Pakistan Daily Economy Update - 29 December

Transcription

1. Dec . 29, 2017 KCCI - eBulletin Energy Ministry asks NEPRA to offer investment-friendly tariff regime The Ministry of Energy (Power Division), in a recent letter to NEPRA, has reiterated its stance that K-Electric’s Multi-Year Tariff (MYT) should offer an investment-friendly environment to encourage future privatizations as well as increase the private sector footprint in the power sector. The letter was written in response to NEPRA’s request seeking confirmation by the federal government about K-Electric’s MYT reconsideration request. The letter highlighted that the final decision on KE MYT should be taken keeping in mind policy directives of the federal government. Daily Times. Additional 2% duty drawback on exports to Russia allowed The govt. has allowed textile and non-textile sectors to get an additional 2% duty drawback on exports to Russia under the revised Prime Minister's Export Incentives Package. The govt. revised the Incentives Package on Oct. 20, 2017 and again on Dec. 12, 2017, where an additional 2% duty drawback was allowed for exports to non-traditional markets but Russia was not included in any of the lists. BR. Tax issues will be addressed, textile sector told The reconstituted Federal Textile Board (FTB) has assured textile sector that major taxation-related issues would be addressed. The issues include stuck-up sales tax refunds and customs duty drawback, mechanism for zero-rating policy for coal and furnace oil, withdrawal of import duty on raw material under chapter 55 of Pakistan Customs Tariff (PCT), tariff protection to intermediary materials and abolition of customs duty and sales tax on cotton imports. BR. Nepra scales down tariff by PKR 3.11/unit NEPRA has approved PKR 3.11 per unit reduction in power tariff for ex-Wapda distribution companies for Nov.’17 under the head of monthly fuel adjustment formula, passing on PKR 25Bn to consumers. This adjustment/relief adjustment will be available to domestic consumers in the entire Pakistan except for K-Electric and the lifeline consumers. BR. 10,000 potential taxpayers to be served notices in Jan.’18 State Minister for Finance, Rana Muhammad Afzal has said that govt. is devising a strategy to go after the tax-evaders and initially 10,000 people have been identified on the basis of data, saying they would be brought under tax net from Jan.’18. These potential taxpayers have been identified in different fields including education, property and other services sectors. The Nation. FBR to start automatic exchange of information under OECD from Jan 1 FBR has finalized all arrangements to start exchange of information with the international community from 1st Jan’18, to prevent fiscal crime and tax evasion. In this connection the revenue body has established five zones in major cities including Karachi, Lahore, Islamabad, Quetta and Multan to utilize information of Pakistanis having deposits in foreign banks. The News. Rana Afzal hints at further borrowing, auction of bonds Newly appointed Minister of State for Finance Mr. Afzal has said that the country has $ 6Bn of external liabilities to meet before the end of FY18. He said that the new economic team is working on many strategies to meet burgeoning expenses through possible borrowing, floating of bonds or reduction in expenditure and provincial surpluses. Dawn. After losing 27% this year, power sector braces for more shocks in 2018 With the operations of scores of inefficient thermal power plants hanging in balance, The market value of country’s listed power sector eroded by an alarming 27% in 2017.It is feared that several generators would go out of business as a capacity addition of over 14,000MW was due by 2020. Meanwhile, country’s electricity generation on residual furnace oil (RFO) plants declined by 46.9% despite a surge of 2.8% in the overall electricity generation in Nov’17. The News. Abbasi orders power sector overhaul