Pakistan Daily Economy Update - 3 May

Transcription

1. May 3 , 2016 KCCI - eBulletin Inflation highest in 16 months Inflation rose 4.3% in Apr.'16, crossing well past the 4% mark for the first time in the last 16 months, because of increase in prices of food and other consumption goods. According to the PBS, average inflation in 10MFY16 slightly picked up to 2.8%. The govt. has decided to set the inflation target at 6% for the next fiscal year 2016-17, while the IMF has projected 5% inflation for the year. Tribune. Economic Indicators Date / Period Unit Value Change Daily USD-Interbank 2-May PKR 104.77 -0.04% Budgets to be based on 7th NFC award The centre has decided to continue with 7th National Finance Commission (NFC) award on centre-provincial revenue sharing for another year, as it is practically impossible to have a new resources sharing arrangement before next year as federal and provincial budgets are due in about a month. The 7th NFC award of 2009 is to be given a second extension, as the provinces, who were to conduct a series of studies, have not finished their task. The five-year constitutional term of the arrangement had expired on 30th Jun’15. All budgetary exercises for budget FY17 are reportedly almost complete now. Dawn. USD-Open MKT 2-May PKR 104.77 -0.31% KSE-100 index FIPI 2-May 2-May Pts. $ Mn 34,568 -4.14 -0.44% NM** Crude (JU'16) 2-May $/bbl 44.93 -3.91% Gold (MY'16) 2-May $/oz 1,293.0 -0.23% Gold (10g) Local 2-May PKR 42,557 1.12% Foreign investment in equity market down 22% Foreign portfolio investment in the equity market of Pakistan has fallen by 22% in the last four months, National Clearing Company of Pakistan Limited (NCCPL) data reveals. A total of $ 118.69Mn outflow was recorded from 1st Jan’16 till 30th Apr’16 in Foreign Investor Portfolio Investment (FIPI), compared to the outflows of $ 97.16Mn the same period last year. During 10MFY16, a total of $ 359.37Mn outflows has been recorded from Pakistan’s equity market. Market players ascribe two major reasons for an increase in the outflow of the FIPI; firstly, Emerging Markets (EM) and Asian markets are under pressure where foreign fund managers are pulling back the money. Secondly, there is redemption in the US economy and funds are moving there to support that market. The News. Silver (MY'16) 2-May $/oz 17.57 -1.72% Cotton(KHI)-40 kg 2-May PKR 6,055 0.88% Kibor-6M 2-May % 6.36% 0.00% Forex Reserves 22-Apr $ Bn 20.79 0.05% Remittances Jul-Mar 16 $ Bn 14.16 4.14% WTO to help Pakistan enhance export capacity WTO Director General Roberto Azevedo has said during the first visit to Pakistan that they would help enhance Pakistan’s export capacity through its ‘Aid for Trade’ initiative by adding value to the products, training people and providing support for exploring new markets. He said the WTO staff would impart training to govt. officials and the private sector in various areas to enhance exports. He also identify areas where Pakistan needed technical assistance like trade development, trade negotiation, production methods and standardization. The WTO DG also urged countries including Pakistan to come up with development proposals for their inclusion in the WTO agenda. Tribune. Exports* Jul-Mar 16 $ Bn 15.61 -12.92% Imports* Jul-Mar 16 $ Bn 32.52 -4.22% Trade Balance* Jul-Mar 16 $ Bn -16.91 -5.50% Current Account Avg. CPI-FY16* Jul-Mar 16 Jul-Apr 16 $ Mn % -1,606 2.79 18.52% AIIB to provide $ 100Mn for Motorway’s Shorkot-Khanewal section Acknowledging Pakistan’s vast potential in the infrastructure sector, Asian Infrastructure Investment Bank (AIIB) President Jin Liqun has expressed his interest in financing infrastructure projects in Pakistan. In this regard, AIIB will provide $ 100Mn as co-financing for the M-4 Motorway Shorkot-Khanewal section. The Nation. China irked by delay in Gwadar project China is reportedly upset over the slow progress made in awarding the $ 2Bn commercial contract that includes laying a gas pipeline and setting up a LNG terminal in Gwadar. The Chinese side had asked Pakistan to apply for the loan, but this process has been delayed as the govt. wanted to have the PC-1 approved from the Planning Commission. Under the proposed structure of the project, the Chinese side is to provide 85% financing under the government-to-government deal to implement the LNG Gwadar terminal and pipeline project. The finance ministry, however, is reluctant to release the remaining amount. Tribune. Pakistan has pumped 77Bn cubic feet of gas into system so far through LNG terminal Terminal manager of Engro Elengy Terminal Limited (EETL) has said that Pakistan’s first and only LNG terminal