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  • Weekly Review: stock market likely to maintain buoyancy

    Weekly Review: stock market likely to maintain buoyancy

    KARACHI: The stock market likely to maintain its buoyancy during next week owing to economic improvement.

    Analysts at Arif Habib Limited said that index will continue it’s upward journey as the economy depicts signs of resurrection.

    Improvement on the external front together with stability in the Pak Rupee is expected to reassure foreign investors.

    Meanwhile inflationary readings are set to touch peak in January 2020 and with an imminent interest rate cut to follow, domestic investors remain jubilant as well.

    The KSE-100 index of Pakistan Stock Exchange (PSX) is currently trading at a PER of 7.2x (2020) compared to Asia Pac regional average of 13.6x and while offering DY of ~7.8 percent versus ~2.6 percent offered by the region.

    The domestic equity bourse breached the 41,000 level this week (last seen in February 2019) albeit, settling at 40,917 points (up by 184 points and 0.45 percent WoW).

    This marks the highest index return in terms of percentage generated in seven consecutive weeks (+21.6 percent) in the past 10 years, last observed in September 2009.

    Although some profit-taking was witnessed throughout the week, a swift rally at the index on the last day reflects continued investor confidence on the back of improving macros (trade deficit narrowed by 33 percent during 5MFY20 and reserves held by the SBP jumped up to USD 9.23bn), and lower bond yields (under 11 percent for 10-year PIBs as per latest auction), which further opens up valuations.

    Sector-wise positive contributions came from i) Oil & Gas Exploration (273 points) as Pakistan invites Russia to acquire governments share in OGDC and PPL, ii) Chemical (54 points), iii) Food and personal care (47 points), iv) Fertilizer (42 points), and v) Tobacco (38 points). Scrip-wise positive contributions were led by OGDC (101 points), PPL (84 points), MARI (52 points), NESTLE (43 points) and POL (36 points).

    Foreign selling was witnessed this week clocking-in at USD 9.1 million compared to a net buy of USD 1.1 million last week. Selling was witnessed in E&P (USD 5.4 million) and Commercial Banks (USD 3.5 million).

    On the domestic front, major buying was reported by Individuals (USD 7.4 million) and Mutual Funds (USD 7.6 million). Average Volumes settled at 276 million shares (down by 41 percent WoW) while average value traded clocked-in at USD 67 million (down by 36 percent WoW).

  • PTBA suggests return filing date extension up to December 31

    PTBA suggests return filing date extension up to December 31

    LAHORE: The Pakistan Tax Bar Association (PTBA) has advised the Federal Board of Revenue (FBR) to extend the deadline for filing income tax returns to December 31, 2019. This recommendation was made in a letter addressed to the FBR chairman on Friday, citing several challenges faced by taxpayers and consultants.

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  • Stock market gains 402 points as buying seen in major scrips

    Stock market gains 402 points as buying seen in major scrips

    KARACHI: The stock exchange gained 402 points on Friday owing to buying seen in major blue chip scrips.

    The benchmark KSE-100 index of Pakistan Stock Exchange (PSX) closed at 40,917 points as against 40,514 points showing an increase of 402 points.

    Analysts at Arif Habib Limited said that the market opened on a positive note today and took cue from higher international oil prices that caused PPL to hit upper circuit and OGDC to trade near upper circuit.

    Buying activity was mainly observed in Oil & Gas chain. Besides E&P stocks, SSGC and SNGP among O&GMCs also closed on upper circuits.

    Autos, Cement and Steel were generally among the laggards. Banking sector led the volumes with 37.9 million shares, followed by Vanaspati (28.2 million) and Technology (27.3 million).

    Among scrips, UNITY led the volumes with 28.2 million shares followed by BOP (14.8 million) and FFL (13.5 million).

    Sectors contributing to the performance include E&P (+168 points), Banks (+77 points), O&GMCs (+55 points), Textile (+28 points), Inv Banks (+14 points).

    Volumes increased from 227 million shares to 270.7 million shares (+19 percent DoD).

