KARACHI: Dr. Aftab Imam, Chief Commissioner, Corporate Regional Tax Office (CRTO) Karachi has urged business community to play their role in improvement of tax policy and procedures.
(more…)Author: Mrs. Anjum Shahnawaz
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Rupee ends flat amid import, corporate payment demand
KARACHI: The Pak Rupee ended flat against dollar on Monday despite demand for import and corporate payments, dealers said.
The rupee closed at Rs154.91 to the dollar from last Friday’s closing of Rs154.90 in interbank foreign exchange market.
The currency dealers said that the due to first trading day after two weekly holidays the local currency was under pressure. In the first half of trading day the demand for the greenback was high. However, inflows of export receipts and workers’ remittances helped the rupee to stable against the foreign currency.
The exchange rate in open market witnessed depreciation in rupee value. The buying and selling of the dollar was recorded at Rs154.70/Rs155.00 from last Friday’s closing of Rs154.40/Rs154.70 in cash ready market.
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SBP includes Japanese Yen to Asian clearing union mechanism
KARACHI: State Bank of Pakistan (SBP) on Monday announced to include Japanese Yen to Asian Clearing Union (ACU) mechanism.
A statement issued by the central bank said that it had been decided to include ACU Japanese Yen as the third ACU currency along with USD & EURO with effect from January 01, 2020.
The ACU Yen would be equivalent in value to one Yen. Accordingly, transactions under ACU Mechanism, in addition to ACU Dollar (ACUD) & ACU Euro (ACUE), may also be denominated and settled in ACU Yen (ACUY) from January 01, 2020.
In this regard, ADs may establish ACUY accounts with their correspondents in ACU member countries and open their correspondents’ ACUY accounts with them.
The transactions in ACUY would be reported by ADs to SBP and settled by SBP separately likewise in other two ACU currencies.
Accordingly, three separate accounts will be maintained for the settlement of each ACU currency (ACU Dollar, ACU Euro and ACU Yen).
Further, with a view to encourage ADs to maintain reasonable / sufficient balances in their accounts to ensure timely payments, the authorized dealers are permitted to pay / receive interest, at their discretion, on these (ACUD, ACUE & ACUY) accounts as per mutually agreed terms and conditions.
The balances of ACUD, ACUE & ACUY accounts together with other FCY / Nostro accounts would however be subject to the overall exposure limits of ADs.
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Equity market falls by 825 points on profit taking
KARACHI: The equity market fell by 825 points on Monday owing to profit taking in the last days of present year.
The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,008 points as against 40,833 points showing a decline of 825 points.
Analysts at Arif Habib Limited said that the market took a significant toll from the internal and external headwinds faced these days.
During MoC, index decline crossed -900 points, which built up throughout the day.
Market closed -825 points and closed the session with 274 stocks in decline. Selling was observed across the board, but was particularly seen in oil & gas chain.
PPL’s most anticipated discovery proved to be a miniscule one that dampened the investor sentiment.
Resultantly, PPL traded near lower circuits by the end of session. Cement sector led the volumes with 26.6 million shares, followed by Technology (23.1 million) and O&GMCs (22.7 million). Among scrips, WTL traded the most with 13.6 million shares, followed by HASCOLR (12.7 million) and UNITY (11.9 million).
Sectors contributing to the performance include Banks (-225 points), E&P (-174 points), Power (-71 points), Fertilizer (-66 points) and Inv Banks (-56 points).
Volumes declined from 180.7 million shares to 179.1 million shares (-1 percent DoD). Average traded value however, declined by 19 percent to reach US$ 44.9 million as against US$ 55.1 million.
Stocks that contributed significantly to the volumes include WTL, HASCOLR1, UNITY, FFL and FCCL, which formed 31 percent of total volumes.
Stocks that contributed positively include NESTLE (+9 points), INDU (+5 points), DGKC (+3 points), GHGL (+1 points) and INIL (+0 points). Stocks that contributed negatively include HBL (-93 points), PPL (-91 points), HUBC (-54 points), DAWH (-51 points), and OGDC (-49 points).
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PPL announces major discoveries of hydrocarbons in Sindh, Balochistan
KARACHI: Pakistan Petroleum Limited (PPL) has announced major discoveries of hydrocarbons in Sindh and Blochistan, according to notifications received by Pakistan Stock Exchange (PSX) on Monday.
In the first notice, the PPL disclosed a hydrocarbon discovery in exploratory well, Bitro-I in Latif Block located in Kharipur District, Sindh, by the joint venture partners of the Latif Exploratory License, namely the company which holds a 33.30 percent working interest there in, ENI Pakistan (M) Limited which holds a 33.30 percent working interest there in, and United Energy Pakistan Limited, which holds a 33.40 percent working interest there in and is also the operator of the Block.
