DAILY INTERNATIONAL FINANCIAL NEWS HIGHLIGHTS || www.globaltaxconsultants.pk |
1. Greek PM set to outline tax cuts, structural reforms – TN
ATHENS: Greece’s prime minister is expected on Saturday to detail tax cuts for companies strained by years of austerity, while also promising pro-business reforms aimed at convincing lenders to ease the nation’s fiscal target from 2021. Conservative premier Kyriakos Mitsotakis was elected two months ago, replacing his leftist predecessor Alexis Tsipras on pledges to revamp Greece’s economy a year after the end of its third international bailout.
Greece remains under financial surveillance to ensure it meets its fiscal targets, and Mitsotakis says his government is confident of achieving a primary budget surplus — which excludes debt-servicing costs — of 3.5 percent of GDP in 2019 and 2020, as agreed with European lenders.
He hopes, however, that foreign creditors will be persuaded to lower that target to around 2 percent in 2021, after Athens gains credibility by implementing reforms such as modernizing and making its state more efficient and cutting down on red tape.
In Saturday’s speech at an annual trade fair in the city of Thessaloniki, Mitsotakis is expected to reiterate that corporate tax will be cut to 24% in 2020 from 28% currently and to 20% in 2021, with taxation on dividends to be halved to 5%, government officials said.
He is also expected to announce measures to help ease the tax burden for certain groups of austerity-hit taxpayers and offer incentives to boost the construction sector.
Securing leeway from creditors on the primary budget surplus target would give Mitsotakis’s administration scope to implement the tax cuts and boost public spending to spur growth in an economy that shrunk by a quarter during a long debt crisis.
Greece has been exceeding its fiscal targets in recent years and European lenders expect the economy to grow by 2.2% in 2019.
The government also wants to resume talks with lenders on repaying earlier loans from the International Monetary Fund, officials said, finishing off a project the former government had started. Senior euro zone officials were neutral to positive this week to the plan presented by their Greek peer.
2. In a slowing economy, appliance sales paint mixed picture – D
Karachi: Barring a big importer cum assembler of domestic appliances, local makers and their dealers are worried over slowdown in sales from July onwards blaming high prices and taxation measures.
Sales of deep freezers and refrigerators also failed to pick up this year in Eidal Azha (August 12-14) following decline in slaughtering of sacrificial animals, they said.
Besides, demand of air conditioners did not show any steep jump despite hot weather from April to August.
Commenting on air conditioner sale, an executive in a Lahore based company, who did not wish to be named, said the AC sales witnessed 20-30 per cent drop in July-August as compared to same period last year due to high prices and some taxation measures taken by the government in Budget FY20 like CNIC condition on sale of above Rs 50,,000 for dealers.
He said AC price has risen by at least Rs 8,000-9,000 in the last one year due to rupee depreciation against the dollar.
On declining production and job cuts, he said his company had not sent home any workers and staffers so far. “Like many companies, our company has also revised sales target this year anticipating depressed market scenario besides cutting production as per demand.”
However, many companies still had unsold stocks of last year which means that they would keep the production low, he added.
“Our company has reduced its margins and also has not fully passed on the exchange rate impact to the consumers in order to keep price affordability to some extent.”
He said his company forecasts the slump to persist throughout the present fiscal year as well. Air conditioner sales dipped 1.37pc to 512,841 units in FY19.
Giving a contrasting view, Business Head B2B Solutions, LG Pakistan, Syed Farrukh Raza Alam said sales in July-August of AC, washing machines, TVs, double door fridge, etc were better than last year same period despite 15-20 per cent increase in prices in the last one year. His sales of invertor ACs were also brisk.
He said the company is currently assembling LED TV in Pakistan and plans to roll out locally made air conditioners and washing machines next year.
However, he said import of completely built up (CBU) units of various items has come down as the company is not importing appliances because of available stocks of previous imports in the markets and issues connected with duties and taxes.
According to official figures, overall local production of TV sets in FY19 rose by 3.3pc to 380,559 units.
President Karachi Electronic Dealers Association (KEDA), Mohammad Rizwan Irfan said deep freezers and fridge sales recorded steep fall of 50pc in the last two months as prices rose by 15-20pc in the last one year while low slaughtering of sacrificial animals also kept buyers away from the market. He said sale of cooling gadgets were also subdued despite marriage season that runs betweenr Eid and 1st Muharram.
He said CNIC condition and Sales Tax registration process had already caused anxiety among the dealers and manufacturers. Rizwan said many companies had suspended providing domestic appliances after various taxation measures, while many dealers are also not income tax filers.
According to figures of Pakistan Bureau of Statistics (PBS), production of refrigerators plunged by 24pc to 1.093 million units in FY19 while deep freezer sales soared by 39pc to 186,545 units in FY19.
A sales representative in Karachi of a Lahore based domestic appliances making company said the overall sales of domestic appliances shrank by 20-25pc in the last two months due to high prices.
3. Salary tax slabs for filing returns tax year 2019 – PK
KARACHI: The salaried person shall follow the following slabs for filing income tax returns for tax year 2019 which is due on September 2019.
01. Where the taxable income does not exceed Rs400,000 the tax shall be zero.
02. Where the taxable income exceeds Rs400,000 but does not exceed Rs800,000 the tax amount shall be Rs1,000.
03. Where the taxable income exceeds Rs800,000 but does not exceed Rs1,200,000 the tax amount shall be Rs2,000.
04. Where the taxable income exceeds Rs1,200,000 but does not exceed Rs2,500,000 the tax shall be 5 percent of the amount exceeding Rs. 1,200,000.
05. Where the taxable income exceeds Rs2,500,000 but does not exceed Rs4,000,000 the tax shall be Rs65,000 + 15 percent of the amount exceeding Rs2,500,000.
06. Where the taxable income exceeds Rs4,000,000 but does not exceed Rs8,000,000 the tax shall be Rs290,000 + 20 percent of the amount exceeding Rs4,000,000.
07. Where the taxable income exceeds Rs8,000,000 the tax shall be 1,090,000 + 25 percent of the amount exceeding Rs8,000,000.
Provided that where the taxable income exceeds eight hundred thousand rupees the minimum tax payable shall be two thousand rupees.
The Federal Board of Revenue (FBR) has issued the final income tax return forms for all categories of taxpayers in order to ensure to complete return filing by September 30, 2019.
4. Benami property holder may get 7 years jail, pay 25pc as fine – PK – 7.9.19
ISLAMABAD: A person holding Benami property shall be liable to punishable offence with rigorous imprisonment up to seven years along with fine up to 25 percent of value of the property.
According to Benami Transaction (Prohibition) Act, 2017 penalty for benami transactions has been explained under Section 51 of the Act.
Section 51. Penalty for Benami Transactions:
Sub-Section 1. Where any person enters into a benami transactions or holds benami property in order to defeat the provisions of any law or to avoid payment of statutory dues or to avoid payment to creditors, the beneficial owner, benamidar and any other person who abets or induces any person to enter into the banami transaction, shall be guilty of an offence of benami transaction.
Sub-Section 2. Whoever is found guilty of the offence of benami transaction or holding benami property referred to in sub-section (1) shall be punishable with rigorous imprisonment for a term which shall not be less than one year, but which may extend to seven years and shall also be liable to fine which may extend to twenty-five percent of the fair market value of the property.
Section 52. Penalty for false information
Any person or any officer, who is required to furnish information under this Act, knowingly gives false information to any authority or furnishes any false document in any proceeding under this Act shall be punishable with rigorous imprisonment for a term which shall not be less than six months but which may extend to five years and shall also be liable to fine which may extend to ten percent of the fair market value of the property.
Section 53. Previous sanction
No prosecution shall be instituted against any person in respect of any offence under section 51 or section 52 without the previous sanction of the Board.
5. FBR, traders fail to break deadlock – PPT – 7.9.19
ISLAMABAD: Negotiation between the Federal Board of Revenue (FBR) and traders have collapsed after the traders once again refused to become part of the formal economy, claimed a report in The Express Tribune.
The decision of the traders to not become part of the formal economy has been a hindrance in the government’s plans to document the economy.
According to the report, the traders threatened to use their street power if the government did not show flexibility, reminding the government that they had even brought the former president Pervaiz Musharraf to his knees.
The government made it mandatory for industrialists to seek the Computerized National Identity Card (CNIC) from wholesalers and distributors on sales of over Rs50,000. The move pitched the traders and small shopkeepers against the government.
FBR Chairman Shabbar Zaidi last month constituted a joint committee of the FBR, tax experts and the traders representative to resolve the issue at the earliest and delayed enforcement of CNIC condition on purchase of over Rs50,000 till September 30.
The CNIC condition is also binding for the consumers, as it will help the FBR track the real income of the people, FBR Chairman Shabbar Zaidi is quoted as saying in the report.
6. FBR issues finalized return forms for companies – PK – 7.9.19
ISLAMABAD: Federal Board of Revenue (FBR) has issued finalized return forms for companies. The FBR issued SRO 1000(I)/2019 to issue the final return form for tax year 2019.
The FBR has previously issued draft corporate return form through SRO 968(I)/2019 on August 29, 2019.
The companies having accounting year between July 01 to December 31 shall required to file their income tax returns by September 30, 2019. Therefore, such companies will have only 24 days to file their annual returns for tax year 2019.
The finalized corporate return form can be downloaded here.
The FBR has already issued finalized income tax return forms for salaried persons, business individuals and Association of Persons.
Although time for return filing is short and the date may be extended. However this year the FBR directed chief commissioners of Inland Revenue to ensure tax payment deposit by September 30 before allowing date extension.
7. FBR seeking IT firm for electronic monitoring of tobacco products – CN – 7.9.19
KARACHI: The Federal Board of Revenue (FBR) has Invitation for License (IFL) for IT-based solutions for electronic monitoring of tobacco products in the country.
FBR is seeking applications for the grant of five-year license to track and trace cigarettes in Pakistan. The licensee will be responsible for end-to-end installation and operation of track and trace system connecting cigarette manufacturing sites and import stations to the FBR and law enforcement officials.
The last date of submitting the application /proposal is September 20, 2019.
The track and trace system would include the provision of tax stamps and integrated codes to enable real time electronic monitoring of the cigarette supply chain throughout the country.
The tobacco sector in Pakistan contributed significant revenue to the Federal Board of Revenue (FBR) in 2018-19 amounting to Rs 117 billion (Rs 90.854 billion FED and Rs. 26.147 Billion sales tax).
However, Pakistan is also facing problem with the illicit trade in tobacco products, which includes undeclared local production, smuggling of tobacco products of foreign brands and counterfeit production. According to FBR estimates, the illicit trade in tobacco products costs Pakistan more than Rs. 20 billion a year.
In order to prevent leakage of revenue, under-reporting of production and sales of tobacco products and to ensure proper payment of FED and Sales Tax on the manufacture and sale of tobacco products, the FBR is mandated to licence the implementation of a track and trace system; which is to be developed, operated and maintained by the licensee for tobacco products manufactured in and imported into Pakistan.
To this end, the FBR is inviting applications for grant of licence to be issued under the Sales Tax Rules of 2006 for the development, maintenance and operation of track and trace system in accordance with the provisions of the rules and the instructions specified herein below.
The successful applicant in compliance with SRO. 250(I)/2019 dated 26.02.2019 shall implement a track and trace system, including high security tax Stamps/Markers/Codes which includes unique, secure and non-removable identification markings combined with state-of-the-art electronic monitoring and tracking systems, for the purpose of protecting existing revenue and to facilitate the generation of further revenue streams through the effective reduction of the illicit trade of tobacco products in Pakistan.
Pakistan ratified the Framework Convention on Tobacco Control (FCTC) on 3 rd November 2004 and acceded to the FCTC Protocol to Eliminate Illicit Trade in Tobacco Products on 29th June 2018. Article 8.2 of the FCTC Protocol requires Pakistan to establish a tracking and tracing system, to be controlled by Pakistan, for all tobacco products that are manufactured in, imported into or transiting through its territory.
Pakistan has to embark on a project to implement a track and trace system for tobacco products to meet its national need to monitor and protect its revenues and address the high level of illicit trade within its borders, and to meet its international obligations under FCTC to implement a track and trace system that can form part of a regional and/or global international track and trace regime for tobacco products.
300+Company Laws News
1. PPAs executed before January 1, 2019: Companies granted exemption from IFRS requirements – BR
The Securities and Exchange Commission of Pakistan (SECP) has granted exemption from requirements of International Financial Reporting Standards (IFRS) to all companies that have executed their power purchase agreements before January 1, 2019.
According to SRO 986 (I)/2019 issued by the SECP here on Saturday, in exercise of the powers conferred by section 510 read with subsection (3) of section 225 of the Companies Act, 2017 and in partial modification of SRO 24(I)/2012, dated 16th January, 2012, the SECP hereby grants exemption from requirements of International Financial Reporting Standards (IFRS) to all companies that have executed their power purchase agreements before January 1, 2019, as follows: (a) IFRS 16 (Leases) to the extent of the power purchase agreements executed before the effective date of IFRS 16 ie January 1, 2019; (b) International Accounting Standard 21 (The Effects of Changes in Foreign Exchange Rates) to the extent of capitalization of exchange differences; (c) In case of capitalization of exchange differences under (b) above, recognition of embedded derivative under IFRS 9 (Financial Instruments) shall not be permitted.
Through SRO 985 (I)/2019, the Commission has notified that, in respect of companies holding financial assets due from the government of Pakistan, the requirements contained in “IFRS 9 (Financial Instruments) with respect to application of Expected Credit Losses method” shall not be applicable till 30th June, 2021, provided that such companies shall follow relevant requirements of IAS 39 – Financial Instruments: Recognition and Measurement, in respect of above referred financial assets during the exemption period.
2. SECP revokes SITE’s licence; bank accounts seized – PPT – 7.9.19
KARACHI: Revocation of its licence by the Securities and Exchange Commission of Pakistan (SECP) led to at least five bank accounts being seized of Sindh Industrial Trading Estates (SITE), claimed a report in The News.
Sources in the report said at least five bank accounts of the SITE Ltd have been seized – one each in Karachi, Nooriabad, Kotri, Hyderabad and Sukkur. Four of the bank accounts were maintained with the National Bank of Pakistan and one account was in Habib Bank Limited.
