Tag: Pakistan Economic Indicators
June 26, 2022: A delegation of K-Electric's majority shareholders representing Saudi Arabia's Aljomaih Holding Company, Kuwait's National Industries Group (NIG), and Infrastructure Growth and Capital Fund (IGCF) called upon the Honorable Prime Minister of Pakistan Mian Shehbaz Sharif during the departed week.
The delegation was led by Sheikh Abdulaziz Aljomaih – Managing Director of Aljomaih Holding Company, one of the strongest conglomerates in Saudi Arabia with interests in diversified industries along with Riyadh Edrees – CEO of NIG.
Prime Minister Shehbaz Sharif highlighted that he has constituted a task force headed by former Prime Minister Shahid Khaqan Abbasi to resolve the concerns related to K-Electric for improving the power utility’s cash flows and streaming generation of electricity from its power plants. Task force members including Shahid Khaqan Abbasi, Federal Minister for Finance, Miftah Ismail, Minister for Petroleum Dr. Musadiq Malik, and Special Assistant to Prime Minister Ahad Cheema were also present.
The delegation briefed the premier about the utility's achievements in the last 17 years. “We enjoy good brotherly relations with Pakistan. This is why we opted to invest in the power sector – which is the backbone of any economy - of Karachi, which holds a special place as Pakistan’s financial and industrial hub,” highlighted Aljomaih who was also the first Chairman of the company post-privatization.
“Aljomaih and I have been part of the KE journey since 2005. As part of the largest investment group in Kuwait, we are ambassadors of Pakistan in investment circles across the GCC. KE’s continued success can be instrumental in generating interest in Pakistan’s energy distribution sector,” shared Riyadh Edrees.
Post-privatization, over USD 4 billion has been invested in KE’s value chain, enabling it to upgrade the power infrastructure including the addition of new power plants. The operational improvements since privatization have resulted in savings of USD 5 Billon to the national exchequer. Today, the company has doubled the number of customers, delivers twice the amount of energy units, and has halved the transmission and distribution losses as compared to 2005.
The investors further informed that the transformation’s success has attracted investors like Shanghai Electric Power (SEP), one of the major players in the global energy sector. However, the acquisition process - which was formally initiated in 2016 - remained stalled due to unresolved issues, they informed.
The delegation also expressed its concerns over the industry's growing challenges that are affecting KE's financial sustainability. The delegation sought support from the premier on the resolution of long-standing issues such as the Power Purchase Agreement (PPA) and the arbitration of historical dues between KE and various government entities, which are deterrents towards the sale of KE's majority shares.
The group of investors was accompanied by Mark Skelton, Director of Infrastructure Growth Capital Fund, Shan Ashary, the Chairman of KE's Board, and Syed Moonis Abdullah Alvi, CEO K-Electric.
The delegation also called upon Dr. Shahid Khaqan Abbasi, Minister for Energy (Power Division) Khurram Dastgir, as well as Tauseef H. Farooqi, Chairman National Electric Power Regulatory Authority (NEPRA).
During the meetings, KE's investors acknowledged Pakistan's importance as an investment destination. They expressed that considering the historical ties and brotherly relations between Gulf countries and Pakistan, the investment was made at a time when the government was actively looking for investment in the power sector. The delegation also reiterated its firm commitment to resolving the challenges and securing the city's energy future, which is inevitable for the country's prosperity.
KE has 3.2 million customers whereas T&D losses have reduced to 15.8% today down from 34.2% in FY05. On the generation front, KE has added 5 efficient power generation plants and fleet efficiency has improved from 25% in 2005 to 38% in 2021.
June 26, 2022 (MLN): The highlights of the important economic and business events that took place during the last week are in order so as to become acquainted with the recent developments in Pakistan’s economic and public policy.
Events of Importance through the week:
- On Saturday, the amended Finance Bill will incorporate some tangible measures to facilitate the exporters of IT and IT-enabled Services (ITeS).
- Mr. Shabbir Mansha, Acting President FPCCI has categorically denounced the imposition of a 10 percent super tax on large industries; which already pay a hefty corporate tax of 29 percent and generate millions of jobs in the country as well.
- Prime Minister Shehbaz Sharif on Friday directed that the ongoing development projects of water, electricity, and infrastructure in Gwadar should be completed in the stipulated time.
