Pakistan Daily Economy Update - 29 September

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1. Sep . 29, 2016 KCCI - eBulletin Murad wants all markets, shops closed by 7pm Sindh Chief Minister Syed Murad Ali Shah has said that he has decided to develop a system under which all business activities, including shops and markets would start functioning from the morning to evening. Addressing a programme, organised by the KCCI on Sep. 28, 2016 the chief minister said that breaking the old habit he as a chief minister has started his day early in the morning, followed by his cabinet members and bureaucracy and now the businessmen and traders have to follow it by opening their shops and markets at 9am and close by 6pm or 7pm. Dawn. IMF approves last tranche of $ 102Mn IMF has approved the last tranche of $ 102Mn for Pakistan which will be received in next two to three days. The govt. has successfully completed the IMF program of 36-month extended arrangement under the EFF amounting SDR 4.39Bn (about $ 6.15Bn, or 216% of Pakistan’s current quota at the IMF), approved in Sept.’13 at a time when country’s foreign exchange reserves were declining sharply. The govt. has so far received $ 6.01Bn in eleven tranches. This is the first time the country has successfully completed the IMF program in 15 years, as Pakistan last time completed a one-year standby arrangement in 2001. The Nation. Govt’s domestic debt reaches PKR 13.8Tn in July The government’s domestic borrowing edged up to PKR 13.8Tn at the end of July from PKR 13.6Tn in the previous month. According to the SBP the govt’s domestic debt rose 10% in the month under review from PKR 12.5Tn at the end of July 2015. The News. PC receives PKR 170Mn from NAB The National Accountability Bureau (NAB) has released PKR 170.62Mn to the Privatization Commission as a part payment recovered from a defaulted investment bank. The total approved amount of the voluntary return offer from the bank is estimated at PKR 404.5Mn. The News. Too little too late: Senate committee demands recovery of $ 800Mn The Senate Standing Committee on Information Technology expressed concern over the outstanding payment of $ 800Mn against Etisalat. This amount is still pending from the privatization of Pakistan Telecommunication Corporation Limited (PTCL) almost a decade ago. Tribune. Free Trade Agreements: Dastgir states trade deals advancing smoothly Federal Minister for Commerce Khurram Dastgir has said that necessary work has been completed for free trade contracts with Turkey and Thailand. He said that in 2017 free trade contracts would be signed with South Korea and have trade opportunities with Russia in the field of defence and agriculture. Tribune. LSM growth slows to 2.6% in Jul.’16 The pace of growth in Large-Scale Manufacturing (LSM) industries slowed down to 2.6% in 1MFY17 over a year ago where almost all major industries either witnessed nominal growth or saw contraction. The govt. has estimated LSM growth at 5.9% for the ongoing FY17. The LSM sector had grown at a pace of 3.2% during FY16 against the govt.’s estimates of 4.61%. The Nation. Pakistan to start roadshows today for dollar sukuk Pakistan will start investor roadshows on Sept. 29, 2016 (today) for a potential sale of US dollar-denominated Islamic bonds, aiming to begin the pricing and book-building process next week. If successful, the deal would mark Pakistan's return to the international sukuk market after a two-year absence. It last raised $ 1Bn via sukuk in late 2014. Investor meetings will start in the UAE before moving to London on Sept. 30, 2016 and concluding in Boston and New York on Oct. 3 and 4, 2016. BR. Thar project progressing ahead of schedule The Thar coal project is progressing 5 months ahead of schedule and would add 660MW electricity to the national grid by 2019, according to the Sindh Engro Coal Mining Company (SECMC). The first phase of the project based on two plants of 330MW each will cost $ 1.1Bn of which 75% is foreign and 25% is local financing. The two power plants and mining in block 2 of Thar coal would cost $ 3.2Bn. Tribune. Agreements signed for first