Pakistan Daily Economy Update - 4 May

Transcription

1. May . 04, 2018 KCCI - eBulletin Earlier than usual: Major budget measures to kick in from mid-May The Senate Standing Committee on Finance has endorsed the govt. move to enforce certain tax measures from May’18. Unlike income tax and sales tax measures that will take effect from 1st Jul’18, the increase in customs duties and FED rates will be enforced from the next day of President Mamnoon Hussain’s consent to the Finance Bill 2018 (expected by 15th May). The committee opposed to increase the petroleum levy rates by threefold to PKR 30/litre for all products. It instead recommended that the petroleum levy should be increased by only 25%, taking it to PKR 13/litre. The committee also rejected a further 1% increase in sales tax, which is aimed at increasing the effective rate to 20%. Tribune. ADB says ‘no need to panic’ over Pakistan’s economy Asian Development Bank’s (ADB) former country director Werner Liepach has said that Pakistan will not need a bailout package as its economy is doing well, adding that there is no need to panic even as the current account deficit widens and foreign exchange reserves continue to fall. Addressing a media briefing at the 51st Annual Meeting of the ADB Board of Governors in Manila, Liepach said remittances continue to remain strong and would help meet external sector challenges. Liepach, who is the DG for Central and West Asia Regional Department, also maintained a positive outlook of Pakistan’s growth. He acknowledged that the budget deficit has gone up a little but it is quite normal in an election year. Tribune. ADB raises concern over CPEC’s debt burden on finances The ADB has raised concern about the debt burden of CPEC led infrastructure projects on Pakistan’s fragile finances. Countries should realize the economic viability of projects under belt and road initiatives, Takehiko Nakao, ADB president said on day one of the ADB’s annual meeting. Sustainability and economic viability of such projects are difficult; investing borrowed money for infrastructure projects potentially pile up debt burden. Yet Nakao said China-Pakistan economic cooperation is very impressive and has stabilized Pakistan’s macroeconomic indicators. The News. PM backs sale of K-Electric’s majority stake to Chinese firm PM Shahid Khaqan Abbasi has put his weight behind the sale of majority shareholding in K-Electric to Shanghai Electric Power of China, with a warning that the power utility will be in dire straits if the deal falls through. In such a scenario, he said, the govt. would be left with no other alternative but to offer bailout packages to K-Electric in a bid to ensure continuous electricity supply to Karachi. He also wants NEPRA to take an early decision on a review petition filed by the Power Division for revising upwards the K-Electric’s tariff. During a meeting of the Cabinet Committee on Energy on 23rd Apr’18, the PM emphasised that Pakistan had got a rare opportunity as one of the largest and biggest utilities was interested in buying a controlling stake in K-Electric. Tribune. Top official accuses KE of ”staging drama” Secretary Power Division Yousuf Naseem Khokhar has reportedly accused K-Electric (KE) of staging drama of electricity crisis in Karachi in order to get a favorable decision from Nepra on tariff reconsideration petition, at the cost of citizens of Karachi. He made these remarks at a recent meeting of Cabinet Committee on Energy (CCoE) on issues relating to KE. He also pointed out that NEPRA had clearly stated in its report on the crisis that the present management has failed to invest in generation, transmission and distribution. NTDC/CPPA was, therefore, forced to continue supply of 650 MW power for the sake of citizens of Karachi. BR. Customs law changes on cards to meet FATF rules Pakistan has proposed to amend its customs law to seek advance information about air crew and passengers, and source of their travel expenses to comply with the regulations of the Financial Action Task Force (FATF) to curb money laundering. It has proposed amendments in Clause 42 of the Customs Act of 1969 that deals with the arrival of conveyance. The amendments are part of the Finance Bill 2018 and are aimed at meeting the FATF requirements regarding the Action Plan to come out of its grey list. Earlier, the FBR was only seeking information of the