Pakistan Daily Economy Update - 29 July

Transcription

1. Jul . 29, 2016 KCCI - eBulletin Pakistan, Turkey hold 3rd round of talks on FTA Pakistan and Turkey discussed the draft for the FTA during the 3rd round of negotiations, held at the Ministry of Economy, Ankara from 25-27 July, 2016. The two sides discussed draft texts for agreements on trade in goods services and investments. During the negotiations on the free List of Indicators trade agreement, matters pertaining to tariffs, Customs facilitation, safeguard measures, rules of origin, tariff reduction, modality, bilateral USD-Interbank investment mechanisms and services were discussed extensively. The News. USD-Open MKT $ 2Bn LNG pipeline: Russian team coming to start talks on commercial contract KSE-100 index Pakistan and Russia are set to start negotiations on a commercial contract for laying a $ 2Bn LNG pipeline next week following the go-ahead FIPI given by the Ministry of Law for the project despite US sanctions against the Russian firm selected to execute the scheme. The pipeline will be laid on the build, operate and transfer model. The Russian company will hand over its control to Pakistan after 25 years. Under an agreement, Crude (JU'16) Pakistan will provide 15% of equity while the remaining 85% financing will be contributed by Russia. First phase of the project is expected to Gold (MY'16) conclude by Dec 2017. Tribune. Gold (10g) Local Economic Indicators Date / Period Unit Value Change Daily 28-Jul PKR 104.84 -0.01% 28-Jul PKR 104.85 0.00% 28-Jul 28-Jul Pts. $ Mn 39,469 -1.40 0.09% NM** 28-Jul $/bbl 41.11 -1.86% 28-Jul $/oz 1,335.6 -0.52% 28-Jul PKR 45,497 2.42% 28-Jul $/oz 20.26 -0.80% 28-Jul PKR 7,057 1.54% 28-Jul % 5.97% -0.01% 15-Jul $ Bn 23.09 0.13% Remittances Jul-Jun 16 $ Bn 19.90 7.84% Exports* Jul-Jun 16 $ Bn 20.80 -12.11% Imports* Jul-Jun 16 $ Bn 44.76 -2.33% Trade Balance* Jul-Jun 16 $ Bn -23.96 -8.13% Current Account Avg. CPI-FY16* Jul-Jun 16 Jul-Jun 16 $ Mn % -2,525 2.86 6.79% Silver (MY'16) FBR awaits govt. go-ahead on blocking non-filers’ CNICs FBR is awaiting a nod from the federal govt. on the blocking of the computerized CNICs of non-filers of returns for business and financial Cotton(KHI)-40 kg transactions to increase its filing counts. In April, a meeting of Senate Standing Committee on Finance recommended the FBR to block the Kibor-6M CNICs of non-filers to forcibly bring them into the tax net. The FBR should ensure to evolve a mechanism by which the CNICs of non-filers could be blocked for business/banking transactions to bring all the non-filers into the tax net, advised the Committee. The News. Forex Reserves FBR and realty sector yet to reach consensus: further talks today FBR and the real estate sector have yet not developed consensus on fair market value of immovable properties in the three main cities of the country, i.e., Karachi, Lahore and Islamabad and next round of talks would be held on Jul. 29, 2016 (today). There is a deadlock on the property valuation issues’ as real estate sector representatives’ presented very low values of properties in Karachi, Lahore and Islamabad as compared to the working of the FBR values’ team. In case of the remaining cities, the FBR has agreed with the market rates provided. However FBR has noted that there is a difference of 25 to 150% in property values’ of Karachi, Lahore and Islamabad submitted by the real estate sector when compared with FBR values. BR. WoW YoY Govt. bans fresh investments in power generation on imported fuel Jun-16 Discount Rate % 5.75 The Govt. has banned fresh private sector investments in power generation on imported fuels owing to surplus capacities contracted so far Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* that are enough to meet electricity demand beyond 2022. As a consequence, the federal government has issued written instructions to the ** Not Meaningful WoW= week on week; YoY=Year on Year Private Power and Infrastructure Board (PPIB) not to extend expiring letters of intent (LoIs) and letters of support (LoSs) for existing proposals Major Currencies or issue new ones for power plants of imported fuel. Dawn. Within radius of 5km of gas field: utility companies ought to bear the cost of supplying gas to villages Petroleum Ministry has proposed that utility companies bear the cost of supplying gas to villages within a radius of 5km of a gas field subject to the approval of Council of Council Interests (CCI). The Ministry also stated in working papers put up for the next CCI meeting that the cost for those in location criteria above a 5km radius may be borne by the gas producing provinces. In the past, cost of such projects was picked by the federal govt. through the Public Sector Development Program but now such schemes have been discontinued in the PSDP and now it is difficult to carry on these schemes. BR. Making Exim Bank functional: Senate body sets Nov. 30, 2016 deadline Commerce Standing Committee has fixed deadline of Nov. 30, 2016 to make the much awaited Exim Bank fully