According to the report, SITE Ltd. Managing Director Zubair Pervez said only two bank accounts of the company in Sindh Bank were seized.
“We have not received any letter of revocation of the licence from the SECP,” said MD SITE. “We were in the process of getting our licence renewed from the SECP.”
The report cited sources as saying that SITE Ltd. hasn’t conducted its audit for the last 30 years,although it was incorporated in 1947.
According to the company rules, all companies registered with the SECP, including not-for-profit companies have to get themselves audited every year. The SECP could revoke their licences if they fail to do so.
SBP, Bank & Financial Institution
1. Insurance sector growth continues; assets increase to Rs1,207 billion – PK
KARACHI: The assets for the Life Insurance sector grew by 11.92 percent to Rs1,207 billion for CY18 as life insurers increased their Total Investments by 13.52 percent to Rs997 billion; investments now constitute 82.63 percent of total assets, State Bank of Pakistan (SBP) said in a report.
Low insurance penetration (0.83 percent of GDP) indicates that there is room for growth in the Pakistani insurance sector (Global insurance penetration = 6.3 percent in 2016), the SBP said in Financial Stability Review (FSR) 2018.
The asset base for the insurance sector has been estimated to have grown by 10.88 percent to Rs1,435 billion as of December 31, 2018 mainly due to an increase in the Life Insurance business.
Investments and properties have registered an increase of 12.11 percent to Rs1,128 billion as of December 31, 2018. Equity for the industry has increased by 5.87 percent to Rs119 billion in CY18 as insurers try to comply with the enhanced regulatory paid-up capital requirements.
Life insurers are considered among the large institutional investors for capital and debt markets.
Given the volatility in the financial markets, life insurers have decreased their share of investment in equities from 20.32 percent in CY17 to 18.10 percent in CY18 while increasing their share of investment in fixed income and term deposits from 1.93 percent in CY17 to 5.38 percent in CY18.
Life insurers continue to have a significant portion (76.14 percent in CY18) of their investments in government securities.
In addition, the dominant public life insurer has increased its investments in properties by 14.82 percent to Rs3.7 billion; overall, investment in properties constitutes 0.37 percent of total investments in CY18.
Growth rate comparison of real GDP and real gross premiums for the life sector shows a positive correlation indicating that an increase in economic activity may lead to an increase in gross premiums for Pakistan.
Total gross premium for Life insurance sector has increased to Rs203 billion in CY18 from Rs185 billion in CY17. The increase of 19.46 percent in Subsequent Year Premium to Rs109 billion, coupled with the 12.55 percent YOY increase in Second Year Premium, signifies that the sector has been able to retain its business.
Moreover, the First-Year Premium to Gross Premium sustained its growth of 9.40 percent in CY18 indicating that the sector sustained issuance of new insurance policies.
The increasing interest rate environment may have led policyholders to look for better rates, which may have led to redemption of policies; this is supported
by the spike in Surrender Claims in CY18.
However, there has been a substantial decline in Single Premium from Rs16 billion in CY17 to Rs7 billion in CY18 as a private life insurer registered a significant decrease in this category over the last year. This policy (along with other life insurance policies) is used to claim tax rebate.
The reduction in tax rates in 2018 along with the prevailing inflationary pressures (which reduces the net future value of the upfront single premium) may have lowered the demand for this product, as they may no longer form an attractive tax saving option, the SBP said.
Life insurers are required to maintain statutory funds in respect of each class of life insurance business; statutory finds are separate from shareholders’ fund, which contains only those assets and liabilities that are solely attributable to the life insurer.
Analysis of statutory funds indicates that Family Takaful Fund has shown extraordinary growth for Gross Premiums in CY16 and CY17 of 1190.61 percent and 136.58 percent, respectively. While this illustrates the widespread demand for an Islamic alternative to conventional insurance, the growth rate of Gross
Premiums for Takaful Fund is extraordinary because of the small base in 2015. This is demonstrated by the lower (albeit still impressive) growth rate of 34.61 percent to Rs14 billion in Gross Premiums for Takaful Fund in CY18.
Ordinary Life, which includes individual and group insurance, still forms the largest statutory funds; its Gross Premiums have increased from Rs100 billion in CY17 to Rs112 billion in CY18.
Due to the initiatives of one of the provincial government to increase health coverage for its population, the gross premium for the public life insurer’s Health Investment Fund has increased by 38.83 percent to Rs5 billion in CY18. It is expected that there will be further growth in this Fund as the federal government has re-launched a national-wide health insurance program.
Claims under individual policies increased from Rs63 billion in CY17 to Rs72 billion in CY18. This was mainly due to increases of Rs4 billion and Rs3 billion to Rs44 billion and Rs16 billion in Surrender Claims and Maturity Claims, respectively.
Surrender Claims, forming 49.24 percent of Gross Claims for CY18, have registered a 19.05 percent YOY increase, indicating that significant number of policyholders are exiting from their insurance policies before maturity; this development may lead to maturity mismatches for the sector.
Several factors have led to an increase in Surrender Claims including the prevailing financial market conditions, which has reduced the value of unit-linked policies (with significant investments in equities); this, coupled with the increasing interest rates, may possibly lead policyholders to surrender their policies in search of higher yields.
In addition, in order to meet their sales targets, agents may encourage recycling of policies, which increases Surrender Claims.
While the Life Insurance sector is relatively stable, some of its indicators have started to deteriorate slightly. Return on Assets has decreased from 0.79 percent in CY17 to 0.69 percent in CY18, as there was only a marginal increase in profitability compared to a significant increase in the asset base for the sector.
Profitability was affected due to an increase in management and marketing expenses as some insurers invested in their branch network, salesforce, IT software, etc. for higher future returns.
In addition, the Claims Ratio has increased from 41.91 percent in CY17 to 43.83 percent in CY18, which is still quite comfortable. In addition, the Return on Investments has increased from 7.10 percent in CY17 to 8.08 in CY18 due, in part, to a tightening of monetary policy in CY18 as the sector maintains a significant portion of investments (76.14 percent) in government securities, the SBP said.
2. Investment in premium prize bonds grows by 115 percent after ban on bearer instruments – PK – 7.9.19
KARACHI: The investment in premium prize bonds of Rs40,000 denomination has increased sharply by 115 percent following the ban imposed by the government on bearer instrument of same denomination.
The investment in registered premium prize bonds has increased to Rs13.26 billion by July 2019 as compared with Rs6.17 billion by end of May 2019, according to data released by State Bank of Pakistan (SBP) this week.
The bearer instruments have been known as parking lot for undocumented economy. Therefore, the government launched registered prize bonds of Rs40,000 denomination in March 2017 which could be purchased against certain requirements including Computerized National Identity Card (CNIC) and valid bank account.
The government on June 24, 2019 announced to discontinue the circulation of Rs40,000 denomination national prize bonds.
According to official statistics made available to The News on Friday, the total investment in bearer prize bonds of Rs40,000 denomination fell to Rs81.38 billion by July-end 2019 as compared with Rs258 billion in May 2019.
The State Bank of Pakistan (SBP) has stopped banks from issuing prize bond denomination of Rs40,000 with immediate effect and also issued instructions regarding conversion into registered bonds and encashment.
The SBP on June 24 issued the following instructions regarding handling of Rs.40,000/- denomination National Prize Bonds are issued herewith for information, guidance and meticulous compliance:
a) National Prize Bonds of Rs.40,000/- denomination shall not be sold after June 24, 2019 and will not be encashed/redeemed after March 31, 2020.
b) No further draws of Rs.40,000/-denomination National Prize Bonds shall be held.
c) Cash payment for encashments of bonds is not allowed. However, the bond holder (s) shall have the following options to replace / encash these bonds:
1. Conversion of premium prize bonds (registered)
2. Replacement with special saving certificate (SSC)/Defence Saving Certificate (DSC)
3. Encashment at face value.
d) Appended below is the SOP for processing requests under the aforementioned options for compliance by all banks:
1. Conversion to Premium Prize Bonds (Registered)
i. The bonds can be converted to premium prize bonds (registered) through the 16 field offices of SBP Banking Services Corporation, and authorized branches of six commercial banks i.e. National Bank of Pakistan (NBP), Habib Bank Limited (HBL), United Bank Limited (UBL), MCB Bank Limited (MCB), Allied Bank Limited (ABL) and Bank Alflah Limited (BAFL).
ii. The bond holder shall be required to submit a written request for conversion of bearer bonds to premium prize bonds (registered) to be registered in his (her) name on the prescribed application.
iii. The bond holder shall also be required to submit prescribed applications forms for registrations / purchase of premium prize bond as per the procedure in vogue.
Replacement with the Special Saving Certificate (SSC)/Defence Saving Certificate (DSC)
i. The bonds can be replaced with SSC / DSC through the 16 field offices of SBP Banking Services Corporation, authorized commercial banks and National Savings Centers.
ii. All authorized commercial banks shall, therefore, accept requests for replacement of bearer bonds with SSC or DSC on the prescribed application form.
iii. The bondholder shall also be required to submit application form for purchase of SSC/DSC (SC-1) as per the prescribed procedure.
Encashment at Face Value:
i. The bonds will only be encashed by transferring the proceeds to the bond holder’s bank account through the 16 field offices of SBP Banking Services Corporation as well as the authorized commercial bank branches.
ii. All commercial banks shall receive requests for encashment of bearer bonds on the prescribed application form.
A cop of the application form, duly signed and stamped, shall be provided to the bondholder as an acknowledgement receipt.
The SBP said that it is needless to mention that the National Prize Bonds of Rs40,000 denomination tendered at the counters of banks shall be subject to through scrutiny to ascertain their genuineness. In this regard, details regarding the security features in Rs40,000 denomination National Prize Bonds are available online.
Moreover, the prize bonds encashed / replaced by general public may be surrendered to concerned SBP BSC office through respective regional office of the commercial banks. For the purpose, the regional office may intimate the SBP BSC office three days in advance so that necessary arrangements for receipt of the bonds can be made.
It is imperative to mention that a notice regarding the above / mentioned facilities must be displayed at prominent places within branch premises for awareness and information of general public.
The SBP said that the bearer prize bonds of Rs40,000 cannot be exchanged against cash. However, it can be redeemed against registered prize bonds or can be converted into national saving schemes or face value (direct transfer to the bank account of bond bolder).
The SBP informed the banks that such prize bonds would not be sold after June 24, 2019 and would also not be encashed/redeemed after March 31, 2020. No further draws of Rs40,000 denomination national prize bonds shall be held.
Due to the ban the investment in bearer bonds of Rs40,000 denomination fell to Rs81.379 billion by July 2019 from Rs258.8 billion by end of May 2019.
3. SBP governor urges private sector to follow rules – PPT – 7.9.19
State Bank of Pakistan (SBP) Governor Dr Reza Baqir on Saturday emphasised the need for the private sector to abide by the government’s rules and regulations.
Talking to members of the business community at the Federation of Pakistan Chambers of Commerce & Industry (FPCCI)-Lahore, he said that stabilization of the national economy was among the government’s topmost priorities.
“The private sector’s growth is vital for the country’s stability. Businesses cannot grow without resolving the issues faced by the sector,” he maintained.
He said owing to the prudent policies of the government, the country’s exports registered a growth of 10 to 20 per cent during the last fiscal year.
“The government wants to see the private sector expand so that new employment opportunities are created and market competitiveness is ensured,” he said.
Previously, he lamented, whenever trade deficit climbed, the exchange rate was not adjusted accordingly. “It is important to keep in view the demand and supply situation of the country while formulating an exchange rate policy.”
Dr Baqir said the current economic situation was way better than what it was six months ago. “We brought reforms and signed a $6-billion agreement with the International Monetary Fund (IMF) to navigate economic challenges,” he added.
He said the government could bring a new policy to facilitate Small and Medium Enterprises (SMEs).
4. SBP fines 10 banks in excess of Rs800 million – PPT – 7.9.19
KARACHI: The State Bank of Pakistan (SBP) has imposed penalties on ten banks amounting to Rs805 million for violation of Anti-Money Laundering and Counter Financing of Terrorism (AML/CFT) laws.
In a circular, SBP laid out details of the amount of fine on each bank and the reason for it. Habib Bank Limited received the biggest fine of Rs Rs320.08 million amongst all banks.
Other banks include MCB Bank, Dubai Islamic Bank, JS Bank, Silk Bank, Bank Alfalah, Allied Bank, Sindh Bank, Summit Bank, and Habib Metropolitan Bank.
The strict actions and penalties, as well as their public disclosure, suggests that the issue of AML/CFT compliance is being pursued by the regulator under strict guidance from the Financial Action Task Force (FATF) to help pull the country out of the grey list.
It is important to note that the fines weren’t just for non-compliance of AML/CFT laws, but also included areas of “erroneous deduction of service charges from customers” to poor implementation of Know-Your-Customer policies as well as inadequate monitoring of asset quality.
SBP had previously imposed Rs186 million fine on four banks owing to non-implementation of AML laws in August this year.
Market News (Stock, Currency, Oil, Gold, Textile & Cotton)
1. Stock brokers resent exclusion from reforms process – TN
KARACHI: Brokers have expressed disappointment over exclusion from the reforms process initiated by the government to rev up the stocks market that lost more than 32 percent in one year, sources said on Saturday.
The sources alleged that Stock Brokers Association (SBA) has been left out from the process of reforms. The Securities and Exchange Commission of Pakistan constituted a committee comprising of senior market professionals / stakeholders to review the current market situation and provide recommendations for increasing liquidity, promoting ease of doing business and addressing practical difficulties being faced by market participants.
The sources said the SECP chose 18 professionals from large brokerage houses out of total 240 brokerage houses, which comprise of large, medium and small companies.
“Only a handful of people from large brokerage houses were selected in the committee,” an official said, requesting anonymity. “Hence, fate of 222 stock members will be decided by a handful of large companies.”
The sources said the SBA has not been considered to be added in the committee. “Therefore any decision by such committee would protect only the interest of few large brokers and hence their decisions would be biased and unacceptable to the TREC (trading rights entitlement certificate) holders at large,” a source in the SBA said.
