The State Bank of Pakistan announced that it will conduct a 1 day OMO (Repo) to Mop-up funds from the market. Result is expected at 11:00 PST
Posted on: 2018-11-29T09:51:00+05:00
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SBP to Conduct 1 Day OMO
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DRAP to issue licenses to pharma companies through CTD...
Jan 19, 2020: The Drug Regulatory Authority of Pakistan (DRAP) has decided to introduce Common Technical Documentation (CTD) system for registration of pharmaceutical companies, issuance of licences to them and carrying out communication with them in the country.
Under the CTD formate, which was already in place in Europe and the USA, all types of communications including applying for registration of products and issuance of licences would be held online through paperless e-mail system.
Sources related to manufacturing of medicines said the net worth of Pakistan's
allopathy medicine market was over US $ 8 billion, besides US $ 4 billion herbal medicines, and the market was expanding day by day.
As many as 910 pharmaceutical companies have been issued licences, out of which 620 are functional in the country including 22 multinational companies.
It has been learnt that not even a single multinational company had acquired the Food and Drugs Association (FDA) certification from the USA and Europe's Good Manufacturing Practices (GMP).
On the other hand, three national companies including Getz Pharma had got the
World Health Organisation (WHO) certification and it was exporting medicines to 66 countries.
The CCL Pharma has also got approval of the WHO pre-qualification certification and was exporting medicines to 35 countries, while Pacific Pharma had already got European GMP and exporting medicines to 18 countries including Germany and England.
Currently, Pakistan's pharmaceutical market is included in top 20 markets of the world, while in 2025, it would be among top 10 markets of the world.
Therefore, in the current scenario, the step of introducing the CTD
formate by DRAP was a good step. However, some experts of the sector have expressed their reservations regarding the training and capacity building of the pharma industry employees before launch of the formate.
They have also expressed reservations over provision of online data of prices of medicines by the local pharmaceutical companies, which till date had not been provided to DRAP.
Moreover, there is no check on prices of medicines due to absence of online data of pharmaceutical companies.
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Weekly Market Roundup
January 19, 2020 (MLN): The KSE-100 index lost nearly 39.29 points during the week, and closed at 43,167 level, i.e. lower by 0.09 percent in comparison to the previous week's closing of 43,207 points.
The trading remained highly dull throughout the week, with minimal participation seen from the market participants and investors. While profit-taking activity can be blamed partially for this mediocre performance, a research report by Arif Habib says that fears of high inflation also kept the investors' sentiments at bay.
During the week, Commercial banks made the highest contribution to the benchmark index with a gain of 109 points, while sectors such as E&P, Power Generation and Insurance Companies pulled the index down by a total of 191 points.
Company wise, MEBL (+32), HBL (+28), THALL (+25), BYCO (+21) AND HMB (+18) captured the highest gains, whereas OGDC (-57), HUBC (-46), DAWH (-37), POL (-31) AND COLG (-29) emerged as the losers during the week.
Likewise, the All-Share Market Index declined by $26.6 million during the week, before settling at $52.3 billion.
Foreign investors were the net buyers during the week, with the total purchase of securities being recorded at $28.8 million. Amongst these investors, Foreign Corporates emerged as the largest group of buyers as they purchased securities worth $3.06 million.
On the contrary, local investors were the net sellers, with Insurance Companies and individual investors making the largest sale at $2.83 million and $2.19 million respectively.
Forex Roundup:
PKR continued to appreciate against the Dollar on the back of improving economic indicators, with the currency gaining 26 paisa during the outgoing week.
The Pak Rupee closed the week at 154.57, which is the strongest it has been since June 13, 2019. The rupee has appreciated by 46 paisa during the last three weeks and 27 paisa since the start of 2020.
With the Current Account Deficit reducing by 75 percent, largely due to shrinking import payments, and improved inflows of dollar courtesy of remittances and foreign investment in Govt. T-Bills & PIBs, the pressure on the Rupee will continue to be low in the short term.
Fixed Income:
Yields in the secondary market remained relatively unchanged during the week with the only notable movement being a decline of 9 bps in 3 month yields.
With the MTB auction witnessing bids mostly in the 3 month paper the market’s expectation that the upcoming monetary policy committee meeting shall maintain interest rates at the current level was evident.