- Federal Minister for Finance, Miftah Ismail said that the coalition government is working hard to enhance the production of electricity and would install 4,000-6,000 megawatts of solar energy in the national grid within a year.
- The Federal Board of Revenue (FBR) directed all tax offices to observe extended working hours till 10:00 PM on Wednesday, June 29, 2022, and till 12:00 AM on Thursday, June 30, 2022.
- On the same day, the Cabinet Committee on Privatisation (CCoP) welcomed the prospect of the revival of Pakistan Steel Mills (PSMC), entailing commercial leasing of 1229 acres of land and jetty.
- Minister for Finance and Revenue Miftah Ismail said that the government had decided to withdraw withholding tax and condition of statements in the IT sector.
- State Bank of Pakistan (SBP) has received a $2.3 billion loan from a Chinese consortium.
- On the same day, the National Electric Power Regulatory Authority (NEPRA) approved a Rs5.27 per unit increase in tariff for April under monthly fuel cost adjustment (FCA) for consumers of K-Electric.
- Central Power Purchasing Agency (CPPA-G) has sought an Rs7.96 per unit increase in power tariff for May under the monthly Fuel Cost Adjustment (FCA) mechanism.
- The government will impose an extra one-time 10% tax on the large-scale industry for one year to raise over 400 billion rupees ahead of a revival of the International Monetary Fund (IMF) bailout program.
- K-Electric requested National Electric Power Regulatory Authority to allow an increase in the power tariff by Rs 11.33 per unit on account of fuel charges adjustment (FCA) for the month of May 2022.
- On Thursday, Federal Minister for Energy, Khurram Dastgir Khan said that the government is negotiating with Russia to import wheat as the US and EU sanctions against Moscow were not applicable on food items.
- Amidst the ongoing energy crisis, the Public Accounts Committee (PAC) in a meeting decided to halt the free supply of electricity to the staff of distribution companies.
- In a bid to conserve fuel and electricity amid the ongoing energy crisis, the State Bank of Pakistan (SBP) has allowed bank officers to work from home for one to two days a week.
- On the same day, the Economic Coordination Committee (ECC) of the Cabinet approved the Technical Supplementary Grant (TSG) of Rs96.13 billion to the Power Division for payment to the IPPs as a second installment (60% payment).
- The central bank has so far received 20 applications for digital banking against the announced five licenses to be awarded soon to the successful institutions.
- PTCL has successfully deployed AirPON solution from Huawei Technologies, in its Fiber Access Network.
- Pakistan is now one more step closer to the IMF deal as the major development surfaced on Tuesday night wherein Pakistan side and IMF reached an understanding on the federal budget for FY23.
- During the departed week, Pakistan and Iran inked an agreement for an additional supply of 100 MW of electricity to Balochistan at Tehran (Iran).
- The Federal Cabinet on Tuesday approved the issuance of the Ijara Sukuk bonds in the domestic and international markets to support the government’s budgetary position and promote the Islamic banking industry in the country.
- During the week, SBP clarified that it has not stopped import payments and that commercial banks have sufficient dollar liquidity to execute these payments.
- Federal Minister for Finance and Revenue Mr. Miftah Ismail assured the delegation of the DHA Estate Agents Association headed by Chief Patron Mian Irfan Asad to consider the relief in terms of capital gain tax.
- The Companies (Amendment) Bill, 2021 was primarily proposed to promote start-ups, business innovation, and entrepreneurship, improve the general business climate and promote Ease of Doing Business (EODB).
- Meanwhile, the Pakistan Bureau of Statistics (PBS) and the National Database Registration Authority (NADRA) on Monday signed a Memorandum of Understanding (MoU) for the development of census software and Tablet provision here at the National Census Coordination Centre (N3C), PBS Head office.
- The Policy Committee and Research and Development Fund of the Ministry of Information Technology and Telecommunications (MoITT) principally approved a budget of Rs 32.13 billion for the Universal Service Fund (USF) and Rs 3.75 billion for the National Technology Fund (Ignite) for the financial year 2022-23.
- Prime Minister Shehbaz Sharif invited Saudi businessmen to make investments in various economic sectors of Pakistan as the government would facilitate investors in every way possible, and remove hurdles and red-tapism.
