August 4, 2019 (MLN): Pak Rupee led a strong week last week as the currency steadily appreciated for the whole week. This is a first in the last six months as the last appreciation streak that exceeded 4 days was observed from January 23, 2019 to January 31, 2019. 

During the week, the currency gained 1.5 rupees against the greenback, as the previous week was concluded at PKR 160.59 per USD.  

With Eid-ul Azha right around the corner, remittances from overseas Pakistanis has enhanced noticeably which has increased the supply of dollars, thereby bringing its value down against the rupee.  

Last week’s other top events that stole the lime light include government’s decision to raise petroleum prices, revision in gas prices for tandoor owners and increase in LPG prices by OGRA. 

What is more is that the Federal Board of Revenue has extended the deadline for filing of Income Tax returns for the fiscal year 2018, for one week up to August 9, 2019 to facilitate the individuals, association of persons and companies, intending to file their annual returns 

Last week, the Government raised the price of petroleum products for the month of August 2019, after which the price of petrol increased by Rs.5.15 per liter, diesel by Rs.5.65, Kerosene by Rs.5.38 while the price of Light Diesel Oil increased by Rs.8.90 per liter. 

The same day, Oil and Gas Regulatory Authority (OGRA) increased LPG price by Rs 2 per Kilogram for the month of August 2019. 

The other major economic and policy-oriented developments that took place during the departed week include FBR’s clarification that sales tax can only be recovered from the customer if the supplier is registered for sales tax purposes and reflects the Sales Tax Registration Number (STRN) on the invoice/receipt issued to the customer. 

On Wednesday, the State Bank of Pakistan (SBP), in an attempt to demystify the calculation and methodology of the Real Effective Exchange Rate Index, released a revision study for the calculation of the REER Index for Pakistan. 

On the other hand, in the larger interest of general public, the Economic Coordination Committee (ECC) of the Cabinet took up the issue of increased prices of roti and approved a proposal submitted by the Ministry of Energy to revise gas prices for roti tandoors with effect from 1st July 2019.

In addition, the SBP conducted an auction on Wednesday in which it sold T-Bills worth Rs.909.08 Billion for 3,6 and 12 months. 

On the upside, the International Finance Corporation (IFC), a member of the World Bank Group, announced to invest $2.5 million in Sarmayacar, one of the first early-stage venture capital funds supporting tech-driven startups in Pakistan, to help boost entrepreneurship and spur economic growth.   

On Tuesday, FBR specified tax collection measures on plot and constructed properties. 

According to the details provided by FBR, 100% of the gain will be taxed on plots if the holding is up to one year, whereas 75% of the gain will be taxed if the holding period is more than 1 year but not more than 2 year. However, no tax will be levied on the gain if the holding period of plot is more than 8 years. 

On Monday, SBP warned the general public not to divulge personal banking details over the phone as SBP/Banks/Micro Finance Banks do not conduct biometric verification of Banks’ existing customers through telephone calls. 

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

• Pakistan's Yearly Inflation rate in July 2019 was 10.34 percent compared to 8.89 percent in June 2019 and 5.83 percent in July 2018. 
• Pak Rupee's Real Effective Exchange Rate Index (REER) decreased by 6.7 percent in June 2019 to a provisional value of 90.5023 from the revised value of 96.9998 in May 2019. 
• The non-government sector retired another net sum of Rs.23.56 billion during the week ended July 26, 2019, which brings the cumulative net retirement for ongoing fiscal year FY2020 to Rs.114.35 billion. The net retirement as of prior week was recorded at Rs.90.8 billion. 
• The government of Pakistan has retired an additional sum of Rs.104.56 billion during the week ended July 26, 2019, which brings its total net retirement for ongoing fiscal year FY2020 to Rs.165.28 billion. As of prior week, the government had retired a net sum of Rs.60.72 billion. 
• Pakistan's Forex Reserves increased by USD 199.40 Million or 1.34% and the total liquid foreign reserves held by the country stood at USD 15,061.80 Million on Jul 26, 2019. 

• The net purchase of securities via SCRA for the week ended July 26, 2019 clocked in at Rs.1.68 billion, i.e. around Rs.756.99 million higher than last week's numbers. 
• The Weekly Sensitive Price Indicator (SPI) for the Combined Group increased by 0.18% during the week ended Jul 25, 2019 while the SPI increased by 15.59% compared to the corresponding period from last year. 
• The repatriation of profit and dividend by foreign investors have witnessed a downward trend, depicting a negative growth of 21 percent as compared to FY18. 

To look another way, the KSE – 100 index slipped below the 32,000 point mark this week, having lost 437 points – net. Out of the five days, only one day experienced positive activity while bears dominated the rest of the week.  

The index currently stands at 31,666 points while last week’s closing value was 32,103 points. Over the week, Commercial Banks took away the most points from the index (239 points), while Tobacco, E&P and Power Generation and Distribution followed with takeaways worth 57 points, 83 points and 34 points, respectively. 

Amongst these, PPL knocked off the most points off benchmark index – 69 points, while MCB took nearly 62 points, PAKT took 57 points and UBL took 55 points. 

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