Pakistan Daily Economy Update - 4 August

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1. Aug . 4, 2017 KCCI - eBulletin New PM to be briefed about export slide Commerce Ministry is to give a detailed presentation to Prime Minister Shahid Khaqan Abbasi on the reasons behind the decline in exports to $ 20.44Bn and surge in imports to $ 52.02Bn along with proposed remedial measures including rationalization of tariffs and currency rate. In this regard, Commerce Ministry, which has severe reservations over the stock of exporters' refunds and overvalued rupee, has prepared mid-term review of hitherto unachieved STPF 2015-18 and would present it to the newly elected Prime Minister. The Ministry is also expected to recommend a further reduction in electricity rates and provision of gas to export-oriented industry. BR. Ease of doing business: govt. in talks with WB for improvement in ranking Pakistan’s govt. has begun consultations with the World Bank on how to improve the country's ranking in the "Ease of Doing Business Index" with the objective of attracting foreign investors. The country is finalizing a plan in consultation with World Bank survey team about the measures Pakistan is required to take to improve its ranking in business climate and is focusing on four areas out of ten in the ease of doing business index. Pakistan's position in the World Bank Doing Business ranking has slipped to 138 in 2016 (out of 189 economies) from 136 in 2015 where country's ranking in starting a business, getting credit, and trading across borders has worsened. BR. Power consumers to pay security cost of CPEC projects Nepra has allowed power producers to charge consumers through tariff 1% cost of 19 power projects worth $ 15.56Bn under CPEC for 20-30 years on account of security cost. In an order, the power sector regulator said it allowed building in tariff the additional security cost on the orders of the federal government and estimated it at $ 155.6Mn (PKR 17Bn) for all 19 power projects under the CPEC. Dawn. Inland Revenue commissioner empowered to finalise tax liabilities FBR has updated income tax law in line with Finance Act 2017, empowering commissioner Inland Revenue to finalize assessment of taxable income if a taxpayer fails to file returns. The government, in budget FY18, deleted section 122(c) from Income Tax Ordinance, 2001 relating to provisional assessment as it was said to give discretionary powers to the tax officials. The new sub-section 1(ab) to Section 121, which replaces the expunged provision, also empowers the Commissioner to prepare best judgment assessment when a taxpayer or a representative of the taxpayer fails to submit the tax return. The News. List of Indicators Date / Period Unit Value Change Daily Crude (AU'17) Gold (JY'17) Gold (10g) Local Silver (JY'17) Cotton(KHI)-40 kg Kibor-6M 3-Aug 3-Aug 3-Aug 3-Aug 3-Aug 3-Aug 3-Aug 3-Aug 3-Aug 3-Aug PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 105.40 106.90 47,084 -9.20 48.95 1,270.3 43,542 16.64 6,805 6.15% Forex Reserves 28-Jul $ Bn 20.28 0.00% -0.37% 0.29% NM** -1.21% 0.19% -0.20% 0.48% 0.00% 0.00% WoW -0.57% YoY -3.08% -1.63% 18.67% -36.32% -148.57% 4.58% USD-Interbank USD-Open MKT KSE-100 index FIPI Jul-Jun 17 Remittances $ Bn 19.30 Jul-Jun 17 Exports* $ Bn 20.45 Jul-Jun 17 Imports* $ Bn 53.03 Jul-Jun 17 Trade Balance* $ Bn -32.58 Jul-Jun 17 Current Account $ Mn -12,098 Foreign Direct Inv. $ Bn 2.41 Jul-Jun 17 Jul-May 17 LSM Growth* % 5.69 % 2.91 Jul-17 Avg. CPI-FY17* Discount Rate % 5.75 Jul-17 WoW= week Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; Major Currencies FBR forms new strategy to enhance revenue during FY2017-18 FBR has formed a comprehensive withholding monitoring and audit strategy for strengthening the ongoing revenue enhancement efforts of the field formations. The strategy envisages devising Quarterly Withholding Audit Plan (QWAP) by each field formation one week before the beginning of new quarter. It envisages withholding audit of at least 