Day: February 4, 2021

Stock market witnesses slight decline amid profit taking

KARACHI: The stock market fell by nominal 28 points on Thursday owing to profit taking as investors preferred profit booking considering long weekend.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 46,905 points as against previous day’s closing of 46,933 points, showing a slight decline of 28 points.

Analysts at Arif Habib Limited said that last trading session of the short trading week made yet another new high of 47,339 points with E&P, O&GMCs, Banks and Cement sectors contributing to the upsurge.

Being a long weekend ahead, Investors preferred booking profit than holding the positions to meet an unforeseen event over the weekend.

Resultantly, the index eroded the gains of 406 points made during the session to close the session -28 points. Banking sectors saw almost across the board slide, whereas Engineering (Steel) sector also saw regression. Among scrips, PRL realized trading volumes of 34.4 million shares, followed by TRG (30.3 million) and KEL (18.6 million).

Sectors contributing to the performance include E&P (+119 points), Fertilizer (+21 points), Banks (-37 points), Pharma (-34 points), and Technology (-29 points).

Volumes declined from 616.3 million shares to 440.3 million shares (-29 percent DoD). Average traded value also declined by 11 percent to reach US$ 165.1 million as against US$ 184.2 million.

Stocks that contributed significantly to the volumes include PRL, TRG, KEL, PIBTL and HASCOL, which formed 26 percent of total volumes.

Stocks that contributed positively to the index include MARI (+70 points), OGDC (+42 points), LUCK (+29 points), SYS (+18 points) and ENGRO (+16 points). Stocks that contributed negatively include TRG (-47 points), AGP (-19 points), MCB (-16 points), PAKT (-14 points) and MLCF (-14 points).

February 4, 2021
PSX issues notices to PIA, 10 companies for unusual price movement

KARACHI: The Pakistan Stock Exchange (PSX) on Thursday issued notices of unusual movement in price or volume to 11 companies, including Pakistan International Airlines Corporation Limited (PIACL).

The PSX in the notice to PIACL said that if there are unusual movements in the price or volume of its traded securities is observed:

(a) Details of any matter or development of which it is aware that is or may relevant to the unusual movements, or

(b) A statement of the fact that it is not aware of any such matter or development.

“It may be noted that while reviewing the trading data of the company, it has been observed that the price of PIA has experienced substantial increase during last two months.”

The PSX further said: “In new of the above and in the absence of any material announcement of the company, you are advised to furnish the reason and/ or any material information in company’s knowledge which may have resulted in substantial increase in price in terms of clause 5.6.3. of PSX Regulations and Section 97 of the Securities Act, 2012 immediately.”

The PSX issued notices of unusual movement in price or volume to following companies:

01. Tri-Star Power Limited

02. Pakistan Cables Limited

03. Orient Rental Modaraba

04. First Pak Modaraba

05. The Universal Insurance Company Limited

06. Hi-Tech Lubricants Limited

07. Telecard Limited

08. MCB Arif Habib Savings and Investments Limited

09. Silkbank Limited

10. Nagina Cotton Mills Limited

11. Pakistan International Airlines Corp

February 4, 2021
Pakistan’s foreign exchange reserves increase to $20.163 billion

KARACHI: Pakistan’s total liquid foreign exchange reserves have increased by $57 million to $20.163 billion by week ended January 29, 2021, State Bank of Pakistan (SBP) said on Thursday.

The foreign exchange reserves of the country were at $20.106 billion by week ended January 22, 2021.

The official reserves of the State Bank increased by $33 million to $13.031 billion by week ended January 29, 2021 as compared with $20.106 billion a week ago.

The foreign exchange reserves held by commercial banks also increased by $24 million to $7.132 billion by week ended January 29, 2021 as compared with $7.108 billion a week ago.

February 4, 2021
Rupee gains 19 paisas ahead of long weekend

KARACHI: The Pak Rupee gained 19 paisas against the dollar on Thursday despite the higher demand for dollar ahead of holidays.

The rupee ended Rs159.99 to the dollar from the previous day’s closing of Rs160.18 in the interbank foreign exchange market.

Currency dealers said that the market witnessed sufficient supply of the foreign currency in the shape of export receipts and workers’ remittances.

They said the demand for import and corporate payments was also high because of upcoming three straight holidays.