The SECP said the committee was formed in consultation with the relevant stakeholders. The committee was tasked to review existing stock market conditions including trading volumes and recommend measures to enhance liquidity and remove hurdles if any towards active trading. They would identify the issues being encountered in the deliverable future contracts, analyse effect of recent reforms and provide recommendations to address any genuine concerns or practical difficulties identified. The committee members are expected to spot regulatory requirements, which may be hampering the growth of market or creating unnecessary burdens and provide suggestions for reform measures.
The committee could form sub-committees or invite participation from financial institutions and small brokerage houses, including Lahore and Islamabad -based brokers, while formulating its recommendations. The SECP asked the committee to submit its recommendations / report to the commission within one month.
Pakistan Stock Exchange started its journey from 42,446 points with market capitalisation standing at Rs8,703 billion when the government took office in August last year.
The stock exchange received heavy battering and the benchmark index trimmed 32 percent or 13,682 points during the year. Market capitalisation fell more than Rs2,797 billion with key scrips plunging sharply.
Brokerage Topline Research, however, said investors sentiment turned positive after long-awaiting measures regarding improving liquidity on the stock exchange were finally announced by the SECP. Main measures include relaxation of margin requirement for brokers and introduction for Murabaha share-financing.
2. Bullish week on PSX – D
KARACHI: After a volatile trade, the stocks closed the week on a positive note underpinned by encouraging news flow that convinced investors in varying degrees. The KSE-100 index gained 795 points (2.68 per cent) week-on-week and settled at 30,467 points.
The rally was built on the SECP’s major reforms announced at the preceding weekend to rejuvenate the capital market and promote ease of doing business. Moreover, the change in CPI methodology revealed a lower than anticipated reading at 10.49pc for August which the market hoped raised the likelihood of a policy rate cut. There was not much improvement in the rupee-dollar parity, price of gold and fixed income returns from banks and national savings schemes, that could suck out liquidity from the market.
The third trading session also witnessed withdrawal of presidential ordinance which was signed to waive off 50pc of outstanding GIDC overdue from the CNG, power, fertiliser and industrial gas consumers.
Moreover, the prime minister’s meeting with businessmen to facilitate economic activity also emboldened investors. Although at the close of trading on the last day, there were reports of an IMF mission on its way to Pakistan to take stock of the financial indicators, the government explained that there was no reason to be alarmed as it was a routine visit.
Finally, the SBP’s foreign exchange reserves increased for third week in a row (though by a minor sum), which was a relief, considering downwards movement for weeks on end.
Foreign investors ditched stocks worth $5.32m in the outgoing week (four days) compared to net buying of $0.97m the preceding week. Major foreign selling was witnessed in commercial banks amounting to $3.05m, cements $2.44m and oil and gas $2.4m.
On the local front, buying was reported by Individuals of stocks worth $6.15m followed by other organisations $4.10m.
Average daily turnover in the outgoing week declined 24.9pc week-on-week to 93m share while average traded value decreased 23pc to $23.3m. Scrips that led the volumes included MLCF (7.17m shares), WTL (4.58m shares), OGDC (4.22m shares), DGKC (2.66m shares) and PAEL (2.64m shares).
SThe major issue that could determine the direction of the market going forward is the definitive decisions by FATF in its meetings on Sept 9-10 in Bangkok to discuss Pakistan’s progress to control terror financing.
It would determine whether the country remains on the greylist or is blacklisted. The IMF staff is also scheduled to visit Pakistan on Sept 17. Based on lower inflationary figures for August, optimists expect rate cut by the State Bank of Pakistan. The Monetary Policy Statement is due in the last week of this month.
3. Index likely to remain range-bound amid lack of triggers – TN
Stocks recovered during the outgoing week with renewed buying interest from key players and financial institutions mainly on grounds that the lower inflation rate has given room to cut the interest rate.
The Pakistan Stock Exchange (PSX) benchmark KSE-100 shares index surged 2.68 percent or 795 points on week on week basis and closed at 30,467 points level. Overall market activity went down 25 percent as average daily turnover stood at 93 million shares, while average daily value saw a dip of 26 percent on week on week basis to $22 million.
Foreign investors continued to remain net sellers during the outgoing week, offloading scrips worth $5.45 million (four days). This was mainly concentrated in oil and gas $2.4 million, commercial banks $2.4 million, and cements $2.3 million. Amongst local participants, individuals $5.3 million and NBFCs $1.9 million provided most of the liquidity.
Contribution to the upside was led by oil and gas exploration companies (299 points) amid rising international oil prices WoW, commercial banks (152 points), power generation and distribution (103 points), oil and gas marketing companies (75 points), and fertiliser (49 points).
Based on NCCPL data, foreigners remained net seller amounting to $5.45 million. On the local’s side, mutual funds remained net sellers of $3.11 million, while individual remained net buyers of $6.15 million.
The government has decided to take back the controversial Gas Infrastructure Development Cess amendment ordinance promulgated last week that offered Rs210 billion financial relief to big industrial consumers of gas.
The government will also ask the Supreme Court to club all stay orders issued by various high courts and itself take an expedited decision in ongoing cases on the GIDC. However, fertiliser sector showed mix trends during the week with an overall gain of 0.27 percent on week on week basis.
Oil prices edged higher on Friday, with crude poised for multi-week gain amid a sharp drawdown in US inventories, while trade tensions eased after Washington and Beijing agreed to hold high-level talks next month.
In line with international crude and Brent prices, the E&P sector was amongst the best-performing sectors during the week with a weekly gain of 6.73 percent.
An analyst from Habib Metro-Finance said, “In the days to come, we expect the PSX-100 to underperform with range-bound trading sessions amid lack of triggers and deteriorating macroeconomic conditions.”
Staying on the sidelines with ample liquidity for value hunting in blue-chip stocks would be a wise strategy, the analyst added.
An analyst from BMA Capital Management said a meeting of the Financial Action Task Force was scheduled to be held in Bangkok on September 9, 2019, to discuss the progress Pakistan has made against terror financing. Any positive development on this front might boost to investor sentiments.
“We believe upcoming T-Bill auction (September 11), PIB auction (September 18) and monetary policy announcement (due in last week of September) will be the key events for the direction of interest rates. IMF staff is also scheduled to visit Pakistan on September 17 to review,” he added.
4. KSE-100 endures mixed week – ET
The volatile movements of the Pakistan stock market continued as the index recovered from the past week’s blow to post gains in the outgoing week. The KSE-100 index soared 795 points or 2.7% to settle over the 30,000-mark.
Trading kicked off on a positive note as investors reacted with euphoria to the host of measures approved by the Securities and Exchange Commission of Pakistan over the weekend. The SECP announced major reforms to rejuvenate the capital market and promote ease of doing business. Moreover, expectations of a lower inflation reading and issuance of the presidential ordinance to waive over Rs300 billion GIDC dues also kept the mood upbeat on the first trading day of the week.
However, the trend could not be sustained and the index tumbled into the red zone as participants succumbed to profit-taking. The persistent selling pressure dragged the index to fall below the 30,000 barriers. The tables turned on Wednesday as the market reversed gears on the back of lower-than-expected inflation reading, which provided a boost to sentiments.
The following two sessions witnessed mixed trend as the KSE-100 retreated on Thursday and recovered on the last trading day of the week. Overall, activity was marred by a lack of positive triggers and the prevailing uncertainty, particularly due to issues on the eastern border. Among some positive developments, news of the PM’s meeting with businessmen to facilitate economic activity also emboldened investors, whereas ECC’s decision to offer a simplified tax regime to non-resident companies to attract foreign exchange flows also enticed market players.
Market activity slowed, as average daily volumes for the outgoing week were down by 25% to 93 million shares, likewise, value traded decreased by 23% to $22.3 million.
Contribution to the upside was led by oil and gas exploration companies (up 299 points) amid rising international oil prices, commercial banks (152 points), power generation and distribution (103 points), oil and gas marketing companies (75 points), and fertiliser (49 points).
Scrip-wise, major gainers were HBL (up 127 points), OGDC (126 points), PPL (118 points), HUBC (87 points), and POL (41 points). On the other hand, MEBL (down 32 points), THALL (19 points), and HASCOL (12 points) dragged the index lower.
Foreigner’s offloaded stocks worth $5.32 million compared to a net buy of $0.97 million last week. Major selling was witnessed in commercial banks ($3.05 million) and cement ($2.44 million). On the local front, buying was reported by individuals ($6.15 million) followed by other organisations ($4.10 million).
Other major news of the week included; ADB expected to lend $10 billion in next five years, economy now capable of absorbing shocks: SBP chief, consumer inflation marginally increase to 10.5% in August, controversial GIDC ordinance withdrawn, and SBP’s foreign exchange reserves inch up $9 million to $8.28 billion.
5. KSE-100 Index down 11 percent YTD – BR
Despite some brief flashes of characteristic brilliance (in mid-August), the KSE-100 Index has declined by 11 percent during year-to-date (YTD) FY20, analysts said. Among the major sectors, oil and gas upstream and downstream were the worst performers, with OMCs, refineries and E&Ps providing negative returns of 23 percent, 19 percent and 18 percent, respectively.
Fertilizers (down 2 percent), engineering (down 5 percent) and textile composite (down 6 percent) fared relatively better among the major sectors, an analyst at JS Global Capital said. Looking at flows, the major sellers during the period were mutual funds, with $79.2 million of selling and insurance companies at a distant second with $9.8 million worth of selling.
This selling activity was mainly absorbed by individuals ($48.5 million), foreigners ($21.3 million) and banks/DFIs ($10.0 million). On a sector-wise basis, the largest sellers in E&Ps were foreigners ($11.1 million), insurance companies ($10.8 million) and mutual funds ($9.5 million), which was largely absorbed by Individuals ($16.8 million) and banks/DFIs ($7.7 million), analysts said.
The same story persisted in cements, where mutual funds and insurance companies were among the major sellers, whereas foreigners were the major buyers in the sector.
Fertilizers, banks/DFIs and cements constituted nearly half of the total selling activity of mutual funds. Looking at it closely, most of the funds” selling in cements and banks was absorbed by foreigners, whereas fertilizer was largely mopped up by individual investors.
Among individuals who stood as the top buyers in the market, half of their buying was constituted in E&Ps and fertilizers, analysts added.
6. Weekly Review: stock market to remain positive on rate cut hopes – PK – 7.9.19
KARACHI: The stock market to remain positive during next week owing to hopes of rate cut by the central bank on latest inflation numbers.
Analysts at Arif Habib Limited on Saturday forecast that the market to remain positive on the back of expectation of a rate cut earlier than prior estimates after recent reduction in inflationary reading (Monetary Policy Statement due in last week of September 2019).
On the other hand, government’s focus to manage twin deficit and domestic tax collection which increased by 28 percent, should trigger economic stability.
However, FATF meeting is scheduled on the September 09, 2019, to discuss Pakistan’s progress to control terror financing by undertaking corrective measures, whereby any undesirable news on this issue could pose risk to the market performance.
This week trading commenced on a positive note post issuance of a presidential ordinance on GIDC.
Whereas SECP undertook major reforms to rejuvenate the capital market and promote ease of doing business.
On the other hand, change in CPI methodology revealed a lower than anticipated reading by 114 basis points of 10.49 percent in August 2019 which increases the likelihood of a policy rate cut.
Furthermore, stability was witnessed in the PKR-USD parity. As a result, the benchmark KSE-100 index closed above 30,000 mark at 30,467 points, increased by 795 points or 2.68 percent WoW.
Contribution to the upside was led by i) Oil and Gas Exploration Companies (+299 points) amid rising international oil prices WoW, ii) Commercial Banks (+152 points), iii) Power Generation and Distribution (+103 points), iv) Oil and Gas Marketing Companies (+75 points), and v) Fertilizer (+49 points).
Scrip wise major gainers were HBL (+127 points), OGDC (+126 points), PPL (+118 points), HUBC (+87 points), and POL (+41 points).
Whereas, scrip wise major losers were MEBL (-32 points), THALL (-19 points), and HASCOL (-12 points).
Foreigner’s offloaded stocks worth USD 5.32 million compared to a net buy of USD 0.97 million last week.
Major selling was witnessed in Commercial Banks (USD 3.05 million) and Cements (USD 2.44 million).
On the local front, buying was reported by Individuals (USD 6.15 million) followed by other organizations (USD 4.10 million).
That said, average daily volumes for the outgoing week were down by 25 percent to 93 million shares likewise value traded decreased by 23 percent to USD 22.3 million.
7. Rupee may strengthen – TN
The rupee is likely to gain next week on improved inflows related to export receipts and workers’ remittances.
The local currency appreciated by 28 paisas during the outgoing week on improved inflows of exports and remittances.
The country received around $450 million on account of payment by two telecommunication companies as licence renewal fee.
Reportedly, more inflows under the head of licence renewal fees are expected in the coming days, which will help the country boost its foreign exchange reserves.
The foreign exchange reserves of the country were at $15.619 billion by the week ended August 30, 2019. Of these the official reserves of the central bank stood at $8.28 billion.
The amount received from cellular companies was not added to the total foreign exchange reserves. According to reports Jazz and Telenor paid $224.6 million each on September 3 to the Pakistan Telecommunication Authority (PTA) for renewal of their licence.
The local currency may witness appreciation on the back of contraction in trade deficit during the current fiscal year.
The trade deficit has been narrowed by 28.84 percent in July 2019 to $2.27 billion from $3.19 billion in the same period of the last year.
The contraction in trade deficit can be attributed to a steep fall in the overall import bill even though export proceeds posted a mixed trend during the same period.
The numbers of foreign trade for the month of August has not been made public so far, but the government official believed the trade deficit may further contracted in the two months of the current fiscal year.
The rupee value was also improving due to measures taken in the budget 2019/20 to discourage import of nonessential and luxury goods.
The currency experts; however, believed the repayment of foreign debt may put pressure on the local unit.
The total public external debt of the country increased to $83.93 billion by June 30, 2019, compared with $75.35 billion on the same date of the last year. Of these the government debt increased to $67.8 billion from $64.14 billion.
During the outgoing week, the rupee gained 28 paisas, as it was at Rs156.63 to the dollar on September 2 and closed the week at Rs156.35 to the dollar on September 6 in the interbank foreign exchange market.
Experts said Pakistan needs to increase its exports and manufacturing activities in order to ease uncertainties and further improve the rupee value.
