Author: Mrs. Anjum Shahnawaz

SBP enhances payment limits to $25,000 against freelance services

KARACHI: The State Bank of Pakistan (SBP) on Wednesday enhanced payment limits against freelance services from $5,000 per individual per month to $25,000 per individual per month.

The central bank in a statement said that in order to broaden the scope of business-to-customer transactions through home remittance channel it had enhanced payment limits against freelance services in computer and information systems and other freelance services from $5,000 per individual per month to $25,000 per individual per month.

The enhancement in limit will facilitate freelancers to route greater value of funds through a more economical and efficient channel of home remittances and help in receiving foreign exchange flows through formal banking channels in the country.
This would also enable freelancers to expand their business/ operations and engage new freelancers to join the workforce.

This is expected to create employment opportunities and increase foreign exchange earnings of the country.

While Export of Services has been growing in double digits, (10.5 percent rise registered in January, 2020), this enhancement of limits for freelancers shall further accelerate growth in Export of Services in the months ahead, the SBP added.

February 12, 2020
Stock market gains 817 points on reports of downward revision in tax target

KARACHI: The stock market continued to make recovery on Wednesday and gained 817 points on Wednesday owing to reports of IMF affirmation to revise tax collection target downwards.

The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,531 points as against 39,714 points showing a gain of 817 points.

Analysts at Topline Securities said that the market continued its momentum as the index increased by 2 percent during the course of the day to close at 40,531-level.

This rally in market was largely attributed to news of ongoing negotiation between Federal Board of Revenue (FBR) and International Monetary Fund (IMF) to revise down revenue target.

Earlier news flows suggested that IMF had agreed to lower revenue collection target to around Rs4.9 trillion (against a previous target of Rs5.2 trillion). The FBR has proposed the target of Rs4.7 trillion, the analysts said.

Traded volume and value increased by 12 percent and 25 percent on DoD basis to 180 million shares and Rs.7.5 billion respectively.

HASCOL was the volume leader for the second consecutive day, as 16mn shares of the OMC changed hands.

MEBL declared its 4Q2020 result announcement in which it posted consolidated EPS of Rs.3.68, along with a final cash dividend of Rs.2/share.

This result announcement was in line with expectation. CHCC in cement sector declared its 2QFY20 result announcement in which it posted LPS of Rs.1.14, this result announcement was better than the street estimate.

Following the result announcement investor interest was witnessed in the cement company, closing 3.30 percent higher.

February 12, 2020
Rupee gains five paisas on export receipts inflow

KARACHI: The Pak Rupee gained five paisas against dollar on Wednesday owing to inflows of export receipts and workers’ remittances, dealers said.

The rupee ended Rs154.37 to the dollar from previous day’s close of Rs154.42 in interbank foreign exchange market.

The currency dealers said that the market witnessed inflows of exports and workers’ remittances during the day. On the other hand the importers were reluctant for fresh buying due to Coronavirus threat.

The foreign currency market was initiated in the range of Rs154.35 and Rs154.40. The market recorded day high of Rs154.39 and low of Rs154.34 and closed at Rs154.37.

The exchange rate in open market also witnessed appreciation in rupee value. The buying and selling of the dollar was recorded at Rs154.20/Rs154.50 as compared with last day’s closing of Rs154.30/Rs154.60 in cash ready market.

February 12, 2020
Meezan Bank announces 70% growth in annual profit

KARACHI: Meezan Bank Limited on Wednesday declared 70 percent growth in its annual net profit for the period December 31, 2019.

It is financial results submitted to Pakistan Stock Exchange (PSX), the bank announced profit after tax to Rs15.23 billion for the year 2019 as compared with Rs8.96 billion in the previous year.

The bank also declared earning per share (EPS) to Rs11.84 for the year under review as compared with Rs6.97 in the previous year.

Total income of the bank for the year 2019 recorded growth of 57 percent to Rs55.86 billion during the year as compared with Rs35.63 billion in the previous year.

The operating expenses of the banks recorded 29 percent growth to Rs24.83 billion during 2019 as compared with Rs19.29 billion in the previous year.

