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Author: Mrs. Anjum Shahnawaz

  • Stock market ends down by 390 points on selling in major scrips

    Stock market ends down by 390 points on selling in major scrips

    KARACHI: The stock market fell by 390 points on Tuesday as selling seen in major scripts during the day. The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 45,293 points as against previous day’s closing of 45,683 points, showing a decline of 390 points.

    Analysts at Arif Habib Limited said that excitement observed yesterday withered away when the benchmark index saw a decline of 513 points during the session.

    The scrips that saw selling today included OGDC, PPL, PSO which performed well the other day. Investor sentiment remained at a low ebb throughout the session with persistent selling in O&GMCs, E&P, Cement and Steel sectors. Among Tech stocks,

    TRG closed below LDCP whereas NETSOL hit upper circuit. Volume leaders include TELE with 48.1 million shares, followed by UNITY (43.4 million) and FLYNGR (26.5 million).

    Sectors contributing to the performance include E&P (-182 points), Fertilizer (-58 points), O&GMCs (-50 points), Cement (-45 points) and Power (-34 points).

    Volumes declined from 409 million shares to 366.8 million shares (-10 percent DoD). Average traded value also declined by 28 percent to reach US$ 112.1 million as against US$ 155.1 million.

    Stocks that contributed significantly to the volumes include TELE, UNITY, FLYNGR, TRG and ANL, which formed 41 percent of total volumes.

    Stocks that contributed positively to the index include NRL (+14 points), DAWH (+14 points), HBL (+12 points), AICL (+11 points) and ICI (+11 points). Stocks that contributed negatively include OGDC (-71 points), PPL (-59 points), ENGRO (-46 points), POL (-44 points) and PSO (-40 points).

  • Financing to housing sector increases to Rs202 billion: SBP

    Financing to housing sector increases to Rs202 billion: SBP

    KARACHI: Recent measures taken by the State Bank of Pakistan (SBP) the financing for housing and construction sector increased significantly to Rs202 billion in March 2021.

    The SBP in a statement said that housing and construction finance has been progressing significantly and a momentum in housing and construction finance is building up. The banks’ housing and construction finance portfolio has increased from Rs148 billion by the end of June 2020 to Rs202 billion in March 2021 (chart).

    This represents a growth of Rs54 billion or 36 percent in three quarters of FY21 compared to a stagnant position in earlier quarters. Such growth in housing and construction finance in such a period has never been witnessed in Pakistan’s history previously.

    Overall financing to the housing and construction sector by banks is likely to increase further significantly as mortgage finance activity under Mera Pakistan Mera Ghar Scheme is picking up pace. As of April 20, 2021banks have received applications for financing of more than Rs52 billion from the general public under this scheme. Of these, the banks have approved financing of more than Rs15 billion to the applicants while the remaining applications are at different stages of the evaluation and approval process. 

    The SBP said that keeping in view the need to improve housing in the country and the important role of construction sector in boosting economic activities in the countries, the Government of Pakistan envisions to increase the number of housing units manifold in coming years and has taken several measures in this regard. A key element to ensure sustainable increase in the construction of building activities is the provision of financing both to the supply and demand side players of the housing and construction sector. 

    Financing to the housing and construction sector in Pakistan has almost always remained quite negligible in the credit portfolios of banks when compared with other developed and developing countries for various reasons. To support the vision of the Government of Pakistan, the State Bank of Pakistan has taken several measures since July 2020 to support the provision of financing for the housing and construction sector by way of giving incentives and targets to the banks. A key regulatory measure in this direction was assigning mandatory targets to banks to increase financing for mortgages to builders and developers. Banks are required to increase their housing and construction finance portfolios to at least 5 percent of their private sector advances by end December 2021.

    In October 2020, the Government of Pakistan augmented these efforts by introducing the Government Markup Subsidy Scheme, now commonly known as Mera Pakistan Mera Ghar Housing Finance Scheme. This scheme enables banks to provide financing for the construction and purchase of houses at very low markup rates, targeting low to middle income segments of the population.

