Pakistan Daily Economy Update - 27 August

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1. August 27 , 2022 KCCI - eBulletin Govt. considers waiving FPA on 300 units Minister for Finance ruled out the possibility of seeking rescheduling of foreign debt from international creditors, saying that Pakistan had paid all its external debt obligations in the past and would continue so in the future as well. PM constituted committee for considering waiving FPA for electricity consumers using 201 to 300 units. If the PM approves abolishing of FPA up to 300 units, the govt. will require the additional cost of PKR 13Bn. The PM waived off FPA up to 200 units on this month’s electricity bills after taking the World Bank and the IMF into confidence and there will be no need for customers to go the office of power companies for getting revised bills. We will manage additional financing without increasing budget deficit or compromising the surplus primary balance of PKR 153Bn for the current FY23” Minister for Finance. The News. Flour price hike compounds consumer misery in Karachi Millers in Karachi have shocked already-stressed consumers by raising the prices of various flour varieties by PKR 4/kg, effective 26thAug’22, citing a significant drop in the arrival of wheat from flood-affected areas of interior Sindh. Dawn. Sindh proposes fixing wheat support price at PKR 3,000/40kg Adviser to CM Sindh on Agriculture said that Sindh has proposed the federal govt. to fix the support price of wheat at PKR 3,000/40 kg. BR. FATF team to visit Pakistan next month The Onsite Inspection Team of FATF is all set to visit Pakistan in the first week of Sept’22 to assess rules, regulations, and strengthening of institutional mechanism in order to decide on removing the country from the grey list. The News. Naya Pakistan Housing Programme: New policy on the anvil: minister Punjab Housing and Urban Development Minister has said a new policy was being brought soon for low-cost housing schemes under Naya Pakistan Housing Programme. Also a special action plan was being prepared against illegal housing societies; if an illegal housing society was not regularized, a case will be sent to the Anti-Corruption department. BR. Electricity bills and taxes: Farmers continue protest against rising inflation Farmers continued their sit-in for the second consecutive day to press the govt. for the fulfilment of their demands including taking back the increase in electricity bills and taxes. The farmers continued their protest at D-Chowk on 26thAug’22 under the banner of Kissan Ittehad. BR. SBP sets PKR 1.8Tn agri credit target for FY23 SBP has assigned annual agriculture credit disbursement target of PKR 1,800Bn to the financial institutions for FY23 to cater for the agriculture credit demand in the country. BR. TransKarachi & LUMS sign MoU to promote gender equality in public transport TransKarachi, a public sector company established and owned by the Govt. of Sindh to carry out the project implementation of the $ 504Mn Karachi Bus Rapid Transit (BRT) Red Line, has signed a MoU, with the UrbanTech Pakistan team at LUMS with a goal to gain an indepth understanding of the challenges faced by women while utilizing public transport & to explore potential solutions for them. BR. Hubco asks CPPA-G to resolve payment ‘disparity’ issue The bitterness between M/s Hubco Power Company (Hubco) and Central Power Purchasing Agency- Guaranteed (CPPA-G) on alleged disparity in allocation of payment to different IPPs is rising with each passing day. The amount of receivables of Hubco stood at PKR 43Bn of which PKR 6Bn were up to 1 month, PKR 9Bn up to 1-2 months, PKR 5Bn up to 2-3 months, PKR 12Bn up to 3-6 months and PKR 11Bn up to 6-9 months. This stock is excluding the disputed amount of PKR 11.5Bn. BR. FBR unveils ‘individual paper return’ for TY22 FBR has issued “individual paper return” for the TY22. The draft of the manual income tax return and wealth statement has been issued through the issuance