Daily News:11th May 2020

Good Morning

The weekly inflation during the week that ended May 7, 2020, against April 30, 2020 – week-on-week – witnessed an increase of 0.36 percent for combined income groups, ie, from 126.84 points to 127.30 points, Pakistan Bureau of Statistic (PBS) revealed. Keeping in view the impact of COVID-19 pandemic, Pakistan’s GDP is going to contract by 1.6 percent in the ongoing fiscal 2019-20 and will grow to 2.9 percent in the next financial year 2020-21 and the loans from IMF and other multilateral and bilateral donors will help to ease the balance-of-payments pressures in 2020 and over the next few years. The Federal Board of Revenue (FBR) has drafted tax proposals for Budget 2020-21 mainly focusing on “simplification of laws and removing tax anomalies,” Dawn has learnt from knowledgeable sources.

Market View: The KSE100 Index ended Friday’s session down 36.47 points, at 33,267.69 points. The ease in lockdown starting today, along with strength in the Asian markets, may support the index. On the other hand, weakness in crude oil prices may apply some pressure. 

Commodities:

Brent oil (USD/bbl): 30.59 (-1.23% D/D)
Crude oil (USD/bbl): 24.32 (-1.19% D/D)
Gold (USD/oz): 1,710.80 (-0.1809% D/D)

National News

SPI inflation up 0.36pc WoW

The weekly inflation during the week that ended May 7, 2020, against April 30, 2020 – week-on-week – witnessed an increase of 0.36 percent for combined income groups, ie, from 126.84 points to 127.30 points, Pakistan Bureau of Statistic (PBS) revealed.

https://epaper.brecorder.com/2020/05/09/1-page/836379-news.html

Impact of COVID-19 pandemic: Pak GDP to contract by 1.6pc in current fiscal, says Economist Intelligence Unit

Keeping in view the impact of COVID-19 pandemic, Pakistan’s GDP is going to contract by 1.6 percent in the ongoing fiscal 2019-20 and will grow to 2.9 percent in the next financial year 2020-21 and the loans from IMF and other multilateral and bilateral donors will help to ease the balance-of-payments pressures in 2020 and over the next few years.

https://www.thenews.com.pk/print/656244-impact-of-covid-19-pandemic-pak-gdp-to-contract-by-1-6pc-in-current-fiscal-economist-intelligence-unit

Govt likely to unveil tax-free budget for 2020-21

The Federal Board of Revenue (FBR) has drafted tax proposals for Budget 2020-21 mainly focusing on “simplification of laws and removing tax anomalies,” Dawn has learnt from knowledgeable sources.

https://www.dawn.com/news/1555916/govt-likely-to-unveil-tax-free-budget-for-2020-21

Customs duty collection falls 10pc to Rs32.9bln in April

Government collected Rs32.85 billion in custom duties in April, down 10 percent year-on-year as sinking imports dwarfed the advantage of relatively improving port activities during the last month, sources said on Saturday.

https://www.thenews.com.pk/print/656471-customs-duty-collection-falls-10pc-to-rs32-9bln-in-april

Mobile phones/devices: FBR eyeing Rs56bn revenue

The Federal Board of Revenue (FBR) is expecting to generate Rs 56 billion of revenue on account of taxes/duties on commercial import of mobile phones/devices in 2019-20 i.e. 154 percent increase compared to Rs 22 billion during the same period of last year due to implementation of Device Identification Registration and Blocking System (DIRBS).

https://epaper.brecorder.com/2020/05/10/1-page/836511-news.html

Fiscal deficit to surge, tax revenue to miss target: Hafeez

The country’s fiscal deficit will surge to 9% in the ongoing fiscal year, Adviser to the Prime Minister on Finance Dr Abdul Hafeez Sheikh has said, as the economy reels from the fallout of the coronavirus crisis.

https://tribune.com.pk/story/2218541/1-fiscal-deficit-surge-tax-revenue-miss-target-hafeez/

SBP expands scope of economic relief facility

The State Bank of Pakistan (SBP) on Friday allowed subsidised financing for setting up of new plants and expansion of existing units while the maximum amount for a single unit has been set at Rs5 billion to boost economic activities in the manufacturing sector.

