Pakistan Daily Economy Update - 27 March

Transcription

1. Mar . 27, 2018 KCCI - eBulletin Shanghai Power committed to buy K-Electric A delegation of Shanghai Electric Power Ltd. (SEPL), led by its Chairman Wang Yundan, called on PM Abbasi and sought the govt.’s support in accelerating the process of regulatory approvals to facilitate the completion of Sale-Purchase Agreement (SPA) of majority shares in K-Electric Ltd (KEL). The premier assured the delegation that govt. remains committed to supporting SEPL with a view to further liberalize the power sector. Meanwhile, KEL and Arif Habib Ltd (AHL), have informed the PSX that SEPL will be renewing its interest in purchasing controlling stake in KEL since the last Public Announcement of Intention (PoI) has run into its time limit. The time period for making the PoI for purchase of stake in KEL expired on Mar. 26, 2018. The deal is valued at $ 1.77Bn. BR. KCCI carries out survey on electricity issues In a report on “Karachi Electricity Supply” by Research & Development Department of KCCI, it has been claimed that consumers do not consider K-electric as a reliable source of electricity due to which almost 95% of the offices, factories and homes keep diesel/petrol generators as an alternate backup for electricity. The report says that even in areas where there is near 100% recovery, consumers face frequent electricity breakdowns which lasts 10 to 15 minutes only, sometimes accompanied by voltage fluctuations which severely damage household electronic items and cost the consumers heavily. The report pointed out that as a general perception, more efficiency, professionalism and transparency is expected from a privatized, listed and foreign held entity. BR. Abraaj may sell part of investment management business Private equity firm Abraaj Group is considering selling part of its investment management business as it seeks to stem the fallout from a dispute with investors in one of its funds. Dubai-based Abraaj is in early stage talks with several possible buyers, with one source saying Abu Dhabi Financial Group is among them and another source saying Abraaj has received interest from international financial firms. BR. Salaried class to benefit as govt. mulls lower income tax rates The federal govt. is considering giving a massive tax relief worth PKR 67Bn to the salaried class in the upcoming budget, as it plans to cut income tax rates for every income bracket with an aim to bring down the highest slab rate to 20%. If it passes the hurdle, the wage-boosting measure will see a 90% cut in tax burden of the lowest income group and around 43% for the highest income group. Cumulatively, the salaried class’s take-home pay will increase by PKR 67Bn at their current income levels, which will be a major relief to them ahead of upcoming general elections. Tribune. 6% inflation favorable for economic growth: SBP’s study Pakistan will continue to have favorable economic growth if annual inflation remains around 6%, an SBP study, titled ‘Threshold Inflation in Pakistan’ read, warning, however, of negative outlook in case of uptick from the forecast. The govt. has projected growth and consumer price inflation at 6% for FY18, above from the SBP’s projections of 5-6% for GDP growth and 4.5-5.5% for inflation. Inflation is however, expected to rise in the coming months in the wake of the rupee depreciation and increasing international oil prices. As per the study, an average 1% increase in inflation is associated with 0.74% increase in real GDP growth when inflation is below threshold level and 0.53% decrease in real GDP growth, when inflation is above threshold level. The News. Govt. divested shares of profitable PSEs Despite making tall claims to privatize loss-making Public Sector Entities (PSEs), the govt. has only divested the shares of profitable PSEs including HBL, UBL, ABL, PPL and National Power Construction Company. The govt. had initiated the privatization of 26 PSEs including PIA, Pakistan Steel Mills and Discos in Jun.’13 and has generated $ 1.7Bn through privatisation since then. According to the IMF, combined accumulated losses by these PSEs now exceed PKR 1.2Tn (4% of GDP), which could eventually lead to sizable demand for budgetary resources. The Nation. Validation of 5% census results: CCI may reconsider decision today A meeting of the Council of Common Interests (CCI) may reconsider its decision for validation of 5% census results on Mar. 27, 2018 (today). The meeting, which will be presided over by PM Abbassi and attended by chief ministers, will be