July 14, 2019 (MLN): The KSE-100 index lost around 517 points over the week and closed at 33,672-mark, despite efforts by Prime Minister to build business community’s confidence in his recent visit to Karachi.

While the index remained in consolidation for most part of the week, it lost 202 points in Friday’s session after the news regarding Monetary Policy announcement emerged, seeding fear of another hike in interest rates within local investors.

Meanwhile, the following economic data was released over the course of last week

• The central government's domestic and external debts by the end of May, 2019 collectively floated the total sum to Rs.29.8 trillion. Compared to the corresponding month of last year, this translates into an expansion of Rs.6 trillion or 25.2% due to low revenue collection which resulted in excessive borrowing to finance the growing domestic expenses.
• The State Bank of Pakistan released the Auction Targets for PIB and MTB for July 2019 – September 2019. As per official notifications, the cumulative auction target for PIB’s at fixed rate for 3, 5, 10 and 20 years is Rs. 300 billion, distributed based on fixed coupon rates of 7.25% for 3 year bond, 8% for 5 year bond, 8.75% for 10 year bond and 10.75% for the 20 year bond.
• Overseas Pakistanis remitted USD 1.65 billion in the month of June 2019 compared to USD 2.32 billion in May 2019 showing a decrease of USD 665.22 million over the previous month.
• Over 14.7 thousand passenger car units were sold during the month of June 2019, as per a report by Pakistan Automotive Manufacturer’s Association (PAMA). The cumulative sale of passenger cars during the year ending June 2019 were reported to be 207.6 thousand.
• Pakistan's Forex Reserves decreased by USD 183.70 Million or 1.27% and the total liquid foreign reserves held by the country stood at USD 14,259.30 Million on Jul 05, 2019.
• Loans to agriculture sector during 11 months (Jul-May) of FY19 mounted by 20% to stand at Rs 1,018 billion, compared to Rs 849 billion in same period last year.
• The total purchase of securities by overseas investors via Special Convertible Rupee Account (SCRA) amounted to Rs. 6 billion during the week ended July 05, 2019, as compared to sale of securities totaling Rs. 5.1 billion. The closing balance of SCRA was recorded at Rs. 27.67 billion, which marks a rise of Rs. 102.45 million over the week.
• The total money supply circulating within the economy in May 2019 was recorded at around Rs. 20.8 trillion as per provisional accounts on Monetary Aggregates for the month, maintained by the State Bank of Pakistan.
• The Weekly Sensitive Price Indicator (SPI) for the Combined Group increased by 1.35% during the week ended Jul 11, 2019 while the SPI increased by 15.01% compared to the corresponding period from last year.

The various economic and policy-oriented developments that took place during the departed week include:

• The Monetary Policy Committee of State Bank of Pakistan (SBP) will meet next week on Tuesday, July 16, 2019 at SBP Head Office Karachi to decide about monetary policy rate for the next two months.
• Apart from this, on Friday, heads of different Chinese companies gave assurance to Prime Minister Imran Khan to invest five billion dollars (US $5 billion) in Pakistan in next three to five years.
• Furthermore, European Union Ambassador to Pakistan Jean-François Cautain said that Pakistan's export to Europe has increased fifty five percent after grant of GSP Plus status to the country.
• The same day, Chairman FBR Shabbar Zaidi while addressing a news conference in Islamabad, emphatically stated that no tax has been imposed on flour, fine flour, fine scmolina flour (suji) or any edible items.
• On Thursday, the International Monetary Fund (IMF) issued a clarification about the exchange rate assumptions in its Staff Report, saying there are no agreed target level for the Exchange rates which are market determined.
• On Wednesday, the biggest development that took place was Pakistan received the USD 991.4 Million from the IMF which was equivalent to SDR 716 million.
• Meanwhile, the Oil and Gas Regulatory Authority (OGRA) informed that the price of Re-Gasified Liquefied Natural Gas (RLNG) for Sui Northern Gas Pipeline Limited has risen by 3% to 11.35 dollars/mmbtu in July.
• The same day, advisor to Prime Minister on Commerce Abdul Razak Dawood while addressing a news conference in Islamabad said that the federal cabinet has decided to reduce the Gas Infrastructure Development Cess (GIDC) in order to minimize the increasing gas price impact on fertilizer manufacturing.
• Moreover, the Government raised taxes on People investing in National Saving Schemes, targeting both filers and Non-Filers. For non-filers, the withholding tax rate for investments up to Rs. 500,000 rose from 10 percent to 20 percent, while investment over the amount will be subject to 30 percent an increase from the current 17.5 percent.
• For tax filers, the applicable tax rate for yield up to Rs.500,000 remains unchanged at 10 percent, however on investments over the amount the applicable tax rate has been raised to 15 percent.
• Another important development was the disclosures of SBP’s Auction Targets for Pakistan Investment Bonds (PIB)’s and Market Treasury Bills (MTB)’s for July 2019 – September 2019, via official notices.
• On the upside, Pakistan Post, after taking revolutionary steps, became the most profitable public department this year by increasing its revenue by 116 percent as compared to the Fiscal Year 2017/18.

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