8. Crude producers mull strategy shift – D
Are the Organisation of Petroleum Exporting Countries (Opec) and their allies, the Opec+, a group of 24 oil-producing countries — including the two heavyweights Russia and Saudi Arabia — finally ready to abandon their ‘whatever it takes strategy’?
In the wake of a deteriorating global crude demand growth outlook and a protracted trade dispute between the US and China, the group has struggled to shore up crude futures this year. And, in the process, Opec’s share of the global oil market has dwindled to the lowest level in several years in August this year – 30 per cent.
Has their strategy worked? Apparently, not.
Despite the efforts, crude markets have fallen nearly 20pc from a year ago, as the US, China trade war escalated and its toll on the global economy became more apparent.
For the time being, rather than anything else, crude markets seem more focused on the ongoing trade war between the US and China. Output cut is not really weighing on the market psyche.
The Opec+ is not oblivious to all this. It is alive to its limits at controlling and influencing the global crude markets. Hence some are now saying, the group is shifting its strategy, abandoning in the process, its current strategy of influencing the markets by cutting output. The policy has also resulted in the loss of their market share.
New signs are now emerging. Although the Opec+ is still over complying with the output quotas as agreed upon in the production restraint arrangement, yet, Opec has already begun loosening the shackles on output.
Not only Saudi Arabia raised its output, the volume of crude oil and condensate exports from Saudi Arabia, and the UAE also went up by 300,000bpd. Iraq’s exports also increased by 150,000bpd.
Russia-the largest non-Opec member that signed onto the production cut deal also increased its production in August.
In the above backdrop, Opec and its non-Opec partners are scheduled to meet in Abu Dhabi later this week to review their progress in stabilising world oil markets – by managing the group’s output.
In the changing market scenario, it is becoming increasingly difficult for some Opec players to adhere to the rules of the game under the output restraint arrangement. They cannot continue to lose market share.
9. Gold unchanged – TN
KARAHI: Gold prices in the local market remained unchanged on Saturday.
According to the All Sindh Saraf Jewellers Association, prices remained intact at Rs88,000/tola. Similarly, 10 grams gold rates also remained unchanged at Rs75,446.
Meanwhile, prices in the international market rose by $2 to $1,507/tola. Jewellers said gold prices in the local market were still trading lower by Rs1,500/tola, compared with the rates in the Dubai gold market.
10. 32 Pakistani companies participate in Intertextile Shanghai Expo – BR
Some 32 Pakistani companies along with Trade Development Authority of Pakistan (TDAP) are participating in Intertexture Shanghai Apparel Fabrics & Yarn Expo Autumn 2019. At the 25th anniversary of Intertextile Shanghai Apparel Fabrics, Pakistan will complete its 21 years of regular participation.
With 25 years of experience, Intertextile Shanghai Apparel Fabrics remains at the forefront of the global textile industry. The largest apparel fabrics and accessories trade fair will take place from 25th – 27th September 2019 in Shanghai, China co-located with Yarn Expo Autumn.
Beyond Denim, a denim display zone will provide the best place to find international and domestic denim producers, designers, ready-to-wear garment manufacturers as well as cutting-edge technologies and fashion trends.
In 2018 Autumn Edition, there were 4,480 exhibitors from 33 countries and 78,131 visitors from 103 countries & regions. This year Pakistan will exhibit with 32 companies and direct exhibitors are also participating in Intertexture Shanghai Apparel Fabrics & Yarn Expo.
Pakistanis from fabric sector are Kohinoor Mills, Mahmood Textile Mills, Nishat Chunian Group, Reliance Weaving Mills and Sapphire Textile. Azgard Nine, Artistic Fabric & Garment Industries, Denim International, Diamond Denim by Sapphire, Rajby Textile, Rajwani Denim and Soorty Enterprise are from Denim sector. Yarn exporters are Abtex International, Fazal Cloth, Fabcot International, Global Textile Networks, Hussain Mills, lndus Dyeing & Mfg Co, Mustaqim Dyeing & Printing Industries, Nadeem Textile, Nagina Cotton, Nisar Spinning, Opulent International, Salman Agencies, Sardar Corporation, Umar Spinning Mills and Xiamen Naseem Trade.
Exhibitors participating through TDAP are SM Denim Mills, Siddiqsons, Indigo Textile, & Pak Denim will present Denim products. Similarly MN Textiles will present Fabric.
The next ITSA & Yarn Expo Spring Edition will be held in March, 2020. Another apparel/fabric fair Texworld/Apparel Sourcing Paris will be held in September, 2019 and Africa Sourcing & Fashion Week will be held in November, 2019.
11. Cotton market: trade activity falls ahead of Ashura holidays – BR
Trade activity came down on the cotton market on Saturday as buyers adopted cautious attitudes towards new deals, dealers said. The official spot rate was unchanged at Rs 8100 ahead of Ashura holidays, they added. In ready session, about 4000 bales of cotton changed hands between Rs 7750 and Rs 8600, they said. Rates of seed cotton per 40kg in Sindh were at Rs 3000-3600, in Punjab prices were at Rs 3200-3800, they said. In Balochistan, seed cotton prices were at Rs 3600-3700, they said.
In Sindh, Binola prices per maund were at Rs 1400-1550 and in Punjab rates were at Rs 1550-1650, they said and adding that polyester fibre per kg rates were at Rs 180. According to the market sources, buyers preferred to be on the sidelines due to quality factor. In fact, the supply was short of demand, which restricted volume of business. The spinners were facing lint quality problem because rains impacted cotton quality and this could also hit the production.
In the meantime, cotton analyst, Naseem Usman said that the Punjab cotton remained free of moisture because recent rains proved beneficial for the standing crop in the field. Adds Reuters: ICE cotton futures fell nearly 1% on Friday, hurt by uninspiring export sales data and as investors used small gains to sell the natural fibre, which has been hit by lack of demand.
Cotton contracts for December settled down 0.54 cent, or 0.91%, at 58.58 cents per lb. It traded within a range of 58.03 and 59.86 cents a lb. Total futures market volume rose by 1,870 to 24,605 lots. Data showed total open interest gained 1,178 to 226,049 contracts in the previous session. The following deals reported: 400 bales of cotton from Shahdadpur at Rs 7800, 600 bales from Hyderabad at Rs 7750/7800, 600 bales from Tando Adam at Rs 7750/7800, 400 bales from Khanewal at Rs 8600, 1400 bales from Haroonabad at Rs 8350/8400, 200 bales from Chistian at Rs 8250 and 200 bales from Faqeerwali at Rs 8250, they said.
The KCA Official Spot Rate for Local Dealings in Pakistan Rupees
FOR BASE GRADE 3 STAPLE LENGTH 1-1/16″
MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL
Rate Ex-Gin Upcountry Spot Rate Spot Rate Difference
For Price Ex-Karachi Ex. KHI. As Ex-Karachi
37.324 kg 8,100 160 8,260 8,260 Nil
40 kgs 8,681 171 8,852 8,852 Nil
12. Dull trading on cotton market – D
Brokers said that after Ashura the market is likely to witness brisk trading activities mainly owing to higher phutti arrivals from Punjab. The textile industry needs quality lint which is in short supply, they added.
KARACHI: Dull activity witnessed on the cotton market on Saturday as buyers were reluctant to enter into any deals ahead of long closure on account of Ashura.
According to market sources there were no official word on crop damages due to recent spell of rains in cotton growing belts of Sindh and Punjab, but private guesstimates suggest that it could be substantial both in terms of quantity and quality.
The world leading cotton market reeled back under the lead of New York cotton where all the future contracts declined. The Chinese and Indian markets were mixed to easy.
The Karachi Cotton Association (KCA) kept its spot rates steady at overnight level of Rs8,100 per maund.
The following deals were reported to have changed hands on the ready counter: 400 bales, Shahdadpur, at Rs7,800; 600 bales, Hyderabad, at Rs7,750 to Rs7,800; 600 bales, Tando Adam, at Rs7,750 to Rs7,800; 400 bales, Khanewal, at Rs8,600; 1,400 bales, Haroonabad, at Rs8,350 to Rs8,400; 200 bales, Chistian, at Rss8,250; and 200 bales, Faqeerwali, at Rs8,250.
1. PM’s direction on trade policy formulation ignored – D
ISLAMABAD: The Commerce Division has delayed the finalisation of proposed five-year Strategic Trade Policy Framework (STPF) document despite clear directions from Prime Minister’s Secretariat to enhance export competitiveness and productivity of the domestic industries.
Prime Minister Imran Khan had directed the Commerce Division to draft a five-year plan with a deadline of Dec 31, 2018 to accelerate exports. However, the division not only missed the deadline by nine months but put the whole process on cold burner.
The policy was touted to provide much-needed boost to the country’s exports which have remained range bound between $20-25 billion during the last decade and have declined in the last few years.
An official document, available with Dawn reveals that the division has almost completed the preliminary work on the draft and also sought feedback from all stakeholders.
ARTICLE CONTINUES AFTER AD
Despite multiple attempts by Dawn to reach the director to seek his official position on the reason for delay in the STPF through his cell phone, no reply was received till the finalisation of the story. Similarly, official spokesperson of the Commerce Division Muhammad Ashraf also did not respond to written queries.
In the last decade, the Commerce Division has notified three STPFs in 2009-12, 2012-15 and 2015-18 respectively, but none of these were successfully implemented to achieve the desired objectives due to various reasons. Moreover, the policies also failed to alter export paradigm over the last decade.
The 2009-10 STPF failed mainly due to mismanagement, whereas the 2012-15 framework suffered due to government’s failure to release the allotted funds. Further, the 2015-18 STPF was announced after a delay of more than nine months and suffered from financial crunch as the government only released Rs500 million of the total budget of Rs20bn leading to poor implementation.
The ultimate target of the last STPF was to enhance the country’s annual exports to $35bn by 2017-18.
The new framework is expected to revolve around four pillars – competitiveness, trade related investment, production sophistication and diversification and trade facilitation. The ultimate goal of the policy is to increase exports at a minimum compound annual growth rate of 12pc annually till FY23.
On the other hand, an official document estimates serious threats to the country’s export sectors in case government fails to take corrective measures in a timely manner.
One of the major threats faced by the exports comes from looming de-industrialisation mainly due to absence of a proactive industrial policy since the 1990s, over 58pc tax burden on manufacturing sector, high cost of energy, and higher tariffs on industrial inputs.
Additionally, the export sector also faces sectoral distortions as over the years, exports have remained concentrated in three major commodities — cotton, rice and leather. Other distortions include cannibalisation of the land and water resources of cotton by the sugarcane crop.
As a result, annual cotton production has fallen short of the target by 4-5m bales, whereas Pakistan continues to produce surplus sugar which is uncompetitive in international market due to procurement price mechanism.
A review study of the past three STPFs identified various shortcomings in the implementation of the proposed frameworks. One of the major interventions of the policies was to extend cash support to exporting enterprises without linking it to boost their competitiveness. The move led to increase in number of corruption vases.
An attempt was made to introduce reforms in the existing trade support institutions and create new ones where institutional gaps exist. However, the results were mixed and not very encouraging.
Furthermore, restructuring exercise for the existing institutions such as Trade Development Authority of Pakistan has encountered strong resistance to change and establishment of new institutions i.e. Exim Bank, Land Port Authority has taken longer than anticipated, due to internal bureaucratic impediments.
2. Federal interior ministry asked to block mobile phone services during 9th, 10th Muharram – TN
The cellular mobile phone services are likely to be suspended on Muharramul Haram 9 and 10 as the provincial government has formally asked the federal interior ministry to block the mobile phone services.
In a letter written to the federal interior ministry, the Sindh government has asked the ministry to block the mobile phone services along the procession routes on Muharram 9 and 10.
The services are partially suspended every year in several cities as part of security arrangements for Majalis and mourning processions of Muharram.
To avoid any untoward incident, the law enforcement agencies have prepared a security plan for Muharram, especially for Karachi. The LEAs have decided to take strict action against nefarious elements under the Anti-Terrorism Act.
There would be a ban on publication and broadcasting of the hate material. Aerial firing and display of weapons would also be banned and the violators would face strict punishment.
The law enforcement agencies would monitor the Muharram processions in Karachi as well as other parts of the Sindh while the procession routes would also be closed for traffic. The religious scholars have also been asked to adhere to the code of conduct and coordinate with the law enforcers to ensure peace and security.
As many as 69,545 police personnel will perform security duties across the province including 17,558 in Karachi, 16,816 in Hyderabad, 2,237 in Mirpurkhas, 9,280 in Shaheed Benazirabad, 8,258 in Sukkar and 15,404 in Larkana, reads a contingency plan prepared by AIG Operations Sindh for Muharram.
Apart from the 69,545 police deployment across the province, 1,202 personnel from the traffic police and 1,339 from the Sindh police’s Special Branch, Rapid Response Force and Sindh Reserve Police will also perform security duties.
According to the Sindh police, a total of 1,996 Imambargahs are located across Sindh, including 356 in Karachi, 590 in Hyderabad, 118 in Mirpurkhas, 93 in Shaheed Benazirabad, 374 in Sukkur and 456 in Larkana divisions.
Sindh Inspector General of Police Dr Syed Kaleem Imam, while reviewing a contingency and deployment plan ahead of Muharram, directed all the deputy inspector generals of police (DIGPs) to monitor the security arrangements of all the small and big processions and Majalis, as well as imambargahs.
3. CAA conducts full-scale airport emergency exercise at JIAP – BR
Pakistan Civil Aviation Authority (CAA) on Saturday conducted a “full scale airport emergency exercise-2019” at Jinnah International Airport (JIAP), Karachi. According to details, the purpose of this exercise was to test the response level of all the concerned agencies working at the airport in accordance with the Crisis & Emergency Response Plan (CERP) in case of any accident or incident.
An aircraft was acquired from Pakistan International Airline (PIA) for demonstration of emergency evacuation of passengers. In addition, concerned branches of CAA, PIA, local airlines, Edhi and Chippa ambulances have also actively participated in the exercise.
Talking to media, Imran Khan, airport manager CAA JIAP said that the authority conducted this exercise after every two years as per the standards of International Civil Aviation Organization (ICAO) that helped in ascertaining the capabilities and checking the response time of fire & rescue personnel.
