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  • Foreign direct investment falls by 58.4pc in July – August

    Foreign direct investment falls by 58.4pc in July – August

    KARACHI: The inflow of foreign direct investment (FDI) has declined 58.4 percent in the first two months of current fiscal year, according to data released by State Bank of Pakistan (SBP) on Wednesday.

    The total inflows under FDI reduced to $156.7 million during July – August 2019 as compared with $377 million in the same period of the last year.

    However, portfolio investment registered 182.8 percent growth during the first two months of the current fiscal year.

    The investment into the capital market grew to $107.3 million during July – August 2019 as compared with outflows of $129.6 million in the corresponding period of the last fiscal year.

    The total foreign private investment posted 6.8 percent increase to $264 million during July – August 2019 as compared with $247.3 million in the corresponding period of the last year.

  • Privatization of National Bank, State Life Insurance under consideration: Dr. Hafeez Shaikh

    Privatization of National Bank, State Life Insurance under consideration: Dr. Hafeez Shaikh

    ISLAMABAD: The government is considering privatization of big entities such as National Bank of Pakistan (NBP) and State Life Insurance Corporation for better results.

    Addressing a news conference in Islamabad on Sunday Prime Minister’s Advisor on Finance Dr. Abdul Hafeez Shaikh said that the government had begun to focus on improving the performance of institutions which were not properly functioning and have made decisions in this regard.

    The organizations which the public sector is unable to run will be handed over to the private sector in a transparent manner. So we have injected new energy into privatization.

    New companies have come forth and expressed their interest in privatization and their advertisements have been placed. We aim at fast-tracking these developments so productivity is increased.

    Furthermore, for state-owned companies which need to be revamped, an organization ‘Sarmaya Pakistan’ has been activated and 20 companies have been selected for restructuring on a fast-track basis.

    Shaikh also said that electricity distribution companies where many problems have arisen out of operating under the state will also be prepared for privatization.

    He said that PTI government had succeeded in reducing the circular debt to less than Rs10 billion rupees.

    He said when PTI government came into power the country was heading towards bankruptcy, but under the objective of economic stability, a number of steps were taken to control our Dollar Reserves.

    The advisor said government expenses were reduced through austerity measures and current account deficit was also reduced over 70 percent.

    Dr Hafeez Shaikh said six hundred thousand additional tax payers were registered. He said a new system has been introduced since 23rd of the last month under which speedy refunds are given to the business community. Now, refunds will be automatically ensured on 16th of every month.

    The advisor said the process of privatization has been expedited and state owned enterprises will be restructured on fast track basis to improve their performance.

    The advisor said value of rupee has improved resulting in a benefit of Rs246 billion in loans. He said Rs250 billion have been allocated for the development of agriculture sector.

    Dr Abdul Hafiz Shaikh said the government fixed the economic growth target of 2.4, which will be achieved easily due to prudent economic policies of the government.

    To a question, Dr Abdul Hafeez Shaikh said ease of doing business is top priority of the government.

    He said government is providing loans and subsidy to the business community on gas, electricity, due to which exports are on the rise. Businessmen are important for the government, who are vital in provision of jobs. He also made it clear that there was no tax on food items.

    The Finance Advisor said the government expects to collect over Rs1000 billion additional revenue through tax and non-tax resources in the current fiscal year. He said Rs140 billion have been received from two cellular companies and Rs370 billion is expected to be received in future from other resources.

    He said the economy of the country is rapidly moving toward stability due to effective policies of the government and economic indicators are positive as stock market and value of rupee are stable.

  • Remittances decline by 8.37pc to $3.73 billion in July – August

    Remittances decline by 8.37pc to $3.73 billion in July – August

    KARACHI: The inflows of workers’ remittances have declined by 8.37 percent to $3.73 billion during first two months (July – August) 2019/2020 as compared with $4.071 billion in the same months of the last fiscal year, State Bank of Pakistan (SBP) said on Friday.

    The central bank said that overseas Pakistani workers remitted US$ 1,690.9 million in the August 2019 as compared with US$ 2039.3 million received during July 2019. This showed a decline of US$ of 348.4 million on month-on-month basis, reflecting the usual one-off post Eid-ul-Azha effect.