    The State Bank of Pakistan has been actively engaged with banks to ensure that a vast majority of masses could benefit from the Mera Pakistan Mera Pakistan Housing Finance Scheme.  For this purpose, SBP with the help of Pakistan Banks’ Association (PBA) and banks is ensuring that process of applying for housing finance is easy for the masses and in case they face any difficulty or have complaints, help is provided to them promptly and complaints are resolved in a timely manner.

    To begin with, commercial Banks have designated 50% of their branches, around 7,700, across the country for accepting applications under Mera Pakistan Mera Ghar Housing Finance Scheme. In addition, all the remaining branches will also provide basic information about the scheme and refer applicants to the designated branches. Banks are regularly advertising the features of the scheme to attract and encourage potential customers.

    In order to address complaints, the State Bank has established a comprehensive complaint resolution mechanism which comprises of an internet portal supported by a network of State Bank and commercial bank staff. The IT portal is live for registration of complaints by applicants who face any difficulty in obtaining loans. State Bank has also established help desks in its 16 offices across the country to facilitate applicants in registration of their complaints through the IT portal. These help desks address access challenges of applicants, especially from low-income strata, arising out of potential language and technology barriers.

    The Pakistan Banks’ Association (PBA) has also been playing a very active role in the promotion of Mera Ghar Mera Pakistan Housing Finance Scheme. It is very close to establishing a single call center to address applicant’s questions and to guide them towards their nearest branches to submit application for home loans.

    A significant number of Pakistanis who currently do not own a house and are eligible for financing under the Mera Pakistan Mera Ghar Scheme face difficulties in providing documentary evidence of regular sources of income to prove their ability to repay. To address this issue, the State Bank is coordinating with banks to develop a mechanism whereby income proxies, based on demonstrated expenses like rent payments or utility bills, could be used for credit evaluation and income assessment.

    PBA is engaged with internationally renowned experts to develop scoring models in this regard in the coming months. The State Bank is facilitating banks to get data from mobile phone companies, utility providers and other government agencies to run these credit scoring models. Banks have already developed initial judgmental income proxy model to accommodate applicants with informal incomes till the time expert’s developed scoring models are implemented.

  • Philip Morris announces 100pc increase in after tax quarterly profit

    Philip Morris announces 100pc increase in after tax quarterly profit

    KARACHI: Philip Morris (Pakistan) Limited, makers of cigarettes in the country, has announced around 100 percent increase in net profit for the quarter ended March 31, 2021.

    According to financial results submitted to Pakistan Stock Exchange (PSX) on Tuesday, the profit after tax for the quarter ended March 31, 2021 increased to Rs718 million as compared with Rs361 million in the corresponding period of the last year.

    During the period ended March 31, 2021, the company’s domestic net turnover stood at Rs4.44 billion reflecting increase by 6 percent versus same period last year.

    Increase in Distribution & Marketing expenses showed commitment by the Company to continuously allocate the resources for Commercial initiatives which can earn the best returns. Further, we continue to find efficiencies in Administrative Expenses to ensure the increase remains under inflation.

    During the same period ended March 31, 2021, the company’s contribution to the National Exchequer, in the form of excise duty, sales tax and other government levies, stood at Rs7,089 million (higher by 23.3 percent compared to the same period last year) reflecting 61.1 percent of first quarter of 2021 Gross Turnover.

    Giving industry background, the company said that the lack of a level playing field is one of the key challenges for the legally compliant tax paying cigarette industry.

    In 2013, the share of non-tax paid illicit sector was 23 percent but due to sheer lack of enforcement, it has now captured almost 40 percent of the market.

    Significant and excessive excise increases over the past few years have widened the price gap between legal and non-tax-paid illicit cigarettes thus facilitating downtrading and contributing to the exponential growth of the illicit cigarette sector.

    Excessive excise duty increases of 93 percent on Value Tier brands (i.e. from Rs17/pack in April 2018 to Rs33/pack in June 2019) during Federal Budgets of September 2018 and June 2019 have stretched the price gap and non-tax paid illicit brands continue selling at below minimum price prescribed under tax laws i.e. Rs63/pack.

