Pakistan Daily Economy Update - 27 June

Transcription

1. Jun . 26-27, 2016 KCCI - eBulletin Sindh Finance Bill 2016 adopted amid protest The Sindh Assembly has approved PKR 869Bn fiscal budget 2016-17 with adopting 'the Sindh Finance Bill 2016' where house approved 149 demands for grants. The majority vote by the treasury helped the budget sail through the assembly but opposition called it 'unjust' to ignore its cut-motions on the next fiscal plan. BR – Mon. Sindh raises stamp duty by 0.1% on bank loans The Sindh govt. has increased the rate of stamp duty by 0.1% on bank loans in the budget 2016-17. Under new slabs which become effective from July 1, the duty will be 0.3% on bank loans of up to PKR 500,000 against 0.2% earlier. The levy will be PKR 1,000 on loans of up to PKR 1Mn, PKR 2,000 on PKR 2Mn, PKR 10,000 on PKR 50Mn and PKR 150,000 on loans of up to PKR 500Mn. Tribune – Sun. Privatisation proceeds: budgeted PKR 50Bn unlikely to be realized The budgeted PKR 50Bn from privatisation proceeds in 2016-17 are unlikely to be realized as the process for sale of ailing Public Sector Entities (PSEs) have been put on hold. The situation is not unique as even in FY16; the govt.'s budgeted PKR 50Bn from privatisation proceeds were revised downward to PKR 13.6Bn. In FY16, the govt. succeeded in only privatizing National Power Construction Corporation for PKR 2.5Bn and failed to complete privatisation of many PSEs. BR – Sun. Dar to approve advanced metering projects for Discos Finance Minister Ishaq Dar has convened a meeting of Executive Committee of National Economic Council (ECNEC) to approve advanced metering projects for distribution companies to deal with electricity theft. The meeting would consider and approve a proposal with respect to advanced metering infrastructure project for second and fifth circles and new customers. BR – Sun. World Bank lowers rating of Dasu hydel project A World Bank report lowered the progress rating of the first phase of 2,160MW Dasu hydropower project, moving it down to ‘moderately satisfactory’ from its previous ‘satisfactory’ status. The latest implementation status report of the WB-funded project also raised the specter of unwanted delays. The Dasu project is one of the projects expected to produce 31,000MW of power that the federal govt. claimed it would complete in next five years to address power outages, on a permanent basis. Its newest deadline for ending power outages is March 2018. Tribune – Sun. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 24-Jun PKR 104.84 0.06% USD-Open MKT 24-Jun PKR 105.20 0.40% KSE-100 index FIPI 24-Jun 24-Jun Pts. $ Mn 37,389 -4.82 -2.22% NM** Crude (JU'16) 24-Jun $/bbl 47.58 -5.14% Gold (MY'16) 24-Jun $/oz 1,318.4 4.88% Gold (10g) Local 24-Jun PKR 44,722 6.92% Silver (MY'16) 24-Jun $/oz 17.78 2.63% Cotton(KHI)-40 kg 24-Jun PKR 6,147 0.00% Kibor-6M 24-Jun % 6.09% -0.01% Forex Reserves 17-Jun $ Bn 21.77 1.63% Remittances Jul-May 16 $ Bn 17.84 5.58% Exports* Jul-May 16 $ Bn 19.15 -12.39% Imports* Jul-May 16 $ Bn 40.32 -2.74% Trade Balance* Jul-May 16 $ Bn -21.17 -7.28% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-May 16 $ Mn % -1,519 2.82 17.71% WoW YoY May-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 Dual taxation treaty: FBR officials in Switzerland to re-negotiate convention FBR’s senior tax officials have reached Switzerland to re-negotiate the convention on avoidance of double taxation between Pakistan and Switzerland with particular focus on exchange of information related to clauses of the existing convention. The second round of negotiations between Pakistan and Switzerland would focus on OECD model on exchange of information and tax rates on interest, royalty, dividend income. The FBR intends to restore rates of 10% rate on interest, royalty, dividend income etc under the said convention. BR – Sun. 175 FBR to implement tax stamps on cigarette packs FBR is taking the initiative to implement tax stamps with the aim of curtailing tax evasion in the cigarette industry. In a research report compiled by Nielsen Pakistan, Local Tax Evaded (LTE) cigarettes. LTE cigarettes cost the national exchequer around PKR 25Bn in lost revenues a year. LTE cigarette brands are priced