Dec.

29, 2015

KCCI - eBulletin
Industrial units: Prime Minister announces PKR 3 cut in power tariff
Prime Minister Nawaz Sharif has announced a cut of PKR 3 in per unit electricity tariff for industrial users which would be
applicable from Jan. 1, 2016. Currently, industrial sector is charged with an average tariff of more than PKR 14/unit, which
has higher peak rates and lower off-peak rates. After reduction in the base tariff, all the current rates will become lower with
an average tariff of around PKR 11/unit. The govt. has already notified subsidized rate for agriculture at PKR 10.35/unit
during peak hours and PKR 8.80 during off-peak hours. Domestic consumers up to 300 units are also enjoying subsidized
rates of PKR 2, PKR 5.79, PKR 8.11 and PKR 10.20. BR.
Govt to announce tax relief on Jan 1
Prime Minister Nawaz Sharif or Finance Minister Ishaq Dar is expected to announce good news in shape of flexibility in
Income Tax Ordinance to encourage people to come in the tax net as a New Year gift on Friday (1st Jan16). Over 300
businesspersons have been invited to Islamabad to hear this announcement. Under the new scheme, black money up to
PKR 50Mn could be whitened and non-filers would be able to file tax returns by 30th Jan 2016. They would also not be asked
about the source of their income for the past four years. Somebody who would show a working capital of PKR 50Mn would
be required to pay only 1% tax. Filers and non-filers would be able to benefit from this scheme equally. The News.

Economic Indicators
Date / Period

Unit

Value

USD-Interbank

List of Indicators

28-Dec

PKR

104.94

0.14%

USD-Open MKT

28-Dec

PKR

106.13

-0.12%

KSE-100 index
FIPI

28-Dec
28-Dec

Pts.
$ Mn

32,674
-1.49

0.53%
NM**

Crude (FE'16)

28-Dec

$/bbl

36.78

-2.78%

Gold (JA'15)

28-Dec

$/oz

1,068.5

-0.02%

Gold (10g) Local

28-Dec

PKR

38,228

0.11%

Silver (JA'15)

