PAR News - Tues, 02 Apr 2024

PAR News Bulletin - Tues, 02 Apr 2024

PAR News - Tues, 02 Apr 2024
PAR News - Tues, 02 Apr 2024
PAR News
April 2, 2024
News

TOPLINE

  • In March, Pakistan's exports grew by 7.99% to $2.55 billion, but the trade deficit widened by 56.30% to $2.17 billion. Overall, the trade gap for the first 9 months of the fiscal year narrowed by 24.94% to $17.03 billion.
  • Pakistan State Oil (PSO) is facing a severe financial crisis with receivables surpassing Rs 800 billion by the end of March, attributed to delayed payments. Sui Northern Pipelines Limited's default on LNG import payments amounts to Rs 525 billion.
  • In the first half of fiscal year 2024, analysis of 15 cement companies' financial statements showed that revenues increased by 20%, leading to a 24% rise in post-tax earnings, with exports more than doubling (2.1x) and local dispatches increasing by 1%.
  • The FBR has swiftly processed all sales tax refund claims for exporters before March 21, 2024, following a prior refund of Rs 65 billion on March 3, 2024, totaling Rs 369 billion from July to March (2023-24), compared to Rs 254 billion last year.
  • Khunjerab Pass, closed for four months since Nov 30, reopened for travel and trade between Pakistan and China on Monday, now expected to remain operational year-round.
  • After a two-week offensive by Israeli forces, Gaza's largest medical facility, the Al-Shifa hospital complex, was left in ruins on Monday. The hospital is now completely out of service due to heavy Israeli airstrikes and tank fire.

COMMODITIES - CROPS, LIVESTOCK & HORTICULTURE

  • Karachi Consumers Face Price Disparities: In Karachi, consumers struggle to find food items at government-notified rates, facing substantial disparities between prices set by the commissioner and market rates, especially at prominent shops where the difference is more than double. For example, jalebi is being sold at Rs 940-1,400/kg, significantly higher than the official rate of Rs 440-400/kg. [Dawn]
  • Karachi Customs Busts Black Tea Tax Evasion: Customs Intelligence in Karachi busted a major tax evasion racket involving black tea imports. Importers exploited a tax exemption meant for Azad Kashmir businesses, evading billions in taxes. Typically subject to a six percent income tax, black tea imports destined for Azad Kashmir were exempt, but some importers abused this to evade taxes on a large scale. [BR]
  • BOP, Karandaaz Partner for Digital Agriculture: The Bank of Punjab (BOP) and Karandaaz Pakistan have teamed up to revolutionize Pakistan’s agriculture sector through the Digital Financing for Agriculture (DFA) Challenge 2023. This partnership aims to enhance digital agriculture loans and promote financial inclusion nationwide, with Zafar Masud, President & CEO of BOP, and Waqas ul Hassan, CEO of Karandaaz Pakistan, leading the initiative. [BR]
  • Exporters' Tax Refunds Surge: The FBR has swiftly processed all sales tax refund claims for exporters prior to March 21, 2024, following a prior refund of Rs 65 billion on March 3, 2024, totaling Rs 369 billion from July to March (2023-24), compared to Rs 254 billion last year, though allocation details among key sectors and others outside the FASTER refund system remain unclear, according to a tax expert. [BR]
  • Cement Sector Thrives in FY2024 First Half: In the first half of fiscal year 2024, analysis of 15 cement companies' financial statements showed impressive performance despite economic challenges. Revenues increased by 20%, leading to a 24% rise in post-tax earnings, with exports more than doubling (2.1x) and local dispatches increasing by 1%. [BR]
  • Nawaz Sharif, Maryam Nawaz Chair Punjab Meeting: PML-N leader Nawaz Sharif continues to chair meetings alongside his daughter, Chief Minister Maryam Nawaz, despite criticism. On Monday, they co-chaired a meeting to address issues in Punjab's agriculture sector. Since the Feb 8 elections, Nawaz Sharif has maintained a low profile but has been seen in public appearances leading administrative meetings with his daughter. [Dawn]
  • Floor Coverings Export: Rs 1.48 billion was the export value of carpets, rugs and mats in Feb 2024, up 19.63% compared to Rs 1.24 billion in Feb 2023, according to the PBS. [ET]

