Pakistan Economy - Daily Update - 7 April

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1. Apr . 7, 2016 KCCI - eBulletin Withdraw GIDC, 23% increase in gas tariff: KCCI Karachi Chamber of Commerce and Industry (KCCI) president Younus Muhammad Bashir has expressed deep concern over descending exports and the reports of further increase in gas tariff from 1st Jul, 2016. He has appealed the govt. to immediately withdraw Gas Infrastructure Development Cess (GIDC) from the date it was implemented and also withdraw the recently-implemented 23% increase in gas tariff in order to save Pakistan’s exports from further deterioration. Tribune. KCCI suggests taxing agriculture sector equally The Karachi Chamber of Commerce and Industry (KCCI) has suggested that the agriculture sector should also be equally taxed like other sectors of the economy in order to strengthen revenue collection. It said that the imposition of an agricultural income tax on large and medium farmers would also help reduce poverty in the country. Leaving huge agricultural wealth untaxed while taxing salaried individuals, entrepreneurs and businessmen is akin to breeding inequality and injustice at the whims of a few influential individuals and entities, the chamber observed. BR. Pakistan to initiate trade talks with EEU The ministry of commerce is planning to initiate a dialogue for a free trade agreement (FTA) with the Eurasian Economic Union (EEU) to gain competitive market access for Pakistani products. The EEU members include Armenia, Belarus, Kazakhstan, Kyrgyzstan and Russia. As Russia is a member of the customs union, Pakistan cannot initiate direct talks on FTA with it. In the last five years, Pakistan’s exports to Russia have stagnated. Pakistan’s exports to Russia stood at $ 183.57Mn in FY11 that inched up marginally to $ 183.84Mn in FY15. On the other hand, imports from Russia reached $ 206.45Mn in FY15 from $ 163.42Mn in FY11. Dawn. Economic Indicators Date / Period Unit Value USD-Interbank List of Indicators 6-Apr PKR 104.70 Change Daily 0.02% USD-Open MKT 6-Apr PKR 105.30 -0.14% KSE-100 index FIPI 6-Apr 6-Apr Pts. $ Mn 33,946 -2.95 0.53% NM** Crude (MY'16) 6-Apr $/bbl 39.76 5.41% Gold (MY'16) 6-Apr $/oz 1,223.1 0.55% Gold (10g) Local 6-Apr PKR 42,042 -0.31% Silver (MY'16) 6-Apr $/oz 15.10 -0.25% Cotton(KHI)-40 kg 6-Apr PKR 5,200 0.00% Kibor-6M 6-Apr % 6.36% -0.01% 25-Mar $ Bn 20.42 -0.48% Remittances Jul-Feb 16 $ Bn 12.71 6.04% Exports* Jul-Feb 16 $ Bn 13.87 -13.26% Imports* Jul-Feb 16 $ Bn 28.98 -4.95% Trade Balance* Jul-Feb 16 $ Bn -15.10 -4.22% Current Account Avg. CPI-FY16* Jul-Feb 16 Jul-Mar 16 $ Mn % -1,859 2.64 4.52% Jan-16 % 6.00 WoW Forex Reserves YoY Discount Rate FBR collects PKR 15Bn through WHT on banking transactions Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS* According to the FBR Chairman, the scheme was launched at the behest of traders who wanted to become part of ** Not Meaningful WoW= week on week; YoY=Year on Year tax net to avoid paying 0.6% WHT on their bank transactions. Under the scheme, around 8,000 tax returns have Major Currencies been received and around PKR 15Bn taxes have also been contributed through the withholding tax on bank 175 transactions during 7MFY16. Daily Times. 165 SBP announces demonetization of old design banknotes SBP has announced that the old design banknotes of PKR 10, 50, 100 and 1,000 would be demonetized from 1ST Dec, 2016. However, SBP-BSC field offices will continue to accept the old design banknotes of above mentioned dominations from general public up to Dec. 31, 2021.The commercial/microfinance banks will accept the old design banknotes of PKR 10, 50, 100 and 1000 and exchange the same with the new design banknotes and coins of all denominations up to Nov 30, 2016 only. Daily Times. Italian companies interested to invest in Pakistan A business delegation comprising entrepreneurs from various sectors visited Rome, Italy from Apr 4-5, 2016 during which the Italian companies expressed interest to invest in Pakistan. The delegation also included representatives of Italian companies working in Pakistan. The delegation was led by Board of Investment (BOI) Chairman Dr Mifta Ismail. The purpose of the visit was to invite the Italian businessmen to invest in Pakistan and expand trade relations between the two countries. Daily Times. Gas crisis over, claims SNGPL Sui Northern Gas Pipelines Limited Managing Director has claimed that the issue of gas crisis is over, and now SNGPL was in a position to supply gas to all sectors of the economy. He said that 470MMCFD RLNG is available in the system and expressed the hope that it would reach 1200MMCFD by the end of 2016. Out of it, 160MMCFD is being supplied to the textile industry, followed by 20MMCFD to the fertilizers sector, 50MMCFD to the CNG sector and remaining to the power sector. The Nation. SECP seeks feedback on revised Companies Bill 2016 SECP has placed the revised draft of the Companies Bill, 2016 on its website for comments and feedback. The public/stakeholders are requested to submit their feedback by May 6, 2016. The SECP submitted the first draft of the Companies Bill to Finance Minister Ishaq Dar in Nov’15. Daily Times. Sri Lankan business team to attend TeXpo-2016 A 15-member Sri Lankan business delegation led by its Minister for Commerce and Industry is arriving in Pakistan today (7th Apr) for a 4-day official visit. The delegation, comprising of top textile and business groups, leading textile chain stores, wholesale dealers, importers of fabric as well as representatives of Chambers of Commerce and Industry, will attend the first ever textile sector specific exhibition TeXpo Pakistan 2016, to be held at Expo Centre, Karachi from April 7-10, 2016. BR. Pfizer, Allergan scrap $ 160Bn deal after US tax rule change US drug maker Pfizer Inc. and Ireland-based Allergan Plc have walked away from their $ 160Bn merger, a major win for US President Barack Obama, who has been pushing to curb deals in which companies move overseas to cut taxes. Pfizer said the decision was driven by new US Treasury rules aimed at such deals, called inversions. The merger would have allowed New York-based Pfizer to cut its tax bill by an estimated $ 1Bn annually by domiciling in Ireland, where tax rates are lower. Dawn. PC recommends approving PKR 858Mn for PSM staff salaries The Privatization Commission (PC) has moved a summary for the approval of PKR 858Mn to be paid as salaries to PSM employees. The recommendation has been initiated by the PC based on the decision taken by the Economic Coordination Committee (ECC) of the Cabinet in a meeting held on Jan 29, 2016 in which ECC directed PSM management to share a detailed analysis of its salary bill. The Nation. GBP, 6-Apr-16, 147.8 155 145 EUR, 6-Apr-16, 119.1 135 125 115 105 95 USD, 6-Apr-16, 104.6 85 75 Apr-15 Jul-15 USD GBP Oct-15 EUR Jan-16 Apr-16 Source: KCCI Research ; Oanda.com Quote of the Day “Great selling involves helping people to make great buying decisions.” Chris Murray Chart of the Day Snapshot of Net Foreign Investment in Pakistan (Mn US$) 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 -1,000 Direct Investment Portfolio Investment Source: KCCI Research, SBP 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