Day: April 13, 2020

ECC approves 0.2MMT wheat for Utility Stores

ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet on Monday approved 0.2 million metric tons of wheat for Utility Stores Corporation (USC) to provide relief to masses.

Adviser to the Prime Minister on Finance and Revenue Dr. Abdul Hafeez Shaikh chaired the meeting of the Economic Coordination Committee (ECC) of the Cabinet today at the Cabinet Division.

ECC approved the allocation of additional 200,000 M.T of wheat for Utility Stores Corporation from PASSCO, the approved quantity will be released in tranches.

The first tranche will be of 50,000MT, which would be released immediately; the rest will be released on demand by USC.

The total cost of this package is Rs.8.690 billion including incidental charges of 1.690 billion. The chair also directed that the record of the USC and PASSCO may be completely computerized so that it may ensure transparency and facilitate decision making.

There was also a discussion in ECC on data collection from private flour mills in order to ascertain the correct situation of demand and supply of wheat/atta in the country and to ensure accuracy in decision making.

The Chair also asked the Poverty Alleviation Division to ensure transparency and efficiency in disbursement of funds to the vulnerable in wake of COVID-19 situation in the country.

Secretary Poverty Alleviation Social Safety Division assured the ECC that no one would be allowed to swindle the poor people of this country, he further informed that the multiple arrests have already been made and exemplary punishment will be given to those who will cheat the poor.

The Division also briefed the ECC that so far 1.7 million families have been paid under the Ehsaas program and payments to remaining families are underway.

April 13, 2020
SECP extends insurance license renewal date

ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has extended license renewal date for insurance brokers in the wake of coronavirus outbreak.

The SECP issued Circular No. 12 on Monday to extend the date for license renewal for insurance business.

The SECP said that considering the gravity of the pandemic coronavirus (COVID-19) on public health and lockdown situation in the country, insurance brokers, insurance surveyors and authorized surveying officers are facing difficulties while ensuring compliance with regulatory requirements related to renewal of license under the Insurance Ordinance, 2000.

The SECP said that in order to facilitate the insurance brokers, insurance surveyors and ASOs during the ongoing pandemic, the regulator issued following guidelines regarding renewal of licenses:

(i) Any insurance brokers/insurance surveyor/ASO whose license has expired or will expire during the period from March 15, 2020 to May 15, 2020 shall continue to carry on its business without renewal of its current license with the commission;

(ii) The above relaxation shall be effective for a period of two months i.e. it shall end on May 15. The respective insurance brokers, insurance surveyors, and ASOs shall be bound to file their applications prior to the deadline of May 15, 2020.

(iii) Upon receipt of the application, license shall be renewed effective from the date of expiry of the previous license.

(iv) Insurance brokers, insurance surveyors and ASOs facing difficulties to arrange documents, required under the Ordinance for renewal of license may avail the above mentioned relaxation.

(v) While surveyors/ASOs can file applications online through e-services, insurance brokers may send their applications to the commission via email until the expiry of the lockdown; and

(vi) All insurance companies/ general takaful operators shall continue to do business with insurance brokers /insurance surveyors/ASOs considering the grace period of two months for any license expired after March 15, 2020.

April 13, 2020
Share market falls by 1,000 points amid cut in global oil production

KARACHI: The share market fell by 1,000 points on Monday despite announcement in cut of international oil production.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 31,033 points as against 32,03 points showing a decline of 1000 points.

Analysts at Arif Habib Limited said that the market headed south today on the back of negative development on OPEC+ deal, which although announced hefty production cuts, but still not enough to meet the global oil demand.

Another key trigger awaited by Oil & gas scrips were the announcement of Official Selling Price (OSP) by Saudi Aramco, which was already delayed by a week for reasons of disagreement on production cuts among OPEC, NOPEC and G20 countries.

The OSP announcement came by the end of session, during MoC, and saw selling activity on KSE100 increased further.

Early on, the index bore significant selling pressure in HUBC, which hit lower circuit after realizing trade of around 2.7 million shares and maintained lower circuit by close of session.

Besides, oil & gas scrips, selling activity was observed almost across the board in Cement and Banking sector scrips as well. Cement sector continued the lead in terms of trading volumes with 39.7 million shares, followed by O&GMCs (21.8 million) and Power (14 million).