- In order to improve the liquidity in the interbank market, SBP will likely reverse around $590 million to scheduled banks against Cash Reserve Requirement (CRR).
- Federal Minister for Power Engr. Khurram Dastgir Khan on Monday held a meeting with Iran’s Minister for Energy Ali Akbari Mehrabian in Tehran and discussed various aspects of electricity supply from Polan (Iran) to Gwadar.
- On the equity side, The shareholders of Fazal Cloth Mills Limited (FZCM) have resolved to change the terms and conditions (TOCs) of the long-term investments of Rs550 million in Fatima Transmission Company Limited (FTCL).
- Packages Limited (PKGS) has extended the timeline for making a Public Announcement of Offer (PAO) to acquire the entire shareholding of Sanofi Foreign Participants B.V. held in Sanofi-Aventis Pakistan Limited (SAPL).
- Registrar Modaraba has issued a no-objection certificate (NOC) on the proposed merger of KASB Modaraba and First Pak Modaraba (FPM) with and into First Prudential Modaraba (FPRM), a notice issued to Pakistan Stock Exchange (PSX) said today.
- The board of Pakistan Services Limited (PSEL) – the owners of the Pearl Continental (PC) hotel chain in the country, has accorded approval for executing the business sale agreement for the disposal of its hotel property namely Pearl Continental Hotel, Peshawar.
- The shareholders of Reliance Weaving Mills Limited (PSX: REWM) have resolved the change in terms and conditions (T&Cs) of the long-term investments in Fatima Transmission Company Limited (FTCL), the company’s filing on PSX showed today.
- The Board of Directors of Amreli Steels Limited (PSX: ASTL) on Thursday approved investment into non-ferrous operations as a first step to diversifying the company's business portfolio.
- Central Depository Company of Pakistan (CDC) has decided to remove the suspension on the CDS eligibility of the ordinary shares of Pak Leather Crafts Limited (PAKL) with effect from today as the company (issuer) has removed the causes of suspension
- Following the civil petition filed by Khalid Siraj Textile Mills Ltd (PSX: KSTM) and its judgment, the Honorable Supreme Court of Pakistan (SC) has issued notices and stay the winding-up proceedings, the company filing on PSX showed today.
- The honorable Lahore High Court, has sanctioned the Scheme of Arrangement between Waves Singer Pakistan Limited (PSX: WAVES) and Samin Textiles Limited (PSX: SMTM) as per which the name of Waves Singer Pakistan Limited will be changed into Waves Corporation Limited (WAVES), and Samin Textiles Limited into Waves Home Appliances Limited (WHALE).
- The Rider, in which TPL E-Ventures, a wholly-owned subsidiary of TPL Corp Limited as it owns around 27% stake has successfully raised seed funding of $3.1 million for its business.
- Oil and Gas Development Limited (PSX: OGDC) has made a Gas discovery at Kaleri Shum-01 well located in Rajanpur (Tribal area), Punjab Province, Pakistan.
- The Joint Venture of Nim Block Comprising Oil & Gas Development Company Limited (OGDCL) as Operator (95%) and Government Holdings (Private) Limited (GHPL) (5% carried) has discovered oil and gas from an exploratory well namely Nim East-1 located in District Tando Allah Yar, Sindh Province.
- D.G. Khan Cement Company Limited (DGKC) has signed an agreement and established a Letter Of Credit (LC) for the supply and installation of the on-grid solar power plant of 6.952MW at its site in Khairpur, Distt Chakwal, in favor of Reon Energy Limited.
- DG Khan Cement Company Limited (DGKCC), a subsidiary of Nishat Group of Industries has become the first Pakistani company to export cement to the United States, starting with a shipment of 50,000 tones of low alkali cement which is scheduled to leave Karachi Port for the USA on Tuesday.
- Unity Foods Limited (PSX: UNITY) has identified a site for the establishment of Oil Terminal storage capacity and is now in process of closing the purchase of land.
- Pakistan International Bulk Terminal Limited (PIBTL) has successfully completed the transaction for repayment of outstanding loans from local banks worth Rs5.49 billion and refinancing the same at economical terms.
- Modaraba Al Mali (PSX Ticker: MODAM) has entered into an arrangement with Hashimi Can Company Limited (PSX: HACC) to acquire 489,900 (29.99% equity capital) shares of HACC.
