Daily news: 13th May 2020

Good Morning

Pakistan has successfully retained its May 2017’s upgraded status in the global MSCI Emerging Market (EM) Index and averted the chances of being downgraded to Frontier Index in its semi-annual review on Wednesday. The International Monetary Fund (IMF) and Pakistani authorities remain closely engaged with a view to bringing the second review of the Extended Fund Facility (EFF) to a positive conclusion with ongoing discussions being virtual. This was stated by IMF Resident Representative, Teresa Dabán Sanchez, while responding to Business Recorder queries. Large Scale Manufacturing Index (LSMI) has witnessed a decline of 5.4 percent, from 145.54 points to 137.68 points during July-March 2019-2020 against same period of the past year, as per the Pakistan Bureau of Statistics (PSB).

Market View: The KSE100 Index gained 319.2 points on Tuesday, ending the session at 33,603 points. We expect the market to remain range bound amid increasing number of COVID19 deaths and provincial government hinting towards implementing lockdown again if SOPs are not followed. 

Commodities:

Brent oil (USD/bbl): 29.51 (-1.47% D/D)

Crude oil (USD/bbl): 25.57 (-0.74% D/D)

Gold (USD/oz): 1,705.40 (-0.082% D/D)

National News

Pakistan retains status in MSCI EM Index

KARACHI: Pakistan has successfully retained its May 2017’s upgraded status in the global MSCI Emerging Market (EM) Index and averted the chances of being downgraded to Frontier Index in its semi-annual review on Wednesday

https://tribune.com.pk/story/2220342/2-pakistan-retains-status-msci-em-index/

External debt, liabilities reach $110bn by Q3-end

Pakistan’s external debt and liabilities continued to grow and surged to $110 billion at the end of the third quarter of (July-March) of this fiscal year (FY20), mainly due to fresh borrowing from multilateral and bilateral sources on account of public debt.

https://www.brecorder.com/2020/05/13/596524/external-debt-liabilities-reach-110bn-by-q3-end/

Pakistan’s economy may contract 5.5% due to lockdowns

LAHORE: Ever since the Covid-19 pandemic hit the globe, several international institutions have given various estimates about economic losses to different countries.

https://tribune.com.pk/story/2220155/2-pakistans-economy-may-contract-5-5-due-lockdowns/

NAB given 30 days to submit report on probe into power sector’s irregularities

ISLAMABAD: The Sub-committee of the Public Account Committee (PAC) Tuesday expressed displeasure over the National Accountability Bureau (NAB) for not completing the inquiries into the cases of irregularities of over billion of rupees of the power sector.

https://www.thenews.com.pk/print/658026-nab-given-30-days-to-submit-report-on-probe-into-power-sector-s-irregularities

ECC decision turned down by Cabinet

The Federal Cabinet has reportedly turned down a decision of ECC regarding rejection of support price of cotton, well-informed sources in Commerce Ministry told Business Recorder.

https://www.brecorder.com/2020/05/13/596523/ecc-decision-turned-down-by-cabinet/

Cabinet decides to arrest cotton production slide

The Federal Cabinet on Tuesday decided that the support price of cotton should be fixed after thorough consultations with all the stakeholders in order to encourage farmers to sow more and more cotton as its cultivation has been woefully declining.

https://www.brecorder.com/2020/05/13/596521/cabinet-decides-to-arrest-cotton-production-slide/

Privatisation: PC reschedules several transactions

The Privat-isation Commission has rescheduled the transactions that include the National Power Parks Management Company Limited (NPPMCL), the SME Bank, Jinnah Convention Centre, the Services Int’l Hotel (SIH) and sale of 28 properties for the next financial year. In a statement, the Privatisation Commission said that the transactions were meant for the current financial year but due to outbreak of the COVID-19 the timelines had to be rescheduled.

https://www.brecorder.com/2020/05/13/596519/privatisation-pc-reschedules-several-transactions/

IMF says communication focuses ‘only on outcomes’

