Pakistan Daily Economy Update - 8 June

Transcription

1. Jun .8, 2016 KCCI - eBulletin Annual Development Programme: Sindh govt. remains miserly, spends only 53% funds The Sindh govt. could spend only 53% of the funds released under the provincial Annual Development Programme (ADP) during the 11MFY16. According to the “released position” of the provincial public-sector development Programme for 2015-16 as on May 27, the Sindh govt. has List of Indicators spent PKR 63.4Bn in the 11-month period out of the released amount of PKR 119.2Bn. The Sindh govt. had promised PKR 18.76Bn for local government, public health engineering and rural development and had promised PKR 10Bn for the education department at the outset of 2015- USD-Interbank USD-Open MKT 16. Similarly, the govt. set aside PKR 9Bn for the works and services department. Tribune. KSE-100 index Input tax adjustment: provinces object to FBR proposal FIPI Finance Standing Committee has said that the provinces have raised objections on the FBR’s proposal to disallow input tax adjustment on sales Crude (JU'16) tax paid against provincial services from 2016-17. While reviewing the budget for FY17, Finance Standing Committee observed that the sales tax Gold (MY'16) adjustment is the issue of all provinces. Provinces have rejected proposed disallowance on the tax adjustment on the provincial services. BR. Import of used cars: government decides to tighten procedures The govt. has decided to tighten used cars' import procedures aimed at discouraging misuse of Commerce Ministry's schemes by commercial importers and encouraging new investment in auto industry. Pakistan's annual import of used cars is around 30,000 units, mainly from Japan. Three-year used cars are imported into Pakistan through informal channels. However, Federal Board of Revenue (FBR) earns huge revenue on illegally imported used cars and insists on import of used cars on a commercial basis. State Bank of Pakistan maintains that the importers remit funds through informal channels i.e. Hawala/ Hundi to pay for the cost of vehicles which ultimately results in a surge in smuggling of foreign currencies out of Pakistan and diversion of inward remittances through Hawala channels which has a negative impact on the economy. BR. Offshore companies: govt. accused of forestalling declaration The govt. has accused of making an amendment in Income Tax Ordinance through Finance Bill 2016 to forestalling, declaration of offshore companies in Pakistan. Taking part in the Budget debate, National Assembly members stated that Finance Minister Ishaq Dar has made an amendment in the Income Tax Ordinance and as per that amendment if anyone has made an offshore company, he need not declare it in Pakistan. Criticizing the govt. policies, they said that investment has also decreased during this period and people of the country would further lose their faith in Parliament if this amendment is approved. BR. Economic Indicators Date / Period Unit Value Change Daily 7-Jun PKR 104.66 0.01% 7-Jun PKR 105.00 0.68% 7-Jun 7-Jun Pts. $ Mn 37,392 -2.01 0.45% NM** 7-Jun $/bbl 50.37 1.21% 7-Jun $/oz 1,244.5 -0.15% Gold (10g) Local 7-Jun PKR 41,057.00 -2.58% Silver (MY'16) 7-Jun $/oz 16.41 -0.44% Cotton(KHI)-40 kg 7-Jun PKR 6,093 -0.88% Kibor-6M 7-Jun % 6.14% 0.00% 27-May $ Bn 16.03 -25.83% Remittances Jul-Apr 16 $ Bn 16.03 5.18% Exports* Jul-Apr 16 $ Bn 17.32 -12.99% Imports* Jul-Apr 16 $ Bn 36.34 -3.70% Trade Balance* Jul-Apr 16 $ Bn -19.02 -6.68% Current Account Avg. CPI-FY16* Jul-Apr 16 Jul-May 16 $ Mn % -1,519 2.82 17.71% WoW Forex Reserves YoY Body to regulate IT companies proposed May-16 Discount Rate % 5.75 The Senate Standing Committee on Information Technology and Telecommunications has recommended to the government to form a regulatory Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* body to regulate the IT companies operating in Pakistan. The committee in a report submitted to the Senate on 7th July 2016 made a ** Not Meaningful WoW= week on week; YoY=Year on Year recommendation of imposing tax on IT companies. Dawn. Major Currencies Govt. ignores provinces demand of levying FED The federal govt. has not included Federal Excise Duty (FED) of PKR 6.29/liter on crude oil in the finance bill for 2016-17 despite insistence by the provinces. In a letter to the Finance Secretary, Petroleum Ministry has conveyed the provinces’ demand to the federal govt. that the former fulfills its obligation, under the 18th Amendment, and include the FED in the finance bill for FY17. The provinces have demanded the imposition of PKR 1000 per barrel or PKR 6.29/liter FED on crude oil. The Nation. 