SUNRISE CAPITAL (PVT) LTD | 16 January 2017 | LANDING

Pakistan stock Exchange (PSX) stated a volatile session. Market observed overall a volatile day, as market is currently trading at all time high level so technical correction was seen across the board. Daily case hearing PM's counsel continues arguments as Panamagate case hearing resumes today. Further Small caps led the volumes today while sideboard stepped up to keep downside  limited as most index names ended the day lower on profit taking. Moreover, Hike in Global crude oil prices played pivotal role in attracting investors to the oil sector, While, increase in urea prices were some of the factors played as a catalyst. At close, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index finished with a drop of 321.96pts or 0.65% to end at 48,888.54 levels. Relatively Dull activity witnessed in the market as turnover settled at 316 million shares as compared to 514 million shares in the last trading session. Shares of 403 companies were traded; at the end of the day 137 stocks closed higher, 249 declined, while 17 remained unchanged. The value of shares traded during the day was at recorded the level of PKR 15.06 billion decreased by 4%.

Volatility prevailed in capital market; major activity witnessed in Commercial Banks, Oil & Gas Marketing Companies and Fertilizer sector. In Commercial Banks sector, NBP, UBL, HBL depreciated their value by 2.41%, 4.49%, 2.26%. In Oil & Gas Marketing sector, Govt. revises fuel prices for next two weeks, petrol hikes by Rs1.77 per litre. SSGC, SNGP, up by 2.38%, 4.99%, While APL depreciated their value by 0.90%.Moreover, In Fertilizer Sector, Government drawing the curtains on the subsidies provided on fertilizers make the fertilizer sector in positive mode. EFERT, FFBL, ENGRO 1.15%, 1.25%, 0.75%.

Active list was topped by KEL with 22 million shares as it closed at PKR 9.46 with a positive change of PKR 0.21. SSGC was the second highest on the volume chart with 18 million shares closed at PKR 38.64 with a positive change of PKR 0.90. It was followed by EFERT with 16 million shares closed at PKR 70.39 with a positive change of PKR 0.80, SNGP with 12 million shares closed at PKR 91.27 with a positive change of PKR 4.34.

Today major trading activities were recorded in Commercial Banks as it was traded above 35 million shares followed by Oil & Gas Marketing Companies sector which recorded the volume of 32 million shares whereas Fertilizer sparked at 3rd place by trading above 29 million shares.

Highest increase was recorded in the shares of  Mari Petroleum, which rose by PKR 47.69 to PKR 1455.28 per share; followed by Ghandhara Industries, that improved by PKR 46.55 to PKR 977.59 per share. Major decline was witnessed in the shares of Unilever Foods, which fell by PKR 235.00 to PKR 5750.00 per share; followed by Rafhan Maize, dropped by PKR 230.00 to PKR 7810.00 per share.

Factors for Today:

·        Chinese ministry okays SEP-Abraaj deal

·        Sales tax on motor spirit, HSD oil increased

·        New PSM plan may be approved tomorrow

·        SECP issues Share Registrars & Ballotters Regulations

·        Pakistan likely to sign FTA with Turkey, Thailand

Factors to watch:

·        International Oil prices.

·        PKR vs. US$ movement.

·        Result Season.

SUNRISE CAPITAL (PVT) LTD | 16 January 2017 | TAKE OFF

Chinese ministry okays SEP-Abraaj deal:

Shanghai Electric Power (SEP) said on Friday it has received approval from the Chinese Ministry of Commerce to acquire stakes in K-Electric.One of Abraaj Group’s companies, KES Power, had reached an agreement with SEP in October to divest its stake in K-Electric, the country’s largest and only vertically integrated power utility.Abraaj owns 66.4 per cent of K-Electric’s total shares, along with management control. The deal, when closed, will be worth $1.77 billion.SEP is a state-owned enterprise controlled by China’s State Power Investment Corporation, a Fortune 500 company.Listed on the Shanghai Stock Exchange, it is mainly responsible for Shanghai’s power supply, with a generation of 35.23TWh (terawatt hours) last year.