There has been no respite from inflation with the SPI, released by PBS on a weekly basis, showing a YoY increase of over 20 percent.
A note from AKD research was quick to point out “Although weak economic activity and an improving external account position merit some easing action, the MPC of the central bank (scheduled to meet later this month) with its singular focus on inflation will not move the needle until it gets comfortable with the inflation outlook. The recent price trends coupled with upside risks to inflation outlook have further dampened early easing prospects, in our view. Moreover, the materializa-tion of upside risks to inflation could delay easing cycle beyond 1HCY20.”
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Weekly News Roundup
January 19, 2020 (MLN): The outgoing week was host to a number of policy-oriented developments among which the important ones that have a direct impact on the economic operations of Pakistan include:
On Friday, Minister for Economic Affairs Hammad Azhar while speaking in the Senate said that government set the target of reducing fiscal deficit to four percent in the next one or two years.
To promote exports of furniture products, President, Islamabad Chamber of Commerce and Industry Muhammad Ahmed Waheed on Friday Urged the government to establish furniture cities or furniture zones in Islamabad and in other major cities of the countries.
On Thursday, the Federal Board of Revenue (FBR) apprised the details through notification regarding the measures introduced in the Sales Tax Act, 1990 and Federal Excise Act, 2005 through the Finance Supplementary (Second Amendment) Act, 2019
Meanwhile, Power Division through an official notice apprised that the zero-rated industry would only be charged 7.5 cents/kWh tariff by WAPDA.
In a statement issued on Thursday, the Ministry of Finance said actions by the government have helped stabilize the economy and reduce the unsustainable fiscal and trade deficits, leading to a restoration of business confidence.
Furthermore, advisor to Prime Minister on Commerce, Industries, Textile and Investment Abdul Razak Dawood said that China-Pakistan, Free Trade Agreement (CPFTA) is a game-changer for increasing the Pakistan exports and also for maintaining a balance of trade with China. Phase II of the Free Trade Agreement could be weighed as better negotiated than the previous phase due to enhanced protection given to businessmen, he added.
On Wednesday, the United States Agency for International Development (USAID) hosted the first-ever ‘Modernizing Agriculture through Innovative Technologies Conference 2020’ in Islamabad. The event showcased the transformational impact of the U.S.-Pakistan partnership to advance agricultural commercialization in Pakistan through strategic partnerships with 30 dynamic agricultural technologies businesses.
The same day, Minister for Housing and Works Tariq Bashir Cheema told the National Assembly that the government was planning to provide 50 percent subsidy on building of affordable housing for low income employees with substantial grants from Italy and Japan amounting to billions of rupees.
On Tuesday, Adviser to Prime Minister on Finance and Revenue Dr Abdul Hafeez Shaikh said the government was taking steps to tackle inflation and enhance domestic productivity through greater spending on social safety net, improving cash transfer programme, ensuring greater ease of doing business and providing subsidized loans, electricity and gas to the exporters.
On the upside, Entrepreneurs from the US have shown keen interest to invest in the China Pakistan Economic Corridor (CPEC)'s first Special Economic Zone (SEZ), Allama Iqbal Industrial City due to immense market potential of the country and improved governance.
In addition, The Heimtextil 2020 Trade Fair turned successful for the Pakistani exporters as a home textile sector received large orders during Heimtextil gatherings in Frankfurt. Advisor to PM for Commerce, Textile, Industry & Production, Abdul Razak, in a tweet, has congratulated to all businessmen who received the orders this time even larger than the last time.
Meanwhile, Minister for Planning and Development, Asad Umar says PTI government is determined to establish four economic zones in all provinces. Talking to a private news channel, he said that feasibility for ML-1 project has been prepared and some nine billion dollars would be spent to improve the railway system.
On Monday, the Oil and Gas Regulatory Authority (OGRA) on notified revised prices of Re-gasified Liquefied Natural Gas (RLNG) for the SSGC and SNGPL for the current month.
On a positive front, the growth in foreign remittances that soared to $11.4 billion during the July-December period of FY 2020 is likely to continue for the rest of the year due to a host government measures that may help achieve the target of $24 billion set for the financial year 2020.
