Author: Mrs. Anjum Shahnawaz

Stock market falls 286 points amid selling in major scrips

KARACHI: The stock market witnessed selling pressure in major scrips on Thursday and fell by 286 points.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 39,869 points as against 40,154 points showing a decline of 286 points.

Analysts at Arif Habib Limited said that the market opened on a positive note today with +29 points, however, couldn’t carry the momentum showed in the previous sessions.

Selling activity was observed in Fertilizer, Cement, Refinery and O&GMCs and intensified by the end of session, especially after announcement of MCB’s and FABL’s financial results.

FABL hit lower circuit after the announcement. Similarly, MCB lost ground after announcement, however, traded above lower circuit. Regional markets already showed bearish activity at the beginning of the session.

Yesterday’s PIB auction also saw rise in shorter term tenors. Technology sector topped the volumes with 84.5 million shares, followed by Power (40.2 million) and Banks (36.7 million). Among scrips, TRG posted 30.4 million shares, followed by PTC (21 million) and UNITY (20 million).

Sectors contributing to the performance include Cement (-81 points), Banks (-39 points), O&GMCs (-26 points), E&P (-24 points) and Power (-23 points).

Volumes declined from 427.2 million shares to 394.3 million shares (-8 percent DoD). Average traded value also declined by 24 percent to reach US$ 84.4 million as against US$ 110.4 million.

Stocks that contributed significantly to the volumes include TRG, PTC, UNITY, TPL and KAPCO, which formed 28 percent of total volumes.

Stocks that contributed positively to the index include HBL (+19 points), ABL (+17 points), TRG (+14 points), KAPCO (+13 points) and FFC (+10 points). Stocks that contributed negatively include MCB (-68 points), HUBC (-31 points), LUCK (-29 points), ENGRO (-25 points) and PPL (-16 points).

August 20, 2020
FBR exempts sales tax, income tax on sugar import

ISLAMABAD: Federal Board of Revenue (FBR) on Thursday exempted sales tax and income tax on import of sugar in compliance with the government decision to lower the price of the commodity.

The FBR issued SRO 750(I)/2020 to exemption income tax and SRO 751(I)/2020 to exempt sales tax.

Through SRO 750(I)/2020, an amendment has been made to Second Schedule of Income Tax Ordinance, 2001.

As per the amendment a new clause 12G has been inserted to the second schedule, which states: “(12G) The provisions of Section 148 shall, in pursuance of the Cabinet Decision dated August 04, 2020, not apply on import by the Trading Corporation of Pakistan of 300,000 metric tons of white sugar having PCT heading 1701.9910, 1701.9920, specification B.”

As per SRO 751(I)/2020, the same specification and PCT heading the import of sugar has been exempted from whole of sales tax.

The Economic Coordination Committee (ECC) of the Cabinet in its meeting held last week of July 2020 allowed import of up to 300,000 metric tonnes of white sugar to maintain buffer stocks in the country.

The permission was given at the ECC meeting in Islamabad with Adviser on Finance Dr. Abdul Hafeez Shaikh in the chair.

The procurement and other modalities of sugar import will be decided by a three-member committee, comprising Secretary Industries and Production, Secretary Commerce and Secretary Finance.

August 20, 2020
Rupee ends down by 12 paisas on import payment demand

KARACHI: The Pak Rupee ended down by 12 paisas against dollar on Thursday owing to persistent demand for import and corporate payments.

The rupee ended Rs168.38 to the dollar from previous day’s closing of Rs168.26 in interbank foreign exchange market.

Currency experts said that the rising economic activities after ease in lockdown had increased the demand for imported goods/raw materials.

The experts however said that the improved trend in export receipts and workers remittance may help the local currency to rebound in coming days.

The inflow of workers’ remittances hit monthly record high of $2.77 billion in July 2020.

In July, workers’ remittances rose to US $ 2.768 billion. “This is the highest ever level of remittances in a single month in Pakistan,” according to the SBP.

In terms of growth, remittances increased by 36.5 percent over July 2019 (y/y) and 12.2 percent over June 2020 (m/m). Given the impact of Covid-19 globally, this increase in worker’s remittances is encouraging.

August 20, 2020
Mobile phones worth Rs24.7 billion imported in July 2020

KARACHI: The country has imported mobile phones worth Rs24.7 billion in the month of July 2020, which is almost double than the import value in the same month of the last year, official data revealed.

According to data released by Pakistan Bureau of Statistics (PBS) on Wednesday the import of mobile phone increased by 98 percent as the country imported mobile phone worth Rs12.42 billion in the same month of the last year.

The import value in US dollar term was $148 million in July 2020 as compared with $78.29 million in the corresponding month of the last year, showing an increase of 89 percent.

Market sources attributed the rise in import of mobile phones to huge demand during lockdown and after ease in lockdown due to rising financial transactions through mobile phones.

They also attributed the significant growth in rupee term due to depreciation of local currency. The average exchange rate in July 2020 was at Rs166.76 to the dollar as compared with Rs158.82 to the dollar in July 2019.