5 cases per month out of the Board's identified list of withholding agents, to be included in the QWAP. The News. 145 Textile City project faces the axe A parliamentary committee has been told that the government had decided to wind up the Pakistan Textile City even though more than PKR 2.5Bn had already been invested in the initiative. Textile city faces financial problems and its liabilities have swollen to nearly PKR 5Bn during the last decade. A general body meeting of investors and shareholders would be held soon and if 75% of the investors voted for winding up the project, it would be closed down. Dawn. 115 Pension fund assets grow 32% to more than PKR 25Bn The private pension fund industry grew by over 32% during FY17 with its total assets crossing PKR 25Bn. Sharia-compliant funds dominated the pension fund market. Data released by SECP shows the growth in pension industry has primarily resulted from an increase in participation by general investors and better performance of the stock market. The private pension funds have more than 18,000 participants, and nearly 60% of their assets are invested in the equity market. Dawn. \ Economic Indicators GBP, 3-Aug-17, 138.7 135 125 EUR, 3-Aug-17, 124.8 105 95 Aug-16 USD Listed companies takeover rules: disclosure of transactions made mandatory The SECP has issued Listed Companies (Substantial Acquisition of Voting Shares and Takeovers) Regulations, 2017 under which mandatory disclosure requirements of transactions have to be made by the acquirer, who acquires voting shares. According to the regulations, a person who is a shareholder of the target company as on the date of book closure shall be eligible to participate in the public offer. BR. Pakistan to facilitate availability of its mangoes in Turkish markets In an opening ceremony of a festival organized by Pakistani Embassy in Ankara, Pakistan’s Ambassador to Turkey Sohail Mahmood has said that Pakistani mangoes are known in Turkey but are not available on a regular basis therefore its availability should be facilitated in the Turkish markets. The Ambassador further said that Pakistan is the 5 th largest producer and the 6th largest exporter of mangoes, out of over 100 countries, with a production of 1.8Mn tons per year. The Nation. Forex reserves down $ 153Mn The country's total liquid foreign exchange reserves declined by $ 153Mn during last week. According to SBP's weekly foreign exchange report, the total liquid foreign exchange reserves held by the country stood at $ 20.28Bn as on Jul. 28, 2017 compared to $ 20.44Bn on Jul. 21, 2017. SBP's reserves decreased by $ 305Mn to $ 14.70Bn, while the reserves held by banks moved up by $ 152Mn to $ 5.49Bn. BR. Nov-16 GBP EUR Feb-17 May-17 Aug-17 Source: KCCI Research ; Oanda.com Quote of the Day "Failure is the condiment that gives success its flavor." Oil sales rise in July as demand picks up pace Sales of petroleum products rose to 2.31 Mn tons in Jul’17, up 9% month-on-month and 8% year-on-year, showed data released by the Oil Companies Advisory Council, as demand picked up in the wake of resumption of smooth transport activities after Ramazan and Eid holidays. Product-wise data depicts that petrol sales increased 14% Y-o-Y to 617,000 tons while High-speed diesel demand surged 36% Y-o-Y to 755,000 tons. Among oil marketing companies (OMCs), Hascol outperformed in the sector during the month, achieving a tremendous 69% growth year-on-year. Tribune. Unpaid shares: SECP extends date for submission of statement SECP, through an SRO 753(I)/2017, has extended the date for submission of statement containing information about unclaimed or unpaid shares of companies, modaraba certificates and dividends declared by companies/Modarabas till Oct.’17. BR. USD, 3-Aug-17, 105.3 Truman Capote Chart of the Day PAKISTAN'S AVERAGE YEARLY INFLATION (1MFY11-1MFY18) 14 12.38 12.43 12 9.60 10 8.26 8 7.88 6 4.12 4 2.91 1.87 2 0 Source: KCCI Research, PBS Value in (%) 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