Author: Mrs. Anjum Shahnawaz

Bank deposits hit record high at Rs15.13 trillion

KARACHI: Bank deposits hit record high at Rs15.13 trillion by end of March 2020, according to data released by State Bank of Pakistan (SBP).

The deposits of the banking sector grew by 12.4 percent YoY and 2.1 percent MoM in March 2020 to Rs15.13 trillion. The deposits are also up 3.4 percent in YTD 2020.

Analysts at Topline Securities said that banks’ focus for deposit mobilization remained more towards Investments compared to Advances during the period given the high yields on govt. papers.

As a result, Investments grew by 61.7 percent YoY and 6.6 percent MoM to Rs9.30 trillion in March 2020, with Investment to Deposit Ratio (IDR) increasing to 61.5 percent in March 2020 from 42.7 percent in March 2019 and 58.9 percent in Feb-2019. The Investments are also up 5.6 percent in YTD 2020.

On the other hand, Advances grew by just 4.7 percent YoY and 0.6 percent MoM in March 2020 hindered by high interest rates and slowdown in overall economic activity.

The Advances are up only 1.2 percent during YTD 2020. As a result, ADR dropped to 54.6 percent in March 2020 from 58.6 percent in March 2019 and 55.4 percent in Feb-2020.

As per the available 2M2020 numbers, Advances to the textile and consumer sectors increased by 9 percent YoY each.

The Currency in Circulation (CIC) in YTD 2020 has registered an increase of 6.5 percent to Rs5.6 trillion. Additionally, CIC as a percentage of M2 clocked in at 29 percent above the historic 5-year average of 27 percent.

Going forward, we see limited Deposit growth in the range of 6-7 percent during 2020 (vs. historical average 3-year growth of 11 percent), in line with the nominal GDP growth amidst slowdown in economic activity because of the outbreak of Covid-19. We expect Advances to grow by around 5 percent during the year (vs. historical average 3-year growth of 14 percent).

April 10, 2020
PTA allows free SMS for Ehsas Program

ISLAMABAD: Pakistan Telecommunication Authority (PTA) on Thursday announced to make charge-free the SMS sent to Ehasas Program.

A statement issued by PTA said that to facilitate people sending SMS to BISP code 8171 for Ehsas Program registration, all SMSs will be free with no charging from April 10, 2020.

This decision to make SMS service free of charge has been taken in view of problems faced by some mobile subscribers with no balance, who now will be able to send SMS on 8171 with zero balance.

It may be mentioned that PTA is extending full support to BISP, without any financial benefit, in its efforts to reach out people wanting for help through mobile technology.

April 9, 2020
Sales tax on services exempted on construction services

LAHORE: Punjab Revenue Authority (PRA) has exempted the sales tax on services rendered by construction industry till June 30, 2020.

The provincial authority issued a notification dated April 02, 2020 and allowed zero percent sales tax on services provided by construction sector for next three months.

However, this exemption from tax is available with condition that no input tax adjustment will be granted.

Previously, the industry was allowed reduced rate of five percent and one percent without input tax credit/adjustment in respect of government civil works and sixteen percent with input tax credit/adjustment for others.

The tax is payable within the provincial jurisdiction by construction services and services provided by contractors of building (including water supply, gas supply and sanitary works), roads and bridges, electrical and mechanical works (including air conditioning), horticultural works, multi-discipline works (including turn-key projects) and similar other works but, excluding:

(i) where the tax is otherwise paid by registered persons as property developers, builders or promoters for building construction; or

(ii) where the construction work is funded under an agreement of foreign grant-in-aid or involves construction of consular buildings; or

(iii) residential construction projects where the covered area does not exceed 10,000 square feet for a house and 20,000 square feet for an apartment except where construction services are provided to construct more than one house or more than one apartment building.

Explanation- Notwithstanding the rate of five percent fixed in column 4, the following further reduced rates shall be applicable:

(a) one per cent for all services specified at S.No.14 without input tax credit or adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched during Financial Year 2016-17 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized after 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by the Cantonment Boards; and

(b) zero per cent for all services specified at S.No.14 without input tax credit/adjustment to the extent of Government civil works including those of cantonment boards involved in the ongoing development schemes and projects launched prior to Financial Year 2016-2017 and funded under the Annual Development Plan of the Punjab Government or funded through foreign loans where the negotiations were finalized as on 1st of July 2016 or funded under Public Sector Development Program of the Federal Government or funded by Cantonment Boards.