Further, the market sources said that the government has provided relief through duty and taxes on import of mobile phones to promote financial inclusion.

August 20, 2020
FBR to reward for identifying fake, flying invoices

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday announced to give reward money to those people who identify culprits involved tax evasion through fake and flying invoices.

A statement issued by the revenue body said that it had encouraged the people to come forward and reveal the identity of the people who are involved in causing tax evasion by using fake and flying invoices.

“FBR will grant reward to such whistle blowers under its Reward Rules,” it said.

The name of the whistle blowers will be kept secret.

The information can be given to the Director Intelligence and Investigation Inland Revenue on office number 0519260167 and fax number 0519260156.

The FBR announced in the wake of strict action launched against tax evaders involving in fake and flying business.

In this regard FBR chairman issued directions to all the FBR field offices to expedite operation against tax evasion and play active role to stop the menace of fake and flying invoices.

Meanwhile, implementing the directions, the Karachi Field Office of FBR has taken action against a fake business unit which was involved in evading duties and taxes at import stage under SRO 1125.

The said unit was also issuing fake and flying invoices in the market due to which the buyers were claiming input adjustment and refunds.

The said unit has committed tax fraud and caused heavy loss of Rs. 210 million to the pubic exchequer. The principal accused Mubarak Khan has been arrested.

Similarly, another case of tax evasion of Rs. 105 million has been unearthed. The tax evasion was taking place by issuance of fake and flying invoices.

FBR Multan office has confiscated the counterfeit and non-duty paid cigarettes. In another case, FBR Karachi office has received a complaint of Rs. 1 billion money laundering. The investigations are underway.

August 20, 2020
SBP allocates additional Rs190 billion refinancing to facilitate exporters

KARACHI: The State Bank of Pakistan (SBP) has allocated an additional amount of Rs190 billion under refinancing schemes for exporters during fiscal year 2020/2021, a statement said on Wednesday.

In order to further facilitate the exporters, SBP enhanced the limit of refinancing provided to the banks under Exports Finance Scheme (EFS) by Rs100 billion.

Hence, banks will now have overall limits of Rs700 billion for the exporters for 2020/2021.

Moreover, to promote export-oriented investment, Rs90 billion have also been allocated under Long Term Financing Facility (LTFF) for the FY 21.

This amount is in addition to limit of Rs100 billion already allocated to banks/DFIs under Temporary Economic Relief Facility (TERF) – a concessionary refinance scheme for setting up of industrial units, the SBP said.

Export Finance Scheme and Long Term Financing Facility are two of the oldest schemes of SBP under which concessionary financing is provided to the exporters.

EFS is operational since 1973 to meet short-term financing needs of exporters, while LTFF has been available 2008. For both the schemes, their Shariah compliant versions are also available.

Since the emergence of Covid-19, SBP has taken several measures to counter its impact on the economy and safeguarding country’s exports has been a key priority. SBP has provided a number of relaxations under EFS and LTFF since March 2020 including:

Additional period of six months for making shipment against loans availed under EFS Part-I.

Additional period of six months for meeting required export performance against loans availed under EFS Part-II.

The export performance of this extended period will also be considered for calculating the entitlement limit for 2020/2021.

Reduction in showing export performance from 2 times to 1.5 times against financing availed during FY20 and FY21.

Relaxation in the eligibility criteria for availing finance under LTFF.

Allowing deferment of principal amount for one year and/or rescheduling/restructuring of loans under LTFF.

It is expected that with the above already provided relaxations, which were widely appreciated by business community; above enhancement of around Rs190 billion in limits will cater to exporters’ cheaper liquidity requirement. SBP is closely monitoring the situation and is ready to take any further actions required to support the export sector.

August 20, 2020
FBR issues draft return forms for tax year 2020

ISLAMABAD: Federal Board of Revenue (FBR) on Wednesday issued draft forms for filing income tax returns tax year 2020.

The FBR issued SRO 745(I)/2020 and invited comments from stakeholders on the draft return forms within seven days from the date of issuance of the draft forms.

The FBR issued the draft forms filing annual income tax returns electronically by salaried persons, business individuals, association of persons (AOPs) and companies.

The FBR said that the return form shall be applicable for tax year 2020.

The draft return forms tax year 2020 can be downloaded here.

August 19, 2020
Iqbal Tabish appointed as FPCCI secretary general

KARACHI: Muhammad Iqbal Tabish has been appointed as general secretary of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) with effect from August 19, 2020, said a statement.

FPCCI president Mian Anjum Nisar appointed Muhammad Iqbal Tabish as the Secretary General of the organization in accordance with rules and procedures laid out in Trade Organization Ordinance of Pakistan.

The appointment of Iqbal Tabish has been termed as a hopeful prospect for FPCCI in view of his wide experience of working with public and private organizations at national and international level.

Prior to assuming office of the Secretary General FPCCI, Iqbal Tabish has served in Ministry of Industries and Production as Chief Executive Officer of Pakistan Industrial Development Corporation (PIDC) and Secretary General SAARC Chamber of Commerce and Industry.