crew. Now the new amendment states that it will be binding on everyone to provide the list of crew and the passengers. Tribune. \ SC takes suo motu of mass tax imposed on prepaid mobile bills The Supreme Court (SC) has taken suo motu notice of massive deductions of prepaid billing as tax by mobile companies. It issued a notice to all mobile companies and the Attorney General, seeking details of the deductions. Tribune. Moody’s says super tax extension credit negative for banks Moody’s has termed the continuation of super tax on banks credit negative, and said that after it expires in 2021, banks may see some improvement, but higher government borrowing will clip lending to the private sector. A credit outlook report released by the financial services company analyzed Pakistan’s recently proposed federal budget FY19, which included a oneyear extension of special tax on banks’ taxable income. It expects all rated Pakistani banks to be affected by the tax extension, which is estimated to lower the banks’ return-on-equity ratios by approximately 1%. The News. China keen to set up furniture manufacturing units Furniture manufacturers from Guangzhou also known as Canton, have shown interest in establishing furniture manufacturing units through joint ventures in Pakistan. The Chinese manufacturers also want to set up Pakistani furniture outlets in Canton to promote furniture trade between two countries. A delegation of Pakistani furniture makers are currently on a visit to participate in Canton Fair 2018, where delegates from more than 120 countries are participating. BR. SBP reserves up $ 593Mn Foreign exchange reserves held by the SBP increased by $ 593Mn to $ 11.51Bn during the week ended 27th Apr’18, due to official inflows from China. Total reserves of the country grew to $ 17.71Bn while the holdings of the commercial banks stood at $ 6.202Bn. Dawn. Economic Indicators List of Indicators Date / Period Unit Value Change Daily 3-May 115.61 118.70 0.00% 0.13% Crude (JU'18) 3-May 3-May 3-May 3-May PKR PKR Pts. $ Mn $/bbl 44,747 3.01 68.50 -1.00% NM** 1.20% Gold (MY'18) Gold (10g) Local 3-May 3-May $/oz PKR 1,312.8 49,885 0.59% -1.61% Silver (MY'18) Cotton(KHI)-40 kg 3-May 3-May $/oz PKR 16.42 8,038 0.40% 0.00% Kibor-6M 3-May % 6.52 $ Bn 17.71 0.00% WoW 3.40% Remittances 27-Apr FY18 Jul-Mar 18 $ Bn 14.61 YoY 3.55% Exports* Imports* Jul-Mar 18 Jul-Mar 18 $ Bn $ Bn 17.08 44.38 13.08% 15.57% USD-Interbank USD-Open MKT KSE-100 index FIPI Forex Reserves Jul-Mar 18 Trade Balance* $ Bn -27.30 Jul-Mar 18 Current Account $ Mn -12,029 Foreign Direct Inv. $ Bn 2.09 Jul-Mar 18 Jul-Feb 18 LSM Growth* % 6.24 % 3.70 Jul-Apr 18 Avg. CPI Discount Rate % 6.00 Mar-18 WoW= Sources: KCCI Research, PMEXweek , NCCPL, KSE, SBP, PBS* ** Not Meaningful on week; -17.18% -50.55% 4.44% Major Currencies 175 GBP, 3-May-18, 157.4 165 155 145 EUR, 3-May-18, 138.8 135 125 115 USD, 3-May-18, 115.8 105 95 May-17 USD Aug-17 GBP EUR Nov-17 Feb-18 Source: KCCI Research ; Oanda.com Quote of the Day "The only limit to our realization of tomorrow will be our doubts of today." Franklin D. Roosevelt Chart of the Day Foreign Private Investment Vs Foreign Public Investment (FY14 - 9MFY18) 3 2.5 2.32 2.12 2 1.5 1.91 0.5 -0.5 2.45 2.00 0.93 1 0 2.23 1.99 -0.01 FY14 FY15 FY16 Foreign Private Investment 0.26 FY17 9MFY18 Foreign Public Investment SECP re-elected to IOSCO Board Figures in $ Bn SECP has been elected to the International Organisation of Securities Commissions (IOSCO) Board for the 4th time for 2018Source: KCCI Research, SBP 2020 term. The SECP has been on the Board since 2012, which comprises of 34 securities regulators and has a major permanent representation from developed countries. IOSCO has a critical role in leading the development of the global Disclaimer framework for securities markets. The Nation. 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. CNG price raised to PKR 81.70 CNG station owners have increased the price of CNG by PKR 1.70/kg in Karachi and other parts of Sindh to PKR 81.70 from icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers' PKR 80/kg. Owners contend that gas stations have been facing higher costs due to exorbitant increases in the gross colorific understanding of the news item. The R&D Dept. bears no responsibility for its correctness or accuracy. Contact: res@kcci.com.pk value in the bills by SSGC in the last few months. Dawn.