The government has decided to allow six sectors to avail 100 percent tax credit after withdrawal of income exemptions from IT services and IT enabled services; coal mining; green field industries; renewable energy and ship building projects.

The State Bank fo Pakistan(SBP) conducted an auction on Wednesday in which it sold Market Treasury Bills (MTBs) worth Rs.715.46 billion for 3, 6 and 12 months. Auction target was Rs.700.00 billion against a maturing amount of Rs.607.00 billion.

The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved Rs7.8 billion subsidy for Ramadan Relief Package-2021 to provide 19 essential items at relatively lower rate at Utility Store Corporations (USC) during Ramazan.

KASB Market View

The sell-off continued today as well. Investors fret over approved bill that reverses Corporate Tax exemptions to meet the IMF conditions. That might have impact on Tax credit recorded by companies which expanded in last cycle. Further clarity is awaited.

Similarly, political noise continued as ECP rejected request to withhold notification of Yousuf Raza Gillani. Although, coalition government seems undeterred over Senate Chairmanship however, noise would continue as opposition parties pitch for their Senate Chairman. The election to be held this Friday should reduce political noise if coalition wins. Otherwise, uncertainty would increase as PDM is expected to do their marches in next two weeks.

Notable events today include Adamjee Insurance’s Material notice announcing their plan to list its subsidiary, Adamjee Life Insurance. This should unlock valuations along with bumper dividends received from MCB Bank, that’s part of Adamjee’s investment portfolio. Similarly, sponsors buying was witnessed in SPEL & Engro Coporation while Flying Cement announced Rights share to finance their cement expansion. Ittehad Chemicals notified PSX on establishing LC for Expansion in LABSA/SLED plant.

We expect turbulence to continue till Senate election although valuations keep getting better as market falls. Many blue-chip growth companies have come under the knife very sharply. However, given better demand, currency & FX reserves outlook keep valuations good for short & medium term gains.

National News

Govt Allows 6 Sectors to Avail 100% Tax Credit

The government has decided to allow six sectors to avail 100 percent tax credit after withdrawal of income exemptions from IT services and IT enabled services; coal mining; green field industries; renewable energy and ship building projects.

https://propakistani.pk/2021/03/10/govt-allows-6-sectors-to-avail-100-tax-credit/

Auction Result: SBP Sells T-Bills worth Rs.715.46 Billion

The State Bank fo Pakistan(SBP) conducted an auction on Wednesday in which it sold Market Treasury Bills (MTBs) worth Rs.715.46 billion for 3, 6 and 12 months. Auction target was Rs.700.00 billion against a maturing amount of Rs.607.00 billion.

https://mettisglobal.news/auction-result-sbp-sells-t-bills-worth-rs-715-46-billion

Ramazan Package-2021; Rs7.8bn subsidy approved by ECC

The Economic Coordination Committee (ECC) of the Cabinet on Wednesday approved Rs7.8 billion subsidy for Ramadan Relief Package-2021 to provide 19 essential items at relatively lower rate at Utility Store Corporations (USC) during Ramazan.

https://epaper.brecorder.com/2021/03/11/1-page/873312-news.html

JJVL-SSGC contract extension; Law division yet to give its opinion

The law division is yet to give its opinion on the extension of a contract between Jamshoro Joint Venture Limited (JJVL) and Sui Southern Gas Company (SSGC) as it is pending before it since August 21, 2020.

ttps://epaper.brecorder.com/2021/03/11/12-page/873407-news.html

LNG handling at Port Qasim; Ministry terms ‘exorbitant’ charges main reason behind higher prices

Ministry of Energy (Petroleum Division) is said to have termed “exorbitant” LNG cargo handling charges at Port Qasim the main reason behind higher LNG prices, well-informed sources told Business Recorder.

https://epaper.brecorder.com/2021/03/11/12-page/873410-news.html

Govt. borrowing expands by Rs.226 billion in a week

The government of Pakistan has acquired an additional debt of Rs.225.58 billion during the week ended February 26, 2021, which brings its total net borrowing for ongoing fiscal year 2021 to Rs.301.27 billion. As of prior week, the government had borrowed a net sum of Rs.75.69 billion.

https://mettisglobal.news/govt-borrowing-expands-by-rs-226-billion-in-a-week

Private sector borrows another net sum of Rs.32.65 billion during the week

The non-government sector has borrowed another net sum of Rs.32.65 billion during the week ended February 26, 2021, which brings the cumulative net borrowing for ongoing fiscal year FY2021 to Rs.378.99 billion. The net borrowing as of prior week was recorded at Rs.346.34 billion.

https://mettisglobal.news/private-sector-borrows-another-net-sum-of-rs-32-65-billion-during-the-week

Exclusion/adjustment certificates issued to steel industry; FBR suffers huge revenue loss

The Federal Board of Revenue (FBR) has suffered a huge revenue loss on account of exclusion/adjustment certificates issued to the steel units by the commissioners for not charging sales tax on power consumption against cheques which were never deposited in the national kitty.
https://epaper.brecorder.com/2021/03/11/12-page/873411-news.html

Internet, mobile banking services; SBP asks banks not to levy charges

In order to promote digitization in the banking sector and encourage use of digital channels, the State Bank of Pakistan (SBP) has asked banks not to levy any activation, subscription or annual charges on their customers for using Internet Banking (IB)/Mobile Banking (MB) services.

https://epaper.brecorder.com/2021/03/11/1-page/873315-news.html

GST removal on locally-assembled units; Samsung, OPPO may start manufacturing cellphones

M/s Samsung and M/s OPPO are likely to start local assembly in Pakistan soon after removal of sales tax on locally assembled mobiles from above $ 200 category. Mobile Device Manufacturing Policy 2020 was approved by the ECC in May 2020. The decision was subsequently ratified by the Cabinet on June 2, 2020.

https://epaper.brecorder.com/2021/03/11/1-page/873314-news.html

Letter of Intent (LOI)

-Word of the Day-

A letter of intent (LOI) is a document declaring the preliminary commitment of one party to do business with another. The letter outlines the chief terms of a prospective deal. Commonly used in major business transactions, LOIs are similar in content to term sheets.

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KASB Morning Shout March 11th, 2021

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