The government has announced public holiday on Friday February 05, 2021 on account of Kashmir Solidarity Day. It will follow with two weekly holidays, making three straight holidays.

February 4, 2021
Jewelers making cash transactions above Rs2 million liable to comply with FATF conditions: FBR

ISLAMABAD: The Federal Board of Revenue (FBR) has said that jewelers making cash transactions with their buyers and sellers above Rs2 million are liable to monitoring under Anti-Money Laundering (AML)/Countering Financing of Terrorism (CFT), sources said on Thursday.

In this regard the FBR issued guidelines for persons dealing in precious stones and metals.

The procedures have been issued under anti money laundering (AML) and combating financing of terrorism (CFT) and to meet conditionalities of Financial Action Task Force (FATF).

A jeweler is required to retain record of such transactions for at least five years following the completion of a transaction.

Bringing Designated Non-Financing Business and Professions (DNFBP) into AML/CFT laws is one of the major requirements of the FATF. The FBR on September 29, 2020 issued SRO 924(I)/2020 to notify regulations namely Anti-Money Laundering and Countering Financing of Terrorism Regulations for DNFBPs, 2020.

The DNFBPs have been defined as real estate agents, jewelers and accountants.

The latest procedure for compliance by jewelers has also been issued to make this segment into money laundering free business.

The sources said a person engaged in the business of precious stones is not subject to AML/CFT if he is selling or buying jewellery below Rs2 million in cash.

According to the procedures issued by the FBR, if a person is a retail merchant and selling or buying jewellery e.g. rings, bracelets, necklaces and other bodily ornaments may not be a Dealers in Precious Metals and Stones (DPMS) in one year or one month, but the person starts selling or buying such items over Rs2 million threshold, in subsequent years or months, the person would be subject to AML/CFT.

The FBR interprets the Rs2 million threshold as a cash transaction below threshold amount, if the cash transaction is below Rs2 million but is part of a series of transactions related to the purchase of the same item or items totaling Rs2 million or above.

The revenue body said that the business of precious stones and metals may be abused by criminals and terrorists because of a number of factors.

“They can be of very high value, but still very small and therefore very easy to carry, transport and conceal. Transferring ownership does not require any formal registration process unlike for real estate, motor vehicles or share ownership,” the FBR said, adding that the holder of the precious stone and metal is the owner and can be held anonymously without a need for records to be kept.

“In terms of gold, it can be considered as a universally accepted currency and therefore, investing in gold to launder illegal earnings would be easy as well as profitable,” the FBR added.

The FBR also issued similar procedures for real estate agents and accountants.

February 4, 2021
Meeting decides speeding up installing video monitoring cameras at sugar mills

ISLAMABAD: A high level meeting chaired by Prime Minister Imran Khan on Wednesday decided to speed up the process of installing video monitoring cameras at sugar mills to ensure transparency in production and supply.

The prime minister was presiding over weekly review meeting regarding the availability and prices of basic commodities across the country.

The meeting was briefed about the various measures taken in the light of Sugar Inquiry Report to keep the price of sugar under control. It was decided that the process of installation of cameras in sugar mills would be quickened.

Besides, the Federal Board of Revenue (FBR) will provide the provincial governments with details of sales tax collected in the head of sugar so as to make the system transparent.

The meeting was told that owing to the effective measures taken by FBR, the collection of sales tax from sugar had recorded 84 percent increase during July-January period of the current fiscal year.

Prime Minister Imran Khan said that besides making the availability of basic commodities certain, ensuring appropriate prices was foremost priority of the government.

He directed the administration of Utility Stores Corporation (USC) to ensure the ample availability of basic goods at all outlets.

The meeting was attended by the relevant Federal and Provincial Ministers, Secretaries, Chief Secretaries and other senior officers.

The prime minister directed the Ministry of National Food Security to complete at the earliest the assessment work regarding the future requirement of basic commodities like wheat and sugar so as to ensure advance arrangements in that regard.

He directed all the chief secretaries to ensure the implementation of price list through active and effective role of the administration.

The prime minister ordered to ensure immediate action against the officers committing any negligence in that respect.

Minister for Finance Dr Hafeez Sheikh told the meeting that in the month of January 2021, the Consumer Price Index (CPI) was recorded at 5.7 percent as against 14.6 percent recorded in the corresponding month of previous fiscal year.

