In Karachi, the Pakistani Rupee showcased resilience on Friday, gaining 16 paisas against the US Dollar and breaking a four-day losing streak in the interbank foreign exchange market.
(more…)Author: Mrs. Anjum Shahnawaz
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Stock market gains 104 points amid third trading halt
KARACHI: The stock market gained 104 points on Friday despite third market halt in the week was witnessed.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) Index closed at 36,060 points as against 35,957 points showing an increase of 104 points.
Analysts at Arif Habib Limited said that third consecutive market halt was met by one of the largest pull backs in recent times at the bourse.
Initially market opened on a negative note with -614 points and 0.86 million traded at opening bell.
Situation worsened and caused the halt at -1683 points by 9:25 AM and 25 million shares traded on KSE100.
Market re-opened at -1267 points, registering a recovery of 416 points and continued the path of recovery by the close of first session.
Second session opened -347 points, which showed a recovery of 1336 points, however, the index swung back into negative territory and yet again managed to post a recovery in MoC when the index posted gain.
Recovery was mainly seen in Oil & Gas, Banking and Cement sectors which have heavy weightage on Index.
Market recovery largely banked on improving sentiments in regional and global markets, whereby India and South Korea were seen banning short sale.
In addition, international crude price also posted an intra-day gain of around 5 percent that helped investors make a positive view on pertinent stocks.
Sectors contributing to the performance include E&P (+117 points), Pharma (+35 points), O&GMCs (+28 points), Chemical (+23 points), Banks (-63 points), Cement (-40 points), Tobacco (-37 points).
Volumes increased from 230.7 million shares to 290.1 million shares (+26 percent DoD). Average traded value also increased by 42 percent to reach US$ 87.8 million as against US$ 61.9 million.
Stocks that contributed significantly to the volumes include BOP, MLCF, FCCL, HASCOL DGKC, which formed 38 percent of total volumes.
Stocks that contributed positively include OGDC (+57 points), PSO (+32 points), POL (+26 points), HBL (+25 points) and ENGRO (+25 points).
Stocks that contributed negatively include LUCK (-51 points), UBL (-48 points), MCB (-42 points), PAKT (-37 points), and FFC (-16 points).
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PSX launches NIT Pakistan Gateway Index
KARACHI: Pakistan Stock Exchange (PSX) on Friday announced the launching of NIT Pakistan Gateway Index (NITPGI).
In a statement the stock market informed all the concerned that the NIT Pakistan Gateway Index would be made live along with its constituents from March 16, 2020.
The index was initiated on January 31, 2020 with the base value of 10,000 points.
As per the prescribed criteria the index aims to track the performance of stocks that represent top 50 percent free float market capitalization of KSE-100 index.
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FBR allows filing Annexure-H for July – October up to April 15
ISLAMABAD: Federal Board of Revenue (FBR) has allowed taxpayers to submit their stock position for the period July – October 2019 up to April 15, 2020 in order to claim sales tax refunds under newly only verification and issuance system.
In an official memorandum issued on Friday, the FBR condoned the time limit for filing of Annexure – H for the tax period July – October 2019 up to April 15, 2020.
Annexure-H is a statement for providing stock position by taxpayers along with monthly sales tax return.
The FBR from July 01, 2019 introduced expeditious payment of sales tax refunds within 72 hours subject to the true filing of Annexure – H.
Recently, Karachi Tax Bar Association (KTBA) highlighted this issue and urged the tax authorities to resolve for facilitating exporters and manufacturers.
The KTBA pointed out that as per the amendments made in Sales Tax Rules, 2006 vide SRO no. 918(I)/2019 dated August 7, 2019, mechanism for expeditious processing of refund claim has been devised only for manufacturers-cum- exporters.
As per the Rules, refund will be treated as having been filed only after filing of Annexure H of the Sales Tax return, for which deadline of 120 days has been prescribed in the Rules and the same can be extended for a period of 60 days on the basis of approval from the Commissioner.
However, the rules are silent about the mechanism for processing of Sales Tax refunds incase Annexure H has not been filed by manufacturer-cum-exporter for any reason. Considering the legal and legitimate right of the taxpayer to claim adjustment / refund of the input tax, either of the following two option be considered by the FBR for facilitation of exporters:
Allow filing of Annexure H without any time limit [present time limit of 4 months be abolished and taxpayer be allowed to claim refund as and when required] ii. Incase present limit of 4 months cannot be abolished, registered persons be allowed at least to alternatively file refund on annual basis after the end of the tax year.
Apart from the above, Annexure H is only being allowed to be filed to taxpayers who have filed the said Annexure from sales tax returns of July 2019 and onwards. Instead of claiming refund, some taxpayers have reported sales tax carried forward balance in their sales tax returns from July 2019 onwards. In case they now intend to file Annexure H from the current month,
FBR’s online portal does not allow such taxpayers to enter opening balance of inventory / raw materials as the said field in blocked for editing. This limitation should be removed and taxpayers should be allowed to file Annexure H for any specific month, for which they intend to claim refund.