Petrol, diesel prices up by Rs1.77, Rs2 a litre

The government on Sunday announced plans to increase the prices of MS 92 RON petrol and high speed diesel (HSD) by Rs1.77 per litre and high-speed diesel (HSD) by Rs2 per litre, respectively. The new petroleum prices will take effect from January 16 and be effective till January 31. This is the second time that the government switched from a monthly to a fortnightly oil prices review. Finance Minister Ishaq Dar announced that the rise in petrol price was in line with Ogra’s recommendations, but the increase in HSD rate was almost half of the suggested increase.

Sales tax on motor spirit, HSD oil increased:

The Federal Board of Revenue (FBR) has increased sales tax on motor spirit and high speed diesel oil from January 16, 2017. Explaining the SRO 21(I)/2016 issued by the FBR here on Sunday, sources said that the sales tax on motor spirit has been increased from 14.5 percent to standard rate of 17 percent. The motor spirit has been excluded from the table of petroleum products specified in the SRO 21(I)/2016. The exclusion of motor spirit from SRO 21(I)/2016 has brought this POL product under the standard rate of sales tax ie 17 percent.

New PSM plan may be approved tomorrow:

Privatisation Board headed by Chairman Privatisation Commission Muhammad Zubair is to approve new plan to dispose of dysfunctional Pakistan Steel Mills (PSM) on Tuesday (tomorrow). According to sources, the Board would discuss both options ie long term lease and sell off, adding that if the board clears the proposals, then it would be submitted to the Cabinet Committee on Privatisation (CCoP) that is expected to meet on January 20. Finance Minister Senator Ishaq Dar will preside over the CCoP meeting.

Debt securities trustee: SECP fixes Rs 50 million minimum equity requirement

The Securities and Exchange Commission of Pakistan (SECP) has fixed Rs 50 million as minimum equity requirement for performing functions of a debt securities trustee. The SECP has issued Debt Securities Trustees Regulations, 2017 to give a comprehensive regulatory framework under the Securities Act, 2015 for licensing and regulation of debt securities trustees (DSTs). According to sources, the validity of DSTs' licence has been reduced from three years to one year as per requirement of the Securities Act. Banks, development financial institutions and investment finance companies may act as DSTs subject to the condition that they remain compliant with the requirements of the act and the regulations at all times. In order to facilitate the development of the debt market, DST has been allowed to make investment up to 10 per cent in the debt issue of which it is acting as a DST, subject to the condition that it would hold such investment till maturity.

SECP issues Share Registrars & Ballotters Regulations:

The minimum paid-up capital of Rs 3 million has been fixed by the Securities and Exchange Commission of Pakistan (SECP) for grant of license to any public limited or private limited company for working as share registrar and ballotter. Through an SRO 16(1)/2017, the SECP has issued Share Registrars and Ballotters Regulations, 2017 which would be applicable on Share Registrars and Balloters. The SECP said that no person shall act or perform the functions of a share registrar and balloter unless such person is licensed as a share registrar and balloter by the Commission under these regulations. Provided that a person registered as a share registrar and balloter under the Balloters and Transfer Agents Rules, 2015, prior to coming into force of these regulations, shall be deemed to be licensed as a share registrar and balloter under the Act and these Regulations till the time its existing certificate of registration remains valid. The share registrar and balloter shall obtain licence under the Act and these Regulations upon expiry of its certificate of registrations granted under the Balloters and Transfer Agents Rules, 2015.

240 LNG shipments: financial bids for supply to open on January 19:

Pakistan LNG Limited (PLL) is to open financial bids for the supply of 240 shipments of liquefied natural gas (LNG) on Jan 19, while contracts to successful bidders will be awarded on Jan 31, it is learnt. Reliable sources in the Ministry of Petroleum and Natural Resources told Business Recorder on Saturday the state-owned PLL issued two separate tenders for the supply of 200 million cubic feet per day (mmcfd) of LNG and in response a total 14 global LNG suppliers submitted their bids to be completed on Jan 31. Sources maintained that PLL on Dec 20 opened technical bidding of two tenders issued last month. The mid-term tender covers a period of five years and calls for 60 shipments, while the long-term tender is for 15 years and 180 shipments.

