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Author: Mrs. Anjum Shahnawaz

  • Stock market gains 198 points in mixed trading

    Stock market gains 198 points in mixed trading

    KARACHI: The stock market gained 198 points on Wednesday in mixed trading sessions.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 34,281 points as against 34,084 points showing an increase of +198 points.

    Analysts at Arif Habib Limited said that the market made a positive move today with a total increase of 351 points and closed the session at 198 points.

    During the session, UBL announced financial results, however the stock price did not react positively to the results, ending the session a rupee down compared with previous closing.

    Oil & Gas scrips from E&P to OMCs generally fared well, with PPL registering volume of 2.3 million shares. Cement sector saw selling pressure and so did Steel, but managed to close the session in green.

    Technology stocks remained in limelight with traded volumes of 22.9 million shares, followed by Chemical (17.4 million) and Power (14.1 million). Among scrips, KEL registered 11.8 million shares followed by WTL (11.8 million) and UNITY (9.9 million).

    Sectors contributing to the performance include Banks (+49 points), E&P (+46 points), Fertilizer (+36 points), O&GMCs (+30 points) and Food (+19 points).

    Volumes declined slightly from 156.4 million shares to 150.8 million shares (-4 percent DoD). Average traded value also declined by 8 percent to reach US$ 31.3 million as against US$ 34 million.

    Stocks that contributed significantly to the volumes include KEL, WTL, UNITY, LOTCHEM and FCCL, which formed 31 percent of total volumes.

    Stocks that contributed positively include PPL (+40 points), OGDC (+27 points), PSO (+20 points), ENGRO (+19 points) and BAHL (+16 points). Stocks that contributed negatively include UBL (-15 points), HUBC (-13 points), POL (-11 points), MARI (-10 points), and LUCK (-6 points).

  • Rupee gains four paisas on improved economic sentiments

    Rupee gains four paisas on improved economic sentiments

    KARACHI: The Pak Rupee gained four paisas against dollar on Wednesday owing to inflows of export receipts and improved economic sentiments.

    The rupee ended Rs156.02 against dollar from previous day’s closing of Rs156.06 in interbank foreign exchange market.

    Currency dealers said that crackdown launch by tax authorities against exchange companies besides positive response from IMF helped the local currency to gain value.

    The foreign exchange market was initiated in the range of Rs156.05 and Rs156.10. The market recorded day high of Rs156.10 and low of Rs156.01 and closed at Rs156.02.

    The exchange rate in open market was remained unchanged. The buying and selling of dollar was recorded at Rs155.70/Rs156.20, the same previous day’s closing level, in cash ready market.

  • SBP directs banks to verify trade price before approving import, export forms

    SBP directs banks to verify trade price before approving import, export forms

    KARACHI: State Bank of Pakistan (SBP) has directed banks, exchange companies to verify trade prices before approving import or exports forms.

    The central bank issued instructions to the authorized dealers in foreign exchange related to Framework for Managing Risks of Trade Based Money Laundering and Terrorist Financing.

    The SBP said that the Authorized Dealers (ADs) shall define clear policies and procedures for price verification, including defining the level of acceptable price variance, escalation procedures and suspicious transaction reporting mechanism when significant differences in prices are identified.

    ii. It shall be the exclusive responsibility of an AD to perform due diligence with respect to various risk factors in a trade transaction. In this regard, ADs shall be specifically required to verify the prices of underlying contracts as declared on EIF/MIF, EFE/MFE, Advance Payment Voucher from reliable sources i.e. chambers of commerce, local business circles, daily newspapers, Internet, historic appraisements, Customs valuation rulings, etc. where prices are available and shall satisfy themselves before approving EIF/MIF, EFE/MFE or disbursing the amount to the exporter as the case may be that the prices declared by their client represent the fair market value of goods.

    The ADs shall institute a mechanism, supported by technology-based solutions, to carry out assessment of prices of underlying contracts on post transaction basis that is after the approval of EIF/MIF, EFE/MFE or disbursing the amount to the exporter, where price checks are not performed at pre-transaction stage, and shall satisfy themselves that the prices declared by their client represent the fair market value of goods.

    This function may be performed by the department other than the front office/centralized trade-processing unit where transaction is taking place. To this end, ADs may assign this function either to their risk management department or compliance department.

    The department to which this function is assigned shall be under obligation to conclude the assessment with thirty days of approving EIF/MIF, EFE/MFE or disbursing the amount to the exporter as the case may be.

    The financial institutions shall require the exporter to submit a copy of underlying sale contract along with Advance Payment Voucher.