    Further countless tax-evading brands of cigarettes across the country are being sold as low as Rs25/pack (avg. illicit price is Rs38/pack). For reference: Total Tax/pack (Excise & Sales Tax) on value brands is Rs44/pack.

    The company said that it had support the introduction of Track and Trace system as it will be an effective tool to supplement enforcement efforts against tax evasion.

    However, since 2019, the Federal Board of Revenue (FBR) has made multiple attempts to implement the system but, till date no major progress has been made on this front.

  • Rupee falls against dollar for seventh straight day

    Rupee falls against dollar for seventh straight day

    KARACHI: The Pak Rupee fell against the dollar for seventh straight day on Tuesday as demand for import and corporate payment remained high.

    The rupee fell by 37 paisas on Tuesday to close at Rs154.50 against the dollar from previous day’s closing of Rs154.13 in the interbank foreign exchange market.

    The rupee has started falling against the dollar from mid of the current month. So far the rupee has been weakened by Rs1.68 against the dollar during last seven trading days or since April 15, 2021.

    The currency experts said that high import payment to meet local demand had jacked up the rupee value.

  • Number of active taxpayers for Tax Year 2020 increases to 2.6 million

    Number of active taxpayers for Tax Year 2020 increases to 2.6 million

    ISLAMABAD: The number of active taxpayers has been increased to 2.6 million by April 25, 2021 for tax year 2020, according to latest data released by Federal Board of Revenue (FBR) on Monday.

    The weekly Active Taxpayers List (ATL) for tax year 2020 updated those taxpayers’ names, who filed their income tax returns up to last date or the date was extended by commissioner Inland Revenue or those taxpayers’ names who filed their income tax returns after the deadline but paid surcharge for appearance on the ATL.

    The FBR officials said that around 0.43 million taxpayers had enrolled their names in the ATL 2020 by filing returns and paying surcharge after the issuance of first ATL 2020 on March 01, 2021.

    The FBR has changed the mechanism for availing reduced rate of withholding tax on various transactions. Previously, the filers were entitled to avail exemptions or reduced rate of withholding tax rates on various types of transactions. But not a person has to file annual return by due date given by the FBR. In case a person fails to file annual return by due date but files after the due date, he will be not entitled to get his name in the ATL. However, it will only be possible after paying of surcharge to appear on the ATL.

  • Equity market gains 976 points on fund injection expectation

    Equity market gains 976 points on fund injection expectation

    KARACHI: The equity market rebounded with an increase of 976 points on Monday on the anticipation of new fund injection by mutual funds.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 45,683 points as against last Friday’s close of 44,707 points, showing an increase of 976 points.

    Analysts at Arif Habib Limited said that the market made a rebound today with the anticipation of new fund injection by mutual funds, despite the persistent selling witnessed in the past couple of sessions at the behest of rising cases of Corona.

    Financial results announced earlier today failed to excite the market, when the index tumbled 317 points earlier in the session.

    Aggressive buying was observed in OGDC, PPL and PSO, all of which hit upper circuits during the session although OGDC and PSO closed below the upper circuit. Similarly, buying was observed in HBL and UBL, which helped the index post 1246 points after sustaining loss of 317 points.

    Session ended +976 points (unadjusted). Among scrips, TELE topped the volumes with 55 million shares, followed by TRG (53.5 million) and UNITY (26.4 million).

    Sectors contributing to the performance include E&P (+239 points), Banks (+177 points), Cement (+99 points), Fertilizer (+87 points) and Pharma (+81 points).

    Volumes increased from 240.4 million shares to 409 million shares (+70 percent DoD). Average traded value also increased by 103 percent to reach US$ 155.5 million as against US$ 76.6 million.

    Stocks that contributed significantly to the volumes include TELE, TRG, UNITY, SILK and GGL, which formed 41 percent of total volumes.

    Stocks that contributed positively to the index include OGDC (+102 points), PPL (+96 points), HUBC (+78 points), TRG (+60 points) and LUCK (+58 points). Stocks that contributed negatively include PSMC (-9 points), INIL (-8 points), AICL (-6 points), LOTCHEM (-5 points) and KEL (-5 points).