https://www.dawn.com/news/1555727/sbp-expands-scope-of-economic-relief-facility

Banks sanction Rs23bln loans to avoid layoffs

“Banks have sanctioned more than Rs23 billion in concessional loans to various companies for payment of wages and salaries to their workers and employees, the central bank said on Friday, preventing layoffs as a  result of the coronavirus lockdown.

https://www.thenews.com.pk/print/655975-banks-sanction-rs23bln-loans-to-avoid-layoffs

Payment of Wages: SBP may enhance limit of loans from Rs500m to Rs1bn

The State Bank of Pakistan (SBP) is likely to enhance the limit against loans from Rs500 million to Rs1 billion to finance three-month wages, said reliable banking industry sources. The central bank is also considering to waive off the condition of ‘no lay-off’ to use this scheme, they said, and added that it is not clear yet whether the payment of wages period has also been extended to six months or not.

https://epaper.brecorder.com/2020/05/10/3-page/836534-news.html

ECC urged to revisit cotton support price decision

“Growers and industrialists have appealed the Economic Coordination Committee (ECC) of the cabinet to revisit the decision of turning the down support price of cotton.”

https://www.thenews.com.pk/print/656479-ecc-urged-to-revisit-cotton-support-price-decision

APTMA submits budgetary proposals to government

Textile Industry has submitted with the government its budgetary proposal for budget 2020-21 asking for abolishing turnover tax, reduction of corporate tax to 25 percent and withdrawal of 10 percent sales tax on ginned cotton. It also asked for doing away with the duty structure on import of spare parts for export oriented industry.

https://www.thenews.com.pk/print/656766-aptma-submits-budgetary-proposals-to-government

PTI govt undecided on sales tax relief

The government faces a difficult choice to withdraw sales tax on gas and chemicals being used to manufacture fertiliser in the upcoming budget – a demand if accepted may irk the International Monetary Fund (IMF) that seeks an end to the concessionary tax regime.

https://tribune.com.pk/story/2217978/2-pti-govt-undecided-sales-tax-relief/

SECP seeks relief for capital markets

The Securities and Exchange Commission of Pakistan (SECP) has asked the Federal Board of Revenue (FBR) to extend critical relief towards the capital markets and corporate sector in the upcoming budget.

https://www.dawn.com/news/1555911/secp-seeks-relief-for-capital-markets

ADB dedicates $200m to drugs firms to beat virus

The Asian Development Bank (ADB) under its ‘Supply Chain Finance Programme’ has dedicated $200 million to support companies that make and distribute medicines and other items needed to combat coronavirus in the developing member countries of the Bank.

https://www.dawn.com/news/1555934/adb-dedicates-200m-to-drugs-firms-to-beat-virus

Some debts need to be written off: IMF

Some debts were not sustainable and needed to be restructured, re-profiled or written off, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said in an interview recorded earlier this week.

https://www.dawn.com/news/1555712/some-debts-need-to-be-written-off-imf

Ogra powers to grow under new rules

The government is set to promulgate Pakistan Petroleum (Downstream Oil Sector) Rules, 2020 to transfer all oil and gas related regulatory functions and powers to the Oil and Gas Regulatory Authority (Ogra), currently being exercised by a sub-ordinate department of the Petroleum Division.

https://www.dawn.com/news/1555724/ogra-powers-to-grow-under-new-rules

Oil price hedging plan prepared

The Petroleum Division has prepared call option-based oil hedging plan for one year or two years through some selected banks. It will be submitting hedging plan to Economic Coordination Committee (ECC) of cabinet anytime soon, well-informed sources told Business Recorder.

https://epaper.brecorder.com/2020/05/11/1-page/836585-news.html

PR decides to bring down freight charges by 10pc: Minister

The Pakistan Railways (PR) has decided to bring down its freight charges by 10 percent on transportation of coal, fertilizer, cement and other commodities because of reduction in fuel prices.