He said that usually the standard response time of fire and rescue personnel towards such incidents is two minutes but it was a matter of satisfaction that response time of this exercise was one minute and seventeen seconds only. Meanwhile, Abbas Memon, Assistant Chief Security Officer, Airport Security Force (ASF) expressed his satisfaction on arrangements of the exercise; adding that ASF used to conduct such exercise after every two months to evaluate the capabilities of its personnel.
Needless to mention, fire vehicles of CAA reached at the fire site within one minute seventeen seconds (43 seconds earlier than the standard response time of 2 minutes) to extinguish the fire during the full scale exercise-2019, started late from the scheduled time. Similarly, rescue workers of CAA, Edhi and Chippa ambulances, doctors & paramedics reached at the aircraft quickly and demonstrated evacuation of passengers from the aircraft in a professional way.
4. SHC tells healthcare commission to submit report by October 1 – TN
The Sindh High Court has directed the Sindh Healthcare Commission to submit a report with regard to a clinical audit of the government and private hospitals and a list of registered health care establishments in the province.
The direction came at a hearing of a petition seeking action against unlicensed healthcare establishments in the province and implementation of Sindh healthcare laws.
Jaffer Raza and Asad Iftikhar submitted in the petition that several patients, including nine-month-old baby Nishwa, had died due to alleged medical negligence by private healthcare institutions.
They submitted that all those medical establishments which failed the clinical audit should be sealed and their licences revoked
They said that medical negligence at such a regular frequency only indicated that the issue was rampant in our society and could only be attributed to weak laws and even weaker implementation.
They added that the apathy and callousness of medical practitioners and healthcare establishments had only contributed to the menace to the extent that there was hardly a citizen who had been not been directly or indirectly affected by medical negligence.
They said that there were countless instances of medical negligence whereby people had lost their lives due to improper treatment and those very medical practitioners continued risking the lives of many more as there was no proper system of checks and balances.
The petitioners submitted that the Sindh Healthcare Commission Act was promulgated in 2013 which also provides for the promulgation of a commission with wide- ranging powers including investigation of malpractices and failures in the provisions of healthcare services.
Despite the lapse of several years, they said, the commission was not working properly. Had the commission’s powers been put to use, the society would not have experienced the horrific incidents of medical malpractice which were happening at an ever-increasing rate, they added.
They submitted that the healthcare commission was also authorised to monitor and regulate the quality and standards of healthcare services and issue regulations and guidelines for the provisions of healthcare in Sindh, but the law seemed far-fetched and fictitious with no implementation.
They stated that omissions and lapses on part of the commission by failing to use their discretionary powers had led to the medical practitioners and health care establishments enjoying unprecedented impunity whose grave negligence went unchecked and without any legal repercussions.
They submitted that medical practitioners used medical jargon and terminologies to misguide the public at large and used the same as a veil to hide their own incompetence and negligence as the common man was easily deceived and did not take it upon himself to investigate the matter.
Citing the federal and provincial health ministries, the PMDC and the Sindh Healthcare Commission as respondents, the court was requested to direct the respondents to implement the act and other prevalent laws in letter and spirit.
They requested the court to direct the government to carry out a third party evaluation through an independent performance/clinical audit of healthcare establishments as per the act and seal/shut down unlicensed healthcare establishments.
The petitioners also sought an order for framing standard operating procedures in line with internationally recognised medical practices and with the World Health Organization guidelines and cancel/revoke/terminate the licences of medical establishments which had been found guilty of medical negligence.
A division bench headed by Justice Mohammad Ali Mazhar directed the counsel of the healthcare commission to file comments on the proposed statement of the petitioners with regard to compliance with the healthcare laws.
The court directed the counsel of the healthcare commission to place on record the facts and figures showing as to of many hospitals the clinical audit had been completed and also submit a list of the registered healthcare establishments in the province.
The court directed the counsel to submit the report by October 1.
The Sindh High Court directed the health secretary to ensure proper identification of newborn babies in government-run hospitals.
The direction came during a hearing of a petition of Hina Ishtiaq with regard to a mechanism for the identification of newborn babies in government-run hospitals.
A representative of the Civil Hospital Karachi submitted a mechanism with regard to identification of newborn babies in government hospitals and to make recommendations.
According to the recommendations, when a child is born, without wasting any time and as soon as possible the child should be tagged as per his or her gender along with the name of his or her mother and then be sent for cleaning or washing.
It was suggested that hospitals should make an official labour room policy as the tagging of babies is delayed due to lack of training or experience and shifting of doctors and staff which would lead to swapping of several newborn children who were present at the same places and at the same time.
The report suggested that the hospitals should also maintain a register of admissions irrespective of their computerised mechanisms to avoid any untoward circumstances.
It was further suggested that the practice of labelling and tagging incubators or mentioning the names of children on the top of the incubator or on a white board or on scotch tape should not be followed and should be set aside and instead the children should be properly tagged at all times.
A division bench headed by Justice Salahuddin Panhwar directed the secretary health that all these recommendations be followed IN letter and spirit in all public hospitals and adjourned the hearing till October 18.
5. ‘Tarbela Dam playing vital role for economic stability of Pakistan’ – ET
The Tarbela Dam is playing a vital role for economic stability and social development of Pakistan by providing water for agriculture, mitigating floods and injecting sizeable quantum of low-cost hydel electricity to the national grid, said Water and Power Development Authority (Wapda) Chairman Muzammil Hussain.
Welcoming a 17-member United States delegation led by US Central Command (US CENTCOM) commander General Kenneth McKenzie Jr, Hussain lauded that Tarbela reservoir could still store more than six million acre-feet (MAF) water despite being in the fifth decade of its life.
“At present, the generation capacity of Tarbela Hydel Power Station stands at 4,888MW with the completion of its 4th Extension last year,” he said. “In view of the successful completion of 4th Extension within the stipulated cost and time, the government has decided to implement 5th Extension of the project on a fast-track basis.”
The 5th Extension would add another 1,410MW to the generation capacity of Tarbela hydel power station, he said.
The chairman apprised the delegation that Tarbela hydel power station possessed more than half of the total installed capacity of hydel power in Pakistan.
Briefing on various components of the project, the chairman appreciated the financial support from the US keeping in view construction of Tarbela Dam back in the 1970s and rehabilitation of aging power generating units installed at Tarbela Hydel Power Station.
US involvement in rehabilitating aging units of Tarbela Hydel Power Station helped Wapda in attracting leading financial institutions like the World Bank for implementation of Tarbela 4th and 5th Extension with a cumulative generation capacity of 2,820MW, he added.
The US delegation observed that recent grant from the US of $41 million would extend the useful life of the Tarbela powerhouse by 15-20 years and restore 148MW of power generation capacity.
6. Infrastructure, rolling stock projects: Railways again seeks JVs – BR
After receiving lackluster response from investors against initial offer, Pakistan Railways (PR) again seeks joint ventures in its infrastructure development and rolling stock projects. PR had earlier issued bids for laying new railways tracks and rehabilitation/ up-gradation of Main Line-2 (ML-2) and ML-3 which were repeatedly extended but according to sources, it got cold shoulder or received almost no response from investors.
Pakistan Railways intends to upgrade Railway Line from Kotri to Attock (ML-2) (1,254 km), as it is considered important for regional connectivity. Joint venture opportunities can be explored for up-gradation of this section. Technical feasibility for up-gradation of this section has been completed and the estimated cost is US $ 2,270.40 million. The up-gradation of ML-1 (1,872 km) is already in process under a framework agreement after which the sectional speed will increase from 65-105 km/h to 120-160 km/h and the line capacity will increase from 34 to 171 trains each way per day.
The PR also intends to establish a new rail link from seaport at Gwadar to Mastung (near Quetta) stretching over 900km at an estimated cost of $2 billion. A new rail link is also required to be established between Basima and Jacobabad (300km) at an estimated cost of $1.25 billion. Joint venture opportunities can be explored for establishment of these new rail links. The ML-3 railway line is an important section of railway network in the context of regional connectivity and tapping the mineral potential of Balochistan.
This project can be conceived as a trade corridor among Pakistan, Iran, Turkey and beyond up to Europe as well as it is important regional connectivity. It will provide a fast comfortable and reliable mode of transport with the commencement of ECO container train from Islamabad to Istanbul via Iran making it an international link for boosting of the cross-border trade and travel.
Feasibility study for ML-III was carried out in 2018; estimated cost for the Rohri-Sibi-Quetta section (384km) is $523 million, whereas for Spezand-Taftan section (612km), the estimated cost is $995 million. The possibilities of joint ventures in extension of ML-3 can also be explored which stretches over 560km on Quetta-Bostan-Zhob-Dl Khan-Kotla Jam sections. This new rail link will provide important connection for transportation of freight and passengers between north & south of the country. The process for feasibility study has been initiated and is expected to be completed by the end of 2019.
Presently the sea freight arriving at Karachi port is mainly being disposed of inland through road transport due to poor rail connectivity. The Ministry of Railways encourages investment on BoT basis for establishing a new rail link from Karachi port to Marshalling Yard Pipri which will reduce the congestion on roads and will enable quick unloading of ships and speedy evacuation of freight from the port area.
The freight will be transported to Pipri Yard and then transported up-country through rail track. There are important terminals/dry ports on Pakistan Railways System which needs to be upgraded, namely Pipri (Karachi) and Badami Bagh (Lahore) stations, also dry ports at Moghalpura (Lahore) and Azakhel (Peshawar). The scope of work may include station platforms, goods yards, goods sheds, offices and customer services.
It may also include heavy machines/ equipment as per requirements. Pakistan Railways intends to upgrade major Railway Stations at Karachi, Hyderabad, Quetta, Sukkur, Rohri, Multan, Lahore, Rawalpindi, and Peshawar station, in order to facilitate the passengers to exploit commercial potential of the railway stations. The Ministry of Railways has production facilities for assembling of locomotives and passenger coaches. To run these facilities on modern lines, the ministry is seeking investment through private sector participation. Various options for joint ventures can be explored in these production facilities mainly in Pakistan Locomotives Factory Risalpur and Carriage Factory Islamabad.
Tender for procurement of 230 passenger coaches has been advertised and its opening date is 17.09.2019. Tender for procurement of 820 high capacity freight wagons has been advertised and its opening date is 17.09.2019. Tender documents can be purchased from the office of Director Procurement, Railway Carriage Factory, Pakistan Railways, Islamabad. Pakistan Railways has following maintenance facilities for overhauling of locomotives and rolling stock.
i. Central Diesel Locomotive Workshop Rawalpindi (1965); ii. Diesel Workshop Karachi (1962); iii. Loco shop Moghalpura Lahore (1912); and iv. Carriage and Wagon shop Moghalpura (1927). These facilities have out-dated plant and machinery and require up-gradation to improve repair and overhauling activities. Partnership possibilities can be explored for sustainable operation of these facilities in different modes including strategic partnership, joint venture or any other mode.
Pakistan Railways owns a locomotive manufacturing facility at Risalpur established in 1993. It is spread over an area of 257 acres and has an annual production capacity of 25 DE Locos. Partnership possibilities can be explored for sustainable operation of this factory in different modes including strategic partnership, joint venture or any other mode. Pakistan Railways owns a passenger coaches manufacturing facility at Islamabad established in 1970. It is spread over an area of 141 acres and has an annual production capacity of 150 passenger coaches. Partnership possibilities can be explored for sustainable operation of this factory in different modes including strategic partnership, joint venture or any other mode.
Pakistan Railways network comprises of 7791km route connecting the entire major cities in Pakistan. There are 527 railway stations over Pakistan Railways (PR) network in addition to 68 halt stations. PR owns 465 diesel electric locomotives and rolling stock comprising of 1822 passenger coaches and 16,159 freight wagons. During last fiscal year more 60 million passengers availed travelling facility over PR while more than 8 million ton of freight was transported.
7. Private sector borrowing falls sharply – D
KARACHI: In the first two months of the current fiscal FY20, private sector credit off take was negative, indicating that firms are largely retiring loans rather than borrowing either for investment or working capital requirements.
The State Bank’s latest data shows the private sector credit was negative Rs84.6 billion till August 30 against a net borrowing of Rs30.6bn in the same period of last fiscal year.
When contacted, president of a commercial bank said the situation would be clear at the end of the first quarter but he considered the slow economic growth and high cost of borrowing as major reasons for low private sector credit off take.
He said the private sector was still borrowing from banks but the amount was lower than the amount of debts retirement.
Bankers said the government has been offering attractive returns in its debt auctions that have attracted robust participation while at the same time, making money costlier for the private sector.
Both, the conventional banks and Islamic banks were facing the same situation of higher debt retirements. The debt retirement figures of the conventional banks were Rs81.9bn during the two months (July-August) against a net borrowing of Rs34bn in the same period of last fiscal. It indicates clearly the situation has significantly changed from last fiscal.
However, in case of Islamic Banks the debt retirement amount has been increased this year compared to debt retirement amount of the last fiscal. The Islamic banks noted a net retirement of Rs19.3bn against a net retirement of Rs6.5bn.
Only unchanged situation was noted in case of Islamic Banking branches of conventional banks. The private sector borrowing from these branches increased to Rs16.7 billion during the first two months of the current fiscal year compared to Rs3bn borrowed in the same period of last fiscal.
8. Fertiliser price expected to rise by Rs200 per bag – ET
Following the government’s decision to withdraw the Gas Infrastructure Development Cess (GIDC) ordinance, the fertiliser industry is set to increase urea price by Rs200 to compensate for the cost incurred from the levy.
“The industry will increase urea prices,” confirmed Sunny Kumar, an analyst at Topline Research. “However, it is not confirmed when the hike is going to take place.”
He said that presently, players in the sector were waiting for other players to hike prices so they could follow.
“The industry is considering increasing the prices by Rs200 per bag,” he said.
Gas, which is used as a raw material for the fertiliser industry, became costlier from July 1, 2019.
Since then, the industry has borne a loss of Rs200 per bag because it did not pass the price on to the customer owing to the government’s promise of a waiver.
The government announced concession of Rs420 billion through the GIDC ordinance to different industries including the fertiliser sector.
According to the ordinance, fertiliser and CNG sectors were liable to pay 50% of their unresolved bills within 90 days in advance and secure 50% discount on future bills on the condition that they would withdraw court cases against the government.
“The industry has already borne the cost for two months, July and August,” said the analyst. “The companies have already sold fertiliser to farmers and now it cannot charge them additionally, however, in the future, urea producers will increase prices.”
In June, farmers expected a hike in gas price hence they stocked urea for July due to which urea sales remained flat in the following month, he said.
He added that the growth of up to 43%, in urea sales, was expected for August but this number would also be impacted after the GIDC fiasco.
“It is the industry’s right to increase prices now,” said Sher Shah Malik, Executive Director of Fertiliser Manufacturers of Pakistan Advisory Council (FMPAC). “Over-efficient people have led the government to make the wrong decision.”
9. Absence of legal prudence delays settlement of financial matters – TN
LAHORE: There is need to limit the time of stay orders on financial matters to ensure settlement of billions of rupees of both public and private sectors as cases remain pending under stay orders or adjournments for years.
Government for instance has not been able to collect Gas Infrastructure Development Cess (GIDC) from industrial gas consumers since 2011, as the collection was suspended by different high courts on petitions from the affected parties.
Cement sector too has taken refuge behind courts to avoid billions of rupee cartelisation fine imposed by the Competition Commission of Pakistan (CCP) a decade back. Sugar barons are also avoiding CCP penalties for years.
Hundreds of cases filed by the Federal Board of Revenue (FBR) have been lingering in the courts for years. Banks avoid going to courts for recovery, but when finally they are forced to do so, they wait for the court verdict for years.
Even ordinary consumers are victims of court delays. In one instance, a car owner won a case from consumer court against a security firm after he proved that his car was stolen with the connivance of the security provider.
The court ordered the security company to pay the full price of the vehicle to the aggrieved consumer, against which an appeal was made in the high court sex years ago.
The case has hardly been heard during that period, as the security company succeeds in obtaining adjournment after adjournment. Consumer has now lost interest and the case has been adjourned indefinitely.
The stolen car at the time of theft was worth rupees one million and currently it costs Rs2.6 million. He is certain that he would win the case in the superior court as well, but he would not be able to buy the same car from the amount that the company would pay him. This is a glaring example of dilution of the worth of money.
This is happening in all cases involving cash. Fines are levied in case, the defaulters have to pay the
principle amount they borrowed from the banks as the interest is suspended when default proceeding starts.
At the start of the century, rupee was worth Rs54 against a dollar. Currently, it is in the range of Rs160 per dollar.
This means that the value of rupee or its purchasing power has declined to 33 paisa. A product worth one rupee in 2000 is now worth at Rs3 at least in dollar terms.
The value may be even lower if we calculate its worth in terms of gold or real estate. So the delay in financial cases results in dilution of money for the litigant.
Then there are cases where the mortgaged properties have to be auctioned. A property auctioned immediately after default is established could at best fetch the aggrieved party equivalent of defaulted amount.
However, if litigation is delayed for a decade or two, the value of the property would shoot to many times the defaulted amount. In this case, the bank is entitled to recover its principal amount and litigation charges and refund the additional amount to defaulter that would in most cases be more than double the defaulted amount.
Who is the winner in this case, of course the defaulter! The value of the money that the bank recovered might have diluted to less than 30 percent, but simply by taking adjournment after adjournment the defaulter is happily placed.
There are many implications of stay orders. Take the case of GIDC where the courts issue stay orders on collection of GIDC.
The stay order meant that if the case was decided in government’s favour the GIDC would be payable for the entire period or for the period that the court would determine.
In such cases, it is prudent to ask the litigants to deposit the suspended amount monthly in the court that would be returned if they won the case or it would be transferred to the treasury.
This in many cases was not done. The fertiliser sector and the CNG stations continued charging the GIDC from the consumers, but did not deposit the amount in the treasury as they got stay orders.
There were industries that made provisions in their balance sheet for GIDC payable to the government. Some did not bother to make any provision on the pretext that they neither paid GIDC nor charged it from their consumers.
A Pandora box has been opened on GIDC and it will be a test of the acumen of the superior court that will decide the issue.
10. Government to initiate three livestock projects this month – BR
The government has decided to initiate three livestock projects this month to increase livestock productivity under the Prime Minister’s Initiatives for Livestock.
Sources said that the projects included: (i) Save the Calf; (ii) Fattening of Calf and; (iii) Backyard Poultry. These are being initiated from this month with the objective to increase production of livestock as well as export-oriented meat.
Under the “Save the Calf” project, the government will distribute 0.380 million calves to provinces, AJK and ICT. Under another project titled “Fattening of Calf,” the government would distribute 0.375 million calves to increase meat production in the country.
Under this project, the government will distribute 0.320 million calves to Balochistan, eighty thousand to Khyber Pakhtunkhwa, 0.150 million to Punjab, 0.1milion to Sindh, fifteen thousand to GB, fifteen thousand to AJK and fifteen thousand calves will be given to Islamabad Capital Territory (ICT).
Moreover, under the “Backyard Poultry” project, which was launched on September 2, 2019, the government is distributing 5 million poultry including hens and cocks to people in rural areas to boost the local poultry industry and fight poverty.
The federal government is giving 0.5 million poultry to Balochistan,1 million poultry to Khyber Pakhtunkhwa, 2 million poultry to Punjab,1 million poultry to Sindh, 0.150 million to Gilgit-Baltistan, 0.250 million to Azad Jammu and Kashmir (AJK) and 0.1 million to Islamabad Capital Territory (ICT) residents.
The government is giving 30 per cent subsidy and rest of price will be borne by the consumers, while more than 0.1 million families would be getting benefit from these projects.
11. Government’s move to attract foreign firms’ investment lauded – BR
President Pakistan Businessmen and Intellectuals Forum (PBIF), Mian Zahid Hussain has lauded the move of the government to lure foreign companies for investment in Pakistan’s debt market. The decision will help reduce Rs 3.4 trillion budget deficit and stabilize foreign exchange reserves which are at $8.27 billion, he said.
He said that the IMF has barred the government from seeking loans from the central bank, therefore, the government has decided to lure foreign investment in government securities etc.
He said that the decision will require amendment in the Income Tax Ordinance 2001 after which such companies would be given 20 percent relaxation in withholding tax, they would be immune from banking transaction tax, advance income tax and filing tax returns.
He noted that interest rates were jacked up to 13.25 percent to boost reserves which has damaged economic activity but results were not very encouraging therefore the decision has been taken to invite foreign companies and banks for investment.
He said the government’s move to reverse GIDC Ordinance is laudable and the government should stop paying dues to companies that are holding back billions on account of GIDC.
Rather, the government should adjust dues against GIDC and try to get the issue of Rs 1.3 trillion stuck in litigation between taxpayers and FBR through a full bench of the Supreme Court.
12. Pakistani team leaves for Bangkok for FATF talks – ET
A 20-member team from Pakistan has left for Bangkok for a face-to-face meeting with the Financial Action Task Force (FATF) for a final evaluation of its anti-money laundering and terror-financing report. Initial talks will be held with the FATF on Sunday (today) and officially kick off from Monday.
The team is being led by Federal Minister for Economic Affairs Hammad Azhar and includes representatives of the Federal Investigation Agency, State Bank, Federal Board of Revenue, Securities and Exchange Commission of Pakistan, Anti Narcotics Force and intelligence agencies.
According to the finance ministry sources, the outcome of the talks, which would continue till September 13, would decide whether Pakistan’s name stayed on the grey list or would it be added to the black list.
Talks will also be held on the matter of including Pakistan’s name in the enhanced expedited list by the Asia-Pacific Group (APG). The name being included in the list means that Pakistan would be required to submit follow-up reports to the APG on a quarterly basis.
The sources said replies to 125 questions of the APG had also been summoned in order to take Pakistan out of the list. It is being said that cross-questioning would also be held during the talks between the two sides. The sources said Pakistan’s stance in the talks would be presented through the APG.
Pakistan would also provide answers to 10 important questions related to curbing money laundering and terrorism financing. Details of punishment handed over to those involved in terrorism financing had also been sought.
Questions would include mode of investigation, prosecution and conviction in the terrorism financing cases. The sources said Pakistan’s name would not be added to the blacklist, instead chances were ripe that its name would be withdrawn from the grey list.
They added that if the FATF decided to keep Pakistan’s name on the grey list, there would certainly be some conditions. They said the FATF would be informed that a new national risk assessment programme with the cooperation of UN Office on Drugs and Crime has been started to assess three important aspects.
Topping the list was terrorism and terrorism financing dangers. It was being determined which departments were under the threat of terrorism financing. On the second number was identifying the departments and areas which were very weak and insecure or vulnerable.
The third aspect was the consequence if the flaws and weaknesses of these weak and vulnerable areas and departments were not addressed.
The sources said the FATF would be informed about the action taken against organisations and the people involved in terrorism financing and terrorism, adding that the current statement of the interior ministry regarding action against banned groups was meant for this purpose.
They said according to the FATF recommendations 22, 23 and 28, a policy regarding monitoring of income and activities of lawyers, chartered accountants, real state dealers, gem dealers and all risk based non-financial business and professions was being prepared.
13. Summer crops thrive on rainfalls with sparse damages – TN
KARACHI: Summer crops managed to save their skin from white dryness owing to recent spell of rains that nonetheless blighted 2.3 percent of areas under cultivation in Sindh, official documents and growers said on Saturday.
Currently, summer (kharif) crops are sown over an area of 1.869 million hectares in the province, of which 43,871 hectares got partially damaged, which are 2.3 percent of the total area under cultivation, according to a latest report of the Sindh Agriculture Department available with The News.
Rain rendered full to partial damages to summer crops in the province, said the report. Monsoon rains have affected cotton, chilies, onion, tomato, rice, sugarcane, fodder and other kharif crops.
Kabool Khatian, chairman of Sindh Chamber of Agriculture, however, said they had not received any report of crop damage. “Indeed, rain has proved beneficial for the crops,” he said. “If more rain occurs, it may affect negatively.”
Khatian said there could have been partial damage but flowering in crops would follow rainfalls. “Nobody from agriculture department has visited the fields and made the report sitting in the office.”
Mehmood Nawaz, senior vice president of Sindh Abadgar Board agreed that rain had overall been beneficial, “but it affected crops in some isolated areas as well”.
“Generally, we receive rain in July, late August and September. If it had not occurred there could have been white dryness. Rain has benefited trees, water table, aquifers and lakes,” Nawaz said.
He, however, said there were also damages in some isolated districts, including Mirpurkhas, Tando Allahyar and others. “Vegetables have got affected. Onion yield would be down by 25 percent and its production would come down,” he added.
Among the major corps of the season, cotton suffered the damage of around 25,000 hectares, which is four percent of the total 615,049 hectares cultivated area, the department report said.
In some areas, cotton was also beneficiary of rain, growers said.
Tomatoes, onion and other vegetables over 5,406 hectares – 11.6 percent out of 46,580 hectares under cultivation – got damages.
It was followed by 10 percent damage to chilies, whose 3,587 hectares got damages from a total cultivated area of 35,861 hectares.
The affected areas included Tharparkar, Umerkot, Mirpurkhas, Tando Allahyar, Tando Muhammad Khan, Badin, Hyderabad, Matiari, Jamshoro, Dadu, Thatta, Sujawal, Sanghar and Karachi.
Date orchards over 170 hectares in Khairpur were also affected. However, there was no impact over crops in Shaheed Benazirabad, Noshehroferoze, Sukkur, Ghotki, Larkana, Kambar Shahdadkot, Jacobabad, Kashmore and Shikarpur districts.
Partial damage also occurred to rice and sugarcane crops, but its intensity was below one percent, as both the crops sustain more water.
According to the report, flower shedding occurred in cotton and chilies crops. Quality of cotton is affected. Around 234 hectares of chilies and 540 hectares vegetables were completely damaged.
Rain benefited paddy, sugarcane and banana crops in some districts. Partial damage has been recorded to 24,844 hectares of crops that include rice (4,956 hectares), sugarcane (2,279 hectares), chilies (3,587 hectares), vegetables (5,406 hectares) and other crops (2,629 hectares).
“Rainwater is still standing in crops in some low-lying areas where growers are trying to drain out the water,” the report said.
14. Old gas tariff restored for tandoors – TN
LAHORE: The federal government has decided to provide relief to tandoor commercial consumers by restoring the old gas tariff for them.
According to a spokesperson for the Sui-Northern Gas Pipelines Limited (SNGPL), the gas tariff for tandoor commercial consumers had been reduced from Rs1,283 per mmbtu to Rs738 per mmbtu.
A notification in this regard is expected to be issued by the Oil and Gas Regulatory Authority (Ogra) shortly.
The consumers have been advised by a spokesperson to contact the SNGPL authorities in this regard.
15. ‘China plans to invest $1b in development projects in Pakistan’ – ET
The pace of development projects under the China-Pakistan Economic Corridor (CPEC) is satisfactory, said Ambassador of China to Pakistan Yao Jing
Talking to a delegation at the Islamabad Women’s Chamber of Commerce and Industry (IWCCI), led by its Founder President Samina Fazil, he said that that the second phase of the China-Pakistan Free Trade Agreement (CPFTA) will be finalised in October after which 90% of Pakistani exports including agricultural products and seafood will attract a zero percent duty.
“Market access will increase Pakistan’s exports by $500 million, which will reduce the disparity between bilateral trade,” said Yao.
He informed participants that China has planned to invest $1 billion in development projects.
He expressed appreciation for the suggestions forwarded by IWCCI to boost bilateral trade and added that he would try to establish a close liaison between women associations of China and women entrepreneurs of Pakistan.
The envoy remarked that Chinese businesswomen would be invited to participate in the fifth Islamabad Expo scheduled in November to explore the market and promote networking.
“In addition, women entrepreneurs of Pakistan would be sent to China to participate in the expos and explore business opportunities,” he added.
16. ‘Formation of CPEC Authority not – TN’
17. Pak-Afghan traders hail 24/7 opening of Torkham border – BR
Traders of both Pakistan and Afghanistan have welcomed the trial-based round the clock (24/7) opening of the Torkham border for bilateral trade and termed it a good step towards the promotion of trade between both neighbouring countries. Commenting on the opening of the border, Zia-ul-Haq Sarhadi, a former senior vice president of Pak-Afghan Joint Chamber of Commerce & Industry (PAJCCI) appreciated the decision of the government of Pakistan and said that the step would play crucial role in the promotion of bilateral trade between both countries.
