Pakistan Daily Economy Update - 29 October

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1. Oct . 29, 2016 KCCI - eBulletin Ogra, Chinese company initiate seismic survey in Gwadar The state owned OGDCL in collaboration with a Chinese Exploration and Production company has initiated seismic survey in Gwadar. For the first time in history, geological survey of Gwadar has been completed and now seismic survey is underway, after data processing, the two companies will be in a position to start drilling as the area has huge potential for producing gas. BR. SHC asks govt. to refund PKR 100Bn in cess The Sindh High Court (SHC) has ordered the govt. to refund PKR 100Bn collected under the gas infrastructure development cess (GIDC) as the court declared the GIDC Act 2015 against the constitution. Since the amount has already been collected in pursuance of (GIDC) Act 2015, the amount is liable to be refunded or adjusted. The govt. may run short of an estimated PKR 145Bn to be collected as GIDC during FY17, as a result of the decision. The News. SECP revamps public offerings’ regulations to ensure transparency SECP has revamped the regulations governing public offerings in a bid to ensure transparency and quality of listings. The SECP, under its new framework has cut down the numbers of regulations related to the debt and equity securities. The main objective of the measure is to promote the ease of doing business and streamline the entire public offering process. The public offering regulations, however, have been divided into three parts: process for public offering; methods of public offering and functions and responsibilities of intermediaries (consultant or underwriter banker to an issue). The News. PMIC to help alleviate poverty, ensure financial inclusion: Dar Finance Minister has said that due to prudent economic policies of the government, macroeconomic stability has been achieved and now focus was on the sustainable economic growth for job creation and poverty alleviation in the country. Addressing as chief guest at the launching ceremony of Pakistan Microfinance Investment Company (PMFC) at Prime Minister's Office, he said establishment of PMIC would help curb the problem of unemployment and ensure financial inclusion to poor segment of the society. Daily Times. Hascol to build PKR 1.8Bn lube oil blending plant The board of directors of Hascol Petroleum Limited (Hascol) has approved a lube oil blending and grease plant worth PKR 1.8Bn with expected commissioning in two years. In a notice sent to PSX, the company also said that the land measuring approximately six acres has also been acquired at Port Qasim for the blending plant in collaboration with FUCHS-Germany. Hascol Petroleum Limited’s consolidated profit surged 20% to PKR 903.82Mn (EPS: PKR 7.49) in 9MCY16. The oil marketing company had earned a profit after tax of PKR 752.76Mn (EPS: PKR 6.24) in 9MCY15. Dawn/Tribune. MCB Bank PMI decreases to 63.51 in October 2016 Economic activity in the manufacturing sector expanded at a slower pace in October (covering Aug-Sept) than in August (covering Jun-Jul), according to company executives surveyed in the MCB Bank Purchasing Managers Index (PMI). The PMI for the month of October registered a value of 63.51, a decrease from August's reading of 64.67. As a rule of thumb, a reading of 50 or above indicates that manufacturing activity and the overall economy expanded. Daily Times. Hydroelectric power: Investor that quotes lowest tariff will win project bid Nepra has decided to switch to a tariff regime based on competitive bidding under which the private-sector investor that quotes the lowest tariff will win the bid for a power project. Nepra has taken the first significant step towards implementing its long-term vision of market-driven tariffs based on competitive bidding by approving the Request for Proposals (RFPs) of 7 hydroelectric power projects with a cumulative capacity of 653MW. Tribune. PNSC introduces ferry service for Port Qasim Pakistan National Shipping Corporation (PNSC) has decided to introduce ferry service from Marina Club Defense to Port Qasim. Arif Elahi, Chairman PNSC at the Annual General Body meeting informed that in order to lessen the traveling difficulties of the commuters to and from Port Qasim, PNSC would start a ferry service and Port Charges would be waived till 2030. He said PNSC would acquire two new ships for the purpose. Daily Times. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 28-Oct PKR 104.84 0.01% USD-Open MKT 28-Oct PKR 105.90 0.00% KSE-100 index FIPI 28-Oct 28-Oct Pts. $ Mn 39,873 4.72 -0.29% NM** Crude (DE'16) 28-Oct $/bbl 49.66 0.00% Gold (NO'16) 28-Oct $/oz 1,270 0.00% Gold (10g) Local 28-Oct PKR 44,228 0.00% Silver (NO'16) 28-Oct $/oz 17.63 0.00% Cotton(KHI)-40 kg 28-Oct PKR 6,468 -0.83% Kibor-6M 28-Oct % 6.05% -0.01% Forex Reserves 21-Oct $ Bn 24.33 -0.53% Remittances Jul-Sep 16 $ Bn 4.70 -5.28% Exports* Jul-Sep 16 $ Bn 4.68 -8.98% Imports* Jul-Sep 16 $ Bn 11.75 10.70% Trade Balance* Jul-Sep 16 $ Bn -7.07 -29.21% Current Account Avg. CPI-FY17* Jul-Sep 16 Jul-Sep 16 $ Mn % -1,368 3.88 -136.27% WoW YoY Sep-16 Discount Rate % 5.75 Sources: KCCI Research, PMEX (4 pm) , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 GBP, 28-Oct-16, EUR, 125.8 28-Oct-16, 113.0 135 125 115 105 95 USD, 28-Oct-16, 103.4 85 75 Oct-15 Jan-16 USD 1,200MWs RLNG-fired plant to be set up in Muzaffargarh The govt. has decided to establish 1,200MW RLNG-fired power plant in Muzaffargarh (Punjab) as part of its plan to eliminate power load-shedding in the country by 2018. The decision of establishing project at Muzaffargarh was taken in the light of the advice of the Cabinet Committee on Energy (CCoE) in its meeting held on Sept. 15, 2016, wherein Prime Minister Nawaz Sharif lifted ban on RLNG-fired power plants. BR. March-end: PIA’s accumulated losses fly up to PKR 267.56Bn Pakistan International Airlines (PIA) increased accumulated losses to PKR 267.56Bn in 3QFY16, up 2.3%. According to the PIA, the prolonged strike in Feb, which was led by employees in protest against the government’s intention to privatise the stateowned company, was the key reason behind the losses and more than 900 flights on domestic and international routes were cancelled due to suspension of flight operations for about 5-6 days in Feb’16. Tribune. Jul-16 Oct-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day “Yesterday is not ours to recover, but tomorrow is ours to win or lose. “ Lyndon B. Johnson 1QFY17: Petroleum sector remains top revenue spinner of ST The petroleum sector remained top revenue spinner of sales tax during 1QFY17 as FBR collected PKR 39.16Bn from POL during 1QFY17 as against PKR 54.88Bn collected during the same period of corresponding year. Sales tax domestic/local supplies data revealed that the total collection of FBR stood at around PKR 83.91Bn from imports and local stage/domestic supplies against PKR 95.26Bn in the same period of last fiscal year, showing a decline of 11.9% or PKR 11.25Bn. BR. BoI documents reveal: strategy to improve business climate cannot be implemented The staff level report of the IMF pointed out that Pakistan's weak business climate continues to constrain private investment and economic growth. In this regard, a Board of Investment (BoI) document has stated that a well thought-out strategy to improve the business climate through facilitation of one stop-shop and reduced taxes could not be implemented due to lack of an action plan. BR. Apr-16 GBP Chart of the Day GDP Growth 2015 9.00% 8.00% 8% 7% 7.00% 6% 6.00% 5% 5.00% 4.00% 3% 3.00% 2% 2.00% 1.00% 0.00% India Bangladesh Pakistan Value in term of percetange Nepal Sri Lanka Afghanistan Source: KCCI Research, World Bank Disclaimer SME financing rises 14% This report has been prepared by KCCI Research & Development Cell. The information contained Bank financing to small and medium-sized enterprises (SMEs) rose 14% to PKR 297.5Bn in FY16, as per the data released by herein have been compiled or arrived at based upon information obtained from sources believed SBP. Working capital financing constituted 66% of outstanding SME financing, followed by fixed investment and trade finance to be reliable and in good faith. Such information has not been independently verified. with shares of 23% and 11%, respectively. The report showed that the share of trading was 27%, manufacturing 36% and the icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' service sector 37% in outstanding SME financing. Dawn. understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk