Pakistan Daily Economy Update - 29 June

Transcription

1. Jun . 29, 2016 KCCI - eBulletin Lower exports feared Commerce Ministry has hinted at a possible estimate of the country's exports, which would be around $ 20.9Bn in FY16, 12.4% or $ 4.6Bn less than the target of $ 25.5Bn set in Strategic Trade Policy Framework (STPF) 2015-18. The exports of Pakistan peaked in 2013 at $ 25.1Bn while the last two years have witnessed a decline in exports. Furthermore, Brexit has suddenly created new challenges for Pakistan. In this regard, United Nations has given five reasons for a decline in Pakistani exports i.e. global price development, persistent power shortages, weak investment growth, narrow export base and poor infrastructure. The IMF, in its eleventh review, also gave five reasons; global commodity crisis, power shortages, business climate, external demand and exchange rate appreciation. BR. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank 28-Jun PKR 104.75 -0.07% USD-Open MKT 28-Jun PKR 104.76 -0.08% KSE-100 index FIPI Transactions with Iran: Dastagir asks banks to make viable proposals Commerce Minister Khurram Dastgir has directed banks’ representatives to furnish viable proposals for facilitating banking transactions within a month for trade with Iran. The Minister said that despite alleviation of international sanctions from Iran, private banks are reluctant to establish direct banking channels with Iran. The absence of banking links; because of the refusal of international banks to support transactions; with Iran has proved to be the prime reason for Pakistan's trade with Iran not getting the much-expected boost. BR. 28-Jun 28-Jun Pts. $ Mn 37,077 -3.47 0.10% NM** Crude (JU'16) 28-Jun $/bbl 48.04 3.22% Gold (MY'16) 28-Jun $/oz 1,314.7 -1.03% Gold (10g) Local 28-Jun PKR 42,857 -4.49% Silver (MY'16) 28-Jun $/oz 17.84 -0.30% ADB approves $ 600Mn loan package The Asian Development Bank has approved $ 600Mn loan package for Pakistan, increasing new loan contracts to $ 2.1Bn in just a week. The ADB will disburse the 1st subprogram of $ 300Mn in a couple of days and the 2nd tranche will be disbursed next year. The $ 600Mn, would help Pakistan roll out major structural reforms to improve the performance and financial sustainability of its public sector enterprises. Whereas, $ 300Mn, an amount of $100Mn has been borrowed at an interest rate of 2% per annum for a period of 25 years. The remaining $ 200Mn has been obtained at an interest rate equivalent to London Inter-bank Offered Rate plus 0.5% for a period of 15 years. Tribune. Cotton(KHI)-40 kg 28-Jun PKR 6,254 1.74% Kibor-6M 28-Jun % 6.09% 0.00% Forex Reserves 17-Jun $ Bn 21.77 1.63% Remittances Jul-May 16 $ Bn 17.84 5.58% Exports* Jul-May 16 $ Bn 19.15 -12.39% Imports* Jul-May 16 $ Bn 40.32 -2.74% Trade Balance* Jul-May 16 $ Bn -21.17 -7.28% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-May 16 $ Mn % -1,519 2.82 17.71% Six new oil, gas discoveries in Sindh, KP Pakistan has made the highest number of oil and gas discoveries in the current month as exploration companies found fresh hydrocarbon deposits in six wells that will add 50.1Mn cubic feet per day (mmcfd) of gas and 2,359 barrels per day (bpd) of oil to the existing production levels. Of these, major discoveries have been made in Sindh that already has a big share in total gas output in the country. Four discoveries were made in Sindh and the remaining two in KPK. Tribune-The News. LNG-based power plants: Govt. flouts least cost generation policy The adverse impact of a ‘seller-favoring’ $ 16Bn deal with Qatar for import of liquefied natural gas (LNG) has started appearing. The ECC of the cabinet approved the implementation agreement for running the LNG-based power plants, two of them being set up by the federal government and the third by the Punjab govt. These power plants will be located in Punjab at Bhikki, Balloki and Haveli Bahadur Shah. Tribune. IMF praises Pakistan’s commitment to fiscal consolidation In a statement issued after the meeting of the Executive Board in Washington IMF’s Deputy Managing Director Mitsuhiro Furusawa emphasized the need of preserving and consolidating macroeconomic stability and further advancing key structural reforms. Steps for fiscal consolidation Mr. Furusawa said the amendments to the Fiscal Responsibility and Debt Limitation Act would strengthen the anchor for medium term fiscal policy supporting fiscal sustainability and medium term macroeconomic stability. Furthermore he said the new framework for Public Private Partnerships would foster much