    The country wise details for the month of August 2019 show that inflows from Saudi Arabia, UAE, USA, UK, GCC countries (including Bahrain, Kuwait, Qatar and Oman) and EU countries amounted to US$ 377.58 million, US$ 348.51 million, US$ 297.41 million, US$ 250.20 million, US$ 158.60 million and US$ 58.14 million respectively compared with the inflow of US$ 465.53 million, US$ 473.11 million, US$ 330.40 million, US$ 294.90 million, US$ 193.17 million and US$ 59.69 million respectively in August 2018.

    Remittances received from Malaysia Norway, Switzerland, Australia, Canada, Japan and other countries during August 2019 amounted to US$ 200.42 million together as against US$ 272.62 million received in August 2018.

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  • Govt plans issuance of Eurobond, Sukuk in international capital markets; intends to hire consortia

    Govt plans issuance of Eurobond, Sukuk in international capital markets; intends to hire consortia

    ISLAMABAD: The government has planned to set up a Medium Term Note (MTN) Program for issuance of US Dollar denominated Eurobonds and Sukuk in the international capital markets.

    The program shall initially cover a period of one year, said ministry of finance on Friday.

    For the purpose, finance division plans to engaged two consortia, each consisting of five financial institutions, for issuance of Eurobonds and Sukuk under the program. “The selected consortia are expected to guide, advise, manage, coordinate and execute the whole range of activities associated with the program,” the ministry said.

    It further said that Consortium – 1 shall consist of five conventional financial institutions and shall assist in issuance of Eurobonds. Consortium-2 shall consist of five financial institutions, including at least two Islamic financial institutions, and shall assist in issuance of international Sukuk.

    Explaining the selection criteria for Consortium-1, the ministry said that the financial institution ranked first shall be selected. The financial institutional ranked second shall be given the option to match the lowest evaluated financial proposal. “If it chooses so, it shall be selected as part of the consortium, otherwise it shall be rejected.”

    The process shall continue in this manner till five consortium members are selected. In case of a tie, the financial institution having secured higher technical score shall be given the option to become part of the consortium.

    Regarding selection of members of Consortium-2, the ministry said that the same process as in case of Consortium – 1 shall be followed except that at least two Islamic financial institutions shall be selected as members of Consortium-2.

    The ministry invited proposals for the program to be submitted by October 14, 2019.

  • Total SECP registered companies increases to 104,030 by August

    Total SECP registered companies increases to 104,030 by August

    ISLAMABAD: The total registered companies with Securities and Exchange Commission of Pakistan (SECP) has reached to 104,030 by end of August 2019, a statement said on Thursday.

    The SECP registered 1,187 new companies in August 2019, out of which 94 percent companies were registered online through eService and 52 percent within same day.

    The increasing trend in registration of new companies is due to simplified and hassle free procedures of company incorporation, the SECP said.

    The SECP has recently undertaken series of reforms for providing ease of business registration. Following reforms, a company can be registered in SECP within four hours through eService.

    The SECP has recently combined the process for name reservation and incorporation to introduce a single application form for company incorporation. Moreover, the company incorporation and other regulatory fee has been reduced significantly and facility provided for payment of fee through mobile and internet banking.

    “To facilitate and guide people, the SECP has also established facilitation desks at company registration offices of Islamabad, Karachi and Lahore,” the statement said.

    The most significant development is the integration of SECP’s eServices with Federal Board of Revenue (FBR), Employees Old-Age Benefits Institution (EOBI) and business registration portals of Punjab and Sindh. Resultantly, SECP eServices is offering a one window facility for company incorporation, NTN registration and registration with EOBI, provincial social security institution, excise and taxation department and labor department of Punjab and Sindh.

    The SECP said that the new companies registered in August 2019, include 71 percent private limited companies, 26 percent single member companies and three percent were registered as public unlisted companies, not for profit associations, trade organizations, foreign companies and Limited Liability Partnership (LLP).

    Trading sector took the lead with 192 companies followed by, services with 148, construction with 132 and IT with 120.

    The SECP said that 595 companies were registered in tourism, real estate development, education, food and beverages, engineering, corporate agricultural farming, marketing and development, chemical, mining and quarrying, textile, pharmaceutical, transport, fuel and energy, and healthcare, auto and allied, and communication, logging, power generation etc.