The provisioning and write offs of the banks increased sharply by 257 percent to Rs4.186 billion in 2019 as compared with Rs1.17 billion in the last year.

The bank announced Rs26.15 billion as profit before tax in 2019 as compared with Rs14.79 billion in the last year. Contribution towards income tax of the bank increased to Rs11 billion in 2019 as compared with Rs5.83 billion in the previous year.

February 12, 2020
DGRM authorized to manage risk involved in customs clearance

KARACHI: Directorate General of Risk Management (DGRM) has been authorized to manage risk involved in customs clearance of containerized, LCL and bulk cargo.

The FBR on Wednesday issued SRO 101(I)/2020 to amend Customs Rules, 2001. Through the SRO the FBR issued Risk Management System Rules.

It said that the DGRM to manage risk involved in customs clearance of containerized, LCL and bulk cargo including but not limited to transit cargo, international passengers and accompanied and unaccompanied baggage thereof including clearances against carnet-de-passage/TIR.

The DG has also been authorized to plan, design and implement strategies by applying accredited risk management tools and techniques specific to each transaction types relating to imports, exports and transit of goods and clearance of international passengers.

The DG shall also monitor, evaluate and review Risk Management System based on changing national and international trends and feedback from stakeholders.

According to the SRO, the DG shall examine clearance patterns of various sectors and commodities to identify, analyze and evaluate risks, develop mitigation strategies and present the same to Risk Management Committee (RMC) for approval and implementation.

The DG shall responsible to develop system whereby different stakeholders’ compliance levels are determined. Compliant stakeholders are facilitated in the system, it added.

The DG shall coordinate with Directorate General of Intelligence and Investigation Customs (DG I&I) to get feedback in the structured format after completion of investigations of cases or studies undertaken by the DG I&I.

The DG shall also coordinate with the Directorate General of Customs Valuation to develop checks and parameters for selection of cases requiring valuation scrutiny.

It said that RMC shall be headed by a BS-21 officer of Customs preferably Director General RMS and shall comprise many BS-19 and BS-20 officers of Customs as may be notified by the FBR.

According to the SRO, the meetings of RMC shall be convened at least once every month.

The RMC shall perform the following key functions, namely:

a. to review performance of the RMS;

b. to review risk parameters and behavior of important risk indicators;

c. to set benchmarks for interventions or interceptions focusing on targeting the risky consignments or entities; and

d. to review major detections by the collectorates or directorates (I&)- Customs with respect to RMS.

February 12, 2020
PIA declares 17% loss for six-month period

KARACHI: Pakistan International Airlines (PIA) has announced 17 percent loss for six months period ended June 30, 2019.

According to financial results submitted to Pakistan Stock Exchange (PSX) on Wednesday, the national flag carrier recorded losses of Rs37.89 billion for the six months period ended June 30, 2019 as compared with Rs32.411 billion in the corresponding period of the last year.

Operation losses of the company fell by 60 percent for the period to Rs7.12 billion as compared with the operation losses of Rs17.53 billion for the six months period ended June 30, 2018.

The company absorbed losses of Rs14.59 billion due to depreciation in rupee value during the six months period ended June 30, 2019 as compared with Rs5.83 billion in the corresponding period of the last fiscal year.

The financial costs of the airline increased to Rs15.85 billion during the period under review as compared with Rs8.8 billion in the same period of the last year.

The administrative expenses of the company were flat at Rs3.49 billion for the six months period ended June 30, 2019 as compared with Rs3.25 billion in the same period of the last fiscal year.

February 12, 2020
FBR defines fair market value of immovable properties, motor vehicles

KARACHI: Federal Board of Revenue (FBR) has defined fair market value of immovable properties and motor vehicles in case of undeclared assets identified.

