Pakistan Daily Economy Update - 8 May

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1. May . 7-8, 2017 KCCI - eBulletin Engro Fertilizers wants extension in export deadline Fertilizer manufacturers have asked the govt. to extend the urea export deadline until Dec’17 to be able to get rid of their surplus production. The govt. had allowed local manufacturers to export 300,000 tons of urea by the end of Apr’17. At the end of 1QCY17, only Engro Fertilizers had exported the urea to Eastern Africa region at Freight on Board (FOB) price of $ 230-240 per ton. Tribune – Sun. Pakistan failing to make money from halal goods trade The halal food trade market will soar beyond $ 1.6Tn by 2018. Halal products beyond food such as cosmetics and pharmaceutical would nearly double this figure. A 2016 study by KCCI placed Pakistan as the 19th largest meat exporter with beef being a preferred commodity. The meat industry in Pakistan has grown at an annualized rate of 27% from $ 14Mn in 2003 to $ 244Mn in 2015 with 708,968 tons of meat exported. Tribune – Mon. Hospital under CPEC project inaugurated in Gwadar An emergency hospital constructed by the Red-Cross Society of China at a cost of PKR 270Mn in the post city of Gwadar has been inaugurated. The hospital is one of such emergency medical facilities to be constructed in the country under the CPEC project. Dawn – Mon. ADB aims to raise $ 1.7Tn annually for region Asian Development Bank (ADB) President Takehiko Nakao has said that the region will require $ 1.7Tn per year in investments in power, transport, telecommunications and water till 2030. During the Annual Meeting of ADB Board of Governors in Yokohama, Japan, Nakao said that the figure is more than double of the previous estimate, reflecting additional investments which are required to support the continued growth. The ADB president also listed 5 chief priorities of the Bank and said that supporting infrastructure development would remain the top priority. Tribune – Sun. Japan pledges additional $ 40Mn to Asian Development Bank Japan has pledged an additional $ 40Mn to ADB to promote high-level technology and boost quality infrastructure in Asia. Japanese Finance Minister Taro Aso said at the ADB's annual gathering in Yokohama that Japan has been promoting quality infrastructure in Asia in close collaboration with the Bank and the funds will be provided over a two-year period to a newly-created fund of the ADB. The News – Sun. 21.15 Jul-Mar 17 Remittances $ Bn 14.06 Jul-Mar 17 Exports* $ Bn 15.12 Jul-Mar 17 Imports* $ Bn 38.50 Jul-Mar 17 Trade Balance* $ Bn -23.39 Jul-Mar 17 Current Account $ Mn -6,130 % 4.01 Avg. CPI-FY17* Jul-Mar 17 Mar-17 Discount Rate % 5.75 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful WoW= week on week; YoY=Year on Year Major Currencies 175 165 155 145 135 125 115 105 95 85 75 May-16 GBP, 5-May-17, 135.2 EUR, 5-May-17, 114.8 USD, 5-May-17, 104.5 Aug-16 USD Nov-16 GBP Feb-17 May-17 Source: KCCI Research ; Oanda.com EUR Quote of the Day “Effective design is a combination of innovation, integrity, cocreation and hassle-free offerings for customers.” Anuvat Chalermchai Chart of the Day Energy Architecture Performance Index (2017) 10 8 6 4 2 1 2 4 3 8 7 6 5 9 10 0.74 Budget deficit soars to 3.7% during 9MFY17 The government struggling to limit the budget deficit that has escalated to 3.7% during the 9MFY17 as against the budgetary target of 3.8% for the entire financial year. The gap between income and expenditure has widened to PKR 1,238Bn with PKR 4,383Bn total expenditure and PKR 3,145Bn total revenue. BR-Sun. $ Bn 0.75 Power evacuation projects: government likely to spend PKR 770Bn The government is to spend PKR 770Bn on 57 projects for evacuation of power from different projects in Punjab, Sindh, KPK, Balochistan and AJK, in addition to investment of $ 1.5Bn on expansion and augmentation of power system. Cabinet Committee on Energy (CCoE) has also been given a clear picture of transmission projects as the PM office has strictly directed the Ministry of Water and Power to look into removal of all constraints. BR-Sun. 21-Apr 0.75 Pakistan, China likely to sign MoU on Diamer-Bhasha dam Pakistan and China are likely to sign MoU for 45,00MW Diamer-Bhasha dam during the Belt and Road Forum scheduled to be held from 14th to 15th May in Beijing. Pakistan will be submit a list of important projects, of the long term plan, during the moot. The Nation – Sun. Forex Reserves 0.75 22,000 big taxpayers, 100,000 