Pakistan Daily Economy Update - 28 September

Transcription

1. Sep . 28, 2016 KCCI - eBulletin WTO drastically cuts global trade forecast The World Trade Organization downshifted its global trade forecast, warning that anti-globalization rhetoric and Brexit were pushing trade growth to its slowest pace since the financial crisis. The warning comes as talks on a landmark free trade deal between the European Union and United States battle stiff opposition and as Britain’s EU exit causes jitters. The WTO said that global trade was now estimated to expand by just 1.7% this year, compared to its April projection of 2.8%. The new figure is also a far cry from a projection a year ago that trade would swell by 3.9% this year. Dawn Global competitiveness: Pakistan ranks last in South Asia The World Economic Forum (WEF) has ranked Pakistan at 122, last amongst its South Asian neighbours, where India leads at 39 followed by Sri Lanka 71, Bhutan 97, Nepal 98 and Bangladesh at 106 at the Global Competitiveness Index (GCI) 2016-17. Pakistan improved from 119 in 2015-16 to 111 in 2016-17 on the institutions pillar, while infrastructure improved only one point and stands at 116 this year. This year among 114 global competitiveness indicators, Pakistan showed improvements on 54 key indices, whereas on 50 indices; the country lost its previous position, while 10 indices remained same as last year. BR. ADB revises growth estimate upward to 5.2% Asian Development Bank (ADB) has revised GDP growth forecast for Pakistan upward to 5.2% as against the initial forecast of 4.8% for FY17 while GDP growth for India has been forecasted at 7.8%. The upgrade in Pakistan's growth is based on the assumption that there would be further improvements in energy supply and security, and likely recovery in cotton and other agriculture crops. The report states that key challenges remain regarding governance and security issues, reviving agriculture and improving its productivity, increasing exports and attracting investment, strengthening public enterprises, and improving the business and regulatory environment. BR. Profit and dividend: foreign investors repatriate $ 204Mn in 2MFY17 Foreign investors repatriated some $ 204Mn on account of profit and dividend during 2MFY17 as against $ 117.3Mn in the same period of last fiscal year, depicting an increase of 74%. The repatriated amount is even much higher than Foreign Direct Investment (FDI), arrived during the period under review as country fetched FDI amounting to $ 112.6Mn. Repatriation of profit and dividend from portfolio is almost equal to the last year as foreign investors repatriated an amount of $ 25.4Mn in 2MFY17 against $ 25.5Mn in the corresponding period of FY16. BR. Tax notices: no raids on business centers, traders assured Special Assistant to the Prime Minister on Revenue, Haroon Akhtar Khan has assured the business community that there will be no raids by Pakistan Revenue Authority Limited (PRA) or the FBR on business centers. Haroon Akhtar Khan further assured the business community that all outstanding issues will be resolved through chamber platform and govt. will make sure that authorities will treat traders with respect and dignity. BR. Power transmission line: Chinese company refuses to accept lower tariff Pakistan’s first $ 1.57Bn high-voltage power transmission line project in the private sector has hit a stumbling block as the Chinese company working on it has refused to accept the tariff determined by the regulator. Nepra had set a tariff of 0.70% unit for the transmission of electricity through the 878km Matiari-Lahore high-voltage direct current (HVDC) line connected to over 4,000MW coal-based power projects in Sindh. However, the tariff fell short of the expectation of the Chinese investor as it was demanding 0.91% per unit for a period of 25 years. Tribune. A rough day for K-Electric as accusations mar tariff hearing Complaints from frustrated consumers and issues raised by stakeholders overshadowed a public hearing called by the National Electric Power Regulatory Authority (Nepra) to determine K-Electric Limited’s multi-year tariff for the coming 10 years. The hearing was held after a petition filed by KE. The company’s Finance Director made a case for the request for extension of the existing tariff with some adjustments but he was quietened by the protesting stakeholders and consumers who wanted their side to be heard first. After some reluctance Nepra Chairman allowed them to air their grievances. Dawn. K-Electric to add 4,283MW in generation capacity K-Electric, the country’s premier integrated power company has unveiled a plan to add 4,283Mw to its generation capacity and improve average fleet efficiency to 43.3% from 37% over the next 10 years. The company will enhance its transmission network by 28% and increase the capacity of power transformers by 3,370MW megavolt amperes (MVA) till the fiscal year of 2025/26. The News. 15-20% water shortage likely in Rabi Pakistan is expected to face 15-20% shortage of water in Rabi 2016 which is going to commence from Oct. 1, 2016. In this regard, Indus River System Authority (IRSA) has convened a meeting; aimed at finalizing the share of provinces in the light of water availability during the Rabi season. As water regulator are not aware of actual demand of the provinces, therefore the actual shortage cannot be calculated. The provinces will thus bring their own workings to the Advisory Council's meeting. BR. Saving-investment gap shrank in 2015-16 National savings marginally improved while the investment dropped to reduce the saving-investment gap to -0.6% in FY16. The September issue of the Monetary Policy Compendium issued by the SBP said the investment fell to 15.2% of gross domestic product (GDP) in FY16 from 15.5% in FY15. According to the SBP report, national savings improved by just 0.1% to 14.6% in FY16 compared to 14.5% in the preceding year. Dawn. Joint cooperation meeting on CPEC in November Pakistan and China decided to hold the sixth Joint Cooperation Committee meeting during the last week of November to take stock of projects under the CPEC. The two countries further agreed they would make appropriate arrangements for holding workshops with experts in the identified areas. Dawn. ICI Pakistan to set up PKR 4.8Bn facility ICI Pakistan will set up a facility at the cost of PKR 4.8Bn to manufacture Japan’s Morinaga infant formula in the country. According to the company, the project was expected to come online in 2018. ICI’s equity stake in the proposed new joint venture is intended to be 51%. The combined equity stakes of Morinaga and Unibrands is intended to be 49%. The venture would also include the distribution, marketing and sales of the locally manufactured infant formula. Tribune. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 27-Sep PKR 104.75 -0.09% USD-Open MKT 27-Sep PKR 105.20 0.87% KSE-100 index FIPI 27-Sep 27-Sep Pts. $ Mn 40,294 -0.33 0.18% NM** Crude (JU'16) 27-Sep $/bbl 44.81 -1.75% Gold (MY'16) 27-Sep $/oz 1,334.1 -0.26% Gold (10g) Local 27-Sep PKR 45,340 -0.71% Silver (MY'16) 27-Sep $/oz 19.18 -1.21% Cotton(KHI)-40 kg 27-Sep PKR 6,629 0.00% Kibor-6M 27-Sep % 6.06% 0.01% 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 Sep-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, 27-Sep-16, 136.0 EUR, 27-Sep-16, 117.7 145 135 125 115 105 95 USD, 27-Sep-16, 104.7 85 75 Sep-15 USD Dec-15 GBP Mar-16 EUR Jun-16 Sep-16 Source: KCCI Research ; Oanda.com Quote of the Day "Pessimism leads to weakness, optimism to power." William James Chart of the Day 160 Communication channels in Pakistan 140 120 100 80 60 40 20 0 FY06 FY07 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 Post Offices 000' Telephones Mn' Mobile Phones Mn' 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