FBR officials said that the valuation of immovable property for the purposes of section 111 of Income Tax Ordinance, 2001 related to undisclosed assets shall be taken to be-

(a) the fair market value of immovable property shall be the value notified by the Board under sub-section (4) of section 68, in respect of area or areas specified in the said notifications;

(b) if the fair market value of any immovable property of any area or areas has not been determined by the Board in the notification referred to in sub-section (4) of section 68, the fair market value of such immovable property shall be deemed to be the value fixed by the District Officer (Revenue) or provincial or any other authority authorized in this behalf for the purposes of stamp duty; and

(c) in the case of agricultural land, the value shall be equal to the average sale price of the sales recorded in the revenue record of the estate in which the land is situated for the relevant period or time;

(d) if in a case sale price recorded in the instrument of sale of any property is higher than the fair market value as determined under clauses (a), (b) and (c), the applicable price shall be higher of the two; and

(e) in the case of sale price of any auctioned property or the fair market value as determined under clauses (a), (b) and (c), the higher price shall be applicable.

(2) For the purposes of section 111 and subject to sub-rule (2), the value of motor cars and jeeps shall be determined in the following manner, namely:-

(a) the value of the new imported car or jeep shall be the C.I.F. value of such car or the jeep, as the case may be, plus the amount of all charges, customs-duty, sales tax, levies, octroi fees and other duties and taxes leviable thereon and the costs incurred till its registration;

(b) the value of a new car or jeep purchased from the manufacturer or assembler or dealer in Pakistan, shall be the price paid by the purchaser, including the amount of all charges, customs-duty, sales tax and other taxes, levies, octroi, fees and all other duties and taxes leviable thereon and the costs incurred till its registration;

(c) the value of used car or jeep imported into Pakistan shall be the import price adopted by the customs authorities for the purposes of levy of customs-duty plus freight, insurance and all other charges, sales tax, levies octroi, fees and other duties and taxes leviable thereon and the costs incurred till its registration;

(d) the value of a car or jeep specified in clause (a), (b) and (c) at the time of its acquisition shall be the value computed in the manner specified in the clause (a), (b) or (c), as the case may be, as reduced by a sum equal to ten percent of the said clause for each successive year, upto a maximum of five years; or

(e) the value of a used car or jeep purchased by an assessee locally shall be taken to be the original cost of the car or the jeep determined in the manner specified in clause (a), (b) or (c), as the case may be, as reduced by an amount equal to ten percent for every year following the year in which it was imported or purchased from a manufacturer.

(3) In no case shall the value be determined at an amount less than fifty percent of the value determined in accordance with clause (a), (b) or (c) or the purchase price whichever is more.

(4) For the purposes of section 61, the value of any property donated to a non-profit organization shall be determined in the following manner, namely:-

(a) the value of articles or goods imported into Pakistan shall be the value determined for the purposes of levy of customs duty and the amount of such duty and sales tax, levies, fees, octroi and other duties, taxes or charges leviable thereon and paid by the donor;

(b) the value of articles and goods manufactured in Pakistan shall be the price as recorded in the purchase vouchers and the taxes, levies and charges leviable thereon and paid by the donor;

(c) the value of articles and goods which have been previously used in Pakistan and in respect of which depreciation has been allowed, the written down value, on the relevant date as determined by the Commissioner;

(d) the value of a motor vehicle shall be the value as determined in accordance with rule; and

(e) the value of articles or goods other than those specified above, shall be the fair market value as determined by the Commissioner.

February 12, 2020
Meezan Bank, Amreli Steels sign agreement for dealers collection

KARACHI: Meezan Bank, the largest Islamic bank in Pakistan, and Amreli Steels Limited have joined hands to streamline dealers collections.

Under this transaction banking agreement, Meezan Bank, through the provision of its state-of-the-art online banking solution, named eBiz+, will enable Amreli Steels to fully automate its dealer collections, a statement said on Tuesday.

The partnership will further create value for Amreli Steels by serving as an end-to-end transaction banking solution delivering standardized reporting, greater safety and efficiency.

The agreement was signed by M. Saqib Ashraf – Head of Transaction Banking, Meezan Bank and Taha Umer – Financial Controller, Amreli Steels Limited. Also present at the occasion were Senior Executives of both organizations including Abdullah Ahmed – Group Head, Corporate & Institutional Banking, Meezan Bank, Amanullah Shaikh – General Manager South, Corporate & Institutional Banking, Meezan Bank, Shayan Akberali – CEO, Amreli Steels Limited and Fazal Ahmed – CFO & COO, Amreli Steels Limited.

