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Pakistan Daily Economy Update - 29 March

IM Insights
By IM Insights
2 years ago
Pakistan Daily Economy Update - 29 March

Al-falah, Sales

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  1. Mar . 29, 2018 KCCI - eBulletin Tax burden to be shifted on non-filers in next budget: Haroon Akhtar Special Assistant to the PM on Revenue, Haroon Akhtar Khan, has said that there will be no new tax in the upcoming budget and the revenue generation will focus on increasing burden on transactions by non-filers. Addressing a prebudget seminar 2018-19 he said rates would be increased for non-filers of income tax returns in order to compel them to get registration. He said that introduction of valuations for immovable properties were major initiatives of the FBR which also forced the unregistered sector to get registered with the tax authorities. Daily Times. Textile buying houses propose national compliance centre Foreign textile buying houses have advised the govt. to set up a central compliance centre in Pakistan to improve manufacturers’ compliance with social standards – a key determinant to clothing exports. The Commerce Division and TDAP hosted the first buying and sourcing houses symposium in which a large number of representatives from foreign buying houses, including Ikea, H&M, Marks and Spencer and Inditex participated. The buying houses urged the govt. to consider setting up sourcing parks to ensure all facilities through a one-window facility and requested that they may be provided incentives in terms of subsidised office space to come back to Pakistan. The News. Production of Datsun models: Nissan Motor re-entering auto market Nissan Motor Co. Ltd. is re-entering Pakistan’s market through a manufacturing and licensing agreement with its automotive partner, Ghandhara Nissan Ltd., for local production of Datsun models. The licensing agreement will also cover distribution which will enable company to get access to the market where demand for new vehicles has grown to more than 200,000 units a year. Sales of the first locally built vehicles are expected to begin in Pakistan from upcoming FY19. Ghandhara will invest PKR 4.5Bn (about $ 41Mn) over the first four years. The project and the development of a retail network will create more than 1,800 jobs. BR. Rickshaw maker Sazgar gets approval for car manufacturing plant Sazgar Engineering Works, the auto rickshaw maker, has been allowed to set up a new car manufacturing plant in Pakistan in partnership with a Chinese company and awarded the Category-A, Greenfield Investment status, according to a notice to the PSX. The vehicles will be assembled and manufactured under the brand name ‘BAIC’. The plant would have a production capacity of 24,000 units per annum. Sazgar had announced in Jan’18 to set up the light commercial vehicles (LVCs) plant on a fast track basis and roll-out models in a maximum of 18 months to tap potential growth in auto sector in Pakistan. To achieve the target, it has put on hold its earlier announced expansion plan for three-wheelers. Tribune. BoI chief woos French investors in Paris While addressing the Pakistan Investment Forum in Paris, Chairman Board of Investment (BoI) Naeem Y. Zamindar said that Pakistan with its 207Mn strong consumer base, growing economy and skilled workforce offers an excellent opportunity to the French companies for investment. Mutually organised by BoI, Pakistan’s Embassy in France and Mouvement des Entreprises de France, the Chairman invited French investors to benefit from the country’s liberal investment policies and assured them of govt’s full support. A number of major French companies including Renault, Total, Suez, General Electric, Gemalto, Vinci, Credit Agricole, Surys and Engie attended the event. Dawn. Labor force provider in 2017: Bangladesh replaces Pakistan in Saudi Arabia: ADB In a report titled ''Labor Migration in Asia, Increasing the Development Impact of Migration through Finance and Technology'', Asian