    The SECP said that foreign investment has been reported in 38 new companies. These companies have foreign investors from China, Denmark, Ireland, Italy, Korea South, Mauritius, Norway, Saudi Arabia, Switzerland, the UK and the US.

    The highest numbers of companies, i.e. 434 were registered in Islamabad, followed by 316 and 189 companies registered in Lahore and Karachi respectively.

    The CRO in Peshawar, Multan, Gilgit Baltistan, Faisalabad, Quetta and Sukkur registered 81, 56, 47, 45, 13 and six companies respectively.

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  • Pakistan’s forex reserves increase by $132 million

    Pakistan’s forex reserves increase by $132 million

    KARACHI: The liquid foreign exchange reserves of the country have increased by $132 million to $15.751 billion by week ended September 06, 2019, State Bank of Pakistan (SBP) said on Thursday.

    The reserves held by SBP increased by $182 million to $8.462 billion by week ended September 06, 2019 as compared with $8.28 billion a week ago. The SBP attributed the increase to official inflows during the week.

    The reserves held by commercial banks, however, declined by $50 million to $7.289 billion as compared with $7.339 billion a week ago.

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  • Pakistan not renegotiating IMF-program

    Pakistan not renegotiating IMF-program

    ISLAMABAD: Pakistan is not renegotiating IMF program and the country remains committed to implement the policies and reforms spelled out in the IMF-supported program, said a clarification issued on Friday.

    A certain news item published on 6th September 2019 has reported that the IMF is sending an SOS mission to Pakistan owing to the fiscal outcomes of FY 2018-2019. The news item has also claimed that programme may be renegotiated.

    It is clarified that both these assertions are completely incorrect are not based on actual ground realities.

    The upcoming IMF Mission is a staff level visit and coincides with the visit of the Director of the Middle East and Central Asia Department of the International Monetary Fund.

    The Director’s visit to Pakistan had been planned for September soon after the finalisation of the programme. As such, it is absolutely erroneous to construe that the IMF staff level mission is any kind of SOS mission as it had already been planned much earlier. The claim that the IMF programme is being renegotiated is equally misconceived.

    “The Government of Pakistan remains firmly committed to implement the policies and reforms spelled out in the IMF-supported program.”

    As indicated in the program documents, the IMF-supported program will be monitored and reviewed according to a calendar of quarterly reviews. The first one is scheduled to take place at some point in December.

    Our understanding is that as part of our technical work program, an IMF team will come on a routine Staff Visit in mid September 16-20. It must also be emphasised that after the initial adjustments, the economy is rapidly stabilising, in particular the external sector, and that the current fiscal year will yield some very positive economic outcomes.

  • Foreign exchange reserves flat at $15.619 billion

    Foreign exchange reserves flat at $15.619 billion

    KARACHI – The State Bank of Pakistan (SBP) reported a marginal shift in the country’s liquid foreign exchange reserves, indicating stability in the economic landscape.

    (more…)
  • Rebasing lowers average inflation for July-August

    Rebasing lowers average inflation for July-August

    ISLAMABAD: The average headline inflation i.e. Consumer Price Index (CPI) was calculated at 9.44 for the months of July and August, 2019 on the basis of revised base year, a statement said on Wednesday.

    Pakistan Bureau of Statistics (PBS) revised base year for calculating Consumer Price Index (CPI) from 2007-2008 to 2015-2016.

    The CPI on new base (2015-16) comprises of urban CPI and Rural CPI. The Urban CPI covers 35 cities and 356 consumer items. The Rural CPI covers 27 Rural Centers and 244 consumer items. In the new base year (2015-16) National CPI for 12 major groups is also computed by taking weighted average of Urban CPI and Rural CPI.

    According to the PBS, the inflation rate for August 2019 over July 2019 as per base year 2007-2008 is 1.3 percent and 1.64 percent as per base year 2016-2016.

    The inflation rate for August 2019 over August 2018 is at 11.63 percent as per base year 2007-2008 and 10.49 percent as per base year 2015-2016.

    The average inflation rate for July – August 2019 over the same period of last year is 10.98 percent as per base year 2007-2008 and 9.44 percent as per base year 2015/2016.

    The CPI National with base year (2015-16) for the month of August, 2019 has increased by 1.64 percent over July, 2019. The Urban CPI with base year (2015-16) recorded an increase of 1.46 percent while Rural CPI with base year (2015-16) recorded an increase of 1.91 percent. CPI with old base year (2007-08) recorded an increase of 1.38 percent.

