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Author: Mrs. Anjum Shahnawaz

  • Trade deficit narrows by 26.52% in July – February

    Trade deficit narrows by 26.52% in July – February

    ISLAMABAD: The trade deficit has narrowed by 26.52 percent in first eight months (July – February) 2019/2020 owing to fall in import bill.

    The trade deficit reduced to $15.773 billion during first eight months of current fiscal year as compared with the deficit of $21.467 billion in the corresponding months of the last fiscal year, according to data released by Pakistan Bureau of Statistics (PBS) on Wednesday.

    The import bill significantly reduced by 14.06 percent during the period. The import bill of the country was at $31.42 billion during July – February 2019/2020 as compared with $36.563 billion in the corresponding period of the last fiscal year.

    The exports of the country also increased by 3.65 percent during the period under review. The exports grew to $15.648 billion during first eight months of current fiscal year as compared with $15.097 billion in the same period of the last fiscal year.

    The exports however increased by 13.82 percent to $2.14 billion in February 2020 as compared with $1.88 billion in the same month of the last year.

    The imports in February 2020 fell by 1.71 percent to $4.073 billion as compared with $4.144 billion in the same month of the last year.

    The trade deficit for the month of February 2020 was at reduced by 14.61 percent to $1.93 billion as compared with the deficit of $2.263 billion in the same month of the last year.

  • Engro wins eight awards at GDIB 2020

    Engro wins eight awards at GDIB 2020

    KARACHI: Engro Fertilizers Limited and Engro Energy, two subsidiaries of Engro Corporation, have won eight awards at this year’s Diversity Hub Pakistan’s 2020 GDIB Awards, hosted by HR Metrics, a statement said on Wednesday.

    Engro Fertilizers was recognized with six awards, the highest number for any company, at the event.

    The company won three awards for Best Practices in diversity and inclusion (D&I) Vision and Strategy, Leadership and Accountability, and Job Design and Compensation.

    In the Progressive category, it was awarded for practices related to Recruitment and Development, Benefits and Work-life Balance, and Assessment and Measurement of its initiatives.

    Further, Engro Energy secured two awards for Best Practices in the categories of D&I Learning and Education, and Community, Government Relations and Social Responsibility.

    This recognition demonstrates Engro Energy’s best in class efforts and initiatives in using GDIB standards to align diversity and inclusion with organizational policies.

    The winners were presented the awards by Guest of Honor Shamshad Akhtar, former State Bank of Pakistan (SBP) Governor, and US Consul General Robert Silberstein, in a ceremony held at a local hotel in Karachi.

    A five-member jury panel reviewed award submissions and declared 19 organizations as winners.

    Ghias Khan, the President and CEO of Engro Corporation, commented that “diversity and inclusion has played a pivotal role in driving our business forward.

    “By creating a culture of inclusion, implementing flexible processes and systems, and forging community partnerships, we continue to deliver on the spirit of Engro. We see diversity and inclusion as an ongoing commitment that is reflected in our business operations to fuel sustainable growth of the company and the world around us”.

    Global Diversity & Inclusion Benchmarks (Standards for Organizations around the World) support organizations globally in the development and implementation of Diversity and Inclusion (D&I) best practices.

    The GDIB awards recognize and encourage progressive organizations, who use GDIB standards to align D&I with organizational policies and process for sustainable financial and social performance.

  • ECC approves withholding tax exemption on remittances transfer to bank accounts

    ECC approves withholding tax exemption on remittances transfer to bank accounts

    ISLAMABAD: The Economic Coordination Committee (ECC) of the Cabinet has approved exemption from withholding tax on transfer of remittances into bank accounts.

    The ECC approved at the meeting on Wednesday chaired by Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh.

    The ECC approved that the amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.

    The ECC approved a host of measures to encourage and facilitate the overseas Pakistanis to send their remittances through official banking channels.

    Under the decision, following measures for the enhancement of home remittances through banking channels were approved:

    i. The rebate of reimbursement of T.T. Charges transactions between USD 100 and USD 200 will be increased from SAR- 10/- to SAR-20/-.

    ii. Continuation of the New Scheme of incentives launched in 2018-19 for banks and exchange companies during the current calendar year from January 2020. As per Scheme financial institutions would be incentivized Rs. 0.50 per 1 USD on 5 percent growth, Rs. 0.75 per 1USD on 10 percent growth and Rs. 1/- per 1USD on 15 percent growth.

    iii. The amount of the remittances transferred into bank accounts will be exempted from withholding tax with effect from July 1, 2020.

    iv. A “National Remittance Loyalty Program” will be launched from September 1, 2020 with collaboration of major commercial banks and government agencies through which various incentives will be given to remitters through mobile apps and cards.

