Pakistan Daily Economy Update - 6 August

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1. August 06 , 2022 KCCI - eBulletin Items being imported on deferred payments: SBP reduces cash margin to 0% SBP reversed the cash margins on imports from 100% to 25% and in some cases to zero, showing the strength of confidence of the policymakers hoping for a better outcome of negotiations with the IMF and friendly countries. As per new directives, cash margin will be 0% for import payments beyond 180 days instead of the previous requirement of 100% cash margin restriction on the import of 177 items regardless of the mode of payment to reduce the pressure on the exchange rate. BR. Dawn. Once IMF programme resumes: ADB to disburse over $1.5bn to support BoP ADB will disburse over $ 1.5Bn to Pakistan in the ongoing CY for BOP support, once the IMF Extended Fund Facility (EFF) programme restores. The ADB has current portfolio of around $ 8.5Bn and 40 ongoing projects. During the meeting, concerns were shown at slowmoving projects including Karachi Bus Rapid Transit (BRT) and Public-Private Partnerships in Punjab. Both sides agreed to hold a detailed meeting to review all projects with a special focus on slow-moving projects in the next 10 days. BR. Miftah gives banks tax relief, import curbs to remain Finance Minister said banks won’t have to pay higher tax rates for maintaining a low advances-to-deposits ratio (ADR) on their earnings from FY21. Dawn. Rupee recovers for sixth day in a row Pakistani currency maintained its uptrend for the sixth successive working day, as it further gained 0.94% (or PKR 2.11) to close at PKR 224.04 against the USD in the inter-bank market. Tribune. SBP opposed to renewal of BPA with Iran SBP has reportedly opposed the renewal of Banking Payment Agreement (BPA) with Iran, saying that the proposed pact may not be practicable in the current international scenario. BR. Penalties sans coal supply: PQEPC accuses CPPA-G of flouting PM’s instructions PQEPC has reportedly accused CPPA-G of flouting instructions of Prime Minister Shahbaz Sharif and imposing penalties without ensuring coal supply to the plant. According to the CEO, some commitments were made with the company during the meeting which need follow-up for implementation. The PQEPC has appreciated the power purchaser, ie, CPPA-G for following up with the SBP on daily basis to expedite foreign exchange process, however, it’s still not sufficient to settle with coal contractor timely. Therefore, the Minister of Finance and Revenue should fulfil the commitment that $ 25Mn foreign exchange requirements be allowed on 1stAug’22. BR. OGDCL gives PKR 20Mn to flood-affected people OGDCL responded to the calamity by mobilizing its own resources. As a part of its relief activities, OGDCL provided PKR 20Mn to DG PDMA Balochistan for flood affected families. In addition, medicines amounting to PKR 2Mn have also been delivered to district authorities of district Jhal Magsi for the relief of flood affectees. BR. Paper industry seeks subsidy Printing industry stakeholders and paper importers have decried the overblown dollar rate as they face a severe business crisis due to a massive hike in paper prices. Tribune. ESG gaining greater significance globally, says SECP commissioner SECP Commissioner, Sadia Khan said that the Environmental Social Governance (ESG) initiatives are gaining greater significance worldwide and the SECP has been at the forefront in addressing these sustainability issues for the corporate sector in Pakistan. BR. Fixed tax decision deferment: Only an ordinance can help govt. avert revenue loss The govt. would suffer a revenue loss of over PKR 40Bn after the reversal of the fixed tax regime on electricity bills for traders in case FBR does not restore the old scheme through the upcoming Presidential Ordinance. FBR has estimated revenue of PKR 30Bn from the introduction of a new tax slab for small retailers under the Finance Act 2022. This amount would not be collected in FY23. Earlier, the