175 165 GBP, 7-Jun-16, 151.8 155 145 Govt plans to raise PKR 211.5Bn from commercial banks in FY17 The government plans to borrow PKR 211.5Bn through commercial banks in the next fiscal year out of the total PKR 807bn earmarked as external sources for loans and grants for the Public Sector Development Programme (PSDP). During the outgoing fiscal year, the government planned to borrow PKR 20.25Bn through a consortium of commercial banks but it ended up raising PKR 102.6Bn, according to revised data. Dawn. 135 Govt. to secure $ 1.75Bn through foreign bonds in 2016/17 The govt. has planned to launch two international papers, including a sovereign bond, for generating $ 1Bn and an Islamic Sukuk to secure around $ 750Mn in 2016/17. Pakistan, in the budget for FY17, projected zero inflows from the U.S. under Kerry Lugar Law (KLL). However, the govt. excluded China Safe Deposits worth $ 1Bn from the list of external liabilities. The budget paper said the govt. is all set to go ahead with launching of Islamic Sukuk bond to generate PKR 79Bn in FY17 in order to meet requirement of external fronts after saying goodbye to the International Monetary Fund (IMF). Moreover, the govt. also planned to launch Eurobond in the upcoming financial year to bridge the financing gap on external front. The News. 85 EUR, 7-Jun-16, 118.7 125 115 105 95 USD, 7-Jun-16, 104.5 75 Jun-15 Sep-15 USD Dec-15 GBP Mar-16 EUR Jun-16 Source: KCCI Research ; Oanda.com Quote of the Day MPs for minimum 20% raise in pays, pensions Finance Standing Committee has recommended to the govt. to increase the salaries and pensions of the civil servants by at least 20% as against the announcement of increasing it by 10%. These recommendations would then be forwarded to the National Assembly for incorporation in the Finance Bill. The committee also suggested to the govt. to implement its decision of fixing minimum wages at PKR 14,000, as majority of the industries pay less than PKR 10, 000 per month to their workers. The Nation. “Talent means nothing, while experience, acquired in humility and with hard work, means everything.” Raise in CPEC’s western route budget proposed A senate panel on 7th Jun, 2016 unanimously recommended the govt. to further increase budgetary allocations for the western route of CPEC, showing apprehensions that the govt. was still not serious on building the road on priority. For FY17, the govt. has proposed PKR 115Bn for CPEC projects, out of which allocations for the western route are only PKR 28.8Bn; the remaining chunk is allocated to construct the eastern route. Tribune. Chart of the Day Banks/DFIs advised to submit returns through DAP In order to bring efficiency and accuracy in the returns and reports submission process, the State Bank of Pakistan (SBP) has advised banks/DFIs to submit reports including exposure to stock market, board meeting minutes and rescheduling of loans, through Data Acquisition Portal (DAP). Previously, banks and DFIs were submitting reports and returns in shape of hardcopies as per described timeframe. BR. Second LNG terminal: PLTL board approves signing services agreement The board of directors of Pakistan LNG Terminals Limited (PLTL) have gave approval on 7th Jun, 2016 for inking a LNG services agreement with the successful bidder for setting up the second LNG terminal in Karachi to handle gas imports. The Ministry of Petroleum and Natural Resources will send a summary to ECC to seek its consent to signing the services agreement. The govt. has embarked on a drive to replace oil consumption in power plants with imported gas in order to improve efficiency and produce clean energy. Tribune. Solar power: NEPRA accepts Oursun application for generation license Oursun Pakistan Limited (OSPL) has won the power regulatory authority’s acceptance regarding its application seeking a power generation license. The National Electric Power Regulatory Authority (Nepra) said that it has admitted the application of OSPL for consideration of grant of ‘generation license’ for its proposed solar power plant. Oursun intends setting up a 50MW solar power plant at Gharo at the cost of $ 76.93Mn to supply electricity to K-Electric Limited. Tribune. Price of cement bag to rise by PKR 34 under new excise duty regime The price of cement would go up by PKR 34 on a 50-kilogram bag in the wake of a change in the federal excise duty (FED) regime for the commodity, the industry says. Cement is currently chargeable at the rate of 5% of the retail price. In the latest budget, the government has proposed to replace the current regime with a fixed rate of PKR 1 per kg. Dawn. Patrick Süskind FBR Sales Tax Collection 480.34 500 418.18 400.68 359.67 400 300 200 100 0 Value in PKR Bn 9MFY16 Sales Tax Imports 9MFY15 Sales Tax Domestic Source: KCCI Research, FBR Disclaimer This report has been prepared by KCCI Research & Development Cell. The information contained herein have been compiled or arrived at based upon Oil hits 2016 high on US draw forecasts, Nigeria worry Oil prices continued their climb on 7th July 2016, hitting eight-month highs at $ 50.55/barrel , as expectations of US crude draws underpinned a information obtained from sources believed to be reliable and in good faith. Such market already worried about potential supply shortages from attacks on Nigeria's oil industry. US crude stockpiles likely fell by 3.5Mn barrels information has not been independently verified. last week to mark a third straight week of declines, a preliminary Reuters poll showed. 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