at Port Qasim has so far re-gasified and pumped over 77Bn cubic feet of gas (bcf) into the national gas distribution network by converting approximately 1.7Mn tons of LNG imported so far. He said that this terminal alone will save up to $ 600Mn for Pakistan through fuel substitution and will generate up to 2,000MW of electricity. He added that a total of 29 LNG shipments have berthed at the port in the last 13 months and all the imported LNG has been re-gasified and pumped into the SSGC system for further distribution. Shipments have arrived from Qatar, Australia, Nigeria and Spain. Tribune. Industry perturbed as SBP changes DLTL rules The State Bank of Pakistan (SBP) has created panic among the exporters by revising calculation method in DLTL Scheme at a time when full payment is due and exporters have submitted their final claims after a lengthy process of paperwork. In this regard, the exporters have said that govt. had committed refunds of claims for Drawback of Local Taxes and Levy (DLTL) in FY16 budget to the exporters. However, recent circular of the SBP given an impression that it will not be materialized. The Nation. HUBCO to set up 330MW coal power plant in Thar Hub Power Company (Hubco) has announced that it will set up a 330MW coal-based power project in Thar at a cost of $ 500Mn in partnership with other investors, subject to approval of the Private Power and Infrastructure Board (PPIB). Hubco Chief Executive Officer has said that it would take one year to achieve financial close of the project after the PPIB gives its stamp of approval to the project. Tribune. Food security, cheap power: government urged to allocate sufficient funds for reservoirs The govt. has been urged to set aside sufficient funds for yet-to-built reservoirs in the upcoming budget of FY17 to help generate cheap electricity and avert a threat of food security. The demand has come from the business community; saying on one side, water shortage is one of the biggest reasons of electricity shortages, while on the other there were food security challenges. BR. Lots of trade avenues lost, says Iran envoy During a visit to the Karachi Chamber of Commerce and Industry (KCCI) Iranian Ambassador Mehdi Honardoost has said that terrorism, which is often an off-shoot of poverty and illiteracy, is a common concern for Pakistan and Iran, hence, both countries should work collectively to deal with the issue. He said Iranian businessmen were keen to enhance business with their Pakistani counterparts and urged the Pakistani business community to start joint ventures with them. He also spoke about Iran’s willingness to extend cooperation to the businessmen and industrialists interested in enhancing trade by facilitating contacts and interaction with their Iranian counterparts. Tribune. SECP approves new product The SECP has approved a new microinsurance product under the SECP (Microinsurance) Rules, 2014 with the name “First Sehat Tahafuz Plan”, under which micro health (hospitalisation) coverage can be provided to low-income clients of a microfinance institution. The initiative is in-line with the objectives of the National Financial Inclusion Strategy recently adopted by the federal government, and aimed at promoting and developing the microinsurance market in Pakistan. The News. WoW YoY Apr-16 Discount Rate % 6.00 Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 GBP, 2-May-16, 152.9 155 145 EUR, 2-May-16, 120.0 135 125 115 105 95 USD, 2-May-16, 104.5 85 75 May-15 Aug-15 USD Nov-15 GBP EUR Feb-16 May-16 Source: KCCI Research ; Oanda.com Quote of the Day “Individuals and organizations that are good react quickly to change. Individuals and organizations that are great create change.” Robert Kriegel Chart of the Day Inflation Vs. Discount Rate (Mar.'13 - Apr.'16) 12.0 10.0 8.0 6.0 4.0 2.0 0.0 -2.0 Mar-13 Apr-13 May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 Apr-16 WB approves $ 1Bn for Pakistan The World Bank (WB) has approved an assistance package of worth $ 1Bn to support Pakistan’s economic reforms. The assistance package consists of two Development Policy Credits (DPCs) where Power Sector Reform DPC of $ 600Mn (with additional co-financing support of the ADB and Japan) would support Pakistan’s goal of developing an efficient and consumer-oriented electric power system. The Fiscally Sustainable and Inclusive Growth DPC of $ 400Mn would support Pakistan’s goal of accelerating growth to help create jobs and economic opportunity for all. The Nation. List of Indicators Real Interest Rate(%) CPI (%) Discount Rate (%) Source: KCCI Research, SPB, 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