28-Dec

$/oz

13.97

-2.18%

Cotton(KHI)-40 kg

28-Dec

PKR

5,573

-0.94%

Kibor-6M

28-Dec

6.51%

-0.01%

Forex Reserves

11-Dec

$ Bn

20.71

1.26%

Jul-Nov 15

$ Bn

8.10

7.57%

Jul-Nov 15

$ Bn

8.54

-13.81%

Jul-Nov 15

$ Bn

18.48

-9.03%

Trade Balance*

Jul-Nov 15

$ Bn

-9.94

4.48%

Current Account
Avg. CPI-FY16*

Jul-Nov 15
Jul-Nov 15

$ Mn
%

-1,005
1.86

59.10%

WoW

Bin Qasim power plant: PM orders completion of project by Dec 2017

Prime Minister Nawaz Sharif has inspected the 1,320-megawatt coal-fired Bin Qasim power project. He also asked the Remittances
Chinese authorities concerned to take steps to make the project completely functional by the Dec 2017 deadline. He was Exports*
briefed that the project costing $ 1.5Bn would comprise two power houses, each of which would generate 660MW and Imports*
would be connected to the national grid after completion. Tribune.
Textile mills cut cotton buying; await promised incentive-package
Textile mills have bought almost 36% less cotton from the local market upto Dec 15th as they reportedly await a promised
incentive-package by the government to materialize. Textile mills have bought 6.81Mn bales from the local market. Buying is
expected to pick up after the announcement of the final production number of current crop, due in the first week of
Feb'16.The stock of unsold cotton bales stands at 1.86Mn bales which is 16% lower than 2.22Mn bales on 15th Dec14.
Cotton production this season has dropped by almost 32% to 9.03Mn bales so far from 13.23Mn bales produced in the same
period of last year. Low cotton output and high cost of business have reportedly close down at least 600 ginning firms in the
country. The News.
Indias state cotton purchases to plummet as Pakistan raises imports
The Indian governments purchases of cotton are set to plunge 89% in the crop year 2015-16 as local prices have jumped
after crop failures have forced Pakistan to raise imports from the worlds biggest producer of the fiber. Although
government purchases were expected to rise initially due to poor demand from China, a sudden increase in demand from
Pakistan and a decision by Indias top producing state Gujarat to buy from farmers at levels higher than the minimum
support price boosted prices and reduced the need for state support. India has so far contracted 2Mn bales for exports to
Pakistan, while Pakistans overall cotton imports are seen climbing to at least 4Mn bales during the year. The News.
Power issues: meeting to resolve overdue receivables
Water and Power Ministry has convened an important meeting on Jan. 5, 2016 to resolve overdue receivables, including
new Power Purchase Agreement (PPA) and Gas Sales Agreement (GSA) in K-Electric, Central Power Purchasing Agency
(CPPA) and Sui Southern Gas Company Limited (SSGCL). The meeting is to be presided over by the Water and Power
Secretary who is heading a sub- committee to evolve a consensus amongst the stakeholders. BR.
World Bank to assist Pakistan in rebasing CPI
The World Bank has approved a project to assist the Pakistan Bureau of Statistics (PBS) to rebase the Consumer Price Index
(CPI) as well as the planned population and agricultural censuses. Both the surveys will be carried out during 2016. The last
population census was held in 1998. Additionally, the bank will assist the bureau in improving the sampling for the
Household Integrated Economic Survey (HIES), implementation of HIES of Pakistan Social and Living Standards Measurement
(PSML), and the implementation of Computer Assisted Personal Interviewing (CAPI) or face-to-face surveys to collect price
data. Dawn.
Services in power sector: planned deal being termed conflict of interest
The USAID'S plan to consider only three pre-qualified firms for up to $ 0.6Mn contract for providing services in power sector
is reportedly being termed as conflict of interest. USAID/Pak recently floated Request for Proposal (RFP) for monitoring,
inspection, milestone certification and design review of ongoing and new Govt. - to Govt. energy projects with the
Government of Pakistan (GoP) entities mainly Water and Power Development Authority (WAPDA). There are deep concerns
about this procurement within the GoP quarters and private industry as it will distort competition for the GoP future
procurement and raise severe conflict of interest issues due to critical elements being ignored by USAID while designing this
procurement. BR.
Recovery improves: Circular debt stands at PKR 310Bn
The govt. is struggling to keep the circular debt at the lowest, which now stands at PKR 310Bn, while recovery of bills has
improved from 85% to 91%. The power line losses have also reduced from 19.2% to 17%. In this regard, Punjab has to pay
PKR 32Bn, Sindh PKR 67Bn, Khyber Pakhtunkhawa PKR 36Bn and Balochistan PKR 25Bn against the circular debt. BR.
Govt. raises gas price by 50% for Sui field
The federal govt. has agreed to raise gas price for the Sui field, operated by the Pakistan Petroleum Limited (PPL), after a
demand was put forward by Baluchistan to increase the rate based on the Petroleum Policy 2012. The center has agreed to
increase the gas price by 50%, saying that prices of fuel had gone down massively in the last year. While, the Baluchistan
govt. wanted a 100% increase. Tribune.
Saudi Arabia posts record deficit, cuts fuel subsidies
Saudi Arabia has announced a record budget deficit and cuts to fuel and utility subsidies as it suffers from drastic fall in
crude prices. The 2015 deficit is the highest in the history of the country, which relies on oil for 90% of public revenues.
Petrol prices in the kingdom are to rise by more than 50% on some products after it said it had posted a deficit of $ 98Bn in
2015. Riyadh has also projected a shortfall of $ 87Bn in next years budget. Dawn.

Change Daily

YoY

Nov-15
Discount Rate
%
6.00
Sources: KCCI Research, PMEX, NCCPL, KSE, SBP, PBS*
** Not Meaningful
WoW= week on week; YoY=Year on Year

Major Currencies
175

GBP, 28-Dec-15,
156.2

165
155
145
135

EUR, 28-Dec-15,
115.0

125
115
105
95

USD, 28-Dec-15,
104.8

85
75
Dec-12

Jun-13
USD

Dec-13

Jun-14

GBP

Dec-14

EUR

Jun-15

Dec-15

Source: KCCI Research ; Oanda.com

Quote of the Day

"When you reach the end of your rope, tie

a knot and hang on."
Abraham Lincoln
Chart of the Day
COMPARISON OF PAKISTAN'S EXPORTS RECEIPTS BY
COMMODITY
5,595

6,000

5,368

5,000
4,000
1,862

1,516
1,356

3,000
2,000

214

1,000
0

1,591

469

Food Group

Textile
Group
5MFY15

Petroleum
Group

Other
Manufacture

5MFY16

Value in $ Mn

Source: KCCI Research, SBP

Disclaimer

This report has been prepared by KCCI Research & Development Cell. The information contained
herein have been compiled or arrived at based upon information obtained from sources believed to
be reliable and in good faith. Such information has not been independently verified.
icon represents the sole viewpoint of the KCCI R&D Cell, and is stated to enrich the readers'
understanding of the news item. The R&D Dept. bears no responsibility for its correctness or
accuracy. Contact: res@kcci.com.pk