Besides, the Asian Development Bank (ADB) and the Royal Norwegian Embassy in Pakistan signed an agreement today to expand support for the National Disaster Risk Management Fund (NDRMF), further strengthening financing for natural disaster risk reduction and preparedness in the country. Under the agreement, the Government of Norway will provide $5 million to NDRMF from the unused resources of the Pakistan Earthquake Fund. Norway’s assistance for NDRMF will be administered by ADB.
On the positive side, the major development was witnessed as Fitch Ratings affirmed Pakistan's Long-Term Foreign-Currency Issuer Default Rating (IDR) at 'B-' with a Stable Outlook.
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Weekly Economic Roundup
January 19, 2020 (MLN): The latest weekly roundup is here to update the financial and economic data releases as they provide a guide to keep an eye on trends in the upcoming week.
The Weekly Sensitive Price Indicator (SPI) for the Combined Group decreased by 0.18% during the week ended Jan 16, 2020 while the SPI increased by 20.02% compared to the corresponding period from last year.
Pakistan’s current account deficit for the first six months of Fiscal Year 2020 stood at USD 2.153 Billion compared to USD 8.614 billion from the corresponding period of last year, showing an improvement of USD 6.461 Billion or 75 percent.
Imports into Pakistan during the month of December 2019 amounted to Rs. 625,463 million as against Rs. 612,215 million in November 2019 and Rs. 609,596 million during December 2018, showing an increase of 2.16% over November 2019 but an increase of 2.60% over December 2018.
Exports from Pakistan during the month of December 2019 amounted to Rs. 308,697 million, as against Rs. 312,420 million in November 2019 and Rs. 286,802 million during December 2018. This signified a decrease of 1.19% over November 2019 but an increase of 7.63% over December 2018.
The overall output of Large Scale Manufacturing Industries (LSMI) decreased by 5.93% during the first 5 months of FY20 compared to the corresponding period from last year.
China has appeared as the single heavy direct investor in Pakistan during 1HFY20, with investment valued at $422.5 million, acting as a catalyst to Pakistan’s economic reforms.
The non-government sector has retired a net sum of Rs.23.96 billion during the week ended January 10, 2020, which brings the cumulative net borrowing for ongoing fiscal year FY2020 to Rs.117.45 billion. The net borrowing as of prior week was recorded at Rs.141.42 billion.
The government of Pakistan has retired a net sum of Rs.133.5 billion during the week ended January 10, 2020, which brings its total net retirement for ongoing fiscal year FY2020 to Rs.48.94 billion. As of prior week, the government had borrowed a net sum of Rs.84.56 billion.
Improved macroeconomic conditions continued to increase Foreign Investors’ interest in local equity markets as according to a weekly report on Specially Convertible Rupee Accounts (SCRA) released by the State Bank of Pakistan, the gross sale of securities during the week was recorded at Rs.27.1 billion, which is around 125.3 percent higher than the figures recorded last week.
Foreign investment in Treasury Bills has crossed $500 million mark for the first time in a single session on January 16, with the overall investment ultimately settling at $536 million.
Pakistan's Forex Reserves increased by USD 38.80 Million or 0.21% and the total liquid foreign reserves held by the country stood at USD 18,123.60 Million on Jan 10, 2020.
The month of December turned out to be a disappointment for Pakistan, as instead of inflow of funds, the country witnessed foreign disinvestment of $198.3 million.
The government has so far released Rs 1.462 million to continue drilling activities for appraisal of massive coal reserves identified by Geological Survey of Pakistan (GSP) in the Badin field and its adjoining areas of southern Sindh on May 16, 2014.
The sale of passenger cars during the month of December 2019 stood at 9,987, units against the production of 8,373 units, i.e. around 17.16% higher than the sales of the previous month and 38.12% lower than the sales recorded in the same month of the previous year.
The Ministry of Planning Development and Reforms has so far authorized release of Rs 731.963 million for various uplift projects of Industries and Production Division under its Public Sector Development Program (PSDP) for the financial year 2019-20 as against the total allocation of Rs 2.343 billion.
