KARACHI: The share market fell by 203 points on Tuesday owing to rising concerns over FATF upcoming meeting and rising inflation number.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,007 points as against 40,210 points showing a decline of 203 points.
Analysts at Arif Habib Limited said that the market continued the downtrend today following yesterday’s attrition on account of FATF concerns, which was further worsened by an uptick in inflation numbers.
Overall, the index lost 564 points but partly recovered by the end of session to close -203 points.
Selling was observed almost across the board, with the exception of PSO, HBL, UNITY, KEL among stocks which traded positive for better part of the session.
Buying activity in LUCK close to end of session also contributed to the recovery in lost points. HASCOL topped the volumes with 43.8 million shares, followed by TRG (28.5 million) and UNITY (19.1 million).
Sectors contributing to the performance include E&P (-68 points), Banks (-32 points), Fertilizer (-30 points), Power (-25 points) and Cement (-19 points).
Volumes declined from 377.6 million shares to 290.1 million shares (-23 percent DoD). Average traded value also declined by 24 percent to reach US$ 59.9 million as against US$ 78.9 million.
Stocks that contributed significantly to the volumes include HASCOL, TRG, UNITY, KEL and PIBTL, which formed 42 percent of total volumes.
Stocks that contributed positively to the index include HBL (+17 points), TRG (+8 points), LUCK (+8 points), DAWH (+8 points) and KEL (+8 points). Stocks that contributed negatively include HUBC (-32 points), PPL (-27 points), OGDC (-24 points), MCB (-23 points) and ENGRO (-21 points).
KARACHI: The Pak Rupee ended down by three paisas against dollar on Tuesday owing to import and corporate payment demand for the foreign currency.
The rupee ended Rs163.84 to the dollar from last day’s closing of Rs163.81 in interbank foreign exchange market.
Currency dealers said that the higher dollar demand for import and corporate demand depreciated the value of the local currency.
They said that higher trade deficit for the month of September 2020 and expected current account deficit for the month also pressured the local unit.
They however hoped that the rupee would make gain during coming days owing to measures taken by the government and substantial inflows in the shape of remittances and export receipts.
The Federal Board of Revenue (FBR) has updated the income tax rates for salaried individuals for the tax year 2021. These rates, which have been incorporated into the Income Tax Ordinance, 2001, as amended by the Finance Act, 2020, will remain applicable from July 1, 2020, to June 30, 2021, unless further amendments are made.
ISLAMABAD: Federal Board of Revenue (FBR) has said that the fixed tax scheme is available to those builders and developers, who opt for the scheme by registering their projects with the FBR.
Under the scheme, the term “builder” means a person who is registered as a builder with the FBR and is engaged in the construction and disposal of residential and commercial buildings.
The term “developer” means a person who is registered as a developer with the FBR and is engaged in the development of land in the form of plots of any kind either for itself or otherwise.
Builders and developers eligible for this fixed tax scheme include individuals, a company or an Association of Persons (AOP), the FBR said.
The fixed tax scheme encompasses a new project as well as an incomplete existing project subject to completion of such projects by 30th September, 2022, the FBR added.
A ‘new project’ means a construction or development project, which commences during the period starting from April 17, 2020 till December 31, 2020 and is completed on or before September 30, 2022.
An ‘existing project’ means an incomplete construction or development project, which has commenced before April 17, 2020, is completed on or before September 30, 2022 and a declaration is provided in the registration form with regard to the percentage of completion of the project up to the last day of the accounting period pertaining to Tax Year 2019.
The tax payable by builders and developers on their income, profits and gains emanating from the sale of buildings or plots shall be determined on a project by project basis on the basis of specified rates per square foot/per square yard for commercial and residential buildings and commercial, residential and industrial plots, the FBR said.
In the case of buildings having dual usage i.e. both commercial and residential the respective rates specified for each category shall apply.
Moreover, in case the development of plots and construction of buildings upon the same constitutes a single project, the respective rates for developers and builders shall both apply, the FBR added.
Fixed tax shall be reduced by 90 percent in the case of low cost housing developed or approved by the Naya Pakistan Housing and Development Authority or under the Ehsaas Programme.
Builders and developers opting for the proposed scheme are not required to withhold income tax on the purchase of building material except steel and cement. Moreover, they are not required to withhold tax on services of plumbing, electrification, shuttering and other similar services other than those provided by companies.
KARACHI: State Bank of Pakistan (SBP) on Monday announced interest rates for loan obtained under Naya Pakistan Housing scheme.
The maximum size of loan shall be Rs5 million and the loan shall be available for the maximum limit at 7 percent for first five years and at 9 percent for remaining five years. The bank prices shall be KIBOR + 4 percent.
The SBP said that in line with its vision of providing affordable housing to the masses, Government of Pakistan will be providing a markup subsidy facility for the construction and purchase of new houses.
This facility will allow all individuals, who will be constructing or buying a new house for the first time, to avail bank’s financing at subsidized and affordable markup rates.
This facility will be provided with the administrative support of State Bank of Pakistan as executing partner with Government of Pakistan and Naya Pakistan Housing and Development Authority (NAPHDA).
The government has allocated Rs33 billion for payment of markup subsidy for financing over a period of 10 years and has assured continuity of the facility.
For this purpose, State Bank and Government of Pakistan have signed a memorandum of understanding.
The markup subsidy facility will be available through all banks and is divided in three tiers:
Financing under Tier I is available for purchase of houses/apartments/flats of upto 5 marla or 125 sq. yards, with maximum covered area of 850 sq. feet and maximum price of Rs. 3.5 million, under NAPHDA projects. Maximum financing under this Tier is Rs. 2.7 million with maximum tenor of up to 20 years. Banks will charge maximum markup rate of KIBOR plus 250 basis points.
However, GOP will provide markup subsidy to reduce borrowers’ rate to 5 percent for first five years and 7 percent for next five years.
KIBOR is the Karachi Interbank Offer Rate that is determined in the interbank market on a daily basis and is used as a benchmark for most of the retail lending by banks.
These rates are published on the website of State Bank of Pakistan on a daily basis.
Financing under Tier II is also for houses/apartments/flats upto 5 marla or 125 sq. yards with maximum covered area of 850 sq. feet and maximum price of Rs 3.5 million.
Maximum financing under this Tier is Rs 3 million with maximum tenor of up to 20 years. This Tier facilitates construction or purchase of housing units by individuals and households who have not applied or qualified for NAPHDA projects.
Banks will charge maximum markup rate of KIBOR plus 400 basis points. However, subsidized rate for the borrowers for first 10 years under Tier 2 is the same as that of Tier I.
The Tier III of the facility promotes affordable housing for middle-income families. This Tier allows subsidized financing for construction or purchase of houses/apartments/flats of more than 5 marla (125 sq. yards) and upto 10 marla (250 sq. yards) with maximum covered area from 850 sq. feet to 1,100 sq. feet and maximum price of Rs 6 million.
Maximum financing under this Tier is Rs. 5 million with maximum tenor of up to 20 years. Banks will charge maximum markup rate of KIBOR plus 400 basis points. However, GOP will provide markup subsidy to reduce borrowers’ rate to 7 percent for first five years and 9 percent for next five years.
It is expected that introduction of the facility with supply of fresh housing units through concerted efforts of NAPHDA and other stakeholders will help transform Government’s vision into reality.
The SBP issued following rates and criteria through a circular:
Markup Subsidy for Housing Finance
1. Housing plays an important role in economic development by contributing in GDP growth, employment generation and social wellbeing. Further, more than 40 industries and 70 percent of unskilled labor are linked with housing and construction sector.
2. In order to provide formal financial services at affordable rates, Government of Pakistan is providing Markup Subsidy for Housing Finance. The key features of the facility approved by the Government are given below:
Particulars
Markup Subsidy Program
Eligibility Criteria
All men/women holding CNIC First time home owner One individual can have subsidized house loan facility under this scheme only once Only for construction and first purchase of newly constructed affordable housing units
Size of Housing Unit
Size of the loan is segregated into three tiers, as under: Tier 1 (T1) – Housing Units/apartments of up to 125 square yards (upto 5 Marla) with covered area of up to 850 square feet. (NAPHDA) Tier 2 (T2) – Housing Units/apartments of up to 125 square yards (5 Marla) with covered area of up to 850 square feet. Tier 3 (T3) – Housing Units of more than 125 square yards up to 250 square yards (10 Marla) or apartments with covered area from more than 850 square feet to 1,100 square feet.
Maximum Price of Housing Units
Maximum Price (Market Value) of a single housing unit at the time of approval of financing, as under:
Tier 1 (T1) – Rs 3.5 million Tier 2 (T2) – Rs 3.5 million Tier 3 (T3) – Rs. 6.0 million
Maximum Loan size
Maximum size of the loan of a single housing unit, as under:
Tier 1 (T1) – Rs 2.7 million Tier 2 (T2) – Rs 3.0 million Tier 3 (T3) – Rs. 5.0 million
Loan type
Long term housing finance loans
Loan Tenor
10/15/20 years, depending upon choice of customers.
Security Requirements
As per banks’ credit policy and prudential regulations for housing finance, the housing unit financed will be mortgaged in favor of financing bank.
Allocation in Budget
Finance Division shall give authority to SBP to debit GOP account on quarterly basis for the subsidy payment to banks. Payment will be made to the banks on submission of quarterly-consolidated subsidy statement as per format prescribed by State Bank of Pakistan.
Pricing
Pricing for Housing Loans: Tier-1: 5% for first 5 years & 7% for next 5 years at KIBOR+250 BPS Tier-2: 5% for first 5 years & 7% for next 5 years at KIBOR+400 BPS (Spread may vary) Tier-3: 7% for first 5 years & 9% for next 5 years For loan tenors exceeding 10 years, market rate will be applicable for the period exceeding 10 years.
Executing Agency
All commercial banks including Islamic banks and House Building Finance Company Limited (HBFCL)
Application Form
A standardized Application Form both in English and Urdu will require minimum essential information with simple format.
The processing time will not exceed 30 days after submission of all documents by the borrower and the same will be clearly stated in the application form.
Standardized Procedures
Banks to have standardized loan documents and risk acceptance criteria.
Monitoring
SBP will publish consolidated information about the loans extended under this program for information of the public on quarterly basis on its website.
Geographical distribution
Geographical distribution
3. Banks can also avail risk coverage against the housing finance under the scheme from Pakistan Mortgage Refinance Company (PMRC) at mutually agreeable terms and conditions.
4. The banks are advised to ensure successful implementation of this facility through dissemination of necessary instructions to branches/ regions and capacity building of field staff, development/alignment of financing products and marketing campaigns, etc.
KARACHI: The sales of locally manufactured cars have registered an 8 percent increase in the first quarter (July – September) 2020/2021 in Year on Year (YoY) basis due to restoration of economic activities after lifting of coronavirus lockdown.
According to statistics released by Pakistan Automobile Manufacturers Association (PAMA) on Monday the car sales went up to 37,017 units during the first quarter of the current fiscal year as compared with 34,308 units in the corresponding quarters of the last fiscal year.
According to analysis by Topline Securities, the car sales have posted an increase of 18 percent YoY in September 2020 to 13,882 units. Indus Motor (INDU) and Honda Car (HCAR) registered sales increase of 106 percent YoY and 87 percent YoY, respectively.
However, Pak Suzuki Motor Company (PSMC) sales declined by 20 percent YoY due to drop in Alto’s sales by 37 percent YoY (last year Alto saw high numbers due to its recent launch).
Car sales also increased by 19 percent MoM in September 2020. The increase was driven by INDU’s increase of 32 percent MoM as Yaris sales picked up 42 percent MoM. HCAR sales also improved by 20 percent MoM as BRV sales increased by 50 percent MoM.
New entrants into Pak Auto space continue to perform well with Hyundai Nishat selling 316 units (+187 percent MoM) in September 2020, while Kia Lucky Motors (KLM, non-member of PAMA) sold around 1,500 units
KLM is also planning to shift to double-shift production from January 2021 to meet high customer demand.
Hyundai Nishat had launched Tucson in the SUV category last month. A strong market response is visible as the number of units have jumped to 215 in September 2020 from 22 last month.
Atlas Honda (ATLH) recorded motorbike sales of 109,002 units in September 2020, up 45 percent YoY. In 1QFY21, sales have increased by 22 percent YoY.
Tractor sales in September 2020 are up 12 percent YoY, while also increased by 49 percent MoM. Millat Tractors (MTL) recorded an increase of 69 percent YoY while Al Ghazi Tractors (AGTL) sales declined by 31 percent YoY, respectively.
The analysts expect demand for cars to grow stronger owing to lower interest rates for auto financing along with pickup in economic activity amidst declining cases of COVID-19.
KARACHI: The stock market fell by 589 points on Monday as investors opted for profit booking during the day.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,210 points as against 40,798 points showing a decline of 589 points.
