The market continued to hovering around present levels throughout the week, being unable to sustain above the 48k level mark because of absence of any notable upside triggers. Rising trade deficit, which rose by 34% YoY to USD 31bn, also raised concerns amongst investors over the sustainability of the prevalent monetary easing cycle. This fact, coupled with elevated inflation figures (June CPI: 9.7% YoY) compelled investors to remain on the sidelines for the week.
KASB Market View
News report of the FBR increasing taxes on savings certificates enhances the draw of equities as potential investment avenues. Moreover, the prevalent increase in construction activities, evidenced by domestic cement sales surging by 20% YoY, is projected to bode well for the cement sector and its allied industries, including long steel producers. Moreover, the reduction in automobile prices through tax adjustments, in tandem with the low interest rate environment, in expected to keep vehicle sales on the higher side.
National News
Nepra okays up to Rs2.97 per unit tariff increase
As the government conceded up to 1,500MW power cuts due to shortfall in addition to load shedding, the power regulator on Friday approved an increase of up to Rs2.97 per unit in tariff for electricity consumers of ex-Wapda distribution companies (Discos) with effect from October 1.
https://www.dawn.com/news/1632940/nepra-okays-up-to-rs297-per-unit-tariff-increase
Trade deficit widened by 34.10pc
The country’s trade deficit widened by 34.10 percent to $31.057 billion during the fiscal year (July-June) 2020-21 compared to $23.159 billion during the same period of 2019-20, says Pakistan Bureau of Statistics (PBS).
https://www.brecorder.com/news/40104899/trade-deficit-widened-by-3410pc
Govt slaps heavy tax on profit from saving certificates
The Federal Board of Revenue (FBR) has slapped a uniform withholding tax rate of 15 percent on filers and 30 percent on non-filers for profit on saving certificates, putting financial burden on small investors who don’t exist on active taxpayers list (ATL), it was learnt on Saturday.
https://www.thenews.com.pk/print/858993-govt-slaps-heavy-tax-on-profit-from-saving-certificates
Overseas Pakistanis remit $1.6bln through RDAs
Overseas Pakistanis have remitted approximately $1.6 billion through Roshan digital accounts (RDAs) in less than one year, according to the central bank on Saturday, using funds for financial transactions and investments in their homeland.
https://www.thenews.com.pk/print/858994-overseas-pakistanis-remit-1-6bln-through-rdas
PQA ends cess on LNG vessels
The Port Qasim Authority (PQA) has discontinued the Channel Development Cess (CDC) it has been charging on LNG vessels.
https://tribune.com.pk/story/2308677/pqa-ends-cess-on-lng-vessels
PIA to issue Rs20bln sukuk this month
Pakistan International Airlines (PIA) is set to issue a 10-year sukuk, worth up to Rs20 billion this month to meet its working capital requirements, an investment banker engaged in the deal told The News.
https://www.thenews.com.pk/print/858995-pia-to-issue-rs20bln-sukuk-this-month
Home appliances: Duty on import of certain raw materials/input goods exempted
The Federal Board of Revenue (FBR) has exempted customs duty on the import of certain raw materials/input goods for home appliances through tariff rationalization under the Finance Act 2021.
Cement sales surge on housing boom, high PSDP spending
The beginning of construction activities under the Naya Pakistan Housing Scheme and good spending under the Public Sector Development Programme (PSDP) pushed up local cement sales by 20.40 per cent to 48.119 million tonnes in FY21 from 39.965m tonnes in FY20.
https://www.dawn.com/news/1632910/cement-sales-surge-on-housing-boom-high-psdp-spending
Rs12.65bn claims of exporters disbursed in FY21
The Collectorate of Customs (Exports), Port Muhammad Bin Qasim, Karachi, has disbursed Rs 12.65 billion claims of exporters during the FY 2020-21. The Collectorate has also liquidated all admissible old claims of duty drawback, pending with the years’ old manual system.
https://www.brecorder.com/news/40104888/rs1265bn-claims-of-exporters-disbursed-in-fy21
Govt to raise Rs5.7trln from debt issues in Q1FY22
The government has targeted a borrowing of Rs5.725 trillion from domestic market by selling debt securities in first quarter of FY2022 to finance budget deficit, central bank’s auction calendar showed on Friday.
https://www.thenews.com.pk/print/858515-govt-to-raise-rs5-7trln-from-debt-issues-in-q1fy22
KPT cargo handling up 25pc
Amid global lockdowns relating to shipping operations and cargo handling, the Karachi Port Trust (KPT) saw an increase of 25 per cent in volume to 52.28 million tonnes (both import and export cargo) in the outgoing fiscal year compared to 41.84m tonnes in FY20.
https://www.dawn.com/news/1632909/kpt-cargo-handling-up-25pc
Sazgar gets greenfield investment status
The Ministry of Industries and Production has awarded the ‘Category A, Greenfield Investment Status’ to Sazgar Engineering Works Ltd and approved Great Wall Motors Company Ltd as second principal for the assembly of GWM ‘Haval’ vehicles in addition to ‘Baic’ vehicles.
https://www.dawn.com/news/1632908/sazgar-gets-greenfield-investment-status
RDs raised on import of various items
The government has increased regulatory duties on the import of mobile phones, tobacco, shampoos, cosmetics, tyres, tiles, dinner sets, padlocks, LCD and LED, and dog or cat goods from July 1, 2021.
https://www.brecorder.com/news/40104743/rds-raised-on-import-of-various-items
Delay in clearance of coal vessels causing loss of $25,000/day
The inordinate delay in clearance of coal vessels by the private handling terminals is inflicting financial loss of $25,000 per vessel per day.
https://www.brecorder.com/news/40104708/delay-in-clearance-of-coal-vessels-causing-loss-of-25000day
Auto financing hits all-time high
Auto financing by banks hit an all-time high of Rs297.5 billion in Pakistan as consumers’ appetite for owning a vehicle shifted to top gear apparently due to availability of the financing at comparatively low interest rate despite the Covid-19 pandemic related financial risks.
https://tribune.com.pk/story/2308498/auto-financing-hits-all-time-high
EAC proposes steps for price stability, accelerating privatization
The Economic Advisory Council (EAC) on Saturday proposed measures to bring price stability, speed up privatization process and promote domestic economy.
June cotton arrivals hit record; prices stable
Cotton arrivals reached around 100,000 bales in June with the start of new season, bringing prices back to stable mode, sources said on Saturday.
https://www.thenews.com.pk/print/858998-june-cotton-arrivals-hit-record-prices-stable
SECP unveils margin financing ‘reforms’
The Securities and Exchange Commission of Pakistan (SECP) has made amendments to National Clearing Company Pakistan Ltd Regulations 2015 to improve margin financing (MF) products.
https://www.dawn.com/news/1633090/secp-unveils-margin-financing-reforms
Cotton imports rise by 44pc in 11MFY21
The country’s cotton imports hit $2.3 billion — an increase of 44 per cent — during July 2020-May 2021 (11MFY21) compared to the same period in the previous fiscal year.
https://www.dawn.com/news/1633093/cotton-imports-rise-by-44pc-in-11mfy21
https://tribune.com.pk/story/2307313/oil-transporters-call-off-strike-resume-supplies