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Key Pakistan Market Stats and Economic Indicators
| Weekly Performance | ||
|---|---|---|
| Jan 17, 2020 | Jan 10, 2020 | |
| PKR InterBank | 154.5699 | 154.8318 |
| KSE100 Index | 43,167.77 | 43,207.05 |
| Avg Daily Volume | 245,666,360 | 303,234,516 |
| Gold (Karachi) Rs/10 gm | 76,560 | 76,732 |
| KIBOR 6M | 13.49 | 13.50 |
| 10Y PIB | 11.01 | 11.00 |
| EUR | 1.1089 | 1.1119 |
| GBP | 1.3016 | 1.3057 |
| CHF | 0.9672 | 0.9726 |
| JPY | 110.087 | 109.433 |
| GOLD | 1556.9 | 1561.8 |
| NY Light Crude | 58.55 | 58.99 |
| Open Market Rates | ||
| Jan 17, 2020 | Jan 10, 2020 | |
| USD | 154.80 | 155.80 |
| EUR | 172.70 | 173.00 |
| GBP | 202.75 | 203.50 |
| JPY | 1.4111 | 1.4215 |
| AED | 42.35 | 42.45 |
| SAR | 41.30 | 41.40 |
| SBP Data | ||
| T-Bill Auction Cutoff Yield | Jan 15, 2020 | Dec 31, 2019 |
| 3M | 13.4694 | 13.4851 |
| 6M | 13.2890 | 13.2899 |
| 12M | 13.1340 | 13.1340 |
| PIB Auction Cutoff Yield | Jan 08, 2020 | Dec 11, 2019 |
| 3Y | 11.7500 | 11.7500 |
| 5Y | 11.1938 | 11.1939 |
| 10Y | 10.9000 | 10.9968 |
| 20Y | Bids Rejected | Bids Rejected |
| Interest Rate Corridor | Jul 17, 2019 | May 21, 2019 |
| SBP Policy Rate | 13.25 | 12.25 |
| SBP Reverse Repo Rate | 13.75 | 12.75 |
| SBP Repo Rate | 11.75 | 10.75 |
| Weekly Indicators | ||
| Jan 10, 2020 | Jan 03, 2020 | |
| SBP FX Reserves * | 11,586.00 | 11,503.70 |
| Bank FX Reseves * | 6,537.60 | 6,581.10 |
| Total FX Reserves * | 18,123.60 | 18,084.80 |
| Jan 16, 2020 | Jan 09, 2020 | |
| SPI (Combined Group) ** | 132.08 | 132.32 |
| Change - WoW (pct) | -0.18 | 0.36 |
| Change - YOY (pct) | 20.02 | 20.07 |
| Monthly Indicators | ||
| December | November | |
| Consumer Price Index (Base 2015-16) | 130.45 | 130.90 |
| Change - MOM (pct) | -0.34 | 1.34 |
| Change - YOY (pct) | 12.63 | 12.67 |
| WholeSale Price Index (Base 2015-16) | 141.75 | 142.17 |
| Change - MOM (pct) | -0.30 | -0.82 |
| Change - YOY (pct) | 12.37 | 11.19 |
| Sensitive Price Indicator (Base 2015-16) | 130.36 | 132.02 |
| Change - MOM (pct) | -1.26 | 2.74 |
| Change - YOY (pct) | 18.20 | 19.45 |
| December | November | |
| Exports * | 1,990.00 | 2,011.00 |
| Imports * | 3,950.00 | 3,940.00 |
| Trade Balance * | -1,960.00 | -1,929.00 |
| December | November | |
| Home Remittances * | 2,097.23 | 1,819.67 |
| December | November | |
| Total Foreign Investment * | -198.27 | 904.07 |
| Quarterly Indicators | ||
| Sep 30, 2019 | Jun 30, 2019 | |
| Pakistan's External Debt * | 106,890.98 | 106,348.38 |
| Annual Indicators | ||
| 2018-19 | 2017-18 | |
| GDP Growth Rate | 3.29 | 5.53 |
| Agriculture | 0.85 | 3.94 |
| Manufacturing | -0.27 | 5.43 |
| Commodity Sector | 1.13 | 4.45 |
| Services Sector | 4.71 | 6.25 |
| Trade Balance * (July - June) | -31,820.00 | -37,583.00 |
| Worker Remittances * (July - June) | 21,841.50 | 19,913.55 |
| Foreign Investment * (July - June) | 329.89 | 5,680.93 |
| Annual Inflation Rate % (July - June) | 7.32 | 3.92 |
| * Amount in USD Million | ||
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