    Average traded value also increased by 39 percent to reach US$ 75.3 million as against US$ 54.3 million.

    Stocks that contributed significantly to the volumes include UNITY, BOP, FFL, AVN and OGDC, which formed 30 percent of total volumes.

    Stocks that contributed positively include PPL (+92 points), OGDC (+77 points), HBL (+34 points), PSO (+26 points) and SNGP (+20 points). Stocks that contributed negatively include FFC (-9 points), THALL (-8 points), ENGRO (-8 points), MLCF (-6 points), and MARI (-5 points).

  • Rupee makes gain on inflows

    Rupee makes gain on inflows

    KARACHI: The Pak Rupee gained three paisas against dollar on Friday owing to inflows of export receipts and workers’ remittances.

    The rupee ended Rs154.96 to the dollar from previous day’s closing of Rs154.99 in interbank foreign exchange market.

    Currency experts said that inflows of exports and remittances helped the rupee to make gain. They said that improvement in foreign exchange reserves also helped the local unit to appreciate against the greenback.

    The foreign currency market was initiated in the range of Rs154.94 and Rs154.99. The market witnessed day high of Rs154.99 and low of Rs154.94 and closed at Rs154.96.

    The exchange rate in open market however witnessed no change in rupee value. The buying and selling of dollar was recorded at Rs154.40/Rs154.70, the same previous day’ closing, in cash ready market.

  • Will FBR extend return filing date or opt to collect surcharge

    Will FBR extend return filing date or opt to collect surcharge

    KARACHI: Federal Board of Revenue (FBR) has two options regarding income tax returns filing either to grant further extension or collect late filing surcharge, sources said on Friday.

    The last date for annual filing income tax for tax year 2019 is December 16, 2019. The date for filing income tax returns by salaried persons, business individuals, Association of Persons (AOPs) and companies having special financial year was September 30, 2019.

    However, the FBR granted first extension on September 30, 2019, second on October 31, 2019 and the third extension was granted on November 29, 2019.

    Normally the FBR extends the last date up to mid of December every year. However, for the tax year 2018 the date was extended up to August 09, 2019 due to various reasons including the amnesty scheme launched during the time period.

    The sources said that the FBR was eying to receive around 3.5 million income tax returns for tax year 2019 as it had received around 2.71 million returns for tax year 2018.

    According to a letter of Pakistan Tax Bar Association (PTBA) the total return filing by November 26, 2019 for tax year 2019 was 1.6 million. So it is unlikely the FBR get around one million returns by December 16, 2019. If FBR eyes 3.5 million returns for tax year 2019 then the required number will be 1.8 million returns to be filed during the last extension or 16 days from December 01, 2019 to December 16, 2019.

    The sources said that the after the introduction of Tenth Schedule to Income Tax Ordinance, 2001 the return filing had become very important and under the new schedule a person was required to pay 100 percent more withholding tax in case his name was not on the ATL.

    Besides, the FBR also introduced slabs of late filing surcharges for individuals, AOPs and companies. The sources said that in case date was not extended beyond December 16, 2019 then return filers would required to pay late surcharge in order to ensure their name on the ATL.

    Some sources believed that the FBR would extend the date for filing income tax returns for tax year 2019 as large segment of retailers and small business were required to file their returns and the FBR was working on a mechanism to resolve the issue with retailers and small traders.

    The sources said that in case return filing date is given to this segment then FBR would grant general extension to all the persons to file their returns.

  • IMF board to meet on December 19 to review Pakistan program

    IMF board to meet on December 19 to review Pakistan program

    KARACHI: The board of International Monetary Fund (IMF) will meet on December 19, 2019 to review Pakistan’s loan program and consider releasing next tranche.

    Gerry Rice, Director Communication, IMF in a press briefing on Thursday said that the IMF had a $6 billion program to support IMF’s economic reforms.

    “We had a mission there in November and the communication around that with a preliminary assessment of where we think Pakistan stands.”

    Which is that the program is on track and we reached a staff-level agreement on what we call the first review. You can read about that in more detail on our website.