Pakistan likely to sign FTA with Turkey, Thailand:

High level delegations from Turkey and Thailand will visit Pakistan on January 17 to negotiate Free Trade Agreements (FTAs), which are likely to be signed within three months. "Delegations from Turkey and Thailand are coming for negotiations on January 17 to speed up the process and negotiate commodity lists and tariff rates," a top official in the Ministry of Commerce said. Talking about the FTA with China, the official said that Phase-II of the FTA with China was also due. He said FTA between the two countries was signed back in 2007. He, however, added that Pakistan was desirous to have duty relaxation on 50 products before launching the phase-II. He said that Pakistan wanted relaxation on these products to protect the local market and ensure competitiveness.

Multi-phased CPEC to enhance exports, foreign exchange:

China Pakistan Economic Corridor (CPEC) - a multi-phased project about binding people through the bond of shared development and prosperity - is set to take Pakistan to new horizons on economic front. CPEC which is not just a corridor of connectivity to bring the places closer but a project of immense potential bound to change the destiny of the whole region. One of the most important phase of China Pakistan Economic Corridor (CPEC) is its industrial phase which will start soon, according to which 36 Economic Zones will be set up in various areas of the country. According to estimates under recently enhanced version of CPEC, as many as 2.3 million jobs for skilled and professional staff will be created through different ventures. Jobs for semi skilled and unskilled persons and indirect jobs will also be in millions.

Bank deposits rise:

The government raised Rs251.19bn from the auction of Market Treasury Bills of various tenors held on Jan 5, surpassing its target of Rs200.00bn. Of the total, six month T-bill fetched Rs216.55bn at a cut off yield of 5.99pc, followed by 12 month T-bill with Rs23.59bn at 5.99pc, and three month bill Rs11.05bn at 5.95pc. The central bank had received total bids worth Rs634.43bn: 6 month T-bill Rs351.41bn, followed by three month T-bill Rs180.03bn and 12 month T-bill Rs102.98bn. According to the weekly statement of position of all scheduled banks for the week ended Dec 30, 2016 deposits and other accounts of all scheduled banks stood at Rs11,202.89bn after a 5.06pc increase over the preceding week’s figure of Rs10,663.65bn. Compared with last year’s corresponding figure of Rs9,675.59bn, the current week’s figure was higher by 15.78pc.

Banks’ renewed interest in project financing:

Whatever banks have done in project financing over the last three years has prompted them to take further steps in 2017. And, as the economy looks set to grow at a 5pc plus rate and as new CPEC-related projects keep coming up, banks are getting ready for big lending. “This means we’re going to see a sort of industrial revival taking place in coming years. I hope project financing is going to remain robust in 2017 and beyond,” says a senior official of the Pakistan Banks Association. So far bank financing has not only gone into financing traditional balances, modernisation and rehabilitation of manufacturing facilities but also into Greenfield projects, top bankers say.

Introducing negative income tax:

The concept of modern state in the 21st century is based on the social and economic welfare of the people. The state, under the cover of social contract, as enshrined in the constitution, has obtained the power of taxation with a promise to spend the collected money on public welfare. The annual budget of different governments contains subsidies and welfare grants for the marginalised or poor segments of the society. These subsidies and grants are disbursed from the taxes collected.

SUNRISE CAPITAL (PVT) LTD | 11 January 2017 | LANDING

The index finished positive after one bearish trading sessions, the rally was sparked by upward trend in international oil prices following the much anticipated package for export oriented sectors was announced by the government. Positivity prevailed in the market as the index gained 505 points to close at 49,371.60 level.  Relatively swift activity witnessed in the market as turnover settled at 460 million shares as compared to 413 million shares in the last trading session. Shares of 408 companies were traded; at the end of the day 245 stocks closed higher, 154 declined, while 09 remained unchanged. The value of shares traded during the day was at recorded the level of PKR 18.04 billion decreased by 11%.

Volatility prevailed in capital market; major activity witnessed in Banks, Technology & Communication, and Fertilizer sector. Fertilizer sector continued to garner investor interest as the sector gained higher than its previous day close. ENGRO, EFERT and FFC were major gainers of the aforementioned sector up 0.97%, 1.36% and 3.63%. In Technology sector, TRG remain positive in the whole session and appreciated their value by 4.28%. In Commercial Banks Sector FABL, MCB, UBL and NBP improved their value by 2.33%, 3.3%, 1.8% and 1.46%. Cement sector continued to remain in limelight LUCK, MLCF and DGKC appreciated the most and surge their value by 1.9% 2.42% and 1.05%.