CPEC energy project in AJK The agreements for the first CPEC energy project in Azad Jammu and Kashmir has been signed on Sept. 28, 2016; among AJK Prime Minister, ministers and top officials of state govt. and chief executive officer of China’s Three Gorge Corporation and Karot power company. Private sector’s largest-ever 720MW Karot power project will be constructed over river Jhelum at Karot which borders AJK in southern district Kotli. It will be completed in 2021 with the cost of $ 1.68Bn. BR. Suspicious transactions: SBP's FMU sending reports to LEAs The State Bank of Pakistan's Financial Monitoring Unit (FMU) is reportedly sending suspicious transaction reports having links with Afghan Transit Trade business as well as smuggling to the concerned Law Enforcement Agencies (LEAs). A sub-committee headed by Finance Minister has finalized a set of recommendations for consideration of the Prime Minister who approved those recommendations which were then sent to the concerned stakeholders for a necessary action. BR. SBP sells T-bills worth PKR 27.5Bn SBP has sold treasury bills worth PKR 27.5Bn in an auction with yields remained flat on all tenors. The raised amount was highly lower than the pre-auction target of PKR 100Bn. The yield on Pakistan’s 3M, 6M, 12M, benchmark treasury held steady at 5.85%, 5.90%, and 5.90% respectively. The News. Bill seeks to promote investment: report on PPP presented in National Assembly Finance Parliamentary body has presented a report on "The Public Private Partnership Authority Bill, 2016" in the National Assembly to execute Public Private Partnerships (PPP) for promotion of domestic and foreign private investment in the country. According to "The Public Private Partnership Authority Bill, 2016" the use of PPP is likely to become widespread in Pakistan, with an expected surge in PPP-financed projects in the near future. BR. Govt borrowing from SBP disrupts fiscal discipline The government realized just PKR 27.5Bn through the auction of treasury bills on Sep. 29, 2016 but its huge borrowing from the SBP seems to have disrupted fiscal discipline it has followed for the last three years. The SBP reported that the government had the auction target of PKR 100Bn, of which PKR 34.6Bn was the maturing amount and PKR 65.4Bn was the additional requirement. Dawn. Senate body okays amendments opposing SLIC privatisation The Senate Standing Committee on Commerce threw a spanner in the government’s plan to privatise the State Life Insurance Corporation (SLIC) by approving amendments to the bill presented by the commerce ministry. The committee, chaired by Senator Syed Shibli Faraz, approved the amendments which deleted the definition of privatization from the State Life Insurance Corporation (Re-Organization and Conversion) Bill of 2016. Dawn. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank List of Indicators 28-Sep PKR 104.72 -0.03% USD-Open MKT 28-Sep PKR 105.20 0.00% KSE-100 index FIPI 28-Sep 28-Sep Pts. $ Mn 40,355 0.03 0.15% NM** Crude (JU'16) 28-Sep $/bbl 47.61 6.25% Gold (MY'16) 28-Sep $/oz 1,323.0 -0.83% Gold (10g) Local 28-Sep PKR 45,313 -0.06% Silver (MY'16) 28-Sep $/oz 19.21 0.17% Cotton(KHI)-40 kg 28-Sep PKR 6,682 0.80% Kibor-6M 28-Sep % 6.07% 0.01% 9-Sep $ Bn 22.86 -0.54% Remittances Jul-Aug 16 $ Bn 3.09 -3.17% Exports* Jul-Aug 16 $ Bn 3.14 -8.19% Imports* Jul-Aug 16 $ Bn 7.88 10.21% Trade Balance* Jul-Aug 16 $ Bn -4.74 -27.06% Current Account Avg. CPI-FY17* Jul-Aug 16 Jul-Aug 16 $ Mn % -1,316 3.84 -91.84% WoW Forex Reserves YoY Sep-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 175 165 155 GBP, 28-Sep-16, 136.5 EUR, 28-Sep-16, 117.6 145 135 125 115 105 95 USD, 28-Sep-16, 104.9 85 75 Sep-15 Dec-15 USD GBP Mar-16 Jun-16 Sep-16 Source: KCCI Research ; Oanda.com EUR Quote of the Day "Strong convictions precede great actions." James Freeman Clarke Chart of the Day Estimated Poplulation of Pakistan 250 200 150 115.52 100 195.4 191.71 188.02 116.52 117.48 72.5 75.19 77.93 2014 Total Population 2015 Urban Population 2016 Rural Population 50 0 Source: KCCI Research, MOF Value in Mn 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