remittances Jul-Sep 16 $ Bn Exports* Jul-Sep 16 $ Bn 4.68 -8.98% Imports* Jul-Sep 16 $ Bn 11.75 10.70% Trade Balance* Jul-Sep 16 $ Bn -7.07 -29.21% Current Account Avg. CPI-FY17* Jul-Sep 16 Jul-Sep 16 $ Mn % -1,368 3.88 -136.27% Foreign investors repatriate $ 335Mn in 1QFY17 Foreign investors repatriated $ 335Mn on account of profit and dividend during 1QFY17 compared to $ 359.4 Mn in 1QFY16, posting a slight decline of about 6.7%. The major outflow of profit and dividend is from FDI and cumulatively, over 92% of the repatriated amount was sent from returns on FDI. The remaining 8% was from portfolio investment. Foreign investors sent abroad $ 307Mn as returns on FDI during 1QFY17 compared to $ 312Mn in the corresponding period of last fiscal year, declining by 1.6%. BR. Sep-16 Discount Rate % 5.75 Sources: KCCI Research, PMEX (2pm) , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Mutual funds, futures contracts: AMCs, PMEX will continue to compute, collect CGT The Asset Management Companies and Pakistan Mercantile Exchange (PMEX) will continue to determine, compute and collect Capital Gains Tax (CGT) on open-ended mutual funds and futures commodity contracts respectively, and shall deposit the same with NCCPL within 10 working days of the month. In this regard, FBR has proposed amendment to special procedures for computation of capital gains and tax collection through an SRO. BR. Open competition: SC rejects Chinese firm’s petition on Dasu Dam The top court has rejected a Chinese company’s plea to allow it to participate in the bidding process of the 4,320MW run-of-theriver Dasu Hydro project on the Indus River. The hydropower project is being developed in two stages: Stage 1 includes installation of 6 hydropower units each of which will produce 360MW power, while in Stage 2, 9 additional 360MW units will be installed. Tribune. Senate body for enhancing cellular coverage across the country The Senate Standing Committee Cabinet Secretariat has suggested that coverage area of the cellular mobile network under the Universal Service Fund (USF) must be enhanced to ensure modern telecom services in remote parts of the country. The PTA Chairman said the number of biometric verified SIMs in the country were 130.4Mn till August 31st 2016, adding that the process of re-verification had started in 2015 and completed successfully with blockage of 90.83Mn SIMs. Daily Times. Builders threaten to shut down business indefinitely Builders and developers have threatened to stop all construction activities for an indefinite period and go to courts if the issue related to newly impose immoveable property valuation is not deferred for one year. They also have rejected “unbearable” betterment charges imposed by the Sindh Building Control Authority (SBCA) and asked the government to withdraw them immediately. Dawn. Major Currencies 175 165 155 145 GBP, 25-Oct-16, EUR, 126.3 25-Oct-16, 112.6 135 125 115 105 95 USD, 25-Oct-16, 103.5 85 75 Oct-15 Jan-16 USD Apr-16 GBP "Success in almost any field depends more on energy and drive than it does on intelligence. This explains why we have so many stupid leaders. " Sloan Wilson Chart of the Day Region Wise Poverty Rate (2016) Corporate results: Earnings of Mari Petroleum soar 88% Mari Petroleum Company Limited’s profit soared 88% to PKR 2.76Bn (EPS: PKR 25.09) in 1QFY17 on the back of higher sales and lower exploration expenditure. The petroleum exploration company had earned a profit of PKR 1.46Bn (EPS: PKR 13.32) in 1QFY16. Tribune. Europe and Central Asia Corporate results: Pak Suzuki’s profit falls 76%, share price plummets Pak Suzuki Motor Company (PSMC) has posted a net profit of PKR 438Mn (EPS: PKR 22.11) in 1QFY17, down by a massive 76% compared to PKR 1.81Bn (EPS: PKR 5.32) in 1QFY16. Tribune. East Asia and Pacific 2% Latin America and the Caribbean 5% 4% 15% South Asia ICI profits up 33% ICI Pakistan Limited in its quarter earnings has posted 33% increase in net profits, amid an increase in sales. The company posted a profit after taxation of PKR 642.64Mn (EPS: PKR 6.96) in 1QFY17, up against PKR 483.96Bn (EPS: PKR 5.24) in FY15. The News. Govt. set to abandon gas supply plan The govt. is set to shelve a plan of dedicated gas supply from new discoveries to a group of 4 fertilizer plants approved during the tenure of previous govt. However, the petroleum ministry now wants to provide the gas to domestic consumers on a permanent basis. The ECC will take a decision on the matter. Tribune. Oct-16 Quote of the Day Engro Fertilizers makes PKR 2.9Bn profit in Q3 Engro Fertilizers has announced a net consolidated profit of PKR 2.9Bn (EPS: PKR 2.2) for 3QCY16, up 7.4% compared with PKR 2.7Bn (EPS: PKR 2.1) in 3QCY15. Tribune. PICT posts PKR 2.12Bn profit, up 22% Pakistan International Container Terminal Limited’s (PICT) profit increased 22% to PKR 2.12Bn (EPS: PKR 19.44) in 9MCY16 with strong support from increased revenue and decreased finance cost. The terminal operator had earned a profit of PKR 1.74Bn (EPS: PKR 15.99) in 9MCY15. The company’s board of directors recommended an interim cash dividend of PKR 6 per share. Tribune. Jul-16 Source: KCCI Research ; Oanda.com EUR 41% Sub-Saharan Africa Value in % terms 0% 10% 20% 30% 40% 50% Source: KCCI Research, MOF Source: Research, SBP Source:KCCI KCCI Research, World Bank 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