    The procedure of price verification/assessment shall be documented by ADs for later review /audit/inspection, the SBP said.

    The significant variance between the prices of goods declared on EIF/MIF, EFE/MFE, Advance Payment Voucher and their fair market value shall serve as one of the prime red flag indicators and all such transactions shall be escalated to the higher management, which shall review the same and consider the option of filing STR with FMU etc. This procedure shall be documented by ADs for later review /audit/inspection.

    The SBP further instructed that Authorized Dealers (ADs) shall ensure compliance of the following instructions while approving EIF/MIF, EFE/MFE:

    a) Full details/exact specification, quality/varieties/sub categories of goods being imported/exported are declared on EIF/MIF, EFE/MFE and declaring the description of goods that is general in nature or represents the generic name of goods should be avoided.

    b) Declaration of unit of measurement such as boxes, cases etc. on EIF/MIF, EFE/MFE, which obscures the actual quantity of goods being imported/exported, shall be avoided. In this respect, unit of measurement, if not required to be declared otherwise, shall be declared in line with relevant Custom Valuation Rulings (if available).

    c) In case, the brand/trade name/trademark of a product is to be declared on EIF/MIF, EFE/MFE, it shall be accompanied by the generic name of such product.

    d) H.S. Code of each product which forms the part of the underlying contract is declared on EIF/MIF, EFE/MFE. Where an H.S. Code includes multiple goods/products, ADs shall ensure that the particulars of each product are written against that H.S. Code.

    e) Guideline at (a)(c) & (d) above shall be followed while making declaration on Advance Payment Voucher. Moreover, it shall be ensured by ADs that in case of advance payment export, declaration made on EFE/MFE is strictly in accordance with the particulars declared on Advance Payment Voucher and name of consignee declared on EFE/MFE is of the same entity from which the advance payment is received.

    ii. The particulars of EIF/MIF, EFE/MFE shall be corroborated with that of Goods Declaration Form, where transaction does not involve a letter of credit, to check the cohesion and in case of significant variation(s), the matter shall be escalated to the higher management, which shall review the same and consider the option of filing STR with FMU etc.

  • Attock Petroleum posts 21 percent decline in after tax profit

    Attock Petroleum posts 21 percent decline in after tax profit

    Attock Petroleum Limited, a leading player in the energy sector, has reported a 21 percent decline in its after-tax profit for the quarter ended September 30, 2019.

    (more…)
  • Pakistan’s exchange rate reflecting actual economic conditions: IMF

    Pakistan’s exchange rate reflecting actual economic conditions: IMF

    The International Monetary Fund (IMF) affirmed on Wednesday that Pakistan’s exchange rate now better reflects the actual economic conditions of the country.

    (more…)
  • Open account, advance payments considered as higher risk transactions for trade based money laundering

    Open account, advance payments considered as higher risk transactions for trade based money laundering

    KARACHI: State Bank of Pakistan (SBP) has advised financial institutions dealing foreign exchange to enhance due diligence on higher risk transactions to stop trade based money laundering.

    The SBP on Tuesday issued Framework for Managing Risks of Trade Based Money Laundering and Terrorist Financing and said that banks and financial institutions should ensure that high risk transactions in the area of trade business are subject to more extensive due diligence and are escalated, where required, to the higher management.

    ii. In this respect, following transactions may have higher Money Laundering/Terror Financing risks and may be considered for Enhanced Due Diligence (EDD):

    a) Open Account

    b) Advance Payments (Import & Export of Goods)

    c) Import/Export of Services

    d) Import/Export of Free of Cost Goods

    e) Trade transactions with related party

    f) Import of goods that are exempt from import related duties

    g) Import of goods that are subject to over 25% import duties

    h) Export of goods on which export related rebates are allowed by the Government of Pakistan

    i) Where an exporter allows trade discounts to the same importer consistently by the way of deduction of amount of discount from the proceeds of export bills.

    j) Trade transaction of sole proprietorship or partnership concern received by centralized trade processing unit from a different branch of an AD with whom their relationship is not generally associated or frequent switching of branch for trade transactions by such concerns.

    k) Trade transactions with high-risk jurisdictions or jurisdictions with lax AML/CFT regulations and implementations

    l) Outward remittance from personal FCY account of the importer

    m) Unusually relaxed terms for settlement of counter value both for exports as well as imports e.g. no specific timeline for shipment of goods against exports advance payment, extended credit period for payment against import of goods especially between unrelated parties.

    Due weightage shall be given by authorized dealers to the risk rating of the customer while allowing high-risk transactions.