Active list was topped by EFERT with 31 million shares as it closed at PKR 70.57 with a positive change of PKR 0.95. TRG was the second highest on the volume chart with 25 million shares closed at PKR 47.98 with a positive change of PKR 1.97. It was followed by PACE with 19 million shares closed at PKR 12.41 with a positive change of PKR 0.24, KEL with 16 million shares closed at PKR 9.37 with positive change of PKR 0.02.

Today major trading activities were recorded in Commercial Banks Sector as it was traded above 54 million shares followed by Technology & Communication sector which recorded the volume of 51 million shares whereas Cement sparked at 3rd place by trading above 45 million shares.

Highest increase was recorded in the shares of Bata Pak, which rose by PKR 100.00 to PKR 4,300.00 per share; followed by Unilever Foods, that improved by PKR 70.00 to PKR 5,700.00 per share. Major decline was witnessed in the shares of Sanofi Aventis, which fell by PKR 104.93 to PKR 2,605.07 per share; followed by Pak Tobacco, dropped by PKR 42.00 to PKR 1,243.50 per share.

SUNRISE CAPITAL (PVT) LTD | 09 January 2017 | LANDING

Pakistan Stock Exchange (PSX) witnessed a flat session. The benchmark breezed past the 49,000-point barrier to settle at an all-time high of 49439.26 levels. The index maintained its bullish ride, Further PTI lawyer till now fail to prove allegations against Sharif’s Family. Moreover, K-P govt. shuts down Lucky Cement’s Pezu plant in KPK make the scrip in negative zone. At close, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index finished with a surge of 0.00% or 1.18 points, to close at 49,039.41 levels. Relatively Strong activity witnessed in the market as turnover settled at 492 million shares as compared to 430 million shares in the last trading session. Shares of 422 companies were traded; at the end of the day 247 stocks closed higher, 163 declined, while 12 remained unchanged. The value of shares traded during the day was at recorded the level of PKR 13.35 billion decreased by 7%.

Bulls remain active in capital market; major activity witnessed in Commercial Banks, Engineering and Textile Composite sector. In banking sector, BOP, MCB and FABL surge by 1.34%, 1.02% and 4.86%.Respectively, on the back of attractive valuations and robust result expectations. In Engineering Sector, DSL drop their value by 0.77%, while ASL & MUGHAL appreciated the most and up by 0.37%, 5.00%. Moreover, Investor interest was seen in Textile Sector, ANL NCL BTL touch their upper limits and supported the index, up by 6.93%, 2.22% & 5.00%In Addition, Cement sector surged 2% in anticipation of increase in prices in North region by Rs15-20/bag while expectation of healthy off take numbers for December attracted investors’ interest DCL FFC & BWCL surge by 1.41%, 1.11%, 1.12%. While, K-P govt shuts down Lucky Cement’s Pezu plant make the script in red down by 0.54%.

Active list was topped by DSL with 33 million shares as it closed at PKR 14.15 with a negative change of PKR 0.11. ANL was the second highest on the volume chart with 27 million shares closed at PKR 9.87 with a positive change of PKR 0.64. It was followed by BOP with 22 million shares closed at PKR 18.11 with a positive change of PKR 0.24, LOTCHEM with 20 million shares closed at PKR 8.97 with a positive change of PKR 0.23.

Today major trading activities were recorded in Commercial Banks Sector as it was traded above 66 million shares followed by Engineering sector which recorded the volume of 62 million shares whereas Textile Composite sparked at 3rd place by trading above 56 million shares.

Highest increase was recorded in the shares of Wyeth Pak Ltd, which rose by PKR 73.40 to PKR 5198.00 per share; followed by Pak Services, that improved by PKR 41.96 to PKR 881.29 per share. Major decline was witnessed in the shares of Ghandhara Ind., which fell by PKR 21.43 to PKR 806.08 per share; followed by Abbott Lab, dropped by PKR 13.11 to PKR 918.20 per share.