needed growth supporting investments and help manage associated fiscal risks. He emphasized on sustaining progress with tax administration reforms to widen the tax base which he said was needed to increase tax revenues and create needed fiscal space for priority infrastructure and to reinforce social expenditures. The News. List of Indicators WoW YoY May-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 GBP, 28-Jun-16, 138.1 155 145 135 EUR, 28-Jun-16, 115.8 125 115 105 95 USD, 28-Jun-16, 103.8 85 Gas utilities: World Bank recommends single transmission firm The World Bank has asked Pakistan to simplify its gas transmission and distribution network by setting up an independent transmission company in order to cut losses of the gas utilities. The govt. is working with the World Bank to bring reforms in the transmission and distribution network of gas utilities SNGPL and SSGC. The World Bank proposed a two-tier system of gas pricing after including imported gas in the existing transmission and distribution network. In tier-1, local gas flows will be recorded whereas tier-2 will indicate imported gas flows. Tribune. 75 Jun-15 Property price to be fixed on market value for tax An important amendment has been made to Section 68 of the Income Tax Ordinance 2001 through the Finance Act 2016, which will be effective from 1st July, 2016. Under the amendment, the property evaluation rate set by the provincial govt. will no longer remain relevant. After that, all investors will have to get their properties evaluated through the valuers of the SBP under a new mechanism. One or more valuers of the SBP will fix the real market value of the immovable property and refer it to the FBR Inland Revenue Department. The News. “Leadership is the art of mobilizing others to want to struggle for shared aspirations.” Worsening textile sector to hit banks’ stability: SBP Further worsening of the textile sector would have dire consequences for the stability of banks due to their huge exposure in the industry, said a report issued by the State Bank of Pakistan (SBP). The textile sector’s infection ratio — the relationship between nonperforming portfolios and the total loan portfolio — is also at elevated level, said SBP’s Financial Stability Review issued on June 27, 2016. Dawn. Chart of the Day SBP extends limits of EFS up to Aug. 31, 2016 In order to ensure continued export financing facility, SBP has extended the current limits, sanctioned in favor of banks up to Aug. 31, 2016 which were due to expire on Jun. 30, 2016. The decision of extending the current limits has been made in order to ensure that the financing facilities are available to exporters till the finalization of their new limits under Part-II of Scheme. BR. Dec-15 GBP Mar-16 EUR Jun-16 Source: KCCI Research ; Oanda.com Quote of the Day Jim Kouzes Currency Trend (Pound into PKR) 159 157 155 153 151 3G/4G auction price: leading cellular company refuses to pay $ 39.5Mn WHT Telenor Pakistan Pvt. Ltd. has refused to pay withholding tax of $ 39.5Mn, i.e., 10% of the total auction price ($ 395Mn) of next generation mobile services (3G/4G), while terming it unlawful, baseless and based on a gross misinterpretation of provision of the law. The mobile operator has filed petition in Islamabad High Court (IHC) against federal govt. including FBR and Pakistan Telecommunication Authority. Telenor Pakistan earlier this month was declared as winner of its 850MHz spectrum (3G/4G) auction with base price of $ 395Mn. BR. 149 Senate body Okays SECP, financial institutions bills The Senate Standing Committee on Finance approved the Securities and Exchange Commission of Pakistan (Amendment) Bill 2016 and the Financial Institutions (Recovery of Finances) (Amendment) Bill 2016 on June 28, 2016, besides approving an amendment to the Credit Bureaus (Amendment) Ordinance 2016. These bills, already approved by the National Assembly, will now be forwarded to the Senate and, if approved, will need the presidential assent to become a law. Dawn. 139 Listed companies issue PKR 941Bn dividend warrants in 3 years The listed companies on the Pakistan Stock Exchange (PSX) have issued the dividend warrants of PKR 941.26Bn to shareholders over the past 3 years, asking them to claim the declared payouts. Total of 237 companies declared dividends of PKR 359.32Bn in 2015 – the highest compared to the previous two years. The News. Sep-15 USD 147 145 143 141 137 1-Jan-16 1-Feb-16 1-Mar-16 1-Apr-16 1-May-16 1-Jun-16 Source: KCCI Research, Exchange-rates.org 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