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SECP issues draft Insurance Ordinance (Amendment) Bill, 2020 for...

July 16, 2020: The Securities and Exchange Commission of Pakistan has proposed amendments to the primary insurance law i.e. Insurance Ordinance 2000. The draft law has been placed on SECP’s website for stakeholders and public consultation.

The Draft Bill will address the regulatory gaps in existing law and provide a conducive regulatory environment to encourage market development. It will facilitate the use of technology, provide ease of doing business and address entity-specific and systemic risks by shifting towards Risk-Based Supervision (RBS) and Risk-Based Capital (RBC) Regime.

The amendments in law will also strengthen the regulatory framework and ensure its alignment with the Insurance Core Principles (ICP) of the International Association of Insurance Supervisors (IAIS).

The significant reforms proposed in the draft bill include the introduction of dedicated microinsurers, provisions for regulation of takaful and re-takaful, regulation of local and foreign reinsurance business for enhancement of local capacity, regulation of reinsurance brokers, flexibility for the introduction of new intermediaries, insurance repository and insurance self-network platform, provisions for regulation of index-based insurance and InsurTech.

Provisions for the introduction of RBS and RBC regime and establishment and operation of a guarantee fund for insolvency of insurers have been included to strengthen the regulatory framework and align the law with core principles of IAIS and address systemic risk. The amended law will also assist in enhancing compliance with AML/CFT frameworks.

The changes include the requirement of appointed actuary and product filing of personal lines for non-life insurance, the appointment of internal actuary for life insurers and enhancement of market conduct provisions. The regulatory powers of the Commission for regulation and supervision of insurance companies and intermediaries have also been streamlined in the Draft Bill.

Press Release

Closing Bell: Interstellar Overdrive

July 16, 2020 (MLN): Domestic equities on Thursday took a turnaround from yesterday’s closing and concluded the today’s session on a greener note by gaining 322 points to reach at 37,001 points.

Meanwhile, it is worth mentioning that this is the first time since March 11, 2020 that the benchmark KSE-100 index has closed higher than 37,000 points.

The index remained positive throughout the session today led by Cement Sector as Prime Minister inaugurated construction of Diamer Bhasha Dam while SBP also mandated banks to increase lending to construction sector. Moreover, E&Ps also closed in green as international crude oil price remained upbeat at USD 43.77/bbl, a closing note by Ismail Iqbl Securities stated.

The Index touched an intraday high of 37,029.44

Of the 98 traded companies in the KSE100 Index 67 closed up 31 closed down, while 0 remained unchanged. Total volume traded for the index was 237.08 million shares.

Sectors propping up the index were Oil & Gas Exploration Companies with 66 points, Cement with 66 points, Commercial Banks with 46 points, Automobile Assembler with 41 points and Automobile Parts & Accessories with 24 points.

The most points added to the index was by LUCK which contributed 38 points followed by PPL with 37 points, HBL with 32 points, THALL with 18 points and MTL with 16 points.

Sector wise, the index was let down by Insurance with 3 points, Textile Spinning with 3 points, Miscellaneous with 2 points, Leather & Tanneries with 2 points and Sugar & Allied Industries with 1 points.

The most points taken off the index was by COLG which stripped the index of 13 points followed by BAFL with 8 points, HASCOL with 6 points, EFUG with 5 points and CHCC with 4 points.

All Share Volume increased by 74.20 Million to 402.59 Million Shares. Market Cap increased by Rs.71.59 Billion.

Total companies traded were 385 compared to 386 from the previous session. Of the scrips traded 231 closed up, 142 closed down while 12 remained unchanged.

Total trades increased by 19,568 to 143,783.