Factors for Today:

·        K-P govt shuts down one of Lucky Cement’s Pezu plant

·        Cement industry posts growth of 11pc in first half of FY17

·        New gas firm to use Sui Southern pipelines

·        Pakistan receives first cargo of better-quality diesel

·        Bank deposits rise

Factors to watch:

·        International Oil prices.

·        PKR vs. US$ movement.

·        Result Season.

SUNRISE CAPITAL (PVT) LTD | 09 January 2017 | TAKE OFF

K-P govt shuts down one of Lucky Cement’s Pezu plant:

Operations at Lucky Cement’s Pezu plant in Lakki Marwat, Khyber-Pakhtunkhwa (K-P) are shrouded in mystery as the provincial government says it has shut down one of the company’s plants at the premises, while an official statement from the country’s second largest cement maker denies there was any disruption to production.Assistant Commissioner Aun Haider Gondal, along with other officials of the district administration, visited the cement factory near Dera Ismail Khan to check its compliance with environmental standards. They, however, found the factory not conforming to prescribed standards and ordered its closure on January 1.Their visit came after locals of the area complained of excessive pollution caused by the factory during a meeting with the deputy commissioner last month. When contacted, Gondal confirmed the development.

Cement industry posts growth of 11pc in first half of FY17:

During the first half of current fiscal year, the cement industry has posted a growth of 11.07 percent in local dispatches as compared to the local dispatches during same period of last fiscal year, according to the data released by All Pakistan Cement Manufacturers Association (APCMA).Exports recorded a decline of 3.53 percent compared with exports during the same period of last year. The overall situation during first half of current fiscal year showed 8.65 percent growth compared to the same period of last fiscal year. The APCMA chairman said that domestic dispatches in December 2016 were 3.186 million tons registering a growth of 6.74 percent while the exports amounted to 0.369 million tons reflecting negative growth of 18.98 percent, compared to December 2015. He said total cement dispatches in December amounted to 3.555 million tons depicting a growth of 3.33 percent and added that capacity utilisation for the month of December 2016 was 90.88 percent.

New gas firm to use Sui Southern pipelines:

The Oil and Gas Regulatory Authority (Ogra) recently issued the first-ever private sector distribution licence for natural gas sales in Sindh to a company incorporated just one day before the licence was granted.The Karachi-based firm — Gaseous Distribution Company (GDC) — will be the first company ever to share the decades-old pipeline network of Sui Southern Gas Company Limited (SSGCL) and challenge its distribution and sales monopoly.The GDC was registered with the Securi­ties and Exchange Commission of Pakistan (SECP) on Dec 21 and granted a 10-year distribution licence on Dec 22.

Bank deposits rise:

According to the weekly statement of position, deposits and other accounts of all scheduled banks for the week ended Dec 23, 2016 stood at Rs10663.65bn after a 0.64pc increase over the preceding week’s figure of Rs10594.93bn.Compared with last year’s corresponding figure of Rs9305.01bn, the current week’s figure was higher by 14.60pc.Deposits and other accounts of all commercial banks stood at Rs10596.15bn against preceding week’s deposits of Rs10529.91bn, showing a rise of 0.63pc.Deposits and other accounts of specialised banks stood at Rs67.49bn, higher by 3.80pc against previous week’s figure of Rs65.02bn.

Move to tap Thar coal reserves in line with global trend:

The initiatives that Pakistan government is taking to improve its power sector are consistent with many other countries, said General Electric’s Power Steam Power Systems General Manager Rotating Equipment Martin Boller.“Every country is looking to produce reliable electricity at a low cost, diversify sources of power, use local resources and promote renewable energy,” he said in an interview.

Tarbela-4 project contractor: PM orders probe into payment of incentive money:

Prime Minister Nawaz Sharif has ordered a comprehensive inquiry into the $25-million incentive money paid to the contractor of Tarbela-4 extension project, after the company failed to meet the deadline set for completing work on the project.“The prime minister wants to know the causes and reasons that have prevented the contractor from meeting the June 2017 time frame despite getting additional payments for accelerating work,” a senior official of the Pakistan Water and Power Development Authority (Wapda) In a high-level meeting, the premier also directed Wapda Chairman Muzammil Hussain to make concerted efforts for finishing work on the project by August 2017.