He said that the volume of bilateral trade between Pakistan and Afghanistan decreased manifold and keeping Torkham border open for 24/7 will not only help in the achievement of the target of trade rather it will also prove helpful in the resolution of the problems of the business community particularly exporters.
Sarhadi, who is also the president of Frontier Customs Agents Group urged the governments of both Pakistan and Afghanistan for provision of facilities to business community and taking immediate steps for the resolution of their problems. He said that besides, the simplification of the issuance of visas for business community including exporters and importers, the provision of facilities can also play major role in the promotion of bilateral trade.
He said that due to inflexible policies, the volume of bilateral trade between both countries slashed down from US$2.5 billion to less than US$1 billion. Therefore, he urged the leadership of both countries to soften their policies to promote bilateral trade.
Similarly, a prominent Afghan trader Ahmad Shah has also welcomed the round the clock opening of Torkham border and said that the business community of Afghanistan is jubilant over the step and are hopeful that the step will help resolve maximum problems at the border and would also build confidence.
The Afghan trader also called for the segregation of politics from the trade and setting aside pity issues by the governments of both countries to promote bilateral trade.
Another Afghan trader, Haji Zalmai has also welcomed the around the clock opening of Torkham border for trade. He said that the closure of the border on minor issues was causing mistrust between both countries. The round the clock opening of the border, he said, will promote bilateral trade between both countries.
The president of Sarhad Chamber of Commerce and Industry (SCCI) Faiz Mohammad Faizi has also hailed the around the clock opening of the Torkham border and termed the initiative as a good step that would be good for the promotion of exports of the country. He has further demanded the opening of letter of credit on soft terms with the objective of increasing exports to Afghanistan.
18. Pakistan, China, Afghanistan to boost counter terror effort – TN
19. SCCI apprises Azeri investors of business opportunities in KP – PPT – 7.9.19
PESHAWAR: The Sarhad Chamber of Commerce and Industry (SCCI) has organised the Khyber Pakhtunkhwa Investment Opportunities Conference (KPIOC) and SCCI Business Excellence Awards ceremony in Baku, Azerbaijan.
Khyber Pakhtunkhwa Assembly Speaker Mushtaq Ahmad Ghani, Information Minister Shaukat Ali Yousafzai and Ambassador of Pakistan to Azerbaijan Saeed Khan Mohmand participated as chief guests on the occasion.
During the five-day event, scheduled to conclude today (Sunday), a total of 16 companies were awarded gold medals in industrial, commercial, services, and retail sectors, while 10 firms were honoured with export trophy awards in KPIOC 2019 and Business Excellence Awards (BEA) 2017-18.
SCCI President Faiz Muhammad Faizi, former FPCCI president Ghazanfar Bilour, SCCI Senior Vice President Engr Saad Khan Zahid, Vice President Haris Mufti, KPIOC and BEA Chairman Zahidullah Shinwari, SCCI executive committee members, leading businessmen, importers and exporters took part in the mega event.
The chief guests on the occasion awarded gold medals to companies that demonstrated outstanding performance in industrial, commercial, services, construction and retail sectors. The recipients included Gadoon Textile Mills Limited, Associate Industries Limited, Wasay Laboratories Pvt Limited, UNISA Pharmaceuticals Industries Limited, Deans Industries, International Marketing Company, Al Imdad General Trading Company, Swat Agro Chemicals, Travel and More, City University of Science and Information Technology, Haris Mehmood Pvt Limited, Makka Agency, R-Sheen Fashion Paradise, AYS International, Toyota Khyber Motors, and Zahid Traders.
Similarly, Gadoon Textile Mills Limited, Cherat Cement Company Limited, Top Stars Industries Pvt Limited, Pedro Pharmaceuticals Labs Pvt Limited, Daudson Armoury Pvt Limited, Alpha Pipe Industries Pvt Limited, MMC General Hospital, Rakaposhi Pharmaceuticals Pvt Limited and Peshawar Model School were awarded with export trophies for displaying remarkable performance in industrial and commercial sectors during the year 2017-18.
Meanwhile, a memorandum of understanding (MoU) was signed between the SCCI and the Azerbaijan Chamber of Commerce and Industry. Both sides agreed to enhance the level of the existing trade and economic relations, besides strengthening business-to-business contacts and taking mutual benefits from each other’s experiences.
Speaking on the occasion, Faiz Muhammad invited the Azerbaijan businessmen to make investments in different sectors of KP. He also informed the audience about the industrial incentives being offered in the province.
He thanked the ACCI along with Azeri traders and businessmen for making the investment conference a success and hoped that the conference would open “a new chapter of cooperation in trade and investment with Azerbaijan”.
Zahidullah Shinwari, in his address, termed KPIOC 2019 as a milestone achievement of the SCCI, reiterating that the Azeri investors “must take full advantages of the business-friendly environment in KP”.
Mushtaq Ahmad Ghani and Shaukat Yousafzai praised the SCCI and the business community for arranging the mega investment event in Baku. They assured the governments of Pakistan and Khyber Pakhtunkhwa would fully facilitate the Azeri investors.
Mushtaq Ghani said the Pakistan was a peaceful country and a lucrative destination for foreign as well as local investors. He said both Pakistan and Azerbaijan were enjoying cordial economic and trade relations, which need to be strengthened further. He also highlighted the existing opportunities in the energy, tourism, textiles, mineral, pharmaceutical, honey and agriculture sectors of Pakistan.
On the sideline of the investment conference, a B2B meeting was also held between the business communities of Khyber Pakhtunkhwa and Azerbaijan, wherein the Azeri investors showed a keen interest to invest in KP.
20. Alleged corruption, favouritism leaves NIRC in shambles – PPT – 7.9.19
ISLAMABAD: The operations of the National Industrial Research Commission (NIRC), an attached department of the Ministry of Overseas Pakistanis and Human Resource Development, have been brought to a virtual standstill amid increasing allegations of favouritism and corruption.
According to sources privy to this development, the government had directed NIRC chairman Justice (r) Shakirullah Jan to vacate his office by mid-September despite the fact that the cabinet had last year extended his contract for two years.
Justice (r) Shakirullah Jan was trying his best to retain his position for another year, sources said, adding that in this regard, he also held meetings with some senior officials at the PM House.
However, sources said his efforts remained futile and he was asked to leave by mid-September.
The retired judge, during his first two-year in office, had not authored any judgment with regard to the labourers’ issues, sources claimed. When a member of the National Assembly had asked the ministry about the chairman’s performance, the ministry simply started manipulating the facts and instead tried to explain the “legal aspects regarding authorisations of judgments”, they added.
“Allegations of bribery and corruption have been rife at the NIRC, as the trade unions are paying heavy bribes to get the commission’s decisions in their favourable,” sources said. “The NIRC officials use various tactics to harass those who refuse to offer them bribes.”
In recent months, the State Bank of Pakistan’s trade union accused the NIRC officials of bribery and requested Prime Minister’s Special Assistant on Overseas Pakistan Zulfi Bukhari to conduct an inquiry in this regard.
The PM’s special assistant then appointed a senior joint secretary as inquiry officer. However, the inquiry officer gave a clean chit to the accused (deputy registrar Bilal Nadeem) owing to the alleged pressure from the ministry and NIRC high-ups.
Similarly, the Federal Investigation Agency (FIA) has also been investigating against NIRC deputy registrar Naveed Khokhar on corruption allegations. He is currently on a three-month leave.
Moreover, the Platinum Pharma Worker Association has urged the PM to take action against Bilal Nadeem and NIRC member Noor Zaman, as both of them had asked the union chairman to pay heavy bribes against the registration of the union.
According to sources, Noor Zaman was a close aide of the incumbent chairman and that he was recently assigned with all the administrative and financial matters at the NIRC.
Noor Zaman retired from government service last year as joint secretary of the MoOP&HRD. The PTI government had appointed him as NIRC member on the recommendation of the chairman despite the fact he lacked relevant education and experience.
Sources further informed that the International Labor Organization had earlier apprised Zulfi Bukhari of the poor state of affairs regarding protection and facilitation of labour unions in Pakistan.
The European Union, on the recommendation of ILO, had granted 4pc rebate on export to Pakistan. However, sources believed that Pakistan failed to promote trade unions while the PM’s special assistant also failed to give solid answers to EU on labourers’ issues, owing to which the rebate opportunity is in danger.
According to sources, the government is mulling to appoint Justice (r) Azmat Saeed as the new NIRC chairman.
When this scribe tried to contact the ministry secretary through his staff, it was told to contact the ministry’s PRO. The PRO told this scribe to contact NIRC as “it has its own chairman” and that “they will be in a better position to provide all the necessary details”.
The scribe also approached to NIRC member Noor Zaman but to no avail. However, NIRC deputy registrar Bilal Nadeem maintained, “There has been no inquiry against me and the chairman will remain on the seat for another year.”
21. Govt may cut development funds to counter budget deficit – PPT – 7.9.19
ISLAMABAD: The country may need to cut on development spending, subsidies and other contingent liabilities to control increasing budget deficit, claimed a report in The News.
“There is no room for increasing tax rates at this juncture as the economy is already in ICU and cannot absorb further burden and suffocation,” former finance minister Dr Hafeez Pasha said while talking to the newspaper.
At the moment the fiscal adjustment of 3 percent of Gross Domestic Product (GDP) equivalent to Rs1,300 billion simply looks impossible. The primary deficit that was envisaged at 1.8 percent for the last fiscal year climbed to 3.6 percent of GDP and under the IMF programme it was envisaged to slash down to 0.6 percent of GDP in the current fiscal year. “The massive adjustment of 3 percent of GDP cannot be done,” said official sources in the report.
The Ministry of Finance said on Friday that the reforms agenda being pursued by the government with the support of IMF Extended Fund Facility (EFF) is aimed at putting the economy on a sustainable growth trajectory.
The ministry also dispelled the impression created in a section of the media claiming that the government will face a gap of up to Rs1 trillion in the FY20 fiscal framework, saying that it was not based on facts, according to the report
FBR tax revenue shortfall of Rs 321bn in FY19 was the single biggest reason for the increase in the fiscal deficit and it was driven by a fall in imports.
22. Dr Mujtaba Piracha appointed as Pakistan’s ambassador to WTO – PPT – 7.9.19
Dr Muhammad Mujtaba Piracha has been appointed as Pakistan’s permanent ambassador to the World Trade Organisation in Geneva, Switzerland, as per a notification signed by the secretary to the prime minister.
“The prime minister has seen and is pleased to approve the nomination of Dr Muhammad Mujtaba Piracha merit No 1 of the panel finalized,” the notification read.
Piracha is a Grade 21 officer from the Pakistan Administrative Service. He completed his PhD from the University of Sussex in the United Kingdom and BSc in Economics from the London School of Economics. He has previously served in the finance and planning departments of Balochistan and Punjab.
23. Govt reprimanded for including 44 unapproved projects in PSDP – PPT – 7.9.19
ISLAMABAD: Senate Standing Committee on Planning Development and Reforms expressed concern over the inclusion of 44 unapproved projects in Public Sector Development Programme (PSDP) for the current fiscal year.
Senator Agha Durrani expressed reservation over inclusion of 44 unapproved schemes which had not appeared in the PSDP documents presented to the Senate and the standing committee.
Senator Durrani said the committee was assured new projects that came under provincial domain and unapproved projects would not be included in the federal PSDP. “Despite all these assurances, 44 unapproved projects were included in the new PSDP book and which were never presented in the senate,” he added. “Such inclusion of projects in PSDP is unconstitutional.”
24. Govt releases Rs76m for ITTMS project – PPT – 7.9.19
The government has released an amount of Rs76 million for the development of an Integrated Transit Trade Management System (ITTMS), being developed under the Asian Development Bank’s (ADB) Regional Improving Border Service Project.
The project envisages the establishment of state-of-the-art facilities at Wagah, Torkham and Chaman border crossing points, official sources said, adding that once completed, it would significantly reduce the processing time at crossing points.
The project is of great strategic importance both in terms of security and trade, they added.
The government had earmarked Rs480 million for the project under the Public Sector Development Programme (PSDP) for the fiscal year 2019-20, with foreign assistance of Rs100 million.
The total cost of the ITTMS project has been estimated at Rs31,62 billion, which includes a foreign exchange component of Rs26,04 billion.
The project was approved by the Executive Committee of National Economic Council (ECNEC) in September 2015.
Experts believe Pakistan has great importance in the region owing to its unique geostrategic position and has the potential to become the most preferred corridor for trade in South and Central Asia.
However, due to very weak and almost rudimentary trade-related infrastructure, Pakistan had missed the opportunity to channel the trade from and to the landlocked neighbouring countries and other emerging economies of the world, including China and India, to become part of the massive global supply chain.
The ITTMS is being executed under Central Asia Regional Economic Cooperation-Regional Improving Border Services (CAREC-RIBS).
According to sources, the project would help upgrade the infrastructure at border crossing points, in the context of CAREC Corridor for Trade, to support a modern supply chain.
“The project includes the development of one-window ICT-based systems and procedures,” they said. “The cargo movement from and to Karachi going upcountry for internal consumption within the country or for transit movement destined to exit from Chamman, Torkham and Wagha would be processed and routed through an integrated system to reduce dwell time for cargo clearance and onward dispatch.”
Sources said the project would also ensure a proper exit of outbound cargo, a check on the backward flow of goods, decrease in the incidences of smuggling for keeping, pave way for one-window operations at country and regional level as well as for the introduction of Authorized Economic Operators.
25. Govt moves SC over GIDC, seeks early hearing – PPT – 7.9.19
ISLAMABAD: The federal government moved the Supreme Court (SC) on Friday over the controversial Gas Infrastructure Development Cess (GIDC) Ordinance, an amnesty scheme of its type, and sought an early hearing of the GIDC-related cases.
Following the directives of Prime Minister Imran Khan, Attorney General Anwar Mansoor Khan filed a petition at the top court’s registrar office, seeking immediate hearing of the case.
The petition stated that the cases related to the ordinance are pending since 2017, while the delay is causing problems to retrieve revenue belonging to the federal government. It pleaded the office to approve the petition for an immediate hearing.
Prime Minister Imran on Wednesday withdrew the much-debated ordinance in view of the recent controversy that allowed to waive off Rs210 billions to the industrialists through a presidential decree.