  • ACCA, IMA global economic conditions survey released

    ACCA, IMA global economic conditions survey released

    KARACHI: The global economy is bouncing back in terms of confidence, orders, employment and spending, according to the latest ACCA and IMA Global Economic Conditions Survey (GECS).

    The survey of senior accountants and finance professional across the world recorded the biggest jump in economic confidence this quarter in the 12 years it has been running. The balance of those more optimistic minus those less optimistic increased by 26 points in this survey.

    The GECS is consistent with the view that the global economy stands a good chance of reaching its pre-pandemic level of activity later this year.

    The results for South Asia – including Pakistan – point to much improved levels of confidence, reflecting better domestic and global demand prospects. As a result, confidence rose sharply in South Asia with only North America recording a bigger increase. But latest spike in Covid-19 cases in India and Pakistan has further muddled the economic outlook for economies in the region.

    When asked about the prospect of higher inflation, there is a marked contrast between the relatively high expectations of respondents in South Asia, Africa and North America and rather lower expectations in Western Europe.

    Across South Asia, activity indicators in the region improved but by less than the global average. There remains a legacy of tens of millions of people in the region who have fallen into poverty as a result of the COVID-19 crisis.

    Sajjeed Aslam, head of ACCA Pakistan, comments: ‘Different levels of economic prospects in the largely optimistic global picture are attributed to three factors that heavily influence the economy – the rate of vaccinations, the amount of government fiscal stimulus and savings banked by individuals during restrictions and lockdowns.’

    Michael Taylor, chief economist at ACCA, said of the global picture: ‘This survey paints a much brighter picture with confidence jumping by the most in the history of the survey. The approval and deployment of several effective vaccines has dramatically improved the prospects of an end to the Covid crisis. A very large US fiscal stimulus has also boosted global economic prospects this year.’

    ‘The global orders index also increased in the Q1 survey and is consistent with further recovery in the global economy into the second half of 2021. We now expect global economic activity to return to its pre-Covid level from Q4 2019, later this year.’

    The survey also reported some more mixed results. The ‘fear’ indices, which track concern about customers and suppliers going out of business, are still above long-term averages, reflecting continued uncertainty.

    And near-term cost concerns increased, to a balance of 33 in Q1 from 24 in the previous survey, reflecting higher commodity prices and other costs, as the global economy recovers. But cost concerns are still below their long-run average.

    The prospect of a strong economic rebound has also raised questions about the possibility of sustained increases in inflation, with two-thirds of global respondents saying they expect it to rise within five years.

    However, the report concludes that the effect of the recessions of 2020 will keep a lid on inflation for the next year in most countries, with an expected steady rise in the next three to five years. In the USA, predicted strong economic growth this year, could lead to inflation much quicker.

  • Foreign investors call for strong protection of intellectual property rights

    Foreign investors call for strong protection of intellectual property rights

    KARACHI: Foreign investors from the platform of Overseas Chamber of Commerce and Industry (OICCI) have demanded strong protection of intellectual property rights in Pakistan for encouraging innovation and creativity in people and society.

     ‘The Overseas Investors Chamber of Commerce and Industry (OICCI) has always championed the cause of protecting Intellectual Property Rights in Pakistan which is critical for attracting and retaining FDI in the country’, commented Irfan Siddiqui President of OICCI on “Intellectual Property Rights Day” celebrated worldwide on April 26th annually.

    Irfan Siddiqui  added that ‘close monitoring of IPR regime in Pakistan has always been a fundamental part of the OICCI agenda.  Laws which give a strong protection to Intellectual Property Rights (IPR) play a key role in encouraging innovation and creativity in people and society’.

    OICCI stated that this year’s World Intellectual Property Rights Day, theme “IP & SMEs: Taking your ideas to market”, will help to highlight the fact that a strong IPR is not only a requirement for multinationals, but a key point for all commercial entities and consumers. Pakistan’s recent accession to the Madrid Protocol has given local businesses, especially exporters, protection of  their Trade Marks in 196 different member countries. There are various indigenous Geographical Indication (GI) products in Pakistan (eg, Peshawari chappals, Ajrak print and Sindhri mangoes). The GI (Registration and Protection) Act 2020 is crucial to secure worldwide recognition of the Pakistani products and has helped establish a system for the registration and protection of GI rights in Pakistan.