Similarly, the CPI recorded at 8.2 percent during July-January period of the current fiscal was also lower when compared with 11.2 percent recorded during the same period of last fiscal, he added.

The meeting was told that the comparison based on the latest statistics depicted significant decline in CPI.

It was further told that the prices of sugar, eggs, onion etc. have recorded decline whereas the price of wheat flour had shown stability.

The meeting was also briefed about the situation of official release of wheat along with the details of price differential at whole sale and retail levels in various districts.

It was told that price differential at whole sale and retail levels depicted the failure of market committees.

The meeting decided to immediately abolish the existing market committees in the two provinces ruled by Pakistan Tehrik-e-Insaf (PTI) and hand over the responsibilities to District and Tehsil administrations till the constitution of new committees comprising competent people through a transparent process.

It was decided that in case of non-implementation of price list, action would be taken against the relevant Assistant Commissioner.

February 4, 2021
Definition of manufacturer or producer under Sales Tax Act

A definition of manufacturer of producer has been included into the Sales Tax Act, 1990 (updated up to June 30, 2020) issued by the Federal Board of Revenue (FBR).

According to the definition “manufacturer” or “producer” means a person who engages, whether exclusively or not, in the production or manufacture of goods whether or not the raw material of which the goods are produced or manufactured are owned by him; and shall include –

(a) a person who by any process or operation assembles, mixes, cuts, dilutes, bottles, packages, repackages or prepares goods by any other manner;

(b) an assignee or trustee in bankruptcy, liquidator, executor, or curator or any manufacturer or producer and any person who disposes of his assets in any fiduciary capacity; and

(c) any person, firm or company which owns, holds, claims or uses any patent, proprietary, or other right to goods being manufactured, whether in his or its name, or on his or its behalf, as the case may be, whether or not such person, firm or company sells, distributes, consigns or otherwise disposes of the goods :

Provided that for the purpose of refund under this Act, only such shall be treated as manufacturer-cum-exporter who owns or has his own manufacturing facility to manufacture or produce the goods exported or to be exported.

It further explains “manufacture” or “produce”, which includes:

(a) any process in which an article singly or in combination with other articles, materials, components, is either converted into another distinct article or product or is so changed, transformed or reshaped that it becomes capable of being put to use differently or distinctly and includes any process incidental or ancillary to the completion of a manufactured product;

(b) process of printing, publishing, lithography and engraving; and

(c) process and operations of assembling, mixing, cutting, diluting, bottling, packaging, repacking or preparation of goods in any other manner.

February 4, 2021
What is input tax under Sales Tax Act?

The Sales Tax Act, 1990 as issued by the Federal Board of Revenue (FBR) as updated up to June 30, 2020 has explained input tax in relation to a registered person.

The input tax in relation to a registered person has been explained as:

(a) tax levied under this Act on supply of goods to the person;

(b) tax levied under this Act on the import of goods by the person;

(c) in relation to goods or services acquired by the person, tax levied under the Federal Excise Act, 2005 in sales tax mode as a duty of excise on the manufacture or production of the goods, or the rendering or providing of the services;

(d) Provincial Sales Tax levied on services rendered or provided to the person; and

(e) levied under the Sales Tax Act, 1990 as adapted in the State of Azad Jammu and Kashmir, on the supply of goods received by the person.

February 4, 2021
Agha Steel to install 2.25MW solar power project

KARACHI: Agha Steel Industries has signed a contract with Renewable Power Pvt. Ltd. for installing a 2.25 Megawatt solar power project at its production facility located at Port Qasim Karachi, a statement said on Wednesday.

Meezan Bank Ltd is the banking partner for this transaction. This would be among one of the largest solar power projects installed by a steel manufacturer in Pakistan.

According to a statement this project will initiate a Green Steel Revolution at Agha Steel Industries by helping in sustainability of its energy mix and at the same time reducing the burden on national grid. The 2.25 Megawatt solar power project would also reduce the carbon emission by 46,000 tons in a lifespan of 20 years.

This solar power plant, being installed on the self-consumption basis, will produce around 3.3 million units of clean and renewable electricity every year, which will result in a significant drop in the carbon footprint of Agha Steel Industries. The company is currently undergoing an expansion to increase its rebar capacity to 650,000 from current 250,000 tons per.

February 4, 2021