as low as PKR 15, which is indicative of clear tax evasion given that the minimum tax payable per pack is around PKR 36. Tribune – Sun. 115 KE seeks raise in tariff K-Electric has submitted a Multi-Year Tariff (MYT) petition with Nepra seeking an increase in tariff by 66 paisa per unit in the name of Operation and Maintenance (O&M) component for ten years commencing from Jul. 1, 2016 to Jun. 30, 2026. The total financial burden on consumers has been calculated at PKR 70Bn. The power utility has also sought a change in claw-back formula threshold from 12%, 15%, 18% to 15%, 18% and 20% respectively. BR – Sun. Brokers must provide risk disclosure document to customers According to the Securities Brokers (Licensing and Operations) Regulations 2016 issued through SRO569(l)/2016, the securities broker shall obtain a written acknowledgement duly signed and filled by the customer confirming that such customer has understood the nature and contents of the risk disclosure document. BR – Sun. Stock market experiences Brexit fallout In line with the rout in global equities markets, the Pakistan Stock Exchange saw massive sums wiped off share prices in the week ended on 24th Junes 2016 as the KSE-100 index dived 1,387 points (3.6%) to settle at 37,390 points. It eroded almost all of the earlier week’s gains of 1,837 points (3.6%); the highest weekly rise in three years that PSX had seen after the MSCI upgrade of Pakistan to emerging market status. The blame for last week’s equity meltdown lay squarely on Britain’s vote to leave the European Union. It rocked world financial markets on Friday. The KSE-100 index also faltered 848 points (2.2%) on the last day of the trading week. Dawn - Mon. Punjab seeks PKR 115Bn foreign aid for mega project Punjab has sought a mammoth PKR 115Bn under foreign project assistance (FPA) in the budget for FY2016-17 to run mega projects, increase of 70% compared to the outgoing fiscal year. During the outgoing fiscal year, the total allocation under FPA was PKR 34Bn. This year’s allocation of PKR 115Bn implies a 70% surge for the current financial year. Tribune - Sun. Global markets lose $ 2.1Tn in Brexit rout Britain's shock vote to pull out of the European Union wiped $ 2.1Tn from global equity markets as traders panicked in the face of a new threat to the global economy. Investors fled to the safety of gold, the yen and bluechip bonds. The Brexit vote sparked 8% losses in the Tokyo and Paris bourses, nearly 7% in Frankfurt and more than 3% in London and New York. The pound crashed 10% to a 31-year low at one point, before rebounding slightly for a 9.1% loss against the greenback in late trade. The euro also plummeted, dropping 2.6% on the dollar. Benefiting from a massive safety selloff, gold jumped nearly 5% and the yen surged 4.2% against the dollar and 7% on the euro. BR – Sun. Pakistani investors have new opportunities in Ukraine Ukrainian Ambassador to Pakistan Volodymyr Lakomov on 26th June 2016 said that attractive opportunities existed for the Pakistani investors in Ukraine, after amendments in investment law. President of Ukraine Petro Poroshenko signed the law on amendments to several legislative acts of Ukraine regarding the abolition of mandatory state registration of foreign investments. Therefore, the Pakistani investors will have new opportunities in the Ukrainian market, including participation in large and middle scale investment projects, he said in press statement issued here. The law provides for creation of more favorable conditions for the attracting investments. Daily times – Sun. 165 155 GBP, 25-Jun-16, 142.4 145 135 EUR, 25-Jun-16, 115.7 125 105 95 USD, 25-Jun-16, 104.1 85 75 Jun-15 Sep-15 USD Dec-15 GBP Mar-16 EUR Jun-16 Source: KCCI Research ; Oanda.com Quote of the Day “The quality of a man's life is in direct proportion to his commitment to excellence, regardless of his chosen field of endeavor." Vince Lombardi Chart of the Day FDI received from Top 10 Countries during 11MFY16 China 571.15 U.A.E 150.96 Hongkong 130.56 Italy 92.72 Switzerland 74.48 United Kingdom 65.67 Austria 41.01 Norway 33.73 Luxembourg 28.57 Singapore 20.68 0 Value in $ Mn 100 200 300 400 500 600 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