April 9, 2020
SBP forex reserves fall by $463 million on debt repayment

KARACHI: The State Bank of Pakistan (SBP) reported a significant drop in the official foreign exchange reserves by $399 million for the week ending April 3, 2020.
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April 9, 2020
Stock market jumps by 866 points on increase in international oil prices

KARACHI: The stock market witnessed increase of 866 points on Thursday on rise in international oil prices and reports of further cut in policy rate.
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April 9, 2020
Rupee gains 57 paisas against dollar

The Pakistani Rupee gained significant ground against the US Dollar on Thursday, appreciating by 57 paisas, closing at Rs167.19 from the previous day’s rate of Rs167.76 in the interbank foreign exchange market.
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April 9, 2020
Engro Fertilizers sets up quarantine facility to prevent coronavirus spread

Engro Fertilizers has set up a 60-bed quarantine facility at its Technical Training College (TTC) in Daharki as part of its ongoing efforts to support the district authorities and local community amid the coronavirus outbreak, a statement from the company said on Thursday.
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April 9, 2020

Nausheen Amjad assumes as 27th FBR chairperson

ISLAMABAD: Ms. Nausheen Javaid Amjad, BS-22 officers of Inland Revenue Service (IRS) on Wednesday assumed the charge of 27^th chairperson of Federal Board of Revenue (FBR).

A notification issued by the FBR, stated that in pursuance of Establishment Division’s Notification No. 34/1/2018-E-I, dated 08.04.2020, Ms. Nausheen Javaid Amjad, a BS-22 officer of Inland Revenue Service has relinquished the charge of the post of Member (Admn), Federal Board of Revenue (HQ), Islamabad w.e.f 08.04.2020 and assumed the charge of the post of Chairperson, Federal Board of Revenue (HQ), Islamabad on the same date.

Details of Chairperson, CBR/FBR:

1)	Ms. Nausheen Javaid Amjad	08.04.2020
2)	Syed Muhammmad Shabbar Zaidi	10.05.2019	08.04.2020
3)	Mr. Mohammad Jehanzeb Khan	29.08.2018	10.05.2019
4)	Ms. Rukhsana Yasmin	02.07.2018	29.08.2018
5)	Mr. Tariq Mahmood Pasha	04.07.2017	02.07.2018
6)	Dr. Muhamad Irshad	19.01.2017	30.06.2017
7)	Mr. Nisar Muhammad Khan	17.11.2015	18.01.2017
8)	Mr. Tariq Bajwa	02-07-2013	17.11.2015
9)	Mr.Ansar Javed	10-04-2013	30-06-2013
10)	Mr. Ali Arshad Hakeem	10-07-2012	09-04-2013
11)	Mr. Mumtaz Haider Rizvi	21.01.2012	10-07-2012
12)	Mr. Salman Siddique	24.12.2010	21.01.2012
13)	Mr. Sohail Ahmad	18.05.2009	24.12.2010
14)	Mr. Moinuddin Khan	02.01.1998	06.11.1998
15)	Mr. Hafeezullah Ishaq	11.11.1996	02.01.1998
16)	Mr. Shamim Ahmed	28.08.1996	11.11.1996
17)	Mr. Alvi Abdul Rahim	13.07.1995	28.08.1996
18)	Mr. Sajjad Hasan	24.07.1991	03.10.1991
19)	Mr. Ahadullah Akmal	16.08.1990	24.07.1991
20)	Mr. Ghulam Yazdani Khan	22.01.1989	11.08.1990
21)	Syed Aitezazuddin Ahmed	20.08.1988	02.01.1989
22)	Mr. I.A. Imtiazi	11.08.1985	20.08.1988
23)	Mr. Fazlur Rahman Khan	14.12.1980	11.08.1985
24)	Mr. N.M. Qureshi	12.11.1975	14.12.1980
25)	Mr. M. Zulfiqar	01.10.1974	12.11.1975
26)	Mr. Riaz Ahmad	17.11.1973	30.09.1974
27)	Mr. M. Zulfiqar	11.10.1971	17.11.1973

April 9, 2020

Global trade may fall up to 32 percent on COVID-19 disruption: WTO

KARACHI: World trade is expected to fall by between 13 percent and 32 percent in 2020 as the COVID 19 pandemic disrupts normal economic activity and life around the world, said a statement issued by World Trade Organization (WTO) on Wednesday.