- TRG Pakistan Limited (PSX: TRG) has clarified that the complaint filed with SECP by Asad Nasir, Director of the company pertaining to matters voted on in December 2021 is not on merit
Copyright Mettis Link News
June 26, 2022: The amended Finance Bill will incorporate some tangible measures to facilitate the exporters of IT and IT-enabled Services (ITeS).
According to a statement issued by FBR, the sector has been provided a reduced tax rate of 0.25% on their export proceeds which is a quarter of the 1% export tax rate provided to all other exporters of goods.
Meanwhile, the sector has been removed from the tax credit regime to simplify the tax filing system and to remove hassles of compliance that were earlier required to make them eligible for 100% tax credit to claim tax exemption.
The requirements of filing Withholding Tax Statements and Sales Tax returns have been liberalized for the sector and only those who are required under the law will file WHT Statements or the Sales Tax Returns.
For individuals having turnover up to Rs 100 m per year, there is no requirement to file WHT A Statement or to deduct tax.
The definition of IT and IT-enabled services as provided under the Income Tax Ordinance, 2001 has been liberalized by expanding its scope by making suitable amendments and all-inclusive, and “not limited to” definition has been provided.
IT and IT-enabled services exporters have been provided the facility of obtaining a Sales Tax refund in respect of any Sales Tax that has been paid as their input on computers, laptops, stationary other items, etc.
This facility is not available under the Provincial Sales Tax Law.
The demand of the IT Sector for reviving tax exemption for the Venture Capital Fund has been accepted and a new provision has been created for providing Income Tax Exemption to the Venture Capital Fund for three years.
June 26, 2022: The Ministry of Planning Development & Special Initiatives is all set to host Turn Around Conference (TAC) with an objective of gathering the nation together to find solutions to the country’s current socio- economic issues. These solutions would be aimed at short term results; if substantial these due deliverance compact ideas can be extended on to mid and long term objectives.
The conference will be held on June 28 at Convention Center which will be graced by Prime Minister Shahbaz Sharif as chief Guest. The prime objective of the conference is to engage all the relevant stakeholders which hold the development sector together from across the nation.
"The aim is to take input, understand and resolve hurdles in Economic Growth in order to place country’s economy back on track" , said the Federal Minister for Planning Development & Special Initiatives, Professor Ahsan Iqbal.
Currently, Pakistan is facing many external and internal challenges which are further compounded by the existing commodity super- cycle and geo-political situation. As the economic growth does not offer enough opportunities for national progress, short-term measures can act as a catayst for speeding up the growth.
Current Socio-economic landscape of Pakistan calls for tactical solutions to address Economic problems. Hence, A quick round of wider and inclusive consultations of experts belong from diversified fields can be helpful in providing solutions to come out of this economic quagmire.
The government has already taken necessary short-term actions to stabilize the economy and deal with the looming balance of payments crisis. However, the government’s focus is to ferret out the medium to long-term solutions to optimise country's economy to tap its full potential in line with Vision 2025.
Moreover, participation of stakeholders from all walks of life is ensured including representatives of Political Parties, Federal Ministries, Provincial Governments, National and International Private Sector Entrepreneurs, International Development and Financial Institutions, Academia, Think Tanks, Independent Experts, NGOs and other parts of Civil society of the country to produce result oriented and focused solutions for bringing a turnaround in the economy of Pakistan.
June 26, 2022: Britain, the United States, Japan and Canada will ban new imports of Russian gold as part of efforts to tighten the sanctions squeeze on Moscow for its invasion of Ukraine, the British government said on Sunday.
The ban will come into force shortly and apply to newly mined or refined gold, the government statement said ahead of a meeting of Group of Seven leaders in Germany on Sunday.
The move will not affect previously exported Russian-origin gold, it added.
Russian gold exports were worth 12.6 billion pounds ($15.45 billion) last year and wealthy Russians have recently been buying bullion to reduce the financial impact of Western sanctions, the government said.
"The measures we have announced today will directly hit Russian oligarchs and strike at the heart of Putin's war machine," Prime Minister Boris Johnson said in the statement.
"We need to starve the Putin regime of its funding. The UK and our allies are doing just that."
The latest initiative follows the London Bullion Market Association's (LBMA) March suspension of accreditation for six Russian precious metals refiners.