given an update \ by Ministry of Statistics on Monitoring and Oversight Committee of Senators. There are remote chances for audit of 5% census results because there has been hardly any progress on the matter after Dec.’17. BR. Mitsubishi setting up 3rd LNG terminal as gas demand increases Japanese business conglomerate Mitsubishi Corporation is setting up another LNG terminal in Pakistan after the successful operation of two terminals that have already been commissioned, as the govt. is exploring oil-substitute means to meet growing energy needs in the country. This was announced after a meeting between PM Abbasi and a delegation of Mitsubishi Corporation and Diamond Gas International. Global energy producers including Exxon and traders like Vitol are also taking keen interest in the country’s energy market with gas shortfall expected to further increase with rise in number of gas consumers. The News. Foreign firms repatriate $ 1.46Bn profit in July-February Multinational firms’ profit repatriation jumped 20.77% to $1.46Bn in 8MFY18, SBP data showed. The largest repatriation was seen in the financial sector (repatriating a hefty $191.7 Mn), followed by power ($ 182.2 Mn) and communications businesses ($ 167.3 Mn). The repatriation of profits on foreign portfolio investment fell to $ 180.5 Mn, compared with $ 226.6 Mn in 7MFY18. In Feb ‘18, profit and dividend repatriation on FDI stood at $116.1 Mn. The News. Alibaba moves to attract Pakistani exporters towards B2B portal Chinese ecommerce giant Alibaba Group has geared up efforts to get Pakistan’s exporters listed on its multination business-tobusiness electronic portal. Its Country Manager said the group has launched Pakistan pavilion on its website to showcase indigenous product listings after TDAP and Alibaba Group signed a pact to improve the country’s ecommerce and boost exporters’ business last year. Jia was addressing a roadshow for Karachi-based businessmen who constitute a negligible portion of the platform’s registered suppliers. Currently, there are 3,000 paid members and most of them are based in Sialkot, Lahore and Faisalabad, while textile, leather, surgical instruments and sports goods sectors are the top categories. Overall, it has around 250,000 registered members from Pakistan. The News. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 26-Mar 115.48 115.00 0.07% 0.44% Crude (MY'18) 26-Mar 26-Mar 26-Mar 26-Mar PKR PKR Pts. $ Mn $/bbl 45,084 1.17 65.50 0.12% NM** -0.62% Gold (AP'18) Gold (10g) Local 26-Mar 26-Mar $/oz PKR 1,353.4 50,271 0.40% 2.00% Silver (AP'18) Cotton(KHI)-40 kg 26-Mar 26-Mar $/oz PKR 16.66 8,145 0.81% 0.00% Kibor-6M 26-Mar % 6.56 $ Bn 18.08 0.03% WoW -0.88% Remittances 16-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Jan 18 LSM Growth* % 6.33 % 3.84 Jul-Feb 18 Avg. CPI Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -20.85% -50.03% 15.64% Major Currencies 175 GBP, 26-Mar-18, 163.7 165 155 145 EUR, 26-Mar-18, 143.1 135 125 115 USD, 26-Mar-18, 115.3 105 95 Mar-17 USD Jun-17 GBP EUR Sep-17 Dec-17 Source: KCCI Research ; Oanda.com Quote of the Day "Gossip is the art of saying nothing in a way that leaves practically nothing unsaid." Walter Winchell Chart of the Day SECTOR-WISE BREAK-UP OF FOREIGN DIRECT INVESTMENT (8MFY18) Others, 79.24, 4% Power , 711.10, 37% Automobiles, 31.00, 1% Construction, 470.94, 24% Electronics , 33.38, 2% Financial Business, 229.62, Cement, 39.34, 2% Trade, 58.22, 3% Transport, 58.94, 3% Values in $ Mn Food, 91.03, 5% Oil & Gas, 138.59, 7% Source: KCCI Research, SBP Disclaimer Pakistan to launch e-payment system soon This report has been prepared by KCCI Research & Development Cell. The information contained Pakistan would soon initiate an e-payment system as almost 97% work in that regard has been completed. Speaking at the herein have been compiled or arrived at based upon information obtained from sources believed to ‘Doing Business Reforms Exhibition’, organised by the Punjab Planning Department in collaboration with the World Bank, Punjab be reliable and in good faith. Such information has not been independently verified. Finance Minister Dr. Ayesha Ghaus Pasha said all provinces are on board and the govts. are very close to fulfilling the long icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' overdue demand of the business community. The agenda for achieving the goal of ease of doing business is to simplify understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk procedures, cut down on costs and reduce time for starting and conducting business. Tribune.