Pakistan Daily Economy Update - 26 September

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1. Sep . 25-26, 2016 KCCI - eBulletin SBP keeps policy rate unchanged at 5.75% State Bank of Pakistan (SBP) has announced its monetary policy for the next two months and kept the policy rate unchanged at 5.75%. According to SBP, the year-on-year CPI inflation rose to 3.6% in August 2016 from 1.8% in August 2015. Tribune. Govt. plans to raise $ 1Bn through Eurobonds The govt. plans to raise $ 1Bn from the international debt market through issuance of Eurobonds in Oct.’16 with the objective of building foreign exchange reserves ahead of approaching debt repayments from next year onwards. As debt repayment to the IMF as well as other obligations will begin from next year, foreign exchange reserves are expected to come under pressure. The govt. has therefore started exploring all the options to mobilize as much foreign inflows as possible through various instruments. In this regard, road-shows have been planned in the first week of Oct.’16 to attract investors from Middle East, Europe and USA. BR - Mon. Banks have no fresh direction from MPS There is no surprise in the Monetary Policy Statement (MPS) as status quo has been maintained for another two months at 5.75%. The SBP sees a comfortable liquidity situation; but it remained silent on the fact that govt. borrowing from the central bank is back in business. The toll stood, on cash basis, at PKR 874Bn in the first nine weeks of the fiscal year and is PKR 1,200Bn now. According to the SBP act, it has to be net zero by the quarter end i.e. the position ought to be reversed in three weeks. BR Mon. SBP tells banks to freeze terror financing accounts In a major move to clamp down on terrorism financing, the SBP has directed all banks in the country to freeze accounts worth millions of rupees linked to 2,021 individuals listed on the Fourth Schedule of the Anti-Terrorism Act (ATA) 1997. All banks, development finance institutions and microfinance banks have been advised to take immediate action as per requirement of the law against individuals, whose names are included in the lists of fourth schedulers provided by the National CounterTerrorism Authority (Nacta). Dawn. PC not reflecting CPEC, non-CPEC projects separately The Planning Commission is not reflecting non-CPEC projects with CPEC projects while working on the projects under CPEC has been expedited. The projects under CPEC are not only funded by China but also the Asian Development Bank (ADB). In this regard, Communication Standing Committee has expressed serious concerns over reflecting non-CPEC projects in terms of CPEC projects and had directed National Highway Authority (NHA) Chairman not to do so. The committee further warned NHA that a Privilege Motion would be moved in case these directives are not followed. BR - Sun. Govt to move court over Nepra tariff for Nandipur plant Disappointed by the power regulator’s ‘stubbornness’, the government is planning to seek judicial intervention to jack up the consumer tariff of the controversial Nandipur power project by over 34% in a bid to make it ‘viable’. Ministry of Water and Power and power companies had exhausted all institutional and regulatory instruments to secure Nandipur’s tariff on actual cost. The National Electric Power Regulatory Authority (Nepra) had blocked all avenues of tariff increase based on actual cost, even rejecting review and reconsideration requests. Dawn. Pakistan seeks Japanese investment in auto sector Finance Minister Senator Ishaq Dar has urged the Japanese companies to enhance their investment in the sector, while appreciating the Japanese investment in the local auto industry. He has also urged the Japanese government to remove its travel advisory for the country to facilitate bilateral business. He said the govt. would facilitate setting up of a special economic zone for Japanese companies in Pakistan. The News. Unending export freefall With an 8.2% decline in the first two months (Jul-Aug) of the new fiscal year, the export downfall has continued unabated for a few years now. The last fiscal year ending June 30 concluded with $ 20.8Bn export earnings against $ 23.9Bn at the end of 2015 and $ 25.11Bn in 2014 the first full-year of the present government. The country has been missing government-set export targets all these years. Dawn. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 23-Sep PKR 104.84 0.04% USD-Open MKT 23-Sep PKR 105.30 0.19% KSE-100 index FIPI 23-Sep 23-Sep Pts. $ Mn 39,782 -0.71 -0.88% NM** Crude (JU'16) 23-Sep $/bbl 44.70 -3.02% Gold (MY'16) 23-Sep $/oz 1,337.4 0.01% Gold (10g) Local 23-Sep PKR 45,773 0.27% Silver (MY'16) 23-Sep $/oz 19.67 -1.15% Cotton(KHI)-40 kg 23-Sep PKR 6,843 0.78% Kibor-6M 23-Sep % 6.06% 0.02% 9-Sep $ Bn 22.86 -0.54% Remittances Jul-Aug 16 $ Bn 3.09 -3.17% Exports* Jul-Aug 16 $ Bn 3.14 -8.19% Imports* Jul-Aug 16 $ Bn 7.88 10.21% Trade Balance* Jul-Aug 16 $ Bn -4.74 -27.06% Current Account Avg. CPI-FY17* Jul-Aug 16 Jul-Aug 16 $ Mn % -1,316 3.84 -91.84% WoW Forex Reserves 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, 24-Sep-16, 136.8 EUR, 24-Sep-16, 117.5 145 135 125 115 105 95 USD, 24-Sep-16, 104.7 85 75 Sep-15 Dec-15 USD GBP Mar-16 Jun-16 Quote of the Day "What's coming will come and we'll just have to meet it when it does." J. K. Rowling Chart of the Day 10 Growth of Sub Sectors of Agriculture (FY10-FY16) 5 0 FY10 FY11 FY12 FY13 FY14 FY15 FY16 -5 -10 -15 Crops Livestock Forestry Value in % terms Attracting retail investors: SECP implements various regulatory measures to facilitate AMCs SECP has implemented various regulatory measures to facilitate Asset Management Companies (AMCs) for attracting retail investors through active coordination between SECP, Mutual Funds Association of Pakistan (MUFAP) and AMCs. The SECP has analyzed the mutual fund industry in detail while comparing it with other mutual funds in neighboring countries to adopt best international practices. The commission has also proposed measures to attract retail investors in AMCs. BR - Mon. Sep-16 Source: KCCI Research ; Oanda.com EUR Fishing Source: KCCI Research, MOF 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