Development Bank (ADB) has stated that labor migration from Pakistan declined by 11% in 2016 to 840,000 people. This downward trend continued by the end of Oct.’17 as well where only 450,000 departures were recorded for overseas employment. The report further states that Bangladesh appears to have replaced Pakistan as \ main labor force provider to Saudi Arabia in 2017. The report also says that 24,000 Pakistanis arrived in Germany in 2015. BR. Infrastructure, highways, roads and bridges: Spending Declines The Poverty Reduction Strategy Paper (PRSP-II) released by Finance Ministry has stated that spending on infrastructure projects, roads, highways and bridges declined to PKR 139.06Bn during 1HFY18 from PKR 149.77Bn in 1HFY17. However, during the same period, govt. spending on law and order increased to PKR 175Bn from PKR 144Bn last year. The federal govt.’s spending on health also decreased to PKR 8Bn from PKR 12Bn in the same period last year. Expenditure of the federal govt. on education increased to PKR 51Bn during 1HFY18 from PKR 38Bn in 1HFY17. BR. Bank Al-Falah raises PKR 7Bn through first-ever bonds Bank Al-Falah has raised PKR 7Bn through the first-ever perpetual Term Finance Certificates (TFC) listed on the stock exchange. The issue has improved the bank’s capital adequacy ratio, thus affording it additional capacity to lend PKR 60Bn to the market. Transactions in the TFCs would take place through the bond automated trading system at the PSX and will be settled on T+1 basis. It is the first debt instrument that was classified as Tier-I capital by the SBP and raising of Tier-I capital in this manner is a crucial step towards development of a healthy debt capital market. The News. FBR launches knowledge-base portal FBR has launched the first version (Beta) of Knowledge Base Portal for guidance and facilitation of taxpayers. The Knowledge Base Portal is a digital help library for taxpayers, tax collectors and other related stakeholders. It is the first common help platform of FBR which provides instant guidance on all issues related to federal taxes and duties. It is an interactive portal and allows users to provide feedback regarding improvement in the articles and suggestions for addition of further articles. Daily Times. Oil price falls 1% Oil prices fell about 1% after data from the Energy Information Administration (EIA) showed a surprise build in US crude stockpiles. US crude inventories rose 1.6Mn barrels last week, compared with analysts’ expectations for a decrease of 287,000 barrels, as net imports soared by 1.1Mn barrels per day. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 28-Mar 115.50 115.75 0.00% 0.52% Crude (MY'18) 28-Mar 28-Mar 28-Mar 28-Mar PKR PKR Pts. $ Mn $/bbl 45,173 -5.42 64.63 0.38% NM** -0.08% Gold (MY'18) Gold (10g) Local 28-Mar 28-Mar $/oz PKR 1,332.1 50,571 -0.89% -0.34% Silver (MY'18) Cotton(KHI)-40 kg 28-Mar 28-Mar $/oz PKR 16.27 8,038 -1.15% 0.00% Kibor-6M 28-Mar % 6.59 $ Bn 18.08 0.03% WoW -0.88% Remittances 16-Mar FY18 Jul-Feb 18 $ Bn 12.83 YoY 3.41% Exports* Imports* Jul-Feb 18 Jul-Feb 18 $ Bn $ Bn 14.85 39.13 11.66% 17.19% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Feb 18 Trade Balance* $ Bn -24.28 Jul-Feb 18 Current Account $ Mn -10,826 Foreign Direct Inv. $ Bn 1.94 Jul-Feb 18 Jul-Jan 18 LSM Growth* % 6.33 % 3.84 Jul-Feb 18 Avg. CPI Discount Rate % 6.00 Jan-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -20.85% -50.03% 15.64% Major Currencies 175 GBP, 28-Mar-18, 163.4 165 155 145 EUR, 28-Mar-18, 143.0 135 125 115 USD, 28-Mar-18, 115.6 105 95 Mar-17 USD Jun-17 GBP EUR Sep-17 Dec-17 Source: KCCI Research ; Quote of the Day "Everyone has their own personal tolerance for the unknown, and we all need to honor that." Aubrie Pagano Chart of the Day BREAK UP OF CUMULATIVE PROVINCIAL TAXES (1HFY18) Property taxes 3% Other 19% Sales tax on Service GST 53% Motor Vehicle Tax 7% Stamp duties 16% Excise duties 2% Source: KCCI Research, MoF Source: KCCI Research, PBS 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: