Day: April 8, 2020

Prolonged industry closure to be harmful: FPCCI

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, urged the authorities to evolve strategy of functioning business activities during lockdown to prevent spread of coronavirus.

FPCCI President Mian Anjum Nisar, while criticizing arrest of businessmen urged the relevant authorities to take serious notice of the situation.

He also urged to devise Standard Operating Procedures (SOPs) to the trade and industry for smooth functioning as the economy of Pakistan may not face prolonged closure of the industry that will be harmful for the entire nations.

He expressed serious concern over unfavorable behavior towards the trade and industry that are supporting the government to ensure economic sustainability in this crises where every segment of economy is suffering.

He said that legal/representative forums are available to complaint against violation by any member of the business community. On the other hand the entire trade and industry has assured to the government for economic progress despite various challenges due to prevailing condition under COVID-19.

However, such attitude discourages commercial activities to support the government policies and programs.

Mian Anjum Nisar President FPCCI seriously expressed his concern over the arrest/detention of a member of the business community and termed it a discouraging environment for businesses where the industry is facing lot of challenges to compete and complete exports order that Pakistan needs to continue to bring foreign exchange through exports.

He further told that the exporters are losing orders, nearly 70 percent export orders has been cancelled due to global environment and for completing remaining 30 percent we need to function smoothly adherence to health precautionary measures.

But under such circumstances where industry has to be closed, no lay off labors, no facility for shipments, cash flow, banking and market obligation, how all these requirements could be met out when the authorities and agencies creating such problems of harassment and arrest/ detention of industrialists.

He stated that at this time of global crises where most of the countries are losing trade and facing drastic decline in exports the government should follow policies that are favourable to industry and avoid from strict actions against trade and industry of the country.

Those are following precautionary, safety and security measures at their factories to protect the environment from spread of virus may be supported uninterrupted production activities.

April 8, 2020
Karachi Chamber flays detaining industrialists

KARACHI: Karachi Chamber of Commerce and Industry (KCCI) has criticized arrest of industrialists especially textile mills owners for engagement in production activities during lockdown.

Agha Shahab, President, KCCI, expressed concerns over the arrest/ detention of owner a textile mill, stated that it was not a wise move to arrest anyone or raid industries but any violation of government’s order should be brought to KCCI’s and relevant industrial zone association’s notice so that the same could be amicably resolved through negotiations.

“The government should refrain from exacerbating their problems and finalize the Standard Operating Procedures (SOPs) at the earliest so that the industries could accordingly adopt precautionary measures,” President KCCI added in a statement issued.

While referring to Chief Minister Sindh’s recent meeting with representatives of the business and industrial community on April 4, 2020, President KCCI said that Chief Minister afterwards formed a committee which was tasked to outline the SOPs for industries but so far no response was received.

He stressed that export oriented industries should be allowed to operate on a condition that they will ensure compliance of precautionary measures including social distancing, use of masks, gloves and sanitizers to disinfect the coronavirus.

He hoped that the Sindh government would take serious notice of the situation and order the Committee to notify SOPs to industries at the earliest while the labor department should only be authorized to vigilantly supervise all the industrial activities.

The government will have to act really fast in this regard with a view to save the industries as prolonged closure of the industrial units is going to be really detrimental and disastrous for the entire economy, he added.

April 8, 2020
Share market sheds 260 points amid selling pressure

KARACHI: The share market fell by 260 points on Wednesday owing to selling pressure seen during the day.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 30,971 points as against 31,231 points showing a decline of 260 points.

Analysts at Arif Habib Limited said that overnight pressure on international crude prices bore impact on KSE100 as well. With OPEC+ meeting scheduled for tomorrow (PST 7:00 PM), followed by a G20 meeting on Friday, on the same subject, i.e. production cut and management of crude price, local E&P stocks didn’t fell as much as the fall was witnessed in crude prices.

Market traded uni-directional (negative) for the most part of the session with Oil & Gas chain trading red. On the other hand, cyclicals, which had positive sentiments yesterday on the back of partial resumption of activities (primarily in Punjab), today saw selling pressure.

Cement sector, as have been the case for the past several sessions, again topped the volumes with 42.1 million shares, followed by Vanaspati (28.8 million) and O&GMCs (28.4 million).

Among scrips, UNITY (got traction from issuance of SRO on withdrawal of additional custom duty) led the volumes with 28.8 million shares, followed by HASCOL (25.8 million) and PAEL (14.1 million).

Sectors contributing to the performance include Banks (-115 points), E&P (-45 points), Cement (-37 points), Tobacco (-36 points), Fertilizer (-21 points), Insurance (+23 points).

Volumes increased from 172.7 million shares to 181.0 million shares (+5 percent DoD). Average traded value, on the other hand, declined by 13 percent to reach US$ 35.1 million as against US$ 40.2 million.

Stocks that contributed significantly to the volumes include UNITY, HASCOL, PAEL, MLCF and PIOC, which formed 50 percent of total volumes.

Stocks that contributed positively to the index include MCB (+18 points), IGIHL (9 points), KOHC (+9 points), KAPCO (+8 points) and OGDC (+7 points). Stocks that contributed negatively include PAKT (-36 points), LUCK (-32 points), BAFL (-29 points), BAHL (-28 points), and POL (-23 points).

April 8, 2020
Rupee recovers 14 paisas against dollar

KARACHI: The Pak Rupee recovered 14 paisas against dollar on Wednesday after witnessing significant decline a day earlier.

The rupee closed at Rs167.76 to the dollar from previous day’s closing of Rs167.90 in interbank foreign exchange market.