From apparent mechanism being followed by the system, it appears that those taxpayers who have not filed Annexure H for the month of July 2019 will never be allowed to file Annexure H for any subsequent month. This apparent anomaly should be resolved at earliest.
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FBR to launch online production monitoring of three major sectors
ISLAMABAD: Federal Board of Revenue (FBR) to launch online monitoring of production in three major sectors for preventing tax evasion.
The FBR has decided to launch real-time monitoring of production by cement, sugar and fertilizer sectors in order to prevent tax evasion.
In this regard the FBR issued Invitation for Licence (IFL) for IT based solution for Electronic Monitoring (Trade and Trace System) of specified products i.e. cement, sugar and fertilizer.
The FBR said that the trade and trace system established, maintained and operated must enable FBR to monitor production activities and to generate real-time information volumes produced at the manufacturing sites, including verification data of collection of applicable taxes relating to specified goods produced.
The track and trace system must be able to provide FBR enforcement officials and delegated agencies with real-time information enabling them to monitor and control the movement of specified goods through the supply chain, including determination of the origin of the specified goods, as well as to determine their legal status.
Foreign specified goods imported into Pakistan will have unique identification markings, applicable for Pakistan, already affixed or printed at the point of manufacture outside of country. Similarly, any specified goods produced in Pakistan for export shall be required to carry unique identification markings for intended destination markets.
The licensee must guarantee to factor these requirements into the system to ensure readability for imported products and application for exported products as per Licensing Rules, 2019.
The FBR said that though Large Scale Manufacturing (LSM), being the major and comparatively documented sector of our economy, contributes a sizeable chunk of revenue yet the real tax potential of LSM segments like Cigarette, Cement, Sugar, Beverages etc is yet to be realized.
Currently across the globe Track and Trace technology offers the most feasible, reliable and straightforward solution.
With minimum human interface Track and Trace technology if implemented in a proper transparent manner it can; a) Safeguard the interest of revenue by mapping and capturing unregistered segment; b) Act as anti-tax fraud tool entailing visible increase in revenue and dis-incentivizing under declaration and; c) Ensure level playing field to all in the aforesaid sectors.
In order to prevent leakage of revenue, under-reporting of production and sales of specified goods and to ensure proper payment of duties/taxes on the manufacture and sale of specified goods, the FBR is mandated to licence the implementation of a track and trace system; which is to be developed, operated and maintained by the licensee for specified goods manufactured in and imported into Pakistan.
To this end, the FBR is inviting applications for grant of licence to be issued under the Sales Tax Rules, 2006 (as amended Vide 250(I)/2019 dated 26.02.2019 and SRO. 918(I)/2019 dated 7th August, 2019) for the development, maintenance and operation of track and trace system in accordance with the provisions of the rules and the instructions.
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US stocks plummet on US travel ban from Europe
US stocks witnessed plummeted on Thursday after the US President imposed travel ban to curb coronavirus outbreak, which spooked investors and rattled world markets.
According to CNBC the Dow Jones Industrial Average fell 2,352.33 points, or 9.99 percent, to 21,200.89, the S&P 500 lost 260.75 points, or 9.51 percent, to 2,480.63 and the Nasdaq Composite dropped 750.25 points, or 9.43 percent, to 7,201.80.
CNN reported that Wall Street had its worst day since October 19, 1987, also known as “Black Monday”.
The S&P 500 (SPX) fell 9.5 percent. The index, which is the broadest measure of US stocks, is now in a bear market, defined as a 20 percent drop from the most recent peak. This has officially ended the longest bull-market in history.
The Dow (INDU) fell 2,353 points, or nearly 10 percent, also its worst day since “Black Monday.” It was its worst one-day point drop on record. The Nasdaq Composite (COMP) dropped 9.4 percent.
CNN further said President Donald Trump used a national address on the coronavirus to announce a ban on most travel from Europe, but failed to deliver the comprehensive economic and medical response to the outbreak that investors are craving.
BBC reported that in the US, the Dow and S&P 500 were also hit by their steepest daily falls since 1987.
The declines came despite actions by the Federal Reserve and European Central Bank to ease financial strains.
At the start of US trading, plummeting shares triggered an unusual automatic suspension in trading for the second time this week.
When trade resumed 15 minutes later, shares continued to fall, taking cues from the slide in European markets.
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Suitable increase in salaries to be proposed in upcoming budget: finance ministry
ISLAMABAD: The government to propose suitable increase in salaries of government employees in the upcoming budget 2020/2021, said a statement issued by the Finance Division on Thursday.
In response to the strike call by the Secretariat employees for raising their salaries the ministry of finance has held meetings with the federal government employees to assure them that their proposals will be duly considered and proposed to the government in the next budget.
In a statement issued here Thursday, the Finance Division has said that on the instructions of Adviser to the Prime Minister on Finance & Revenue Dr Abdul Hafeez Shaikh, separate meetings of Secretary Finance as well as Special Secretary Finance had been held with the protesting employees to get a full understanding and awareness of the financial constraints and problems of the government employees due to the inflation.
