Pakistan Daily Economy Update - 4 January

Transcription

1. Jan . 4, 2017 KCCI - eBulletin Consensus still eludes China, Pakistan on FTA expansion Commerce Ministry has not yet decided to go for the second phase of the FTA with China due to the inability of domestic industry to withstand the immediate opening of 90% of its trade as is being demanded by Beijing and get more time for liberalizing the remaining 10% tariffs. In this regard, Pakistan and China have held several rounds on FTA-II but both sides are still reluctant to proceed further due to disagreement on some of the issues. BR. $ 85Mn investment to boost economic collaboration between Pakistan and China The Chinese consortium that acquired stake in Pakistan Stock Exchange (PSX) will invest $ 85Mn. This is the first time for a Chinese bourse to acquire shares of a foreign stock exchange (PSX) and would help in broadening economic and financial collaboration between Pakistan and China by implementing the Belt and Road Initiative and the CPEC. A Chinese-led consortium has successfully bid to buy a 40% strategic stake in Pakistan Stock Exchange. The Nation. China to loan $ 1Bn for new road projects China would provide about $ 1Bn in soft loans for 3 new road projects along the western route of CPEC, connecting the shortest route from Gwadar to China. Sindh Chief Minister Syed Murad Ali Shah has said that China would invest in new roads and factories to help smaller Pakistan provinces integrate into the project. However, more investment and opportunities had gone into the eastern route, where most of the country’s industrial and financial units were located. Tribune. Shortfall in tax collection crosses PKR 127Bn FBR witnessed a shortfall of more than PKR 127Bn in collection for the 1HFY17. The government faces the challenge of achieving a fiscal deficit target of 3.8% of the GDP owing to its lower-than-expected revenue collection so far. In the first six months, the revenue collection amounted to PKR 1,466Bn against the target of PKR 1,593Bn, leaving a shortfall of PKR 127Bn. Dawn. Country has to pay $ 11.5Bn in next 18 months Pakistan has to pay $ 11.5Bn to various international monetary institutions during the next 18 months. In this regard, a sum of $ 8.76Bn has to be paid to the IMF, World Bank and Asian Development Bank. Moreover, Pakistan has to pay 160Mn Saudi Riyals to Islamic Development Bank, $ 1.6Bn to China, ¥ 192Bn to Japan and € 625Mn to Paris Club. The Nation. Senate body urges private banks to support textile industry SBP Governor Arshad Wathra has reiterated the govt.’s resolve to revive the textile industry and pledged unequivocal support for all the stakeholders. While addressing the meeting of Textile Industry Standing Committee, governor asked the representatives of the banking sector to play their due role in rehabilitating the textile industry by extending loans to the exporters. He further said that entire business community should bring back their foreign assets and liquidity so that the alarming situation of the textile industry might be ameliorated. The Nation. Govt. mulling to privatize five entities in 2017 As part of economic reforms, federal govt. is mulling to privatize five Public Sector Enterprises (PSEs) in 2017. Pakistan Steel Mill (PSM) tops priority list which is expected to be privatized by Jun.’17. Despite injecting over PKR 26Bn in two and half years, the govt. failed in reviving PSM. With no production activity since July-2015, PSM is causing a mammoth loss of PKR 2Bn to national exchequer every month. Besides PSM, other PSEs that are included in the privatisation list are Telephone Industies of Pakistan (TIP), Industrial Development Bank, Mari Petroleum Company and Kot Addu Power Company. The Nation. Govt. releases PKR 280Bn for development spending The govt. sanctioned PKR 280Bn for development spending in the first half of this fiscal year and two-thirds of the amount was given for four priority sectors by compromising on other critical areas like water security. The releases were made for different development projects under the (PSDP) 2016-17 from Jul through Dec of FY17, according to the Ministry of Planning, Development and Reform. An amount of PKR 79Bn has been sanctioned to the National Highway Authority – which is 42% of its annual