He has also worked as a Senior Economist and Head (R&I) at WTO Cell of Trade Development Authority of Pakistan, Ministry of Commerce and has been associated with FPCCI as Director (R&D) in addition to other important assignments.

Iqbal Tabish has a long term association with National and International organizations, which included Member, Economic Advisory Council (UNESCAP), Observer on World Banks’ Investment Climate Fund’s Program on Climate Resilience, Stakeholder Advisory Network-CIF, Steering Committee Member of Sweden Standards Institute (South and East Asia) and has been regular invitee to Expert Group Meetings on SAFTA, Honorary Secretary General, China-South Asia Business Council for Promotion of International Trade (CCPIT), Yunnan and Sichuan Province of Peoples’ Republic of China and Member, Advisory Committee of SAARC Trade Portal Network of GIZ in addition to involvement in projects of UNDP and World Bank Group.

Scholastically enriched, Iqbal Tabish is a Ph. D Scholar in a leading university and holds M. Phil Degree in Management Sciences (Finance) along with Master Degree in the faculty of Economics as well as Business Administration.

He has contributed in the development of literature on trade, economics, intra-regional transport and connectivity, energy, climate change and author of several publications in the similar areas.

August 19, 2020
Stock market witnesses range bound activity; sheds 30 points

KARACHI: The stock market ended down by 30 points on Wednesday in a range bound trading during the day.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,154 points as against 40,184 points showing a decline of 30 points.

Analysts at Arif Habib Limited said that the market traded range bound today between -119 points and +241 points.

E&P largely added points on the index, whereas Cement and Banking sector stocks faced selling pressure. Fertilizer Sector remained under pressure throughout the session, but ENGRO’s financial results with a dividend of Rs. 8/share, helped Fertilizer sector stage recovery by the end of session.

Cement sector posted volumes of 75.4 million shares, followed by Technology (54.5 million) and O&GMCs (40.3 million). Among scrips, PIBTL topped the volumes with 35.5 million shares, followed by PRL (27.5 million) and DGKC (26.8 million).

Sectors contributing to the performance include Fertilizer (+63 points), E&P (+40 points), O&GMCs (+10 points), Cement (-25 points), Technology (-23 points), Autos (-21 points), Power (-20 points) and Banks (-20 points).

Volumes declined from 458.8 million shares to 427.2 million shares (-7 percent DoD). Average traded value also declined by 10 percent to reach US$ 110.4 million as against US$ 123.2 million.

Stocks that contributed significantly to the volumes include PIBTL, TRG, POWERR1, PRL and POWER, which formed 25 percent of total volumes.

Stocks that contributed positively to the index include ENGRO (+40 points), POL (+18 points), EFERT (+14 points), OGDC (+10 points) and FFC (+10 points). Stocks that contributed negatively include TRG (-23 points), HUBC (-21 points), INDU (-10 points), DGKC (-10 points) and SHFA (-8 points).

August 19, 2020
FBR urges taxpayers to lodge complaints against officials demanding bribe for clearing refunds

KARACHI: Federal Board of Revenue (FBR) has advised taxpayers to lodge complaints against tax officials, who are demanding bribe for clearing stuck up refunds.

“Immediate action will be taken against the delinquent functionaries,” said Dr. Muhammad Ashfaq Ahmed, Member Inland Revenue Operations, Federal Board of Revenue (FBR) in a meeting with the office bearers of All Pakistan Textile Mills Association (APTMA).

According to a statement released by the APTMA on Wednesday, the Member also urged the taxpayers to lodge complaints against the harassment by the tax collectors.

The meeting discussed in detail the issues pertaining to the release of Sales Tax refunds in seventy-two hours, removing irritants of the Annexure-H, issuance of Income Tax exemption on electricity bills, delay in Income Tax refunds and other irritants faced by export oriented industries.

APTMA delegation comprised of Raza Baqir and Shahid Sattar while the Member Inland Revenue Operations was assisted by concerned chiefs and secretaries of the Board.

Dr. Ashfaq reiterated the resolve and commitment of the government for expeditious payment of tax refunds and removal of all irritants in doing the business.

He told APTMA delegation that release of refund claims has been expedited by the Board and it would be ensured that all sales tax refunds are paid within 72 hours.

He said all the systematic issues relating to Annexure H would be removed within a week which will facilitate exporters in filing of refund claims. He added that Annexure-H would be simplified to facilitate the taxpayers. According to him, the trial test of the changes made in software of Annexure-H is underway and it would be implemented shortly.

He said the Board was also releasing the outstanding and deferred refund claims of the exporters on war-footing basis.

Furthermore, he urged the APTMA delegation to convey all member mills to file their Income Tax refunds at the earliest for speedy clearance.

APTMA delegation appreciated the efforts made by the Board for early disposal of refund claims of the export-oriented industry, saying that the member mills were satisfied with the performance of the tax machinery.

The delegation further expressed the hope that the Board would start clearing refund claims within 72 hours of their filing by the exporters.

The delegation further expressed the hope the FBR would soon overcome the inherent loopholes, infirmities and snags in the system and adopt measures to remove all odds which hamper and retard the system.

August 19, 2020