    Top few commodities which varied from previous month i.e. July, 2019 are given below:

    URBAN:

    Increased: Chicken (40.75 percent), Tomatoes(37.47 percent), Onions(32.31 percent), Fresh vegetables(12.84 percent), Eggs (9.76 percent), Potatoes(6.21 percent), Cooking oil(4.68 percent), Vegetable ghee(4.18 percent), Motor fuel(3.88 percent), Sugar(3.78 percent), Pulse masoor(2.54 percent), Mustard oil(1.75 percent), Pulse gram(1.44 percent), Wheat flour (1.29 percent) and Pulse mash(1.01 percent).

    Decreased: Fresh fruits(15.64 percent), Liquified Hydrocarbons (LPG) (5.19 percent), and Wheat(0.3 percent).

    RURAL:

    Increased: Tomatoes(35.4 percent), Onions(28.49 percent), Chicken(26.56 percent), Potatoes(18.18 percent), Fresh Vegetables(10.96 percent), Eggs(9.79 percent), Sugar(5.21 percent), Doctor Clinic Fee (4.74 percent), Motor Fuels (4.21 percent), Cooking oil(3.22 percent), Pulse Moong(2.81 percent), Vegetable ghee(2.51 percent), Pulse Mash(2.35 percent) and Milk powder(1.85 percent).

    Decreased: Fresh fruits(20.6 percent), Fish(2.8 percent), Beans(1.72 percent) and Wheat(0.32 percent).

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  • Simplified tax regime for non-residents approved: Dr. Hafeez Shaikh

    Simplified tax regime for non-residents approved: Dr. Hafeez Shaikh

    ISLAMABAD: The Economic Coordination Committee (ECC) on Wednesday approved a simplified tax regime to facilitate the non-resident companies for investment in the local capital market.

    Dr. Abdul Hafeez Shaikh, Advisor to Prime Minister on Finance said that the ECC had approved a simplified tax regime to facilitate the non-resident companies for investment in the local capital market.

    Dr. Abdul Hafeez Shaikh said that these incentives will increase the foreign exchange inflows and reserves of the country.

    A statement issued after the ECC meeting stated that the meeting has approved separate proposals for simplification of tax regime for non-resident companies investing in the local debt market, revision of cess rate on tobacco for the year 2019-2020 and payment of outstanding amount of Rs 5.85 billion as gas subsidy to the fertilizer industry.

    The approvals were given at a meeting of the ECC which met here at the Cabinet Block with Adviser to the Prime Minister on Finance & Revenue Dr. Abdul Hafeez Shaikh in the chair.

    The ECC was also briefed on the wheat situation in the country and it was pointed out that while prices were stable in most parts of the country, there were certain areas and places such as Karachi where the wheat and flour prices had escalated.

    The ECC directed the Ministry of National Food Security and Research to sit down with all stakeholders and ensure that the situation does not get out of hands and supply of wheat and flour at regular prices is ensured.

    The ECC also considered a proposal by the Ministry of Energy for application of quarterly adjustment notified on 1st July 2019 to the zero rated industrial consumers and for it to be charged over and above the notified tariff for zero rated industrial consumers at 7.5 cents as well as a proposal to the effect that Financial Cost Surcharge, Neelum Jhelum Surcharge, taxes and positive fuel adjustments would not be part of billing to zero rated sector industrial consumers and would be part of subsidy claims to be picked by the Government of Pakistan.

    The Committee discussed the pros and cons of the proposal in view of its financial implications and asked the Finance Division to hold a meeting with the stakeholders, including the Power Division, Commerce Division and Industries & Production Division and resubmit the case to ECC with solid proposals.

    The ECC also approved proposals submitted by the Ministry of Finance for simplification of tax regime for non-resident companies investing in the local debt market with a view to deepening the country’s capital markets, reducing the cost of debt for the government and increasing foreign exchange inflows and reserves.

    The new tax regime as approved by the ECC would apply to the non-resident companies having no permanent presence in Pakistan.

    The ECC also took up a proposal for extension and rehabilitation of gas network in the oil and gas producing districts of Khyber Pakhtunkhwa and referred the matter to the Development Working Party headed by the Secretary Petroleum for an appropriate decision.