https://epaper.brecorder.com/2020/05/10/3-page/836536-news.html

Sectors earning high profits: FBR may suggest one-time taxation

The Federal Board of Revenue (FBR) is planning to propose a one-time tax on sectors earning high profits in the budget 2020-21. The board is also working on several other proposals to generate additional revenue to the tune of Rs500-600 billion in the next fiscal year through taxation measures, documentation and effective monitoring, enforcement and administrative measures.

https://epaper.brecorder.com/2020/05/10/8-page/836579-news.html

PM urged to cut power tariff

Patron-in-Chief Siraj Kassam Teli, Patron Zubair Motiwala and President Suleman Chawla of SITE Association of Industry have urged Prime Minister Imran Khan to order immediate cut of 30 percent in the tariff of K-Electric in the wake of lowest oil prices locally and internationally.

https://epaper.brecorder.com/2020/05/09/3-page/836408-news.html

Development projects: Govt releases Rs541.63bn under PSDP 2019-20

The federal government has released Rs 541.63 billion (77.3 percent) including Rs 109.29 billion foreign aid (85 percent) for various ongoing and new development projects under the Public Sector Development Programme (PSDP) 2019-2020 against the total budgeted allocation of Rs701 billion.

https://epaper.brecorder.com/2020/05/09/10-page/836459-news.html

SECP introduces concept of ‘start-up companies’

The Securities and Exchange Commission of Pakistan (SECP) has introduced concept of “Start Up companies” to promote startup of new business relating innovation and technology through recently promulgated Companies (Amendment) Ordinance, 2020.

https://epaper.brecorder.com/2020/05/09/10-page/836457-news.html

Coronavirus: First successful trial of passive immunisation therapy reported in Sindh

Sindh on Sunday reported its first successful recovery from the passive immunisation therapy of a coronavirus patient. The treatment had been approved earlier in March.

https://www.thenews.com.pk/latest/656911-coronavirus-first-successful-trial-of-passive-immunisation-therapy-reported-in-sindh

Easing lockdown to cause spread of corona: PMA

The Pakistan Medical Association (PMA) expressed its dissatisfaction over the existing lockdown in the country, warning the government against lifting restrictions as it would allow the coronavirus to spread further.

https://www.thenews.com.pk/print/656780-easing-lockdown-to-cause-spread-of-corona-pma

FBR mulling over options to fetch additional Rs600bn

The FBR is mulling over different options to fetch additional Rs600 billion through effective enforcement and administrative improvements as well as moving ahead with one-time tax on sectors earning abnormal profits at difficult times, it is learnt.

https://www.thenews.com.pk/print/656783-fbr-mulling-over-options-to-fetch-additional-rs600bn

Pakistan shelves plan for offshore storages

As several countries are struggling to buy cheaper oil amid a drastic plunge in demand due to the coronavirus fuelled lockdowns, Pakistan’s attempts to take advantage of the slump in oil prices have failed due to lack of strategic storages in the country.

https://tribune.com.pk/story/2217984/2-pakistan-shelves-plan-offshore-storages/

SAB to review price, stock of sugar today

Minister for Industries and Production Hammad Azhar will be chairing his first meeting of the Sugar Advisory Board (SAB) on Monday (today) to review price and stock position of sugar in the country.

https://epaper.brecorder.com/2020/05/11/1-page/836581-news.html

International News

Oil prices drop amid supply glut, fears of 2nd coronavirus wave

Oil prices slid nearly $1 a barrel on Monday as concern over a persistent glut and economic gloom caused by the coronavirus pandemic combined to cancel out support from supply cuts at some of the world’s top producers.

https://www.cnbc.com/2020/05/11/oil-markets-coronavirus-crude-output-in-focus.html

Hong Kong jumps nearly 2% as hopes rise on economies reopening

Stocks in Asia traded higher on Monday morning as hopes rise on economies reopening, even as U.S. reported record job losses in April.

https://www.cnbc.com/2020/05/11/asia-markets-global-economy-coronavirus-currencies-in-focus.html

Emirates predicts 18-month lull in air demand

Gulf aviation giant Emirates said on Sunday it would take at least 18 months for travel demand to return to “a semblance of normality”, despite reporting bumper pre-pandemic profits.

https://www.dawn.com/news/1556000/emirates-predicts-18-month-lull-in-air-demand

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