    ECC approved a technical supplementary grant of Rs.9.6 billion during the current financial year to finance the above mentioned initiatives.

    Taking up other agenda items, the ECC approved a proposal by the Ministry of Federal Education & Professional Training for a technical supplementary grant of Rs 5 billion in favour of the Higher Education Commission (HEC) for the current Financial Year 2019-20 with instruction for a judicious and need-based distribution of funds among the universities.

    The ECC also approved a proposal by the National Security Division for a technical supplementary grant amounting to Rs 15 million for the Strategic Policy Planning Cell (SPPC) created in the National Security Division with the approval of the Prime Minister to act as an intellectual hub for evidence-based policy input on key national security issues.

    On a proposal by the Ministry of Defence, the ECC okayed a proposal for a technical supplementary grant amounting to Rs 34.528 million for Internal Security Duty Allowance to the Pakistan Air Force.

    On a proposal by the Petroleum Division, the ECC approved allocation of gas to SSGC and Provisional Tight Gas Incentive for Rehman-4 Well in Kirthar Block subject to the finalization and approval of requisite third-party certifications for Tight Gas for the same well.

    The ECC also discussed a proposal regarding quarterly adjustments of the K-Eectric Limited for the period from July 2016 to March 2019 and in the light of input and discussion by the members, set up a committee including Minister for Power Omar Ayub Khan, Minister for Economic Affairs Muhammad Hammad Azhar, Deputy Chairman Planning Commission, Secretary Finance and a representative from the K-Electric to examine the issue in detail and recommend to ECC within a week a solution and roadmap for resolving the issue.

    The ECC also deliberated upon a proposal by the Ministry of Energy to further extend till June 2020 the grant of subsidy to agricultural tubewell consumers in Balochistan.

    Earlier, the ECC was briefed that nearly 30,000 agri consumers in Balochistan had been given subsidy since 01.01.2015 with 40 percent of the burden of subsidy born by the Government of Pakistan and the remaining 60% picked up the Balochistan government.

    However, the recovery of dues from the farmers for the electricity consumed over and above the limit of subsidy had been negligible and attempts to recover these dues from defaulters in the past had not been successful.

    The ECC discussed the issue in detail and set up a Committee, including the Minister for Power, to discuss the issue with the Government of Balochistan to ensure a credible solution to the problems impeding a judicious execution of the scheme for which the federal government alone was contributing Rs 9 billion annually, and also allowed the extension of subsidy until a solution to the issue was found by the Committee and put in place.

    On a proposal by the Ministry of Industries and Production for revival of M/s Tuwairqi Steel Mills Limited (TSML) – A Direct Reduced Iron (DRI) Unit, the ECC discussed the issue and asked the Ministry of Industries and Production to resubmit the proposal in the light of recent and ongoing development on different issues among stakeholders on the proposal.

  • Stock market slides by 293 points on selling pressure

    Stock market slides by 293 points on selling pressure

    KARACHI: The stock market ended down by 293 points on Wednesday owing as selling pressure gripped the market.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 38,906 points as against 39,200 points showing a decline of 293 points.

    Analysts at Arif Habib Limited said that the market continued to slide with another draw down of 437 points during the session.

    By the close of session, index recovered somewhat but ended negative 293 points from LDCP.

    Other than Cement and Steel sector scrips, all the other sectors sustained losses.

    News related to Naya Pakistan Housing Scheme, higher PSDP utilization and indication of relaxation from IMF on fiscal targets kept Investors’ interest alive, preferring cyclical stocks over index heavy weights like HBL, UBL, ENGRO, HUBC, FFC, OGDC and PPL. Oil & gas chain disregarded the hike in international crude prices and had muted interest from investors.

    Cement sector remained in the limelight with 71.3 million shares, followed by Banks (23.1 million) and O&GMCs (21.7 million). Among scrips, MLCF realized trading volume of 23.4 million shares, followed by HASCOL (19.2 million) and BOP (15.9 million).