Analysts at Arif Habib Limited said that the market braced the impact of APG’s (Asia Pacific Group) decision to maintain Pakistan’s position on Enhanced Follow-up List, which was primarily an evaluation based on Pakistan’s performance as of February 2020.
The plenary session is scheduled to be held during October 21-23, 2020.
The index which added another 249 points during the session today, on top of 2230 points since recent low, all of a sudden felt quite heavy to retail investors who considered it best to book profit and close positions.
Among scrips, POWER topped the volumes with 50.4 million shares, followed by HASCOL (41.8 million) and TRG (23.4 million).
Sectors contributing to the performance include E&P (-98 points), Cement (-85 points), Banks (-72 points), O&GMCs (-50 points) and Power (-48 points).
Volumes increased from 358.8 million shares to 377.6 million shares (+5 percent DoD). Average traded value also increased by 8 percent to reach US$ 79 million as against US$ 72.8 million.
Stocks that contributed significantly to the volumes include POWER, HASCOL, TRG, UNITY and JSCL, which formed 41 percent of total volumes.
Stocks that contributed positively to the index include ANL (+5 points), BAHL (+4 points), FCEPL (+4 points), MTL (+4 points) and AGP (+4 points). Stocks that contributed negatively include OGDC (-45 points), HBL (-38 points), HUBC (-38 points), TRG (-35 points) and PPL (-32 points).
The FBR issued SRO 1038(I)/2020 to comply with the government decision to allow tax free import of sugar in order to reduce the price of the commodity in the local market.
The Economic Coordination Committee (ECC) allowed the import of 300,000 metric tons of sugar by Trading Corporation of Pakistan (TCP) without imposition of sales tax at the import stage. The FBR issued SRO 751(I)/2020 dated August 20, 2020 to comply with the decision.
FBR sources said that although the commodity was allowed exemption from sales tax on import of sugar but there was an ambiguity that subsequent sale of such sugar remained subject to sales tax on supply to the domestic market.
To remove this ambiguity the FBR now issued the SRO 1038(I)/2020 dated October 12, 2020 and streamline the supply of sugar to the local market.
The FBR sources believed that this would help in reducing the prices in the local market. The price of sugar in the local market had gone up to above Rs100 per kilogram.
On the other hand, industry sources said that the decision to allow sales tax exemption on local supply of imported sugar would be discriminatory against local sugar manufacturers.
The local sugar mills are subject to 17 percent sales tax on a per kilo price fixed by the government.
KARACHI: The Pak Rupee made a nominal gain of three paisas against dollar on Monday amid significant rise in home remittances as reported by the State Bank of Pakistan (SBP).
The rupee ended Rs163.81 to the dollar from last Friday’s closing of Rs163.84 in interbank foreign exchange market.
Currency dealers said that market players were remained optimistic about the ease in pressure on the local unit. However, the market witnessed demand from importers and corporate buyers as marked was opened after two days weekly holidays.
The dealers said that the home remittances posted a growth of over 32 percent in the month of September 2020 on Year on Year basis (YoY). Besides, the foreign currency account rules issued by the ministry of finance on Friday evening also sent positive message to the market.
The currency dealers hoped that the rupee would make gain during coming days owing to measures taken by the government and substantial inflows in the shape of remittances and export receipts.
KARACHI: The inflow of workers’ remittances has registered sharp increase of 31.2 percent after making fourth consecutive month of over $2 billion received in September 2020.
The State Bank of Pakistan (SBP) on Monday said that the remittances increased to $2.3 billion, 31.2 percent higher than the same month last year and 9 percent higher than in August 2020.
Workers’ remittances remained above $2 billion for the fourth consecutive month in September, the central bank said.
On a cumulative basis, remittances rose to a record $ 7.1 billion in first quarter of current fiscal year, 31.1 higher than the same period last year.
The level of remittances in September was slightly higher than SBP’s projections of $2 billion.
Efforts under the Pakistan Remittances Initiative (PRI) and the gradual re-opening of major host destinations such as Middle East, Europe and United States contributed to the sustained increase in workers’ remittances.
Prime Minister Imran Khan earlier in his tweet said: “Despite COVID more good news for our economy. Alhamdulillah, remittances from our hardworking overseas Pakistanis rose to $2.3 billion in September 2020, 31 percent higher than last September and 9 percent higher than August 2020. This marks the fourth consecutive month that remittances have remained above $2 billion.”