The PPL said that the well was spud on October 6, 2019 to test the hydrocarbon potential of B and Intra B sands of the Lower Goru Formation, as primary and secondary objectives, respectively. The well was successfully drilled to a depth of 11,854 ft. Based on the wireline logs and the drilling results, a Modular Dynamics Testing was done against the promising zone in the B and Intra B sands.
Upon the completion of the well, B sand zone was perforated, which flowed 28.6 million standard cubic feet per day of gas with 152 barrels per day (condensed) water at a flowing well head pressure of 3,116 pounds per square inch at 44/64” choke size.
In another notice, the PPLC disclosed that the company had made a hydrocarbon discovery in the first exploratory well, Margand X-I in Margand Block, Blochistan, that is operated by the company which holds 100 percent working interest there in.
The well was spud on June 30, 2019 to a measured dept of 4,500 meters inside Chiltan Limestone. Based on the wireline logs, Modular Dynamics Testing was done which proved the presence of hydrocarbons.
Accordingly, a Drill Stem Test was done in the Chiltan Limestone, during which the well flowed a maximum 10.7 million cubic feet per day of gas at 64/64 inches choke size at a flowing well head pressure of around 516 pounds per square inch with 132 barrels per day liquid. The nature of the liquid is being investigated. However, the well has the potential to flow at higher rates after an acid stimulation job.
The company said that it was the first gas discovery in the Kalat Plateau and it had opened a new sub-basin for further hydrocarbon exploration.
The discovery is the result of Company’s aggressive strategy of exploration of the frontier basins in order to open new avenues for hydrocarbons exploration and production in the province of Balochistan.
The discovery will add to the company’s hydrocarbon reserves and will contribute in reducing the gap between the supply and demand of oil and gas in the country through exploitation of indigenous resources.
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Bank holiday
KARACHI: The State Bank of Pakistan (SBP) on Monday said that the central bank will remain closed on December 25, 2019 (Wednesday) on the occasion of Qauid-e-Azam Day and Christmas.
In a circular issued to all the presidents and chief executives of banks, development finance institutions and microfinance banks, the central bank said that it will remained closed on December 25, 2019 (Wednesday) on the occasion of Qauid-e-Azam Day and Christmas, as declared by the government of Pakistan.
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Investors of saving schemes to explain source of income
ISLAMABAD: Investors of National Saving Schemes (NSS) will explain source of income for their existing investments under ongoing drive of the government to check money laundering and terror financing.
The ministry of finance last week issued draft National Savings Schemes (AML and CFT) Rules, 2019 to document the investment and identify links of investments to Money Laundering and Terror Financing.
Under the rules the Central Directorate of National Savings (CDNS) will conduct customers due diligence (CDD) of all existing and new investors of NSS.
The customers will require to provide source of earnings for the investment and their annual income.
Currently CSNS has 4 million customers and the total investment has increased to around Rs4 trillion by October 2019.
According to the draft rules: Every customer, whether permanent or occasional and whether natural or legal person or legal arrangement, shall be identified for establishing business relationship and for the purpose following information shall be obtained, verified using reliable, independent source documents, data or information and recorded namely: –
(a) full name as per identity or registration documents;
(b) national identity card, passport, national identity card for overseas pakistanis, Pakistan origin card or alien registration card number, etc.
(c) registration or incorporation number of business, if applicable;
(d) residential address, telephone numbers and e-mail, if available;
(e) business address, telephone numbers and e-mail, if available;
(f) date of birth;
(g) date and place of registration or incorporation of business, if applicable;
(h) nationality
(i) place of birth;
(j) national tax number (NTN), if applicable;
(k) nature of business and location, if applicable;
(l) sources of earnings;
(m) customer’s net worth in respect of legal persons, legal arrangements and high risk customers; and
(n) annual income.
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Stock market likely to cross 51,000 points in 2020
KARACHI: The stock market likely to cross 51,000 points during year 2020 owing to growth in earnings and justified price to earning ratio, analysts said on Monday.
The analysts at Arif Habib Limited in its report on Pakistan Strategy 2020, said that Pakistan equity market is expected to generate a total return of 25 percent during 2020.
They expect that the benchmark KSE-100 index of Pakistan Stock Exchange to reach 51,000 points by December 2020. The index target mapping methodology included: earnings growth; justified PER; and target price mapping.