AGRI-INPUTS, WEATHER, WATER & POWER

  • PSO Struggles with Rs 800 Billion Receivables: Pakistan State Oil (PSO) is facing a severe financial crisis with receivables surpassing Rs 800 billion by the end of March, attributed to delayed payments from both public and private sectors. The situation is exacerbated by Sui Northern Pipelines Limited's default on LNG import payments, amounting to Rs 525 billion, contributing significantly to PSO's total receivables of Rs 804.5 billion. [The News]
  • March Oil Sales Rise, Overall Sales Decline in FY24: In March, local oil sales rose 4% year-on-year and 3% month-on-month to 1.15 million tonnes. However, sales for the first nine months of FY24 dropped 11% to 11.34 million tonnes compared to last year. Petrol and diesel sales increased, but furnace oil sales fell 11% in March. Overall, sales fell 11% in the first nine months. [Dawn]
  • PIAA Announces Restructuring Plan: PIAA plans to restructure its operations through a scheme of arrangement, dividing the company into two segments: PIA for aviation and Holdco for non-core operations. An EOGM is scheduled for April 20th, 2024, following approval from the Privatization Commission for divestment, with the board approving the scheme on March 28th, 2024. [The News]
  • SNGPL Urges Dues Clearance for LNG Supply: Sui Northern Gas Pipelines Limited (SNGPL) has urged the Petroleum Division to clear outstanding dues from the power sector and Sui Southern Gas Company Limited (SSGCL) to maintain LNG supply. Despite paying Rs 57.3 billion to Pakistan State Oil (PSO) for March 2024 RLNG costs, SNGPL still has a Rs 48.7 billion balance. [BR]
  • PPIB Proposes Exemption for Hydropower Projects: The PPIB proposed exempting certain pipeline hydropower projects from the NEPRA Regulations if they filed tariff petitions before April 30, 2023. Managing Director Shah Jahan Mirza cited correspondence from the Prime Minister’s Office and Korea South-East Power Co Ltd (KOEN) regarding foreign direct investment in hydropower projects in a letter to the Power Division. [BR]
  • Khunjerab Pass Reopens for Year-Round Trade: Khunjerab Pass, closed for four months since Nov 30, reopened for travel and trade between Pakistan and China on Monday, now expected to remain operational year-round. Former caretaker Prime Minister Anwaarul Haq Kakar met Chinese President Xi Jinping on Oct 20 in Beijing, where both sides agreed to keep Khunjerab Pass open year-round. [Dawn]
  • Wasa Accused of Wasteful Spending on Filtration Plants: Wasa is accused of wasteful spending by adding new tiles to already expensive ones on filtration plants across the city, with substandard work reported. Fifty percent of the plants are shut down, and the rest fail to provide clean water, leading to health issues among residents. [ET]

AGRI UPDATES & PAKISTAN POLICY

  • Pakistan's March Exports Up, Trade Deficit Widens: In March, Pakistan's exports grew by 7.99% to $2.55 billion, but the trade deficit widened by 56.30% to $2.17 billion. Overall, the trade gap for the first nine months of the fiscal year narrowed by 24.94% to $17.03 billion. However, the IMF review suggests export proceeds may fall short of the commerce ministry's $100 billion target by FY28. [Dawn] [ET]
  • Pakistan's March 2024 CPI Inflation Eases to 20.7%: In March 2024, Pakistan's CPI-based inflation decreased to 20.7% YoY from 23.1% the previous month, with an average CPI of 27.06% in the first nine months of the fiscal year, slightly lower than last year. Month-on-month inflation rose by 1.7% in March 2024, compared to no change in February and a 3.7% increase in March 2023. [BR] [Dawn] [ET]
  • Supreme Court Suo Motu on Judicial Interference: The Supreme Court took suo motu notice of an Islamabad High Court judges' letter alleging intelligence agency interference in judicial affairs. A seven-member bench, led by Chief Justice Qazi Faez Isa, will hear the matter tomorrow at 11:30 am, with a notice issued to the Attorney General for Pakistan. [The News]
  • Supreme Court Investigates Alleged Interference: The Supreme Court formed a seven-member bench to investigate allegations of executive interference in judicial affairs, after former Chief Justice Tassaduq Hussain Jillani declined to lead a one-man commission. This decision came after concerns were raised about the commission's authority to probe claims of harassment by intelligence officials against six Islamabad High Court judges. [Dawn] [ET]
  • PML N MNAs Sworn In Amid Protests: NA Speaker Ayaz Sadiq swore in 12 PML N MNAs amid protests by Sunni Ittehad Council over limited time for discussing an Islamabad High Court letter to the Supreme Judicial Council. MNAs include Azhar Qayyum Nehra, Abdul Rehman Kanju, Saira Afzal Tarar, Huma Akhtar Chughtai, Bushra Anjum Butt, Mahjabeen Abbasi, Shazia Fareed, Sufia Shahid Shah, Sobia Shahid, Syeda Amna Umair, Gulnar Shahzadi, and Shumaila Rana. [The News]
  • World Bank, IFC Discuss Investment with Finance Minister: The World Bank country director and IFC country manager met Finance Minister Muhammad Aurangzeb to discuss cooperation and investment in agriculture, power, and IT sectors. They explored strategies to promote economic growth, financial stability, and sustainable development in Pakistan. [BR]