    Sectors contributing to the performance include E&P (-107 points), Power (-53 points), Fertilizer (-45 points), O&GMCs (-26 points), Inv Banks (-20 points) and Cement (+38 points).

    Volumes declined from 225.3 million shares to 186.8 million shares (-17 percent DoD). Average traded value also declined by 16 percent to reach US$ 47.8 million as against US$ 56.8 million.

    Stocks that contributed significantly to the volumes include HASCOL, BOP, FCCL, PIOC and UNITY, which formed 45 percent of total volumes.

    Stocks that contributed positively include MCB (+20 points), FFC (+20 points), COLG (+16 points), PAKT (+13 points) and UBL (+12 points). Stocks that contributed negatively include ENGRO (-46 points), HUBC (-45 points), OGDC (-43 points), PPL (-33 points), and MEBL (-20 points).

  • Rupee gains seven paisas on lackluster dollar demand

    Rupee gains seven paisas on lackluster dollar demand

    KARACHI: The Pak Rupee gained seven paisas against dollar on Wednesday owing to lower import and corporate demand, dealers said.

    The rupee ended Rs154.22 to the dollar from previous day’s closing of Rs154.29 in interbank foreign exchange market.

    The currency dealers said that lackluster demand was seen from importer and corporate buyers for the dollar.

    The said that due to coronavirus threat, which spread in many countries, many states imposed restrictions imports from those countries where infections had been detected.

    Certain checks have also been imposed by the government on imports from such countries particularly from China, which is the center-point of this epidemic.

    The exchange rate in open market witnessed no change in rupee value. The buying and selling of dollar was recorded at Rs154.00/Rs154.30, the same previous day’s closing, in cash ready market.

  • World Bank approves $300 million to support Pakistan human capital, livelihoods

    World Bank approves $300 million to support Pakistan human capital, livelihoods

    WASHINGTON: The World Bank has approved $300 million to support human capital and livelihoods in Pakistan, said a statement on Wednesday.

    Pakistan is accelerating investments in health care and education to prepare children to reach their productive potential and generate wealth. Today the World Bank committed $200 million for the Punjab Human Capital Investment Project that will strengthen health services and social protection for poor and vulnerable households in select districts in Punjab.

    “Pakistan’s strongest asset is its people. Investing at the start of life, especially for girls and women, is essential to empower citizens to thrive,” said Illango Patchamuthu, World Bank Country Director for Pakistan. “This project will help the Punjab province to invest in early years now to create a productive workforce for the future.”

    The project will increase the quality and uptake of health services, including maternal care, immunizations, and childbirths attended by qualified professionals, reaching up to 18 million people. It will provide early childhood education and skills training for young parents and will improve systems to more efficiently manage economic and social inclusion programs.

    “There are substantial financial and non-financial barriers to access quality health services, such as expenses to visit health facilities and the burden of household chores and childcare, especially among women in poor households,” said Yoonyoung Cho, Task Team Leader for the project.

    “The first 1,000 days are the most critical time in a child’s development, thus prioritizing maternal and natal care is integral to their productive capacity and strengthening human capital accumulation in Pakistan.”

    The World Bank also approved $85 million in grants and credits from IDA18 Regional Sub-Window for Refugees and Host Communities and $15 million from the Multi-Donor Trust Fund to the Federal Government and the Government of Balochistan to support the strengthening of institutions, delivery of services, and support for livelihoods and enterprise development.

  • Banking deposits hit all-time high on attractive policy rate

    Banking deposits hit all-time high on attractive policy rate

    KARACHI: The deposits of banking system hit all-time high of Rs14.672 trillion by end of January 2020 owing to higher returns on attractive interest rates.

    According to State Bank of Pakistan (SBP), the deposits of banking system grew by 12.36 percent to Rs14.672 trillion by January 2020 as compared with Rs13.057 trillion in the same month of the last year.

    The banking deposits were previously hit all-time high of Rs14.632 trillion by end of December 2019.

    Analysts said that the higher interest rate attracted the investors to keep their money in banking system for higher returns.

    The SBP kept the policy rate unchanged at 13.25 percent in the last monetary policy on January 28, 2020.

    The analysts also believed that the slowdown in economy also discouraged new investment in the industrial and other avenues. Therefore, profit through banking deposits has become prime option.