to tackle circular debt PM Abbasi has directed an overhaul of the power transmission, distribution and recovery processes of distribution \ companies (Discos) for cutting down inefficiencies, reducing administrative losses and to find a permanent solution to circular debt. The PM ordered the constitution of a high level committee to find solution to the issue of circular debt. Dawn. Unit Value Change Daily 28-Dec 28-Dec 28-Dec 28-Dec 28-Dec 28-Dec 28-Dec 28-Dec 28-Dec 28-Dec PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 110.53 110.75 40,371 5.57 59.90 1,297.1 48,000 16.95 7,502 6.21% 0.04% 0.00% 0.56% NM** 0.54% 0.38% -0.35% 1.31% 0.00% 0.00% WoW -0.95% YoY 1.29% 10.49% 21.12% -28.56% -90.74% 57.12% Forex Reserves $ Bn 20.19 22-Dec FY18 Jul-Nov 17 Remittances $ Bn 8.02 Jul-Nov 17 Exports* $ Bn 9.03 Jul-Nov 17 Imports* $ Bn 24.06 Jul-Nov 17 Trade Balance* $ Bn -15.03 Jul-Nov 17 Current Account $ Mn -6,430 Foreign Direct Inv. $ Bn 1.15 Jul-Nov 17 Jul-Oct 17 LSM Growth* % 9.64 % 3.59 Jul-Nov 17 Avg. CPI Discount Rate % 5.75 Sep-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies GBP, 28-Dec-17, 148.6 155 145 135 EUR, 28-Dec-17, 132.0 125 115 105 USD, 28-Dec-17, 110.6 95 Dec-16 USD Mar-17 GBP EUR Jun-17 Sep-17 Source: KCCI Research ; Oanda.com Quote of the Day "Whoever is new to power is always harsh." Aeschylus Chart of the Day 51.2 56.0 51.3 55.6 52.9 54.3 51.1 52.8 50.2 52.9 48.4 35.5 42.0 38.1 44.4 33.0 40 37.3 50 47.5 47.7 60 63.4 Current Account-Pakistan 70 40.1 30 22.4 17.4 Engro Polymer plans capital expenditure of PKR 10.3Bn Engro Polymer and Chemicals Limited has announced a capital expenditure of PKR 10.3Bn, to be funded through issuance of right shares, debt and internally generated cash flows. PKR 7.6Bn would be spent on the addition of new PVC plant of 100,000MT (taking the total capacity to 295,000MT/annum) and VCM Plant debottlenecking of 50MT/annum with the target completion in the third quarter of 2020. The News. Date / Period Crude (FE'18) Gold (FE'18) Gold (10g) Local Silver (FE'18) Cotton(KHI)-40 kg Kibor-6M 36.6 31.7 Shipyard at Gwadar port: work to begin soon Chief of the Naval staff, Admiral Zafar Mahmood has said that global scenario in general, and regional geo-political situation in particular, warrant concrete and long-term policy decisions for achieving self-reliance. While announcing the establishment of a shipyard in Gwadar, the Admiral said the project will commence anytime soon and will be completed in 3 to 5 years. He was speaking at the “2nd PN Industrial Seminar" at Pakistan Navy Engineering College, Karachi organized by Pakistan Navy. BR. List of Indicators USD-Interbank USD-Open MKT KSE-100 index FIPI 51.1 Oman oil and gas company to sign MoU with Pakistan soon Ambassador of Oman to Pakistan, terming Oman a gateway to the Gulf, Africa and the Far East, has said that said Oman had planned a strategic railway project which would link it with Gulf Cooperation Council (GCC) countries, adding enhanced cooperation with Oman would allow Pakistan easy access to the GCC states. He revealed that an oil and gas company of Oman would soon sign an MoU with Pakistan, and expressed hope that it would open new opportunities for business collaboration between the two countries. Economic Indicators 20 10 0 -10 -20 Current A/C Credit Current A/C Debit Balance Value in Bn US$ Source: KCCI Research, SBP Forex reserves dip to $ 20.19Bn Pakistan’s foreign exchange reserves fell to $ 20.19Bn during the week ended 22nd Dec’17 from $ 20.38Bn a week ago. The Disclaimer central bank’s reserves dropped $ 199Mn to $ 14.13Bn due to external debt and other official payments. The foreign This report has been prepared by KCCI Research & Development Cell. The information exchange reserves held by commercial banks stood at $ 6.05Bn as compared to $ 6.05Bn during the previous week. The 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 News. 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