Abdullah Ahmed, while speaking at the occasion said, “It is a pleasure to on-board Amreli Steels as a Transaction Banking customer.

Meezan Bank has always been a futuristic institution that aims to create even more attractive offerings to facilitate its customers.

At Meezan, we realize that corporations of all sizes need creative cash management strategies to support their operations and we are glad that Amreli Steels has taken this initiative.”

Shayan Akberali also commended the Bank for successfully launching cash management services and bringing forth operational efficiency in their collections process.

February 11, 2020
SECP proposes amendments to prevent corporate money laundering

ISLAMABAD: Securities and Exchange Commission of Pakistan (SECP) has proposed amendments laws to prevent money laundering through corporate entities.

A statement issued on Tuesday said that the SECP has issued a set of notifications, soliciting public consultation on drafts of amendments to the Companies (Incorporation) Regulations, 2017, Companies (General Provisions and Forms) Regulations, 2018, Foreign Companies Regulations, 2018, and Limited Liability Partnership Regulations, 2018.

The proposed amendments collectively make disclosures regarding the ownership and control structure of the companies and limited liability partnerships more transparent.

These amendments, issued in line with the recommendations on transparency of legal persons issued by the Financial Action Task Force, will help in identifying the real owners of such entities.

The amendments also propose to explicitly prohibit the issuance or transfer of equity and debt securities of a bearer nature as well as to increase the period for retention of records of dissolved companies.

The amendments will address the deficiencies highlighted in the country’s mutual evaluation report published by the Asia Pacific Group on Money Laundering in October 2019.

With the effect of propose amendments, Companies and LLPs would have to provide additional information to SECP, if the ownership and control structure of such entities is obscured through a chain of multiple entities, whether registered in Pakistan or abroad.

The draft Regulations define an ultimate beneficial owner as a person who exercises ownership or control rights over a company or LLP indirectly through multiple layers of corporate entities or other legal persons or any other arrangements.

Amendments suggested specifying a threshold of a minimum of 25 percent of ownership or control rights of the ultimate beneficial owner in the reporting entity, which would be owned through multiple layers of intermediate corporate entities.

In order to give effect to the proposed amendments, the Commission has also publicized the substantive provisions being added to the enabling laws, i.e. the Companies Act, 2017 and the Limited Liability Partnership Act, 2017.

The proposed amendments are placed on SECP’s website for public consultation.

February 11, 2020
Finance ministry urges careful media reporting over ebb

ISLAMABAD: The ministry of finance on Tuesday urged the media for careful reporting over the ebb and flows of Pakistan Stock Exchange (PSX).

“Yesterday as being unfortunate as such reports highlighting sharp volatility in the market damage the interest of the small investors and create uncertainty in the market,” a statement said.

“The role of the media in reporting the ebb and flow in the market needs to be carefully analyzed particularly in the wake of rumors spread by a section of the media regarding alleged changes in the government’s economic team which sent wrong signal to the market and damaged the interest of small investors and hurt overall sentiment in the market,” says it added.

The Ministry of Finance has noted that it is natural for the market to see a correction after rising sharply by over 50 percent.

“Yesterday, the market fell 846 points. Today the market gained 417 points. These ebbs and flows of the market are driven by sentiments, whereas the fundamentals remain strong and continue to improve.”

The Ministry of Finance also pointed out that after rising by 50 percent from August 2019 to January 2020, the KSE 100 index had already been named as the top performing market in the world by Bloomberg in December 2019.

The improved investor confidence was based on corrective measures taken by the government to reduce the twin deficits.

These measures were also strongly endorsed by Moody’s Investor Services in December 2019 with an upgrade in outlook to ‘stable’ from ‘negative’.

Foreign portfolio investment in the stock market during the first 6 months of the current fiscal year has also stood at US$ 18.8 million after 4 years of heavy selling by foreign investors.

February 11, 2020