functional, after the Commerce Ministry held Finance Ministry responsible for delay in making the Bank a reality. Exim Bank of Pakistan had been approved in the federal budget 2014-15 with an allocation of PKR 100Bn as an authorized capital with an initial paid-up capital of PKR 10Bn. BR. Forex reserves fall to $ 22.99Bn Pakistan’s foreign exchange reserves fell to $ 22.99Bn during the week ended July 22 as compared to $ 23.09Bn in the previous week. The foreign exchange reserves held by the SBP decreased by $ 40Mn to $ 18.03Bn from $ 18.07Bn in the previous week. The decline in forex reserves is attributed to $ 83Mn debt repayments made to the international lenders. The forex reserves of commercial banks also declined to $ 4.95Bn from $ 5.01Bn in the preceding week. The News. Accords worth $ 110Mn inked with Chinese firms Punjab Chief Minister Shahbaz Sharif has inked 4 agreements worth $ 110Mn with Chinese engineering companies during their visit to the neighboring country. Under these agreements, Chenab Engineering Works and Foundries and Chensin Enterprises will set up modern manufacturing plants in the M-3 Industrial Estate by adopting international manufacturing technology. Tribune. SME sector should be considered in CPEC’s contracts Small & Medium Enterprise (SME) businessmen have urged the govt. to provide opportunities to the local SME sector whenever it awards contracts to various major and small projects in CPEC. They said, that the SME sector can play a major role in CPEC as Pakistan’s medium and small industries are keen to participate in the development and prosperity of the two friendly countries and wish for its earliest completion. Dawn. National IP strategy to be developed: Dastgir Commerce Minister has instructed the Intellectual Property Organization (IPO) to develop a National IP Strategy and fast-track pending amendments in legislation in the field of trademarks, patents, copyrights and industrial design. Further, he directed the IPO chief to pay due diligence before acceding to the international treaties relating to IP such as Patent Cooperation Treaty (PCT), International System for Registration of Patents, Madrid Protocol, International System for Registration of Trademarks and internet treaties like World Intellectual Property Organization (WIPO) Copyright Treaty (WCT) and WIPO Performances and Phonograms Treaty (WPPT). Dawn. Marble exports decline by $ 16.55Mn in FY-16 Overall exports in the marble sector stood at $ 53.43Mn during FY-16, registering a decline of around $ 16.55Mn as compared to the preceding FY-16, in which the exports stood at $ 69.98Mn. Exporters said frequent load shedding was proving to be the biggest hurdle in the smooth performance of the marble industry. Dawn. Pakistan exports rice worth $ 1.86Bn in FY16 According the PBS, the country earned $ 1.86Bn by exporting rice in FY16 as compared to the exports in the corresponding period of the last year. Around 4,262,216 metric tons of rice was exported during FY16. However, rice exports witnessed decrease of 8.60% during FY16, as its exports were recorded at 3,861,406 metric tons, valuing $ 2.035Bn during FY15. The News. Ambassador Jilani, Dar discuss ways to enhance trade with US Ambassador of Pakistan to the US Jalil Abbas Jilani had a meeting with Finance Minister here on Jul. 28, 2016 and discussed ways to enhance Pak-US trade and economic relations. He told the minister that the US financial institutions, the World Bank and the International Monetary Fund (IMF) had acknowledged the economic turnaround of the country. He said reputed think tanks and academic institutions of the US including the United States Institute of Peace and John Hopkins University had shown keen interest to invest in Pakistan. Dawn. 175 165 155 GBP, 28-Jul-16, 137.7 145 135 EUR, 28-Jul-16, 115.7 125 115 105 95 USD, 28-Jul-16, 104.4 85 75 Jul-15 Oct-15 USD Jan-16 GBP Apr-16 EUR Jul-16 Source: KCCI Research ; Oanda.com Quote of the Day "The roots of education are bitter, but the fruit is sweet." Aristotle Chart of the Day Foreign Direct Investment in Pakistan (FY02-FY16) FY16 FY15 FY14 FY13 FY12 FY11 FY10 FY09 FY08 FY07 FY06 FY05 FY04 FY03 FY02 1,281 923 1,699 1,456 821 1,635 2,151 3,720 5,410 5,140 3,521 1,524 949 798 485 0 1,000 2,000 3,000 Value in $ Mn 4,000 5,000 6,000 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 State Bank suspends euro transactions through ACU SBP on Jul. 28, 2016 suspended euro transactions through the Asian Clearing Union (ACU) with immediate effect but did not give a reason for sources believed to be reliable and in good faith. Such information has not been independently verified. the move. The SBP followed the decision taken by the Reserve Bank of India (RBI). On July 1, the RBI temporally suspended all euro transactions through the ACU mechanism and said all such trade will now have to be settled outside the system. Similarly, on Jul. 28, 2016 Bangladesh’s central bank also suspended the ACU mechanism. Dawn. 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