According to a statement issued by the Prime Minister’s Office (PMO), the premier had decided to withdraw the presidential ordinance regarding the GIDC and directed the attorney general to “approach the Supreme Court for urgent hearing of the matter”.
However, the government was concerned over going to the SC, saying the decision could go either way and then it wouldn’t get even half of the money under the GIDC head.
“Going to court carries a risk because the decision could go either way. This means that the government could get the whole amount or could lose it all and possibly forgo any prospect of future revenue collection under the head,” added the statement.
“Also on top of this, the government could be saddled with the burden of administering refunds of approximately Rs295 billion of the principal amount.”
The government attracted criticism in recent days for granting major discount worth around Rs 420bn in terms of GIDC, payable by fertiliser plants, power plants, general industry and the CNG sector. It extended Rs 210 billion waver to the gas sector businesses under the GIDC ordinance.
26. Pakistan, Saudi Arabia discuss investment avenues – PPT – 7.9.19
ISLAMABAD: A delegation of Saudi companies, led by Deputy Minister of Energy, Industry and Mineral Resources for Mining Khalid Saleh Al-Modaifer met Adviser to PM on Commerce, Textile, Industries and Production, and Investment Abdul Razak Dawood.
The two parties discussed investment prospects in Pakistan’s energy, power and mining and mineral sectors, said a press release issued by the commerce ministry.
As per media reports, Saudi Arabia has vowed to show tangible progress on $20 billion investment commitments before the next meeting of Pak-Saudi Supreme Coordination Council.
“The proposed mega projects are complex and require time and studies but our leaderships want to accelerate work on them,” said Saudi Arabia Deputy Minister of Energy Khalid Saleh Al-Modaifer during an interaction on Friday.
The Gulf state has announced a $20 billion investment package for Pakistan that includes a petrochemical complex, renewable energy projects and investment in mineral resources.
1. China ships equipment for $1.7bln energy project – TN
2. China’s August forex reserves rise to $3.1072trln – TN
1. Georgieva closes in on top IMF job as no challengers seen – TN
2. US-UK trade deal won’t be so easy post-Brexit – D
WASHINGTON: Britain hasn’t even divorced the European Union yet, and already a new suitor has come calling: the United States.
During a visit this week to the United Kingdom, Vice President Mike Pence brought word from his boss, President Donald Trump: The United States is eager to reach a new trade pact one that won’t be possible until Britain completes Brexit and moves out of the 28-country EU trading bloc.
“Our message is clear: The minute the UK is out, America is in,” Vice President Mike Pence said in a visit with British Prime Minister Boris Johnson at 10 Downing Street on Thursday.
Not so fast.
Building a new US-UK trading relationship atop the wreckage of Brexit won’t be easy.
British officials are already vowing to resist an agreement that is lopsided in favor of the more powerful United States, creating potential for disputes over matters such as chlorinated chicken and the divisive Scottish dish haggis.
“I know that you guys are pretty tough negotiators,” Johnson told Pence. “So, we’re going to work very hard to make sure that that free trade deal is one that works for all sides.”
As a member of the EU, Britain outsourced its trade policy to the bloc’s bureaucrats in Brussels. Before it can pursue an independent course and reach a brand-new trade pact with Washington, London will have to negotiate a divorce with the EU or crash out of the bloc without a deal and risk damaging its own economy.
“Until that gets resolved, this is all speculation,” said Christine McDaniel, senior research fellow at George Mason University’s Mercatus Centre.
And the terms of the UK-EU split will complicate any deal with the Americans, which will have to be approved by Congress.
No obstacle looms larger than the fate of the border between the independent Republic of Ireland and Northern Ireland, which is part of the United Kingdom.
Currently, people and goods can freely cross the Irish border without encountering immigration or customs checkpoints because both the U.K. and Ireland belong to the EU, which allows free trade and travel among its members.
The question is: What happens to the Irish border if Britain leaves the EU? If the border stays open, a US-UK trade deal won’t work. That is because an open border would allow goods from the remaining 27 EU countries to slip into Britain via the Republic of Ireland. Those goods could then be exported to the United States under the favourable terms of what is supposed to be an exclusive deal between the U.K. and the US.
But creating a hard border between the two Ireland’s would risk conjuring up old animosities and undermining the historic Good Friday accord of 1998 that brought peace to an island long torn by violence.
What’s more, House Speaker Nancy Pelosi has repeatedly said there is “no chance” the U.S. Congress will approve a trade pact with Britain if Brexit closes the Irish border.
Still, there are reasons for optimism if the Brexit issues can be resolved. Trump has a friendlier relationship with Johnson than he does with many other leaders. So it’s possible that US-UK trade talks can proceed more smoothly and quickly than American negotiations with, say, China.
Some issues are likely to prove thorny. Britain’s farmers have been shielded from export competition under the EU’s protectionist agricultural policies. The US intends to demand more access to Britain’s agriculture market post-Brexit, according to a list of negotiating objectives the Office of the US Trade Representative published in February. Accepting more competition from American farmers could prove a tough sell in Britain.
And there are other sensitive issues. In June, Trump caused a stir when he said that “everything” including Britain’s National Health Service would “be on the table” in US-UK trade talks. The British are fiercely protective of the state-run health system, which delivers free medical care to everyone. Although Trump later walked back the idea, Johnson reiterated this week that “the National Health Service is not on the table.”
Johnson also suggested that America needs to lift its ban on Scottish haggis a savoury pudding cooked in the stomach of a calf or lamb and made a joking reference to British fears that the US would insist on more lax food safety standards, resulting in an influx of chlorinated chicken from the United States.
3. US states launch antitrust probes of tech companies – ET
Two groups of US state attorneys general on Friday announced separate antitrust probes of large tech companies such as Alphabet’s Google and Facebook.
The first probe, led by New York and including seven other states and the District of Columbia, focuses on Facebook. The second, announced by Texas and likely to include up to 40 other states, did not specify the targets among large tech companies but was expected to centre on Google.
Once lauded as engines of economic growth, the companies in social media, internet search, e-commerce and other digital technologies have increasingly been on the defensive over lapses such as privacy breaches and their outsized market influence. Politicians including President Donald Trump, consumers, other firms and regulators have criticised that power.
“I’m launching an investigation into Facebook to determine whether their actions endangered consumer data, reduced the quality of consumers’ choices or increased the price of advertising,” New York Attorney General Letitia James tweeted.
“The largest social media platform in the world must follow the law,” she said.
The Facebook probe will include New York, Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.
Texas Attorney General Ken Paxton’s office said it was leading an investigation of large tech companies but did not name them.
That probe, likely to include more than 40 state attorneys general, is expected to focus on Google, sources familiar with the matter told Reuters. A second source previously said that the Google investigation would look at the intersection of privacy and antitrust.
Google’s parent Alphabet said on Friday the Department of Justice in late August requested information and documents related to prior antitrust probes of the company.
4. US to preserve economic expansion – TN
5. US-China trade conflict could take years to resolve: Kudlow – ET
White House Economic Adviser Larry Kudlow said on Friday the United States wants “near term” results from US-China trade talks in September and October but cautioned that the trade conflict could take years to resolve.
Speaking to reporters outside the White House, Kudlow said that although the United States and China have been negotiating on trade and intellectual property issues for 18 months, that was a short period of time in terms of what was at stake and negotiations could go on much longer.
“A deal of this size and scope and central global importance, I don’t think 18 months is a very long time,” Kudlow said. “The stakes are so high, we have to get it right, and if that takes a decade, so be it,” Kudlow added, drawing parallels to US Cold War competition against the Soviet Union.
But in confirming talks between high-level US and Chinese officials in early October, Kudlow declined to predict outcomes or a specific timeline for reaching any agreements. The plans for the first in-person US-China trade meeting since late July were set during a phone call on Thursday between Chinese Vice Premier Liu He, US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin. Trade deputies are due to meet in mid-September.
Back to May
The 14-month US-China trade war has escalated sharply since May, when talks broke down after Beijing backtracked on earlier commitments to make changes in law to improve intellectual property protections, curb the forced transfer of US technology to Chinese firms and improve US access to Chinese markets.
Since then, US President Donald Trump has sharply increased existing tariffs on $200 billion worth of Chinese goods and imposed or scheduled new tariffs on virtually all remaining imports from China to increase his negotiating leverage. Kudlow told Bloomberg TV that he could not speculate on whether the September or October talks could delay a planned tariff increase on October 1 to 30% from 25% on $250 billion worth of Chinese goods.
“We would like to go back to where we were last May, but I don’t know if that’s possible, and I don’t want to predict any outcomes. This is a difficult matter,” told reporters at the White House. He also said that it was importance that Chinese reforms be reflected in changes to its laws and that any deal must have enforcement provisions to ensure that China lives up to its commitments.
6. US states launch antitrust probes of tech companies – PPT – 7.9.19
AGENCIES: Two groups of US state attorneys general have announced separate antitrust probes of large tech companies such as Alphabet’s Google and Facebook.
The first probe, led by New York and including seven other states and the District of Columbia, focuses on Facebook. The second, announced by Texas and likely to include up to 40 other states, did not specify the targets among large tech companies but was expected to centre on Google.
Once lauded as engines of economic growth, the companies in social media, Internet search, e-commerce and other digital technologies have increasingly been on the defensive over lapses such as privacy breaches and their outsized market influence.
Politicians including President Donald Trump, consumers, other firms and regulators have criticized that power.
“I’m launching an investigation into Facebook to determine whether their actions endangered consumer data, reduced the quality of consumers’ choices or increased the price of advertising,” New York Attorney General Letitia James tweeted.
“The largest social media platform in the world must follow the law,” she said.
The Facebook probe will include New York, Colorado, Florida, Iowa, Nebraska, North Carolina, Ohio, Tennessee and the District of Columbia.
Texas Attorney General Ken Paxton’s office said it was leading an investigation of large tech companies but did not name them.
That probe, likely to include more than 40 state attorneys general, is expected to focus on Google, sources familiar with the matter told Reuters. A second source previously said that the Google investigation would look at the intersection of privacy and antitrust.
Google’s parent Alphabet said on Friday the Department of Justice in late August requested information and documents related to prior antitrust probes of the company. The company added in a securities filing that it expects similar investigative demands from state attorneys general, and that it is cooperating with regulators.
On the federal level, the Justice Department and Federal Trade Commission are probing Facebook, Google, Apple and Amazon, also for potential violations of antitrust law.
Trump has called for closer scrutiny of social media firms and Google, accusing them of suppressing conservative voices online without presenting any evidence.
Facebook’s shares were down nearly 2pc in afternoon trading. Google, Apple and Amazon stocks were virtually unchanged.
Will Castleberry, Facebook’s vice president for state and local policy, said after the New York announcement that the company would work constructively with state attorneys general.
“People have multiple choices for every one of the services we provide. We understand that if we stop innovating, people can easily leave our platform. This underscores the competition we face, not only in the United States but around the globe,” Castleberry said.
The tech companies have come under fire repeatedly in recent years. Facebook, for example, has been slow to clamp down on hate speech, and it recently paid a $5 billion settlement for sharing 87 million users’ data with the now-defunct British political consulting firm Cambridge Analytica. The consultancy’s clients included Trump’s 2016 election campaign.
Other International News
1. Canada challenges China’s canola ban at WTO – ET
Canada, locked in a major dispute with Beijing, is taking the first formal step at the World Trade Organisation (WTO) to challenge China’s decision to block Canadian canola exports, Trade Minister Jim Carr said on Friday.
China, angry at Canada’s detention of a top Huawei Technologies executive last year on a US arrest warrant, blocked all imports of canola seed in March on the grounds they contained pests. “We have continuously been engaging with China at multiple levels. The issue is that we’re not seeing progress fast enough and as we would with any trading partner, this is the next step,” Carr spokesman Michael Jones said.
Carr said in a statement that Ottawa was seeking bilateral consultations with China at the WTO. Under WTO rules, Canada and China should meet within 30 days, and if these talks fail, Canada can request adjudication by a panel. The WTO timeline means there is slim chance of a resolution before Canadians vote in a federal election on October 21. Polls show Prime Minister Justin Trudeau’s Liberals face a tough fight against the opposition Conservatives. Conservative leader Andrew Scheer, who has strong political support from Canada’s agriculture community, has attacked the prime minister for being weak in his dealings with China.
2. Canada jobless rate steady – TN
3. Turkey calls on US to lift trade barriers – ET
Turkey asked the United States to lift trade barriers between the two countries during talks on Saturday aimed at sharply increasing bilateral commerce, Turkey’s trade minister said.
Washington and Ankara have set an ambitious goal of quadrupling their trade to $100 billion a year, despite the prospect of US sanctions over Turkey’s recent purchase of Russian missile defence systems.
Trade Minister Ruhsar Pekcan said she expressed Turkey’s “clear expectation” to US Secretary of Commerce Wilbur Ross over the removal of “certain barriers and policies as implemented by the US administration that constitute (an) obstacle to enhancing our bilateral trade.”
The White House said in May it was ending a preferential trade agreement with Turkey, saying Turkey’s level of economic development meant it was no longer eligible for the support. Pekcan said she discussed increasing Turkish exports in the civil aviation, automotive, jewellery, furniture, textiles and clothing sectors.
4. Erdogan expects Turkish interest rates to fall further – PPT – 7.9.19
ISTANBUL: Turkish President Tayyip Erdogan said on Saturday he expected the central bank to keep cutting interest rates, five days before its monetary policy board is due to meet.
The central bank slashed its key interest rate by 425 basis points to 19.75pc last month, and Erdogan said the downward trend was likely to continue.
“The monetary policy board meets on Thursday. I believe interest rates will fall further,” said Erdogan, who often criticises high interest rates, calling for lower borrowing costs to boost economic activity.
“As interest rates fall, inflation will downgrade too, you will see,” he said in a speech in the northwestern city of Eskisehir.
Last year, Turkey’s central bank hiked its benchmark rate to 24pc to stem a slump in the lira and a spike in inflation, which has since fallen from October’s 15-year high of more than 25pc.
The lira lost nearly 30pc of its value against the US dollar last year in what Erdogan portrayed as an economic war against Turkey.
“After the currency attacks last August, the balancing process we implemented continues successfully. We are back to the stage of strengthening our growth,” he said.
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