The wide range of possibilities for the predicted decline is explained by the unprecedented nature of this health crisis and the uncertainty around its precise economic impact.

But WTO economists believe the decline will likely exceed the trade slump brought on by the global financial crisis of 2008‑2009.

Estimates of the expected recovery in 2021 are equally uncertain, with outcomes depending largely on the duration of the outbreak and the effectiveness of the policy responses.

“This crisis is first and foremost a health crisis which has forced governments to take unprecedented measures to protect people’s lives,” WTO Director-General Roberto Azevêdo said.

“The unavoidable declines in trade and output will have painful consequences for households and businesses, on top of the human suffering caused by the disease itself.”

“The immediate goal is to bring the pandemic under control and mitigate the economic damage to people, companies and countries. But policymakers must start planning for the aftermath of the pandemic,” he said.

“These numbers are ugly – there is no getting around that. But a rapid, vigorous rebound is possible. Decisions taken now will determine the future shape of the recovery and global growth prospects. We need to lay the foundations for a strong, sustained and socially inclusive recovery. Trade will be an important ingredient here, along with fiscal and monetary policy. Keeping markets open and predictable, as well as fostering a more generally favourable business environment, will be critical to spur the renewed investment we will need. And if countries work together, we will see a much faster recovery than if each country acts alone.”

Trade was already slowing in 2019 before the virus struck, weighed down by trade tensions and slowing economic growth. World merchandise trade registered a slight decline for the year of ‑0.1 percent in volume terms after rising by 2.9 percent in the previous year. Meanwhile, the dollar value of world merchandise exports in 2019 fell by 3 percent to US$ 18.89 trillion.

In contrast, world commercial services trade increased in 2019, with exports in dollar terms rising by 2 percent to US$ 6.03 trillion. The pace of expansion was slower than in 2018, when services trade increased by 9 percent.

April 9, 2020
Prolonged industry closure to be harmful: FPCCI

KARACHI: Federation of Pakistan Chambers of Commerce and Industry (FPCCI), the apex trade body of the country, urged the authorities to evolve strategy of functioning business activities during lockdown to prevent spread of coronavirus.

FPCCI President Mian Anjum Nisar, while criticizing arrest of businessmen urged the relevant authorities to take serious notice of the situation.

He also urged to devise Standard Operating Procedures (SOPs) to the trade and industry for smooth functioning as the economy of Pakistan may not face prolonged closure of the industry that will be harmful for the entire nations.

He expressed serious concern over unfavorable behavior towards the trade and industry that are supporting the government to ensure economic sustainability in this crises where every segment of economy is suffering.

He said that legal/representative forums are available to complaint against violation by any member of the business community. On the other hand the entire trade and industry has assured to the government for economic progress despite various challenges due to prevailing condition under COVID-19.

However, such attitude discourages commercial activities to support the government policies and programs.

Mian Anjum Nisar President FPCCI seriously expressed his concern over the arrest/detention of a member of the business community and termed it a discouraging environment for businesses where the industry is facing lot of challenges to compete and complete exports order that Pakistan needs to continue to bring foreign exchange through exports.

He further told that the exporters are losing orders, nearly 70 percent export orders has been cancelled due to global environment and for completing remaining 30 percent we need to function smoothly adherence to health precautionary measures.

But under such circumstances where industry has to be closed, no lay off labors, no facility for shipments, cash flow, banking and market obligation, how all these requirements could be met out when the authorities and agencies creating such problems of harassment and arrest/ detention of industrialists.

He stated that at this time of global crises where most of the countries are losing trade and facing drastic decline in exports the government should follow policies that are favourable to industry and avoid from strict actions against trade and industry of the country.

Those are following precautionary, safety and security measures at their factories to protect the environment from spread of virus may be supported uninterrupted production activities.

April 8, 2020