    ‘IPR protection motivates innovators, promotes business growth, creating employment, and diversifying the choice of products available to consumers. Strong and effective enforcement of IPR legal framework benefits consumers as they get the feeling of purchasing safe and guaranteed products, especially healthcare products”, commented Erum Shakir, OICCI Managing Committee member and Chairperson of the OICCI IPR Subcommittee

    Sharing the experience and way forward for improving the IPR regime in Pakistan, OICCI members representing the collective voice of top 200 foreign investors in Pakistan, have observed that while the IPR laws in Pakistan are, by and large, world class, its implementation is far from being effective. While appreciating various initiative of the IPR regulator in Pakistan, Intellectual Property Organization of Pakistan (IPO-P) towards facilitating IP protection and rationalizing the associated costs, the registration process for IPR ( copyrights, patents and Trade Marks) needs to be fully digitalized and fast turnaround timing to facilitate all IPR owners, spread all over the country.  This is needed to encourage, new innovators and SMEs to opt for IP Registration. Moreover, a fast track resolution of IP disputes, with enhanced capacity and knowledge sharing on IPR in special courts / tribunals is expected to accelerate new  registration of IPR and build positive image for the country.

    In conclusion, Irfan Siddiqui, OICCI President, observed, “we are proud of OICCI members contribution over the years in raising the awareness about the importance of Intellectual Property Rights in Pakistan for  attracting new FDI, and in promoting innovation and creativity and jobs in the country .  Working in partnership with IPOP and all relevant stakeholders, OICCI is promoting knowledge sharing for a more effective and business friendly IPR regime , so as to encourage innovators in Pakistan and worldwide to share their invention , including latest patents in medicine, in the country.  Without adequate IP protection, local innovators are unable to attract investments, business creation is slow, and jobs lost. Economic prosperity relies on job growth, and strong, effective IP rights have a role to play in creating both”.

  • Rupee weakens by 26 paisas against dollar

    Rupee weakens by 26 paisas against dollar

    The Pakistani rupee weakened by another 26 paisas against the US dollar on Monday, closing at Rs154.13 in the interbank foreign exchange market. This depreciation comes as demand for the greenback continues to rise due to import and corporate payment requirements.

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  • FBR authorizes IR Intelligence to access business premises

    FBR authorizes IR Intelligence to access business premises

    ISLAMABAD: Federal Board of Revenue (FBR) has authorized Directorate General of Intelligence and Investigation (I&I) to access business premises for detecting tax evasion and revenue leakages.

    The FBR through a notification authorized the DG I&I IR to carry out intelligence activities, access and verification of business premises, access to record/documents or system maintained therein, intelligence gathering on all tax related issues including under-reporting, tax evasion and revenue leakages.

    The directorate is authorized to collect information/record/documents from any person including taxpayer and third party-relating to financial transactions like investment and expenses etc. and details of persons who are involved in such activities.

    The FBR directed the directorate to process information and take necessary action on the basis of information provided by any other organization, agency or department under the relevant provisions of Income Tax Ordinance, 2001.

    Further, the directorate has been asked to utilize the information obtained through establishment of linkages by the Federal Board of Revenue with all major national, provincial other data bases to collect relevant information.

    The FBR asked the DG I&I to identify cases of income tax evasion and carry out inquiry, investigation, whichever is deemed fit, to retrieve the loss of revenue; to identify, investigate and prosecute cases of tax evasion and/or offences punishable under the Income Tax Ordinance, 2001 and the rules made thereunder.

    Further, the directorate is required to share and disseminate actionable information and corroborating evidence, where required, through written reports or information reports or otherwise to authorities or officers in the headquarters and field formations of the Federal Board of Revenue for further proceedings.

    The FBR also authorized the DG I&I to process, investigate and prosecute complaints of tax evasion; to process, investigate and prosecute information shared by other agencies and to carry out any other work or function that may be assigned to it by the FBR.