allocation. Whereas, the power sector got PKR 41.3Bn during the first half, which was just 31.6% of its annual allocation and below the half-year threshold. Tribune. Cotton arrivals up 11.7%; still off target Cotton arrival from the current crop has increased 11.72% but remained below the revised output target for 2016. Fortnightly cotton arrival report said a total of 10.36 bales arrived in the country by 31, Dec16 against 9.27Mn bales during the same period in the preceding year. Fortnightly cotton arrival flow (15-31, Dec’16) remained at 218,762 bales, lower than the preceding year’s arrival of 244,987 bales during this period. The News. Govt. to borrow PKR 2.7Tn through MTBs, PIBs sale The govt. will borrow PKR 2.7Tn from the banking system in 1QCY17 to finance its budgetary requirements. According to the SBP In its latest auction calendar, govt. has planned to borrow PKR 2.55Tn through the sale of treasury bills. The govt. would also raise PKR 150Bn through the sale of Pakistan Investment Bonds (PIBs). Besides, the govt. would also borrow cash from the central bank for deficit financing and to settle maturing amount of PKR 2.5Tn in T-bills and PKR 176Bn of PIBs during Jan-Mar 2017. The News. Change Daily USD-Interbank 3-Jan PKR 104.84 -0.01% USD-Open MKT 3-Jan PKR 108.50 0.18% KSE-100 index FIPI 3-Jan Pts. $ Mn 48,828 1.34 1.22% NM** Crude (FE'17) 3-Jan 3-Jan $/bbl 52.39 -2.86% Gold (FE'16) 3-Jan $/oz 1,158 1.35% Gold (10g) Local 3-Jan PKR 42,685 0.00% Silver (FE'17) 3-Jan $/oz 16.30 1.47% Cotton(KHI)-40 kg 3-Jan PKR 6,843 2.16% Kibor-6M 3-Jan % 6.15% 6.15% 23-Dec $ Bn 23.29 0.67% Remittances Jul-Nov 16 $ Bn 7.87 -2.50% Exports* Jul-Nov 16 $ Bn 8.19 -3.93% Imports* Jul-Nov 16 $ Bn 19.96 8.83% Trade Balance* Jul-Nov 16 $ Bn -11.78 -19.90% Current Account Avg. CPI-FY17* Jul-Nov 16 $ Mn % -2,601 #N/A -90.97% WoW Forex Reserves YoY Jul-Dec 16 Nov-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 175 165 155 145 GBP, 3-Jan-17, 128.5 135 125 115 105 EUR, 3-Jan-17, 109.3 USD, 3-Jan-17, 104.7 95 85 75 Jan-16 Apr-16 USD Jul-16 GBP Oct-16 Jan-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day "There are no secrets to success. It is the result of preparation, hard work, and learning from failure." Colin Powell Chart of the Day FBR Tax Collection 25.00% 20.00% 2,590 3,112 15.00% 1,452 1,946 2,254 1,558 1,883 1,157 1,329 847 590 5000 4500 4000 3500 3000 2500 2000 1500 1000 500 0 713 China begins first freight train service to London China has begun its first freight train service to London from Yiwu, a famed wholesale market town in the eastern province of Zhejiang. The train will travel for 18 days over more than 12,000 kilometers to reach Britain from China. It will pass through Kazakhstan, Russia, Belarus, Poland, Germany, Belgium and France before arriving in London. Dawn. Value 461 Telecom contribution to national exchequer increases According to the Annual Report for the FY16 issued by PTA, telecom contribution to the National Exchequer has increased from PKR 126.3Bn during FY15 to PKR 157.8Bn in FY16. In the reported period the telecom sector continued to grow positively in terms of subscriptions, revenues and tele-density. Daily Times. Unit 521 SECP initiates thematic review of leading brokerage houses The Securities and Exchange Commission of Pakistan (SECP) has initiated a thematic review of leading brokerage houses of Pakistan Stock Exchange (PSX) to avoid any systemic threat to the integrity of the capital market. Leading brokerage houses are being reviewed with regards to financing, borrowing, lending, extension or maintenance of credit for the purpose of purchasing or carrying any security activity. The News. Date / Period 1,008 FBR to audit returns; exemptions withdrawn The FBR has issued the Audit Policy 2016 and withdrew immunity from audit granted to various segments of taxpayers, including salaried persons. According to the audit policy, the revenue board would conduct computer ballot on parametric basis for selection of 7.5% cases for audit of the total income tax, sales tax and federal excise returns filed for the tax year 2015 and tax periods July 1, 2014 to June 2015. The News. Economic Indicators List of Indicators 10.00% 5.00% 0.00% Amount (PKR Bn) % Change (RHS) 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