The analysts believed that the balance of payments front is quite manageable now with continuous decline in imports, thanks to Pak Rupee depreciation and taxation measures at large to curb imports, along with several inflows planned for the next year tagged with hot money flows which are expected to lead towards continuous increase in reserves of State Bank of Pakistan (SBP).
The analysts said that the country has successfully managed to attract foreign investment in lucrative short term government papers. High yields coupled with strengthening currency have helped lure over $1.2 billion foreign investment in treasury bills, which is unprecedented in history. Further, this shows the confidence of foreign investors in the local currency parity and economic reforms, and could also trigger equities flows in the country in 2020.
Earnings growth in 2020 is estimated to be 14.4 percent, the double digit growth is attributable to earnings growth in heavy weight including commercial banks (41 percent), power (53 percent), fertilizers (12 percent) and E&P (10 percent), which have a cumulative around 61.7 percent weightage in the KSE-100 index. Higher net interest income coupled with stellar earning rebound in large banks shall stem growth in the banking sector, whereas power sector profitability mainly stem from CoD of HUBC’s 130MW coal-based power plant.
The analysts said that the local bourse is expected to amass strong returns in 2020 supported by ongoing PER re-rating hypothesis. The analysts view that firmness in external sector, stable foreign currency outlook, hot money inflows, increase in SBP foreign exchange reserves in external sector and strong earnings growth of over 14 percent will re-rate the market PE to ites mean average of 8.6x (14-year).
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NCCPL to collect CGT for Oct-Nov on Jan 03
KARACHI: National Clearing Company of Pakistan Limited (NCCPL) on Monday announced to collection capital gain tax (CGT) for the months of October – November 2019 on January 03, 2020.
In a communication sent to Pakistan Stock Exchange (PSX), the NCCPL said that the aggregate amount of CGT arising on disposal of shares at PSX for the period October 01, 2019 to November 30, 2019, would be collected on Friday January 3, 2020 through respective settling banks of the Clearing Members.
The NCCPL advised all clearing members to ensure requisite amount in their respective settling bank’s account. Necessary details and reports for the said period have already been made available in the CGT System.
Further, the aggregate amount of CGT arising on trading of future commodity contracts at Pakistan Mercantile Exchange for the period October 01, 2019 to November 30, 2019, would also be collected from the Pakistan Mercantile Exchange on Friday January 3, 2020.
Necessary details and reports for the said period have already been made available.
Moreover, the aggregate amount of CGT arising on redemption of units of open end mutual funds have also been finalized for the period July 01, 2019 to November 30, 2019. Necessary details and reports have already been made available in the CGT System.
Clearing Members and Pakistan Mercantile Exchange are hereby requested to verify the investor wise details of capital gain or loss and tax thereon, if any, through reports/downloads.
The NCCPL warned that in case of none or partial collection of CGT, necessary action would be taken in accordance with the Rules and NCCPL Regulations.
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Sindh issues schedule for announcing budget 2020/2021
KARACHI: Sindh government has announced to present provincial budget for 2020/2021 in first or second week of June 2020.
According to schedule issued by Sindh Finance Department the budget for the fiscal year 2021/2020 likely to be presented to the cabinet and the provincial assembly by the finance minister in the first or second week of June 2020.
According to the schedule by May 28, 2020, the finance department would complete all budget documents, schedules, and summaries for the cabinet.
The planning and development department would present finalized Annual Development Program (ADP) – 2020/2021 by third or fourth week of May 2020.
The meeting of National Economic Council (NEC) is scheduled for first week of May 2020.
The finance department would finalize new taxation proposals and review existing taxes and fees by April 30, 2020.
The meeting of Annual Plan Coordination Committee (APCC) to be held by fourth week of April 2020.
The finance department would finalize Medium Term Budge Framework (MTBF) 2022/2023 by March 31, 2020.
The finance department would finalize of revised estimates for 2019/2020, budget estimates for 2020/2021 and SNE 2020/2021 for recruitment budget by March 31, 2020.
Last date for incorporation of any modification in the ADP 2020/2021 for Annual Plan Coordination Committee by April 20, 2020.
The Sindh government issued budget circular which is integrated the formulation of the Recurrent (non-development) & Development budget and it is being issued in consultation with Planning & Development Department.
Accordingly two additional forms (Form BCC-X and BCC-XI) have been incorporated in the circular for the formulation of development budget.
The Planning & Development Department will have the lead role in development budget formulation, whereas, the Finance department will be formulating the non-development Budget, Receipts and MTBF.
All Administrative Departments are required to submit budgetary proposals on prescribed forms which will be scrutinized by Finance Department and Planning & Development Department in detail, as per prevailing practice.