of the SRO1612(1)/2022. According to the notification, the FBR has issued a draft of certain further amendments to the Income Tax Rules, 2002, which the FBR proposes to make in exercise of the powers conferred by sub-section (1) of section 237 of the Income Tax Ordinance, 2001. BR. PM announces Rs15bn grant for Sindh \ The federal govt. will provide a grant of PKR 15Bn to the Sindh govt. to overcome the heavy losses of life and infrastructure in the wake of the massive destruction caused by flash floods. BR. List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 26-Aug 26-Aug PKR PKR 220.66 229.00 0.57% 1.55% KSE-100 index FIPI 26-Aug 26-Aug Pts. $ Mn 42,592 0.84 -1.02% NM** Crude Oil 26-Aug $/bbl 93.06 0.12% Gold 26-Aug $/oz 1,749.8 -1.22% Gold (10g) Local 26-Aug PKR 123,460 1.20% Silver 26-Aug $/oz 18.75 -1.96% Cotton(KHI)-40 kg 26-Aug PKR 22,500 -6.69% Kibor-6M 26-Aug % 16.00 0.00% Forex Reserves 12-Aug $ Bn 13.61 WoW 0.38% Remittances Jul-22 $ Bn 2.52 -6.77% Exports* Jul-22 $ Bn 2.22 -4.76% Imports* Jul-22 $ Bn 4.86 -10.48% Trade Balance* Jul-22 $ Bn -2.64 14.77% Jul-22 Jul-Jun 22 $ Bn $ Bn -0.85 1.87 -10.1% 1.13% YoY Current Account Foreign Direct Inv. Jul-Jun 22 LSM Growth* % 11.70 % 24.93 Jul-22 Avg. CPI Discount Rate % 15.00 Jul-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 305 295 285 275 265 255 245 235 225 215 205 195 185 175 165 155 145 Aug-21 GBP, 26-Aug-… EUR, 26-Aug-22, 226.3 USD, 26-Aug-22, 229.0 Nov-21 GBP USD Lucky to buy back 10Mn shares to improve ‘future financial position’ Lucky Cement Ltd told investors it wants to buy back up to 10Mn of its own shares from the stock market for the purpose of cancellation. The move is aimed at improving the “future financial position” of the company, said a regulatory filing on the stock exchange. Dawn. PSO earnings surge PSO recorded an unconsolidated profit of PKR 86.2Bn for FY22, up 196% from the preceding year. A regulatory filing showed quarterly earnings of the oil marketing company rose 97% to PKR 21.5Bn on an annual basis in the latest three-month period. Dawn. Stocks fall 441 points on floods, political turmoil Share prices tumbled as investors resorted to profit-taking on the last day of the rollover week in which futures contracts are either settled or rolled over to the next month. Dawn. Aug-22 Source: KCCI Research "Even if you are on the right track, you'll get run over if you just sit there.” Will Rogers Tax Expenditure by FBR Estimates of FY22 Govt. aims to collect PKR 91Bn thru GST, PL on POL products The federal govt. may impose General Sales Tax (GST) on all petroleum products with effect from 1stOct’22 to generate revenues amid decreasing oil prices in global market, according to petroleum division. This will guarantee minimum PKR 279Bn/annum revenue only on account of GST from petroleum products at current consumption levels. BR. LHC moved against ‘deal with Qatar on PIA control’ The LHC has been requested to restrain the federal government from striking a “deal” with Qatar allegedly for selling 51% shares of the PIA, and handing over the administrative control of the national flag carrier and the Islamabad International Airport to the Gulf state. Dawn. May-22 Quote of the Day Inquiries against taxmen: FBR creates new ‘section’ FBR created a new Section, ie, “Discipline/ Inquiries” to ensure timely completion of all disciplinary cases/inquiries against tax officials involved in corruption and corrupt practices in the field formations. BR. UN plans $ 160Mn Flash Appeal The United Nations will launch a $ 160Mn Flash Appeal to help millions of people affected by unprecedented monsoon rains in Pakistan that triggered massive floods. Dawn. Feb-22 EUR 50% 25% 62% 12% 13% Income Tax Sales Tax Customs Duty Total Source: KCCI Research, FBR Note If any member is facing any issues pertaining to PakistanAfghanistan investment and trade policies or has project proposals is requested to share the information at secretary@kcci.com.pk for forwarding to the Board of Investment.