Value Traded increased by 1.91 Billion to Rs.16.07 Billion

CompanyVolume

Top Ten by Volume

JS Bank31,676,000
Maple Leaf Cement Factory24,850,000
Pak Elektron24,115,500
Hascol Petroleum20,333,500
Pakistan Petroleum19,194,559
Fauji Cement Company19,116,000
Unity Foods18,223,500
TRG Pakistan15,599,000
Hum Network15,444,500
TPL Corp14,377,000

 

SectorVolume

Top Sector by Volume

Cement66,551,986
Technology & Communication52,429,000
Commercial Banks51,144,503
Cable & Electrical Goods31,984,750
Oil & Gas Marketing Companies27,286,074
Oil & Gas Exploration Companies21,803,383
Chemical19,722,219
Vanaspati & Allied Industries18,228,700
Engineering17,211,400
Power Generation & Distribution13,197,854

 

 

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Gold posts marginal gains

July 16, 2020 (MLN): Gold moved fractionally higher at the domestic bullion market today. The price of 24 Karat-Gold increased by only Rs 50 to Rs 109,350 per tola in the local market. The valuable yellow metal had closed at Rs 109,300 per tola on the previous trading day. 

According to the Karachi Sarafa Association, the price of 10-gram gold also increased marginally by Rs 43 to settle at Rs 93,750 against Rs 93,707 on the last trading day.

On the other hand, the silver prices remained flat at Rs 1,110 per tola.  Similarly, 10-gram silver remained stable at Rs 943.07.

In the international market, gold prices reached $1,806 an ounce, down by only $2 while silver was pegged at $19.27 per ounce.

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Amendments in CGT System have been incorporated as per...

July 16, 2020 (MLN): National Clearing Company of Pakistan Limited (NCCPL) via notification to Exchange has notified all market participants that the Finance Act 2020 has introduced a new subsection 3B in Section 37A of the Income Tax Ordinance, 2001, as per which "shares of a public company" shall be considered as security if such company is a public company at the time of disposal of such shares.

The effect of the above proviso has been  incorporated in the Capital Gain Tax (CGT) System with effect from July 1, 2020 whereby CGT System will compute, determine, collect and deposit Capital Gain and Tax thereon on disposal of all listed securities irrespective of its date of acquisition whether acquired before or after of its listing date, the notification revealed.

The notice further highlights that Finance Act, 2020 has maintained applicable CGT Rates for the Financial Year 2020-21, details of which are mentioned in the table below.

Market

Period

FY 2020-21 CGT Rates

 

Investors appearing in (ATL)

Investors not appearing
in (ATL)

PSX

Where the security was acquired before 1st July, 2013

0.00%

0.00%

Securities Acquired before July 1, 2016. Where holding period of a security is twenty-four months or more but the security was acquired on or after 1st July, 2013

7.50%

15.00%

Securities Acquired on or after July 1, 2016

15.00%

30.00%

Cash settled derivatives traded on Stock Exchange

5.00%

10.00%

MUFAP

Where the holding period of securities more than Four years

0.00%

0.00%

Stock Funds:  For individuals and corporate if Dividend receipts of the fund are more than capital gains

10.00%

20.00%

 

Stock Funds: For individuals and corporate if Dividend receipts of the fund are less than capital gains

12.50%

25.00%

Other than Stock Funds: For Individuals

10.00%

20.00%

Other than Stock Funds: For Corporate

25.00%

50.00%

PMEX

Future Commodity Contracts executed at Pakistan Mercantile Exchange

5.00%

10.00%

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PRL starts producing FO and HSD under its new...

July 16, 2020 (MLN): Pakistan Refinery Limited has released the details of its new operational strategy, which involves the implementation of new crude oil recipes.

As a part of the strategy, the new crude oil recipes are expected to positively change the product slate and make Refinery compliant with regulatory requirements. According to the latest notification issued by the company in this regard, the following progress has been achieved so far:

IMO-2020 FO

The Refinery is presently producing the Fuel Oil (FO) of new emission-standards enforced by the International Maritime Organization 2020 (IMO-2020) carrying a much higher price than High Sulphur FO which was previously produced.

EURO-H HSD

The Refinery has also started producing the EURO-ll compliant High-Speed Diesel (HSD) w.e.f July 14, 2020. This has enabled Company to save the price differential and High Sulphur penalty imposed on the non-compliant HSD.

The above efforts are to improve future refinery-margins and to help the Company in achieving regulatory compliance. However, based on the present unstable business situation and depending on the margins, the Company will review its strategy regularly and, if required, may change it accordingly.

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