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European stock markets slide at open

Sep 24, 2020: European stock markets slid at the start of trading on Thursday following falls in Asia and overnight on Wall Street.

London's benchmark FTSE 100 index shed 1.3 percent to 5,825.18 points.

In the eurozone, Frankfurt's DAX 30 index lost 1.0 percent to 12,514.08 points and the Paris CAC 40 dropped 1.2 percent to 4,746.32.

AFP/APP

Oil falls as demand growth concerns outweigh US stock...

September 24, 2020: Oil prices dropped on Thursday, weighed down by concerns that US economic recovery is slowing as the coronavirus outbreak lingers, while a renewed wave of COVID-19 cases in Europe have led to reimposed travel restrictions in several countries.

The jitters over demand and economic outlook due to the coronavirus resurgence have prompted a rally in the dollar as investors turned to safer assets, adding pressure to oil prices. A stronger dollar makes oil, priced in US dollars, less attractive to global buyers.

US West Texas Intermediate (WTI) crude futures fell 37 cents, or 0.9%, to $39.56 a barrel at 0650 GMT, while Brent crude futures dropped 34 cents, or 0.8%, to $41.43 a barrel.

Both benchmarks climbed slightly on Wednesday after government data showed US crude and fuel stockpiles dropped last week. Gasoline inventories fell more than expected, sliding by 4 million barrels, and distillate stockpiles posted a surprise drawdown of 3.4 million barrels. 

Still, fuel demand in the US remains subdued as the pandemic limits travel. The four-week average of gasoline demand was 8.5 million barrels per day (bpd) last week, the government data showed, down 9% from a year earlier. 

Prices turned down after data showed US business activity slowed in September, US Federal Reserve officials flagged concerns about a stalling recovery, and Britain and Germany imposed restrictions to stem new coronavirus infections -- all factors affecting the fuel demand outlook.

"Oil prices are wilting as product for immediate delivery remains plentiful," said Jeffrey Halley, a senior market analyst at OANDA.

"Consumption outlook concerns are rising as COVID-19 restrictions return in Europe, and the clamour from the Federal Reserve for more US fiscal stimulus, undermines the global recovery case, the lynchpin for oil's price recovery."

On the supply side, the market remains wary of a resumption of exports from Libya, although it is unclear how quickly it can ramp up volumes.

"That clearly is going to be something the oil market doesn't need right now," said Commonwealth Bank commodities analyst Vivek Dhar.

Meanwhile, Iraq's oil minister Ihsan Abdul Jabbar expects an agreement with the OPEC+ group to increase Iraq's crude oil exports, state news agency INA cited him as saying on Thursday.

Reuters

 

FBR’s demand for recovery of 5% remaining WHT on...

 

September 24, 2020 (MLN): The Union of Small and Medium Enterprises (UNISAME) has expressed deep regret on the shocking demand of the Federal Board of Revenue (FBR) for recovery of 5% remaining withholding tax (WHT) from account holders from profits earned during last fiscal year July 2019 to June 2020.

President UNISAME Zulfikar Thaver  said the banks and financial institutions were deducting 10% WHT on profit paid to their filer account holders during the period July 2019 to June 2020

The account holders have now learned from their Income Tax Practitioners (ITP) that they were supposed to pay 15% and not 10% of their income on profit has exceeded Rs 500000 per annum

The question raised by account holders is that why was the FBR sleeping all this time and did not clarify with the banks right in the beginning and creating this big burden on the account holders already burdened with the highest ever inflation.

Most of the people who depend on the profit from income on savings or certificates are retired senior citizens and now demanding 5% from these people especially during these circumstances of the pandemic and floods is unbearable. 

Thaver said, "We would also blame the banks for not seeking clarification and the FBR equally for ambiguous notifications causing hardships to income tax filers."

It is very irresponsible of FBR to leave loose ends in such matters causing problems and difficulties to income tax assets.

Since the finance bill was passed in the assembly it has to be followed in toto and the taxpayers are liable to pay the same. Some account holders may not be in a position to pay the dues due to the non-availability of liquid funds in that case it is to be seen how FBR facilitates the underprivileged and the senior citizens.

Power generation increases by 4% YoY in Aug’20 as...

September 24, 2020 (MLN): The overall power production during the month of August’20 increased by 4%YoY to 14,630Gwh.

According to the latest data released by NEPRA, power generation through RFO and Coal in August’20 stood at 792 and 2,530Gwh, showing an increase of 57% and 35%, YoY, respectively. However, generation through Gas-LNG and Hydel decreased by 9% and 3%, YoY to 4,460 and 5,470Gwh respectively during August’20.

According to the research by IGI Securities, the decline in generation compared to July’20 (down by 1% MoM) is primarily attributable to power outages in late August’20 due to heavy rains witnessed across Pakistan.

On a cumulative basis, the total generation for CY20TD clocked in at to 84,742Gwh,  down by 1% YoY on an account of 30% and 26% YoY decline in production through RFO and Gas-LNG, contributing 4% and 31% of the total power generation respectively while the share from coal-based power generation is up to 21% as compared to 14% in CY19TD.

With regards to power production through RFO, this 57% YoY increase in August’20 was the result of higher generation from Narowal, Attock, Atlas and Lalpir (cumulatively up by 184Gwh) while generation from NPL and NCPL was cumulatively down by 21Gwh. This brings total generation for CY20TD to 3,340Gwh down by 30%YoY owing to lower generation from Hub Plant, KAPCO Block I & II and GENCO I & III along with lower generation from smaller inefficient IPPs such as Lalpir and Pakgen, the research revealed.

On the other hand, the research highlighted, the Gas/LNG based power generation dropped by 9%YoY (424Gwh) to 4,460Gwh in August’20 on the back of lower generation from GENCO I-III (contributing 198Gwh), KAPCO (down by 194Gwh) and Saphire (down by 72Gwh) while generation from other smaller IPPs rose during the month of August’20. This takes total generation in CY20TD to 26,043Gwh, down by 26% YoY led by lower generation from KAPCO, GENCO I-III, and smaller IPPs.

As per NEPRA, power cost on RFO during August’20 came down by 2% YoY (or down by 12%MoM) to PKR 12.23/Kwh. However, the gas price dropped to PKR 7.04/Kwh, down by 8% YoY (flat on MoM) while generation cost through LNG stood PKR 7.02/Kwh, down by 39% YoY or up 2% MoM.

It is prudent to mention that FO plants moved up slightly in the merit in Aug-20 on account of higher demand during the summer season. The cost of generation remained relatively mixed on a monthly basis as Narowal, NCPL, PKGP, and LPL witnessed a drop in fuel cost thus moving up in the merit order list.

Going forward, as demand picks up post-COVID-19 and peak summer season, the research believes FO plants are likely to remain operational whereas in the long-term contribution of FO plants in total generation mix would remain low whereas LNG and coal contribution would increase.

Copyright Mettis Link News

NBP issues foreign exchange rates

September 24, 2020: Treasury Management Division of National Bank of Pakistan (NBP) on Thursday...

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