Pakistan Daily Economy Update - 29 July

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1. Jul . 29, 2017 KCCI - eBulletin No panic among business circles, but caution urged Despite the disqualification of PM Nawaz Sharif, businessmen of the country are confident that the government will continue its economic policies until the next general elections in 2018. In this respect, KCCI President Shamim Firpo commented that there is absolutely no panic in the business community; in fact the Supreme Court’s verdict has ended the long-lasting uncertainty in the business circles, he added. KCCI President further said that the business community expects the new prime minister to take everyone with him so that the country can see higher economic growth in the future. Tribune. Rupee falls to 3-week low of PKR 109/$ in open market after Sharif ouster The rupee/dollar parity dropped 2% in the kerb dealings compared to the previous day’s closing amid shortage of foreign currency as dealers continued to hold greenback instead of selling. The rupee, however, remained stable at 105.40 per dollar in the interbank market. Dealers in the currency market said that there is a significant decline in the supply of dollars as no seller is willing to sell the currency, however, markets were largely expecting the decision and they had already priced it in. The News. Ogra proposes up to PKR 5 cut in diesel, petrol prices Ogra has recommended PKR 5.07 and PKR 3.67 per liter cut in the prices of HSD and petrol, respectively, for Aug‘17. On the other hand, the regulator proposed an increase of PKR 13 and PKR 10 per liter in the prices of kerosene and light diesel oil. In a summary sent to the government, Ogra said the adjustment in diesel and petrol prices was required to pass on the impact of drop in the international market during Jul’17. Dawn. In PM’s absence, decision to cut petroleum prices in limbo Oil consumers could be getting reasonable relief in Aug’17 as OGRA has recommended price cuts for major petroleum products. However, as the final approval for the oil price revision is given by the prime minister, the government is likely to keep petroleum product prices unchanged in the absence of the premier; there seems to be no competent authority to decide on the price revision. Tribune. Political developments won’t affect ties: China China expressed the hope that its bilateral relations would remain unaffected by political developments in Pakistan and urged Pakistan’s political parties to show maturity. A statement issued by the Chinese embassy said that, as a friendly neighbor China hopes that all parties and sections in Pakistan can priorities state and national interests, properly deal with their domestic affairs, maintain unity and stability and keep focusing on the economic and social development. Dawn. Private sector’s role crucial in CPEC, says BoI The China-Pakistan Economic Corridor (CPEC) will spark development in trade and industry, which is the driving force behind economic growth and prosperity in the country, said the Board of Investment (BoI). Speaking at a consultative session on CPEC challenges and opportunities held at KCCI, BoI spokesman Mr. Shah Jahan said the role of private sector was more crucial in the current phase of CPEC. The sustainability of the entire CPEC project depends on industrial cooperation, and the government is committed to facilitating the private sector in its endeavours, he said. Tribune. PSX heaves a sigh of relief as uncertainty subsides A bounce-back close to the end of trading hours on 28th Jul’17 (Friday) saw the KSE-100 index end the session with a marginal gain of 6.27 points (0.01%) at 45,912. The stock market was jittery in the morning as investors speculated about the verdict in the Panamagate case. Some brokers and dealers in the trading hall cheered and celebrated while investors heaved a sigh of relief because the decision ended prolonged uncertainty. Despite the last trading day of the rollover week, bargain hunters decided to cherry-pick stocks with attractive valuations. Dawn. Neelum Jhelum first unit to start generation by Feb The strategically important Neelum Jhelum Hydropower Project (NJHP) is fast heading towards its completion and is scheduled to start electricity generation with commissioning of its first generating unit by Feb’18. NJHP Board of Management (BoM) briefed Wapda Chairman during a meeting, and the Wapda chairman expressed satisfaction over the progress on the project, adding that despite the delay of years and cost overrun, the project will finally see the light of the day because of some extraordinary commitment and display of professional excellence by Wapda and NJHP team members. NJHP comprises four generating units with \ cumulative generation capacity of 969 MW. The Nation. Economic Indicators List of Indicators Date / Period Unit Value Change Daily Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 28-Jul 28-Jul 28-Jul 28-Jul 27-Jul 27-Jul 28-Jul 27-Jul 28-Jul 28-Jul PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.40 107.35 45,912 -13.45 49.14 1,259.9 43,885 16.56 6,805 6.14% Forex Reserves 21-Jul $ Bn 20.40 0.01% -0.05% 0.01% NM** 0.97% -0.02% 0.19% -0.14% 0.78% 0.00% WoW -2.06% YoY -3.08% -1.63% 18.67% -36.32% -148.57% 4.58% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Jun 17 Remittances $ Bn 19.30 Jul-Jun 17 Exports* $ Bn 20.45 Jul-Jun 17 Imports* $ Bn 53.03 Jul-Jun 17 Trade Balance* $ Bn -32.58 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 4.16 Jul-Jun 17 Avg. CPI-FY17* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies 145 GBP, 28-Jul-17, 138.1 135 125 EUR, 28-Jul-17, 123.5 115 105 95 Jul-16 USD, 28-Jul-17, 105.4 USD SECP notifies companies’ incorporation rules SECP has issued a detailed list of prohibited names which cannot be incorporated by new companies, including names associated with any political personality, bureau/division, department, undertaking, court/judiciary/judge and names of international bodies and donor agencies. The SECP has issued SRO 704(I)/2017 to notify Companies (Incorporation) Regulations, 2017 to be applicable from 14th Aug’17. BR. Weekly inflation down 0.13% Inflation, calculated through sensitive price index (SPI) for the combined income groups, ticked lower by 0.13% during the week ended on 27th Jul‘17 compared to the previous week. The SPI for the aforementioned group settled at 218.75 points in the period under review against 219.03 points a week earlier. The News. Sri Lanka to sign China port deal despite protests Sri Lanka will proceed with the billion-dollar sale of a deep sea port to China despite protests in an effort to slash its foreign debt. Hambantota port straddles the world's busiest east-west shipping route and several countries, including neighbouring India, had raised concerns China could use it for its own military needs. The port, built in 2010 with a massive loan from China and named after former president Mahinda Rajapakse, has failed to generate enough business to even pay staff salaries. BR. EUR Jan-17 Apr-17 Jul-17 Source: KCCI Research ; Oanda.com Quote of the Day "Life is about making an impact, not making an income." Kevin Kruse NEPRA notifies upfront tariff for CPPs NEPRA has notified upfront tariff for captive power plants (CPPs) running on residual fuel oil (RFO) for short-term utilization of available generation capacity at PKR 12.24/kWh. The determined tariff is applicable till Dec‘18 for the delivery of electricity by CPPs to power purchaser on take and pay basis. Any captive power plant or small power producer can opt for the upfront tariff for sale of surplus power into the system and the minimum capacity to be offered will be 3 MW. The News. Concern over non-execution of textile city, plastic company Senate Standing Committee on Textile Industry, has showed serious concerns over non-execution of Pakistan Textile City Limited and Garments City launched in 2004 under Trade Policy of 2003-04, and Plastic Company near Port Qasim. The committee chairman formed two sub-committees to hold detailed inquiries and suggest the way-forward for these projects. Billions of rupees have been reported to be spent on these projects but there is no visible progress so far. The Nation. Oct-16 GBP Chart of the Day Cement Sales (Local Vs Export) 40.00 35.65 33.00 35.00 30.00 25.00 20.00 15.00 10.00 5.87 4.66 5.00 - FY16 Value in Mn Tons FY17 Local Export Source: KCCI Research, APCMA 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