    In this respect, a criteria shall be developed by the ADs whereby transactions falling in high-risk category specifically Advance Payments (Import & Export), where clients have outstanding overdues/poor performance history, shall be escalated to the higher management for taking appropriate decision about the fate of transactions.

    In case of recurrence of non-performance post allowing the transaction, the higher management of financial institutions may subject the customer to enhance/continuous monitoring.

    However, in case of persistent non-performance during the period in which the customer has been subjected to enhance/continuous monitoring, the AD may evaluate the transaction for filing an Suspicious Transaction Report (STR) with Financial Monitoring Unit (FMU) if they have sufficient grounds to form suspicion that the customer is using trade transaction to launder money, finance terrorism etc. ADs, in such circumstance, should also evaluate the risks of continuing relationship with the customer.

    Notwithstanding the above, even if the senior management of ADs on the matter escalated to it does not find sufficient grounds for filing of an STR, they may consider subjecting the customer to enhanced/continuous monitoring.

  • Customs to secure deferential duty, taxes on provisional assessment

    Customs to secure deferential duty, taxes on provisional assessment

    KARACHI: Importers are liable to deposit bank guarantee against deferential amount assessed provisionally by customs authorities on those consignments, which required further examination.

    The Federal Board of Revenue (FBR) issued Customs Act, 1969 updated till June 30, 2019 incorporating changes brought through Finance Act, 2019. The updated act explained through Section 81 the security of deferential amount in provisional determination liability.

    Section 81: Provisional determination of liability

    Sub-Section (1): Where it is not possible for an officer of Customs during the checking of the goods declaration to satisfy himself of the correctness of the assessment of the goods made under section 79 or 131, for reasons that the goods require chemical or other test or a further inquiry, an officer, not below the rank of Assistant Collector of Customs, may order that the duty, taxes and other charges payable on such goods, be determined provisionally:

    Provided that the importer, save in the case of goods entered for warehousing, pays such additional amount on the basis of provisional assessment or furnishes bank guarantee or pay order of a scheduled bank along with an indemnity bond for the payment thereof as the said officer deems sufficient to meet the likely differential between the final determination of duty, taxes and other charges over the amount determined provisionally:

    Provided further that there shall be no provisional assessment under this section if no differential amount of duty and taxes and other charges is paid or secured against bank guarantee or pay order.

    Sub-Section (2): Where any goods are allowed to be cleared or delivered on the basis of such provisional determination, the amount of duty, taxes and charges correctly payable on those goods shall be determined within six months of the date of provisional determination:

    Provided that the Collector of Customs or, as the case may be, Director of Valuation, may in circumstances of exceptional nature and after recording such circumstances, extend the period for final determination which shall in no case exceed ninety days:

    Provided further that any period, during which the proceedings are adjourned on account of a stay order or for want of clarification from the Board or the time taken through adjournment by the importer, shall be excluded for the computation of aforesaid periods.

    Sub-Section (3): On completion of final determination, the amount already paid or guaranteed shall be adjusted against the amount payable on the basis of final determination, and the difference between the two amounts shall be paid forthwith to or by the importer, as the case may be.

    Sub-Section (4): If the final determination is not made with the period specified in sub-section (2), the provisional determination shall, in the absence of any new evidence, be deemed to be the final determination.

    Sub-Section (5): On completion of final determination under sub-section (3) or (4), the appropriate officer shall issue an order for adjustment, refund or recovery of amount determined, as the case may be.

    Explanation.- Provisional assessment means the amount of duties and taxes paid or secured against bank guarantee or pay order.

  • Prime minister welcomes $240 million investment by Hutchison Port Holdings

    Prime minister welcomes $240 million investment by Hutchison Port Holdings

    ISLAMABAD: Prime Minister Imran Khan has welcomed fresh investment of $240 million by Hutchison Port Holdings and commitment of the company to the Pakistan’s economic prosperity.

    The prime minister praised the company at a meeting with a delegation of Hutchison Port Holdings led by their Group Managing Director Mr. Eric Ip called on Prime Minister Imran Khan on Tuesday.

    The Prime Minister reiterated the commitment and focus of the Government to facilitate investment and ease-of-doing-business that would ultimately result in economic growth and employment generation.

    Minister for Maritime Affairs Syed Ali Haider Zaidi, Advisor to PM on Commerce Abdul Razzaq Dawood, Special Assistant to PM Syed Zulfiqar Abbas Bukhari, Ambassador at Large for Foreign Investment Ali Jehangir Siddiqui, Chairman Board of Investment Zubair Haider Gilani and senior officials were present during the meeting.