The statement said that the government understood and acknowledged the difficulties and economic constraints faced by the federal government employees and in view of their inputs obtained in the meetings held, proposal for a suitable raise in their salaries would be prepared by factoring in the overall economic situation, and available fiscal space and incorporated in the upcoming Federal Budget 2020-21.
In another statement, the ministry of finance denied a news report published in a section of the press suggesting and insinuating a Rs 100 billion cut in the Public Sector Development Programme (PSDP) for the current fiscal year as per briefing by the Finance Secretary to the National Assembly’s Standing Committee on Finance and Revenue the other day.
The Finance Division strongly denies and rebuts this news report as the Secretary Finance never stated at any point during his presentation to the National Assembly’s Standing Committee on Finance and Revenue that there could be cut in the federal development programme this year, said an official statement issued by the Finance Division today.
The statement asserted that the Finance Division has actually facilitated maximum and speedy disbursements for the year and there is no cut planned or suggested in the development spending for the current fiscal year. The Finance Division has always provided full support to Planning Division to ensure timely expenditure, said the statement.
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Sindh shuts educational institutions till May 30 on coronavirus threat
KARACHI: The Sindh government on Thursday decided to extend the closure of educational institutions up to May 30, 2020 as prevention measures against coronavirus pandemic.
Sindh Chief Minister Syed Murad Ali Shah presiding over special cabinet meeting decided to keep the educational institutions closed up to May 30, 2020.
This will be treated as summer vacation.
The meeting was attended by all the provincial ministers, advisors, chief secretary Mumtaz Shah, Chairman P&D M. Waseem, secretaries of school education, colleges and university and boards and general administration.
The chief minister said that he has been chairing taskforce meeting on coronavirus from the last 14 days. The coronavirus has become an endemic, therefore the government has to take drastic measures to contain it.
The cabinet after thorough discussion decided to close the schools up to May 30, 2020. This would be treated as summer vacation. The schools would reopen June 1, 2020.
The cabinet also proposed to discourage every kind of gathering, including marraiges, social and religious gatherings.
Prisoners: The cabinet members raised the issue of prisoners who meet with their relatives during their hearing in the courts and then return to the crowded jails.
The chief minister directed health department to issue advisory of jail inmates and their family members with whom they meet during the hearings and at the jail.
The chief minister directed the commissioners through chief secretary to hold meetings with the religious scholars and minorities’ leaders and discuss how the religious congregation could be discouraged in the present condition.
In a tweet Senator Saeed Ghani, spokesman of Sindh government said that the matriculation examination which was scheduled to start from March 16, 2010 was also postponed.
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SECP issues advisory for companies on coronavirus threat
ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) on Thursday issued advisory for companies to protect from coronavirus threat.
In light of the threat posed by the evolving COVID-19 situation (Corona Virus) and to protect the wellbeing of shareholders, the SECP advised all companies to modify their usual planning for annual general meetings.
Meeting of the Board of Director may also be held through tele / video conferencing.
SECP has recommended all companies to consider and evaluate the risks in the present situation.
Every company, is required to hold, an annual general meeting (AGM) within sixteen months from the date of its incorporation and thereafter once in every calendar year within a period of 120 days following the close of its financial year.
As AGM season for December end companies is approaching, the directors and secretaries should modify their usual planning for their company’s AGM in light of the threat posed by the evolving COVID-19 situation.
Directors should consider if members can consolidate their attendance and voting at AGMs into as few people as possible through proxies, while honoring quorum provisions.
In order to avoid large gathering at one place, the companies may consider provision of video link facilities at different locations considering the geographical dispersal of its members.
The companies shall consider basic protective measures during the meeting including facility of cleaning hand with sanitizers or soap and water. Moreover, for safety of members seating arrangement shall be made at appropriate distance.
Furthermore, voting through postal ballot may be considered by the chairman of the meeting or by the members present in person or through video-link or by proxy having not less than one-tenth of the total voting power by demanding poll for resolutions.
This is safer option in current situation. The members of a private company or a public unlisted company (having not more than 50 members), may pass a resolution (ordinary or special) by circulation signed by all the members for the time being entitled to receive notice of a meeting, except for the ordinary businesses specified under sub-section (2) of section 134 of the Companies Act, 2017 to be conducted in the annual general meeting.
The directors may hold their board meetings through tele or video link provided that the minutes of such meeting are approved and signed subsequently by all the directors.
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Foreign exchange reserves increase to $18.906 billion
KARACHI: The foreign exchange reserves of the country increased by $37 million to $18.906 billion by week ended March 06, 2020, State Bank of Pakistan (SBP) said on Thursday.
The foreign exchange reserves were at $18.869 billion a week ago.
The official reserves of the central bank increased to $12.789 billion by week ended March 06 from previous week‘s level of $12.757 billion.
The reserves held by commercial banks was at $6.115 billion as against $6.111 billion by week ended February 28, 2020.