Pakistan Daily Economy Update - 17 October

Transcription

1. October 17 , 2020 KCCI - eBulletin Paradigm shift: Govt to cut industrial power tariff by PKR 6 per unit The govt. will slash the power tariff primarily for the industrial sector to almost PKR 13 per unit from PKR 18 per unit, aims to utilize the idle capacity of electricity and put the country on its way to industrialization. Govt. is also brainstorming the option to erase the peak hour tariff of domestic and commercial consumers having time of use meters and also examining the option to reduce the tariff for SMEs. The News. Digitalization of forex regulatory approvals launched SBP Governor Dr. Reza Baqir has launched a Regulatory Approval System (RAS) for end-to-end digitalization of foreign exchange-related case submission process. The objective of this initiative was to provide a fully digitalized platform to the business community and individuals in approaching banks for their foreign exchange related requests. Dawn. FDI falls 24% to $ 415.7Mn in first quarter Pakistan’s FDI inflows fell 23.8% to $ 415.7Mn in 1QFY21 from $ 545.5Mn in 1QFY20, as risk-off investors, waiting for their COVID-hit economies to recover, were now bracing for the impact of a second wave of the pandemic. However FDI in Pakistan’s financial sector sharply rose to $ 113.3Mn from $ 32.3Mn a year ago, while FDI in the financial businesses increased to $ 102.5Mn from $ 30.7Mn. The News. Large-scale manufacturing sputters amid recovery as lockdowns recede LSM posted a paltry growth of 1.19% in Aug’20 from Aug’19, but fell by 6.78% from Jul’20. The big industry output grew by 3.66% in 2MFY21 compared with the same period last year, reflecting a revival in economic activities. The auto sector — with the exception of tractors, trucks and motorcycles — was the major laggard with massive declines in sales in Aug’20 on account of multiple upward price revisions due to currency depreciation. Dawn. Development of islands: Centre begins implementing ordinance, ignores Sindh’s opposition Setting aside the continual protest by the Sindh administration, the federal govt. is going ahead with the implementation of the Pakistan Islands Development Authority (PIDA) Ordinance which was quietly promulgated on 31st Aug’20. A recent advertisement said that PIDA has planned to develop Bundal Island located in the Arabian Sea off the coast of Karachi on land measuring 8,000 acres, approximately 49 kilometers square. The News. SSGC evolves plan to meet winter needs SSGC has evolved an effective strategy of injecting additional RLNG in its transmission network to meet the increased commodity demand during the upcoming peak winter season. This year, around 160MMCFD gas is expected to be short supplied from the fields and SSGC will face shortage of around 250-300MMCFD gas this winter. This shortfall will be met by injecting RLNG in the system. The News. Pakistan to locally manufacture heart stents Pakistan has become the 2nd Muslim country in the world to produce heart stents indigenously after PM Imran Khan inaugurated the NOvative Health Technology Facility at NUST. The facility will be the first to locally manufacture cardiac stents, adding that it will also make Pakistan the 18th country in the world to do so. It is expected to save PKR 8Bn annually in foreign exchange. The Nation. Govt. borrowings for reforms top $ 10Bn, Senate told The finance ministry has presented details of losses incurred by the national economy due to the coronavirus pandemic as well as the loans acquired from international financial institutions for the govt.’s reform agenda in the Senate session. The govt. borrowed more than $ 10Bn from international financial institutions, including $ 4.11Bn from World Bank, $ 3.66Bn from ADB, $ 1.68Bn from Islamic Development Bank (IDB) and $ 800Mn from Asian Infrastructure Investment Development Bank. Tribune. Pakistan to challenge India’s claim of GI tag to Basmati rice in EU, MPs told Senate Standing Committee on Commerce was informed that Pakistan would challenge India’s claim of Geographical Indication tag to Basmati rice in EU. India in its application had falsely claimed Basmati rice as an Indian origin despite the fact that the same rice is largely produced in Pakistan. The Nation. Tariff differential: MoF urged to release half of subsidy's amount The Power Division has requested the Finance Ministry to release half of the tariff differential subsidy's amount allocated for FY21 to import over 1Mn metric tons of HSFO and LSFO, respectively to meet fuel requirements of Gencos and IPPs. Petroleum