    The delegation from Hutchison Ports also included Mr. Andy Tsoi, Managing Director Middle East & Africa, Mr. Eric Ng, Business Director Middle East & Africa and the leadership of their Pakistan management team.

    Group Managing Director Mr. Eric Ip apprised the Prime Minister of Hutchison Port Holdings’ fresh investment into Pakistan approximating $240 million that will make available a significant amount of new container terminal capacity at the Karachi Port, and increase Hutchison Ports’ total investment in Pakistan to $1 billion.

    The Prime Minister was informed that this investment will also grow Hutchison employees to 3,000 people. The Prime Minister was also briefed about the development of Hutchison Port Holdings, its parent company CK Hutchison Holdings, and the group’s commitment to play a pivotal role in facilitating the economic growth of Pakistan, as well as supporting the development of Karachi Port into a major hub for trade in Asia.

    Hutchison Port Holdings is one of the world’s largest port companies, with over 30,000 employees, operating 52 ports and terminals in 27 countries spanning Asia, the Middle East, Africa, Europe, the Americas and Australia. The company is headquartered in Hong Kong.
    Ambassador Ali Jehangir Siddiqui stated that as a result of a fairly priced currency, unit volumes of exports were increasing and there was a great need for additional container terminal capacity. As a result, this investment would support our export competitiveness and also result in greater revenue for both the federal exchequer and the Karachi Port Trust

  • FBR takes measures to improve trade facilitation in Balochistan

    FBR takes measures to improve trade facilitation in Balochistan

    KARACHI: Federal Board of Revenue (FBR) has taken measures to improve trade facilitation and curb smuggling in Balochistan. Accordingly a senior BS-21 officer of Pakistan Customs Service(PCS) has been specifically posted as Chief Collector, Balochistan with dedicated Collectorates for Enforcement and Appraisement.

    Model Customs Collectorate (Preventive), Quetta was established to curb the menace of smuggling. Dedicated anti-smuggling units have been set-up with the available manpower and logistics and tasked to man the long and porous Pak Afghan border.

    The FBR has also established Model Customs Collectorate, Appraisement Quetta to facilitate trade and to expedite customs clearances from dry port and customs border stations in Balochistan.

    On directives of Chairman FBR Syed Shabbar Zaidi, adequate staff has been posted in the far flung customs stations of Taftan, Panjgur and Chaman border in order to ensure immediate clearance of goods especially perishable items like dry / fresh fruits and vegetables and to ensure clearances through the WeBOC-Glo automated system.

    Member Customs Operations has instructed all customs formations operating in Balochistan to ensure speedy clearances while at the same time to curb the menace of smuggling and apprehend those involved in these illegal movement of goods.

  • Stock market declines by 103 points

    Stock market declines by 103 points

    KARACHI: The stock market declined by 103 points on Tuesday amid positive vibes of FATF proceedings, which maintained interest of investors, analysts said.

    The benchmark KSE-100 index of Pakistan Stock Exchange closed at 34,084 points as against 34,186 points showing a decline of 103 points.

    Analysts at Arif Habib Limited said that the index lost another 100 points, after an oscillation of +73 points and -257 points, but maintained the 34,000 level.

    Largely, Oil and Gas chain and Auto sector kept the index under pressure, which was due to lower international crude prices.

    Second day of FATF proceedings, on the whole, gave positive vibes that helped investors maintain interest. Brokerage commission, which also proved to be an issue yesterday had a slight impact on the activity.

    Volumes, nonetheless, inched up over the day. Cement sector again led the volumes with 27.5 million shares, followed by Technology (26.7 million) and Chemical (18 million) stocks. Technology sector stocks have lately been in the limelight for some time now, courtesy of WTL. Among scrips, WTL led the table with 18.3 million shares, followed by FCCL (14.3 million) and LOTCHEM (8.7 million).

    Sectors contributing to the performance include E&P (-59 points), Power (-45 points), Fertilizer (-18 points), O&GMCs (-12 points) and Chemical (+7 points).

    Volumes increased from 137.9 million shares to 1562 million shares (+13 percent DoD). Average traded value also increased by 10 percent to reach US$ 33.9 million as against US$ 30.8 million.

    Stocks that contributed significantly to the volumes include WTL, FCCL, LOTCHEM, EPCL and UNITY, which formed 35 percent of total volumes.

    Stocks that contributed positively include HBL (+9 points), FCCL (+9 points), FABL (+8 points), COLG (+6 points) and MCB (+6 points). Stocks that contributed negatively include HUBC (-41 points), POL (-23 points), OGDC (-21 points), SNGP (-14 points), and ENGRO (-11 points).