    The higher deposits also provided room for banks to invest in government papers. The higher investment in government securities resulted in significant profitability of the banks.

    Analysts said that the year 2019 was an exceptional year for the banking sector with profitability increasing by 20 percent or Rs30 billion to reach Rs177 billion, in spite of economic slowdown.

    The primary driver this year has been the net interest income which has increased by 27 percent from Rs486 billion to Rs620 billion, which is mainly due to higher interest rates.

    Weighted average policy rate in 2019 remained 12.2 percent compared to 7.2 percent in 2018.

    In absolute terms, the highest yearly profit was earned by MCB bank (Rs23.8 billion) followed by UBL (Rs19 billion) and NBP (Rs16.6 billion). However in terms of earnings growth BIPL came out on top with 247 percent growth followed by MEBL with 73 percent and AKBL with 58 percent growth, said analysts at Arif Habib Limited.

    As mentioned Net Interest Income (NII) of the banks remained major earnings driver in 2019. In Pakistan rising interest rates bodes well for banks as around 34 percent of deposits are non-remunerative (Current Deposits on which banks give no return) that leads to a higher spread. Top banks with the highest growth in NII are BIPL (78 percent), MEBL (65 percent) and SCBPL (50 percent).

  • UBL continues de-risking strategy in international operations

    UBL continues de-risking strategy in international operations

    KARACHI: The United Bank Limited (UBL) has continued its de-risking strategy in its overseas operations, with the business model focused on selective lending mainly to established corporates with a longer term business relationship with the bank.

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  • Source of money for immovable property purchase may be questioned

    Source of money for immovable property purchase may be questioned

    KARACHI: Federal Board of Revenue (FBR) has said that a commissioner of Inland Revenue has been empowered to ask source of money used for purchase of immovable properties under legal provisions related to undeclared assets.

    The FBR in explanations related to purchase of immovable properties, said that the commissioner of Inland Revenue can ask to explain the source of funds in the investment made in immovable property and apply the provision of unexplained income under Section 111 of Income Tax Ordinance, 2001 by providing opportunity of being heard.

    The tax authority explained to general queries related to FBR valuations of immovable properties. The FBR responded in a scenario when a person is not a filer of income tax returns and the person intended to purchase property at FBR’s notified rates and required to pay advance tax under Section 236K at the time of purchase.

    The general query was whether commissioner can ask the question of source of investment for such property.

    The FBR in another query related to purchase of an immovable property at FBR’s notified value on which advance tax payable whether commissioner of Inland Revenue shall still be empowered to re-determine the value of property?

    The FBR said that the commissioner was not empowered to re-determine the value of the immovable property purchased on the valuation as determined by the FBR for which advance tax under Section 236K of Income Tax Ordinance, 2001 has been paid on such valuation.

  • Prime Minister welcomes banks’ proposals for revival of sick industrial units

    Prime Minister welcomes banks’ proposals for revival of sick industrial units

    ISLAMABAD: Prime Minister Imran Khan on Tuesday welcomed proposals of banks for revival of sick industrial units.

    A delegation of prominent bankers of the country called on Prime Minister Imran Khan in Islamabad.

    Prime Minister Imran Khan welcomed the proposals of the banking community particularly those related to the revival of the sick industrial units.

    Adviser to PM on Finance Dr. Abdul Hafeez Shaikh, Adviser to PM on Institutional Reforms Dr. Ishrat Hussain, Governor State Bank of Pakistan Syed Reza Baqir and senior officials of the Government were present during the meeting.

    The bankers apprised the Prime Minister about the issues concerning banking sector in terms of financing for accelerating the economic activities aimed at wealth creation and presented various suggestions to overcome issues being encountered.

    The Prime Minister stated that the Government is working relentlessly for economic growth and sustained positive sentiments, domestically as well as externally.

    The Prime Minister highlighted human resource potential of the country with enterprising youth in majority; we need to channelize their energies through skill development thereby enabling them to contribute towards economic development.

    The Prime Minister said that the present Government is focused on reviving sick industrial units and promoting the SMEs, as they are essential for wealth creation and generation of employment opportunities.

    The Prime Minister appreciated the proposals of the delegation and assured maximum facilitation.

    The meeting was informed that Corporate Restructuring Company has been established to take over sick industrial units for the purpose of reviving the commercially or financially distressed companies thereby making them profitable with consultation of all the stakeholders.