INTERNATIONAL – OVERVIEW & MARKET OUTLOOK

  • Israeli Genocide: After a two-week offensive by Israeli forces, Gaza's largest medical facility, the Al-Shifa hospital complex, was left in ruins on Monday. The Gaza health ministry reported extensive destruction, with dozens of bodies recovered from the area. The hospital is now completely out of service due to heavy Israeli airstrikes and tank fire. [Dawn]
  • Israeli Airstrike Hits Iran's Damascus Consulate: On Monday, an Israeli airstrike flattened part of Iran's consulate in Damascus, escalating tensions in the Middle East. The attack killed a Revolutionary Guards commander and others, prompting Tehran to reserve the right to respond. [Dawn] [ET]
  • Meta to Shut Down CrowdTangle, Concerns Arise: Meta, Facebook's owner, will shut down CrowdTangle, a crucial tool for tracking viral falsehoods, before the US election, sparking concerns among researchers. The new tool lacks the same functionality and will be inaccessible to news organizations. CrowdTangle provided real-time transparency into the spread of misinformation on Meta-owned platforms. [ET] [SCMP] [Tech Times] [AJ]
  • Germany Legalizes Recreational Cannabis: Germany legalized recreational cannabis on Monday, becoming the largest EU country to do so, despite opposition from politicians and medical associations. The new law allows adults over 18 to possess up to 25 grams of dried cannabis and grow up to three marijuana plants at home as the first step in the legalization process. [ET] [France 24]
  • Indian Gold Futures Hit Record High: Indian gold futures surged to a record high on Monday, driven by global market gains, reducing demand in the world's second-largest gold consumer. Domestic futures hit 69,487 Indian rupees ($834.07) per 10 grams, up nearly 10% in 2024. Additionally, gold imports in India are expected to plummet by over 90% in March from the previous month, marking their lowest level since the COVID pandemic, according to Reuters. [BR]
  • Crude Prices Hit 5-Month High on Supply Concerns: Crude prices surged around 1% to a five-month high on Monday, buoyed by positive economic news from the US and China, alongside OPEC+ cuts and attacks on Russian refineries tightening global supplies. Brent futures hit $87.73 a barrel, while US WTI crude reached $84.21. Additionally, prices on the Bursa Malaysia Derivatives Exchange rose to 4,266 ringgit ($902.48) per metric ton at closing. [BR] [BR]

PAKISTAN - REMAINDERS

  • PM Shehbaz Assures Security, Seeks Justice for Dasu Attack: Prime Minister Shehbaz Sharif assured heightened security for Chinese nationals and vowed swift justice for the perpetrators of the March 26 incident at the Dasu Hydropower Project. He reaffirmed the strong China-Pakistan friendship and committed to continuing mega development projects during his visit to Upper Kohistan, expressing condolences for the five Chinese engineers killed in the terrorist attack. [BR] [Dawn] [ET]
  • FBR Introduces 'Pakistan Honour Card Scheme: FBR will launch "Pakistan Honour Card Scheme" to grant privileges, especially at airports, to top taxpayers and exporters. Cardholders, including 65 top exporters and compliant taxpayers, will receive benefits like speedy immigration clearance, official passport issuance, and access to VIP lounges. [BR]
PAR News - Tues, 02 Apr 2024

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