    We had the preliminary assessment from staff after that mission to Pakistan and the board will meet to discuss that first review on Thursday, December 19th.

    What that indicates is that all prior actions and performance criteria under the program with Pakistan have been met. And that the financing assurances needed for the program to go forward are in place.

  • Tenth Schedule enforces income tax return filing

    Tenth Schedule enforces income tax return filing

    KARACHI: The Tenth Schedule introduced to Income Tax Ordinance, 2001 has proved its importance as it compelled people for filing their income tax returns.

    The importance of this schedule can be proved as return filing witnessed record high of 2.71 million for tax year 2018. This schedule will remain productive for tax year 2019 and onward for forcing people making financial transactions to file their returns.

    “The newly introduced Tenth Schedule, which envisages the entire path to be adopted by the Inland Revenue Department to enforce the persons who make financial transactions yet choose not to file their returns of income,” officials of Federal Board of Revenue (FBR) said.

    They said that prior to Finance Act, 2019, a concept of non-filer existed in the Ordinance whereby higher tax rates of withholding were prescribed for persons who were non-filers. Such non-filers could claim adjustment of the higher tax collected at the time of filing of income tax returns.

    “The aim was to compel the non-filers to file their returns of income. However, it was observed that the non-filers, even though subjected to higher withholding rates, still had a propensity not to file their returns.”

    This proved detrimental to the exercise of expansion or tax base. This was due to the absence of an explicit provision specifying a standard procedure for action against such persons.

    Through the Finance Act, 2019, the concept of Non-Filers was done away with and a new concept regarding persons not appearing in the active taxpayers’ list was introduced. The officials said that this concept was a major paradigm shift from the erstwhile non-filer higher tax regime in that it not only penalized those persons not appearing in the ATL but also introduced an effective mechanism for enforcing returns from such persons.

    In this regard, a new section 100BA has been introduced which provides that collection or deduction of advance income tax, computation of income and tax payable thereon should be determined in accordance with the rules in the newly introduced the Tenth Schedule.

    Under this schedule persons whose names are not appearing in the ATL will be subjected to hundred percent increased rate of tax.

  • Trade restrictions increase to historic high levels: WTO

    Trade restrictions increase to historic high levels: WTO

    KARACHI: The World Trade Organization (WTO) has observed that trade restrictions have increased to historic high levels. The Director-General’s annual overview of trade-related developments discussed on 12 December at a meeting of the Trade Policy Review Body shows that trade restrictions by WTO members continue at historically high levels.

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  • FBR allows filing Annexure H for July 2019 to claim sales tax refund

    FBR allows filing Annexure H for July 2019 to claim sales tax refund

    ISLAMABAD: Federal Board of Revenue (FBR) has allowed filing of statement containing stock position for July 2019 to taxpayers for claiming sales tax refunds.

    In an official memorandum issued on Thursday, the FBR condoned the time limit for filing of Annexure – H for the tax period July 2019 up to January 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 atleast 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.

  • Pakistan’s foreign exchange reserves increase despite $1bn Sukuk repayment

    Pakistan’s foreign exchange reserves increase despite $1bn Sukuk repayment

    KARACHI: The foreign exchange reserves of the country have increased by $55 million by the week ended December 06, 2019 despite repayment of $1 billion against International Sukuk.

    The foreign exchange reserves of the country increased by $55 million to $16.048 billion by week ended December 06, 2019 as compared with $15.993 billion a week ago, State Bank of Pakistan (SBP) said on Thursday.

    During the week ending December 06, 2019, SBP made a repayment of Pakistan International Sukuk of $1,000 million.

    After accounting for multilateral and other official inflows during the week, SBP reserves increased by US$121 million to US$9.233 billion. The SBP’s foreign exchange reserves were $9.113 billion a week ago.

    The SBP said that on 09-December-2019 it received US$1.3 billion from Asian Development Bank. These funds will be part of the SBP weekly reserves data as of 13-December-2019, to be released on 19-December-2019.

    The reserves held by commercial bank decline by $65.8 million to $6.814 billion by week ended December 06, 2019 as compared with $6.88 billion a week ago.