Division indicated that during the winter further RLNG will be diverted to domestic gas sectors and there would be an expected cut in RLNG and natural gas supply \ to power sector. Additional fuel supply chain would be required to maintain power in grid through the HSFO and LSFO fired power plants. BR. Economic Indicators List of Indicators SBP amends exchange companies manual SBP has amended exchange companies manual by incorporating references related to regulations, guidelines, notifications issued by SBP and the Federal Govt., under Anti-Money Laundering Act, 2010. Previously, AML, Combating the Financing of Terrorism (CFT) and Countering Proliferation Financing (CPF) Regulations were issued by the State Bank of Pakistan on 30th Sep’20 for exchange companies and exchange companies of 'B' category. BR. Crushing season 2020-21: Sugarcane price fixed at PKR 200 per 40kg: Dawood Advisor on Commerce, Abdul Razak Dawood has said that the govt. has fixed sugarcane price at PKR 200 per 40kg for crushing season FY21. The Punjab govt. had fixed PKR 190 per 40 kg for FY20, whereas in Sindh it was PKR 192 per 40 kg. BR. AGP blames finance ministry for irregularities worth PKR 1.54Tn Identifying over PKR 1.54Tn worth of irregularities and revenue losses in oil and gas sector during the first year of incumbent govt., the Auditor General of Pakistan (AGP) blamed the Ministry of Finance for non-production of record for audit, high debt build up and distribution of unauthorized bonuses to its staff. AGP also found serious financial management weaknesses in the Petroleum Division as “no mechanism was in place for monitoring the assessment and collection of revenue receipts, recovery of areas of gas development surcharge, gas infrastructure development cess, petroleum levy and royalties. Dawn. Food industry forms trade body Food Industry has established a new body called Pakistan Association of Food Industries comprising of the national and multinational food enterprises operating in Pakistan. The News. Unit Value Change Daily USD-Interbank USD-Open MKT 16-Oct 16-Oct PKR PKR 162.49 162.75 -0.23% -0.31% KSE-100 index FIPI 16-Oct 16-Oct Pts. $ Mn 40,164 -2.24 0.24% NM** Crude (AP'19) 15-Oct $/bbl 41.14 2.39% Gold (MA'19) 15-Oct $/oz 1,900.2 0.50% Gold (10g) Local 16-Oct PKR 99,108 0.00% Silver (MA'19) 15-Oct $/oz 24.34 0.57% Cotton(KHI)-40 kg 16-Oct PKR 10,610 0.00% Kibor-6M 16-Oct % 7.35 0.00% 9-Oct $ Bn 19.02 WoW -1.73% Remittances Jul-Sep 20 $ Bn 7.15 31.08% Exports* Jul-Sep 20 $ Bn 5.46 -0.94% Imports* Jul-Sep 20 $ Bn 11.26 0.56% Trade Balance* Jul-Sep 20 $ Bn -5.80 -2.02% Current Account Foreign Direct Inv. Jul-Aug 20 Jul-Sep 20 $ Bn $ Bn 0.81 0.42 166.31% -23.79% Forex Reserves YoY Jul-Aug 20 LSM Growth* % 3.66 % 8.84 Jul-Sep 20 Avg. CPI Discount Rate % 7.00 Jul-20 Sources: KCCI Research, PMEX , NCCPL, KSE, SBP, PBS* ** Not Meaningful, WoW= week on week; YoY=Year on Year Major Currencies 235 225 GBP, 16-Oct-20, 208.7 215 205 195 EUR, 16-Oct-20, 189.4 185 175 165 155 USD, 16-Oct-20, 161.6 145 Oct-19 Jan-20 USD GBP Apr-20 Jul-20 Oct-20 Source: KCCI Research ; Oanda.com EUR Quote of the Day “Its not an experiment if you know its going to work.” Jeff Bezos Pakistan eyes $ 1.2Bn additional debt relief from G-20 Pakistan is expected to get additional temporary debt relief of nearly $ 1.2Bn after the world’s richest nations agreed to extend debt-relief initiative for the ‘poorest’ nations by another six months to June 2021. Tribune. Floating-rate PIBs: SBP amends instructions SBP has amended instructions regarding Floating Rate Pakistan Investment Bonds (also know as PFLs) and now profit of PFLs may be offered monthly, quarterly and semi-annual as decided by the Finance Division. Govt. of Pakistan (GoP) vide it notification dated bases 14th Oct’20 has made amendment in the Pakistan Investment Bonds Rules, 2000. As per amended announced by SBP, only Primary Dealers (PDs) of govt. securities (MTBs & PIBs) will be eligible to participate in the competitive auctions and submit Non-Competitive Bids (NCBs) on behalf of eligible investors. BR. Date / Period TOP 10 NET FOREIGN DIRECT INVESTMENT IN PAKISTAN-BY COUNTRY in 1QFY21 ($ MN) 120 103.6 100 80 60 40 55.6 49.1 38.4 29.2 27.9 20 18.9 15.2 12.5 10.0 0 Source: KCCI Research, SBP Trade Inquiries Members interested in establishing links with Russian companies in the following sectors are requested to contact res@kcci.com.pk with company details including KCCI membership number. 1)A leading locomotive company in the area of digital signaling and rail traffic 2)A leading peat extraction and processing company.