The local unit fell significantly a day earlier and lost 91 paisas against the greenback.

Currency experts said that the rupee was under massive pressure due to outflow of hot money during the past couple of month.

The outbreak of coronavirus jolted the financial markets across the globe, which also forced the investors to consolidate their funds.

A huge amount was also taken out by foreign investors from domestic debt market, which resulted pressure the local currency.

The experts said that the rupee likely to gain further in future owing to lower import payment demand after decline in international oil prices.

The import bill of the country has declined by 21 percent in March 2020 over the previous month owing to lockdown to contain coronavirus pandemic.

The import bill was at $3.3 billion in March 2020 as compared with $4.185 billion in February 2020, according to data released by Pakistan Bureau of Statistics (PBS) on Friday.

Similarly, the pandemic also adversely affected the country’s exports. The exports fell by 15.56 percent to $1.8 billion in March 2020 as compared with $2.14 billion in February 2020.

The total import bill during July – March 2019/2020 fell by 14.42 percent to $38.81 billion as compared with $40.68 billion in the corresponding period of the last fiscal year.

However, the exports registered increase of 2.23 percent during first nine months of current fiscal year to $17.45 billion as compared with $17 billion in the corresponding months of the last fiscal year.

The trade deficit during first nine months contracted by 26.45 percent to $17.36 billion as compared with the deficit of $23.61 billion in the corresponding period of the last fiscal year.

April 8, 2020
Punjab Tax Relief Package: Many sectors granted exemption till June 30

LAHORE: The government of Punjab has granted exemption from sales tax on services to many sectors in order to dilute effects of coronavirus.

The provincial government announced tax relief package to fight COVID-19 through a notification issued on April 02, 2020.

According to a notification issued by Punjab Revenue Authority (PRA) the tax exemption has been granted through amendments brought into the Second Schedule to the Punjab Sales Tax on Services Act, 2012.

The PRA said that zero percent without input tax adjustment has been allowed to hotels, motels and guest houses. However, this exemption has been granted to non-corporate, non-franchise and non-chain business. Meanwhile, 16 percent sales tax on service shall remained applicable for others.

The zero percent tax without input tax adjustment has also been allowed to:

Marriage halls and lawns (by whatever name called) including pandal and shamiana services.

Catering services (including all ancillary / allied services such as floral or other decoration, furnishing of space whether or not involving rental or equipment and accessories).

However, 16 percent sales tax on services shall applicable on clubs including race clubs and their membership services including services, facilities or advantages, for a subscription or any other amount to their member.

For life insurance and health insurance businesses, the PRA announced zero percent without input tax adjustment. While, sixteen percent of gross minimum paid shall be applicable for other insurance services.

Zero percent tax without input tax adjustment has been granted to services provided by digital platform. But the rate of 16 percent shall remain applicable for others.

The following services have been allowed zero percent sales tax on services without input tax adjustment under serial number of Second Schedule:

14. Construction services and services provided by contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works

18. Services provided for personal care by beauty parlors, salons, clinics, slimming clinics, spas (including saunas, Turkish baths and Jacuzzi) and similar other establishments

24. Services provided by other consultants (by whatever name called or treated, whether as consultant or otherwise) including human resource and personnel development services, exhibition or convention services[including provision of space, equipment, accessories and other allied services], event management services (whole range and variety of their services regardless of separate or individual classification thereof), valuation services, evaluation services (including competency and eligibility testing services), certification, verification and equivalence services, market research services, marketing or sales services (including marketing agencies and on line marketing or sales services), surveyors services, training or coaching services (other than general education services) and credit rating services.]

25. Services provided by tour operators[and travel agents including all their allied services or facilities] (other than Hajj and Umrah).

32. Services provided by property dealers[and realtors].

35. Services provided in respect of rent-a-car[(including renting of all categories of vehicles meant for transportation of persons)

36. Services provided by car/automobile dealers

43. Services provided in specified fields such as health care, gym, physical fitness, indoor sports, games,[amusement parks, arcades and other recreation facilities,]and body or sauna massage etc.

44. Services provided by laundries and dry cleaners

45. Services provided by cable TV operators.

66. Services in respect of treatment of textile, leather but not limited to Dyeing services, Edging and cutting, cloth treating, water proofing, Embroidery, Engraving, Fabric bleaching, Knitting, Leather staining, Leather working, Pre-shrinking, Color separation services, pattern printing and shoe making services.

67. Apartment house management, real estate management and services of rent collection.

68. (i) Medical consultation/ visit fee exceeding Rs.1,500per consultation/ visit of doctors, medical practitioners and medical specialists.(ii) Bed/ room charges of hospitals exceeding Rs.6,000/-per day per bed / room.

The PRA said that the notification shall remain effective for a period from its publication till June 06, 2020 (both days inclusive) and on and from July 01, 2020, the amendments shall cease to have effect and the position obtaining prior to this notification shall stand restored.

April 8, 2020
Bank timings during lockdown

KARACHI: State Bank of Pakistan (SBP) on Tuesday extended the office timings of the central bank and commercial banks during the lockdown period.

Many parts of the country are facing lockdown in order to contain the spread of coronavirus (COVID-19).

The SBP issued a notification dated March 26, 2020 and directed to observe office timings: Monday to Thursday 10:00AM to 4:00PM; and Friday (10:00AM to 1:00PM).

The SBP said that the above timings shall continue till April 14, 2020 (date included), unless modified or withdrawn earlier.

Accordingly, banks/development financial institutions/microfinance banks have also been directed to observe the mentioned timings in letter and spirit.

April 8, 2020