The International Monetary Fund (IMF) and Pakistani authorities remain closely engaged with a view to bringing the second review of the Extended Fund Facility (EFF) to a positive conclusion with ongoing discussions being virtual. This was stated by IMF Resident Representative, Teresa Dabán Sanchez, while responding to Business Recorder queries. The government’s proposed budget proposals for the next fiscal year regarding revenue target and expenditures are identical to a great extent to projections given in the document uploaded on the IMF’s website titled ‘Request for purchase under the rapid financing instrument (RFI).’

https://www.brecorder.com/2020/05/13/596518/imf-says-communication-focuses-only-on-outcomes/

Cement, sugar, ghee/oil, fertilizer & wheat flour: CCP urges SECP to conduct cost audit of sectors

The Competition Commission of Pakistan (CCP) has recommended the Securities and Exchange Commission of Pakistan (SECP) to immediately conduct cost audit of sectors including cement, sugar, vegetable ghee/cooking oil, fertilizer and wheat flour to facilitate policy interventions in a fair, transparent, and independent manner.

https://www.brecorder.com/2020/05/13/596511/cement-sugar-gheeoil-fertilizer-wheat-flour-ccp-urges-secp-to-conduct-cost-audit-of-sectors/

July-March 2019-2020: LSMI witnesses 5.4 percent decline

Large Scale Manufacturing Index (LSMI) has witnessed a decline of 5.4 percent, from 145.54 points to 137.68 points during July-March 2019-2020 against same period of the past year, as per the Pakistan Bureau of Statistics (PSB).

https://www.brecorder.com/2020/05/13/596509/july-march-2019-2020-lsmi-witnesses-54-percent-decline/

APTMA urges SBP to cut policy rate to 7 percent

All Pakistan Textile Mills Association (APTMA) has urged the State Bank of Pakistan (SBP) to further slash the interest rate by 2 percent to bring it at par with inflation.

https://www.brecorder.com/?p=596507

Public debt piles up to Rs34.1 trillion till March-end

KARACHI: Public debt rose Rs2.3 trillion in the first nine months of the current fiscal year of 2019/20 as the government’s budget financing needs continued to increase with revenue constraints, the central bank’s data showed on Tuesday.

https://www.thenews.com.pk/print/657814-public-debt-piles-up-to-rs34-1-trillion-till-march-end

ECC may allow recovering Rs35b loss from consumers

ISLAMABAD: The Economic Coordination Committee (ECC) is likely to approve the passing of Rs35-billion loss of Sui Southern Gas Company (SSGC) on account of gas theft and leakage to honest consumers that are paying bills regularly.

https://tribune.com.pk/story/2220160/2-ecc-may-allow-recovering-rs35b-loss-consumers/

French firms invited to invest in IT, telecom

ISLAMABAD: Pakistan on Tuesday invited French firms to invest in information technology and telecom sector to benefit from an untapped investment potential amid the pandemic that presents opportunities for digital economy.

https://www.thenews.com.pk/print/657817-french-firms-invited-to-invest-in-it-telecom

Pakistani exporters decry 17% sales tax on local sales

KARACHI: Exporters have cautioned that the value added textile sector is on the verge of closure due to a severe liquidity crunch caused by the imposition of 17% sales tax in the last budget, as a result of which billions of rupees have been stuck with the government.

https://tribune.com.pk/story/2220165/2-pakistani-exporters-decry-17-sales-tax-local-sales/

International News

Oil falls amid concerns about new viral outbreaks, rise in inventories

Oil prices fell in early Asian trading on Wednesday after industry data showed a rise in U.S. crude inventories and concerns mount about a possible second wave of the coronavirus pandemic in countries easing lockdowns.

https://www.cnbc.com/2020/05/13/oil-markets-us-crude-inventories-coronavirus-in-focus.html

Gold gains as virus resurgence fears dampen risk appetite

Gold gained on Wednesday as concerns that a second wave of conoravirus infections may be emerging in many countries weighed on riskier assets.Spot gold climbed 0.1% to $1,704.23 an ounce by 0030 GMT. U.S. gold futures gained 0.1% to $1,708.10.

https://www.cnbc.com/2020/05/13/gold-markets-coronavirus-in-focus.html

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