govt. was collecting nearly PKR 20Bn from this sector against the projected revenue of PKR 40Bn under the old scheme. BR. PC reopens SIH sell-off transaction The Privatisation Commission (PC) has reopened Services International Hotel (SIH) transaction as the hotel was allegedly sold to a party at a \ throwaway price. The govt. had approved reserve price of PKR 2.250Bn for the land and building of Services International Hotel (SIH), Lahore. Financial Advisers (FA) conducted the legal work with due diligence and transaction structure was approved by CCoP in Aug’20. BR. ECC fixes import price for Russian wheat at $390 a tonne Amid falling international wheat prices, the ECC of the cabinet has decided to link the opening of tender for the import of wheat from Russia with a lower price of $ 390/tonne and the tender may be scrapped if they do not accept the offer. It was observed in the meeting that there is a declining trend in the price of wheat which may further drop in the coming days. Dawn. List of Indicators Date / Period Unit Value Change Daily USD-Interbank USD-Open MKT 5-Aug 5-Aug PKR PKR 224.04 222.00 -0.94% 1.60% KSE-100 index FIPI 5-Aug 5-Aug Pts. $ Mn 42,096 0.46 1.62% NM** Crude Oil 5-Aug $/bbl 89.01 1.11% Gold 5-Aug $/oz 1,791.2 -0.87% Gold (10g) Local 5-Aug PKR 128,520 0.00% Silver 5-Aug $/oz 19.84 -1.39% Cotton(KHI)-40 kg 5-Aug PKR 18,219 -2.86% Kibor-6M 5-Aug % 15.89 0.01% Forex Reserves 29-Jul $ Bn 14.21 WoW -1.42% Jul-Jun 22 $ Bn 31.24 6.36% Exports* Jul-22 $ Bn 2.22 -4.76% Imports* Jul-22 $ Bn 4.86 -10.48% Jul-22 $ Bn -2.64 14.77% Jul-Jun 22 Jul-Jun 22 $ Bn $ Bn -17.41 1.87 -839.8% 1.13% YoY Remittances Trade Balance* Current Account Foreign Direct Inv. Jul-May 22 LSM Growth* % 7.10 % 24.93 Jul-22 Avg. CPI Discount Rate % 15.00 Jul-22 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 305 295 285 275 265 255 245 235 225 215 205 195 185 175 165 155 145 Aug-21 GBP, 5-Aug-… EUR, 5-Aug-22, 224.8 USD, 5-Aug-22, 222.0 USD Nov-21 GBP Feb-22 EUR May-22 Aug-22 Source: KCCI Research Quote of the Day “Don't spend time beating on a wall, hoping to transform it into a door. ” Coco Chanel Liquid Foreign Exchange Reserves From FY17 to 5MFY22 ($Bn) 94.5248 UAE intends to invest $1bn across various sectors UAE intends to invest $ 1Bn in Pakistani firms across various sectors, state news agency (WAM) reported. UAE is keen to continue cooperation with Pakistan “in various fields, which include gas, energy infrastructure, renewable energy, health care,” the agency added. BR. FBR issues list of unregistered retailers FBR has notified a list of 114 unregistered retailers (Tier-1), who are required to be integrated with the FBR’s POS system by 10thAug’22. BR. Sindh to partner Chinese firm in bus-making plant The Chinese bus-making company is considering producing 500 buses annually from its plant it plans to be built in a Sindh city in the next 16 to 20 months. Dawn. Emlaak Financials launched In Pakistan’s capital market landscape, “Emlaak Financials”, the first digital aggregator platform for mutual funds, has been formally inaugurated by Federal Minister for Finance and Revenue at CDC House, Karachi. This platform has been successfully implemented as a digital distribution channel initially for Mutual Funds and later on for other asset classes also. BR. Lucky Cement profit jumps Lucky Cement Ltd posted a net profit of PKR 9.89Bn for April-June, up 63% cent from a year ago. Net sales increased 128% to PKR 114.8Bn in the quarter. Dawn. Iris being upgraded FBR is all set to upgrade its key Iris system to improve its operation, enhance security and add a new GUI. Dawn. 21.4029 16.1448 FY17 18.8864 16.3836 14.4816 9.7652 7.2852 12.132 FY18 FY19 FY20 Net Reserves with SBP 24.3976 64.3149 17.2986 FY21 5MFY22 Total Liquid FX Reserves Note If any member is facing any issues pertaining to PakistanAfghanistan investment and trade policies or has project proposals is requested to share the information at secretary@kcci.com.pk for forwarding to the Board of Investment.