Among scrips, HASCOL topped the volumes with 16.9 million shares, followed by MLCF (12.7 million) and PAEL (8.2 million).

Sectors contributing to the performance include Banks (-253 points), Power (-148 points), Cement (-110 points), Fertilizer (-107 points and E&P (-93 points).

Volumes increased from 127.1 million shares to 153.8 million shares (+21 percent DoD). Average traded value also increased by 14 percent to reach US$ 34.4 million as against US$ 30.1 million.

Stocks that contributed significantly to the volumes include HASCOL, MLCF, PIOC, PAEL and TRG, which formed 35 percent of total volumes.

Stocks that contributed positively to the index include SYS (+6 points), JLICL (6 points), IDYM (+3 points), MUREB (+1 points) and ARPL (+1 points). Stocks that contributed negatively include HUBC (-126 points), ENGRO (-57 points), UBL (-51 points), HBL (-49 points), and NESTLE (-42 points).

April 13, 2020
Rupee eases by four paisas on import demand

KARACHI: The Pak Rupee fell by four paisas on Monday owing to demand for import payment as market opened after two weekly holidays.

The rupee ended at Rs166.83 to the dollar from last Friday’s of Rs166.79 in interbank foreign exchange market.

The rupee was under pressure during the day due to demand for import payment, especially related to commodities used during the holy month of Razaman.

Currency experts said that the rupee may make gain in coming days with expected disbursement by the IMF.

They said that the IMF disbursement would help the country to improve foreign exchange reserves.

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 13, 2020
Karachi Chamber advocates unregistered transactions

KARACHI: Karachi Chamber of Commerce and Industry (KCCI) reiterated demand for eliminating condition of Computerized National Identity Card (CNIC) and allow unregistered persons to make purchases freely.

KCCI President Agha Shahab Ahmed Khan in a statement on Monday urged the government to immediately waive CNIC requirement for sales to unregistered persons and three percent further tax in order to revive the economic activities and business transactions.

In a letter sent to PM’s Advisor on Finance & Revenue Dr. Abdul Hafeez Shaikh, President KCCI said that waiver of CNIC condition and 3 percent Further Tax would result in release of major stockpiles of commodities and consumer goods into the markets and revenue collection will improve through liberalization of transactions.

“Small and Medium Industry will also benefit as a result of such measure because a very large volume of raw materials is supplied to SMEs by commercial importers who are stuck with inventories. In order to stimulate the economy, an across the board relief is required rather than selective assistance to already favored sectors,” he added.

President KCCI pointed out that in the Finance Act 2019, an amendment was made to Section 8 (Sub-Sec.1, Clause M) of Sales Tax Act, by addition of 10th Schedule, whereby it is mandatory to provide CNIC number of unregistered buyers in the invoice and Sales Tax Returns in addition to payment of 3 percent Further Tax. Similar statute has been added U/S.19A of Federal Excise Act, Sec.216A to Income Tax Ordinance and Sec.156A of Customs Act.

He noted that since the number of registered persons in Sales Tax regime stood hardly at around 45,000 all over Pakistan, it is not possible for suppliers/ sellers and manufacturers to provide the CNIC of buyers on account of all their sales. This condition has resulted in a slowdown of business transactions and proliferation of cash economy.

Agha Shahab said that the situation has further aggravated due to country-wide lockdown and disruption in supply chain due to the outbreak of coronavirus. Consequently, stocks and inventories with importers, manufacturers and wholesalers are accumulating while recoveries from markets have completely stopped and a large number of bank defaults are likely to take place due to liquidity crunch.

Unfortunately, while giving major relief to export sectors which hardly contributes 5 to 6 percent to GDP, the government has entirely ignored the larger sectors of industry and trade catering to domestic markets and contributing 94 percent to GDP and major part of tax revenue, he said, adding that it will prove to be detrimental for revenue collection by the FBR if the business transactions remain stalled while the government would surely miss the revenue targets and incur larger fiscal deficit as a result of imposition of CNIC provisions and 3 percent further tax.

“Hence, as a relief measure, the requirement of CNIC for sales to unregistered persons and 3 percent Further Tax has to be waived immediately in order to revive the economic activities and business transactions”, Agha Shahab stressed.

April 13, 2020