rich individuals slip under FBR radar FBR has identified over 21,800 big taxpayers and 100,000 rich individuals who have disappeared from the tax net in the past one year. In TY14 and TY15, the big taxpayers – including 7,720 companies and 14,103 associations of persons (AoPs) – had filed their income tax returns and paid revenue of PKR 10.41Bn, and PKR 11.69Bn, respectively. In TY16, however they did not file tax returns. Dawn-Sun. Crude (JU'17) Gold (MY'17) Gold (10g) Local Silver (MY'17) Cotton(KHI)-40 kg Kibor-6M 0.01% -0.14% 1.15% NM** 2.11% 0.02% -0.79% -0.35% 0.00% 0.00% WoW -1.94% YoY -2.29% -3.06% 18.67% -38.80% -160.74% 0.76 Govt. plan to expand super tax net to individuals The govt. has proposed to expand the net of Super Tax to high net-worth individuals and increase sales tax rate to 20% for majority of the population amid differences over these measures between finance ministry and FBR headquarters. The finance ministry has expressed doubts over a budget proposal to abolish 25% dividend income tax rate on real estate investors, suspecting that the move is aimed at giving relief to particular Company. Tribune –Mon. Change Daily 104.85 105.90 49,851 -4.78 46.51 1,229 42,857 16.32 7,180 6.15% 0.77 Yellow Line hits snags as funding not arranged by Chinese firm As the Sindh government prepares to launch “Red Line” of the bus rapid transit system (BRTS) in Aug‘17, a similar project — Yellow Line — hit a snag after the Chinese company tasked with building crucial parts of the mass transit project has so far been unable to arrange funds through its financial institutions under the defined agreement. The 26.5Km-long Yellow Line project — from Landhi to New M.A. Jinnah road — is to be built with an estimated cost of PKR 14.4Bn with 104 new buses on the route. Dawn-Mon. Value PKR PKR Pts. $ Mn $/bbl $/oz PKR $/oz PKR % 0.77 CM seeks funds from Islamabad for mega projects Sindh CM has said that the NFC award should have been finalized and awarded to the provinces, but the federal government has been showing reluctance in this regard. He said during the last 10 months Sindh has received around PKR 67Bn less than its share and expressed the hope that the transfer of funds would be increased during the last two concluding months of FY17 to cover the shortfall. He assured the people of Karachi that Sharea Faisal, an underpass at the Natha Khan Bridge, University Road and other works in the city would be completed by end of Jun17. Dawn-Sun. Unit 5-May 5-May 5-May 5-May 5-May 5-May 5-May 5-May 5-May 5-May 0.78 Power cuts return as shortfall touches 7,000MW Electricity consumers across the country had to face severe load shedding of 7 to 10 hours on 8th May‘17 (Sunday), when the gap between the demand and supply kept fluctuating between 5,000 and 7,000MW. The Ministry of Water and Power said the demand crossed 20,223MW at 8pm, compared to peak generation of 15,400 to 15,700MW, a shortfall of 4,786MW. Dawn-Mon. Date / Period 0.79 Country expects GDP Growth above 5% in FY17: Dar Finance Minister Ishaq Dar has said Gross Domestic Product (GDP) growth rate is expected to be above 5% during FY17 with inflation declining to single digit around 4% - the lowest in 47 years. He said that an effective resource mobilization strategy helped in increasing tax collections by 60% over the last three fiscal years, a 20% average annual increase. The govt., as a result of these efforts, successfully brought down the fiscal deficit from 8.2% in FY13 to 4.6% in FY’16 and projects it at 4.1% for FY’17. The Nation – Sun. List of Indicators USD-Interbank USD-Open MKT KSE-100 index FIPI 0.8 Pakistan focused on realizing higher sustainable growth: Dar Finance Minister Ishaq Dar has said that after achieving macroeconomic stability, Pakistan is now focused on realizing higher sustainable growth as part of its economic turnaround. He said the developing world has made remarkable progress in lowering poverty in the last two decades; around 125,000 people are coming out of poverty on a daily basis globally and Asia is leading that endeavor to reduce poverty through its phenomenal economic growth. Pakistan's Vision 2025 prioritizes investment in human capital and social services, recognizes the importance of inclusive and balanced growth and shares prosperity aiming at redressing geographical and social inequality. The News – Sun. Economic Indicators 0 Rank Score Source: KCCI Research, World Economic Forum 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