Pakistan receives first cargo of better-quality diesel:

Pakistan has received from Kuwait the first consignment of improved-quality diesel that meets Euro-II emission standards. Federal Minister for Petroleum and Natural Resources Shahid Khaqan Abbasi said sulphur content, which caused pollution in the environment, was 95% lower in the new diesel quality compared to the old fuel being sold across the country for decades.

Local lobby fears Chinese entrance in textile sector:

Pakistan seems to have placed a lot of faith in the ‘game-changing’ China-Pakistan Economic Corridor (CPEC), but the local business community still has some concerns.Stakeholders of the country’s textile sector are anticipating a further decline, fearing that if Chinese companies started relocating their textile units in different tax-free industrial zones in Pakistan, they would go out of business.“Whenever China enters any country it damages the domestic market – it’s a fact,” said Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) Senior Vice President Jawad Choudhry while talking to a group of journalists.

SUNRISE CAPITAL (PVT) LTD | 06 January 2017 | LANDING

Pakistan Equities started a day on optimistic note at 48775.14 levels. Positivity prevailed in the market as the index traded between intra-day high of 49104.04 pts and an intra- day low at 48713.63 points. Market was positive due to case hearing related to panama gate; case has been adjourned to 9th January 2016 that’s make the investors to take the fresh position in the market. Further Investor interest was seen in the market which played an active role in the optimistic trend of the market. Moreover cement dispatches for the month of December 1HFY 17 shows a YoY rise of 3% make the cement sector in the positive circle. Refineries outperformed on surge in POL sales by over 23pc year-on-year for December, Foreign inflows, upbeat data on urea off take for December, recovery in WTI crude prices above $53/barrel & Commercial Banks, cement sectors played a catalyst in the positive close. At close, the Pakistan Stock Exchange’s (PSX) benchmark KSE 100-share Index finished with a surge of 0.67% or 324.60 points, to close at 49,038.23 levels. Relatively Strong activity witnessed in the market as turnover settled at 430 million shares as compared to 329 million shares in the last trading session. Shares of 400 companies were traded; at the end of the day 247 stocks closed higher, 136 declined, while 17 remained unchanged. The value of shares traded during the day was at recorded the level of PKR 14.40 billion increased by 9%.

Bulls remain active in capital market; major activity witnessed in Engineering, Textile Composite and Commercial Banks sector. In Engineering sector, DSL, ASL, CSAP surge their value by 7.38%, 5.65%, 2.37%. Investor interest was seen in Textile Sector, ANL, NCL, BHAT touch their upper circuits 7.95%, 4.85%, 5.00%. Moreover, Positive sentiments in banking where BOP, FABL, JSBL led to close in green stood at 3.06%, 3.32%, 3.90%. In Addition, Cement Dispatches for the month of December 1HFY 17 shows a YoY rise of 3% make the cement sector in the positive , ENGRO , EFERT FFC close in green 1.08%, 0.41%, 2.40%. Gains to the upside were attributable to rally in MARI up by 1.15%, SHEL up by 2.82%, SNGP up by 2.16%.

Active list was topped by DSL with 51 million shares as it closed at PKR 14.26 with a positive change of PKR 0.98. ASL was the second highest on the volume chart with 30 million shares closed at PKR 18.71 with a positive change of PKR 1.00. It was followed by ANL with 29 million shares closed at PKR 9.23 with a positive change of PKR 0.68, BOP with 15 million shares closed at PKR 17.87 with a positive change of PKR 0.53.

Today major trading activities were recorded in Engineering Sector as it was traded above 92 million shares followed by Textile Composite sector which recorded the volume of 62 million shares whereas Commercial Banks sparked at 3rd place by trading above 47 million shares.

Highest increase was recorded in the shares of Wyeth Pak Ltd, which rose by PKR 225.60 to PKR 5124.60 per share; followed by ICI Pakistan, that improved by PKR 49.43 to PKR 1038.13 per share. Major decline was witnessed in the shares of Unilever Foods, which fell by PKR 270.00 to PKR 5630.00 per share; followed by Bata (Pak), dropped by PKR 100.00 to PKR 4200.00 per share.

Factors for Today:

·        Cement production capacity projected to rise by 26m tons

·        Govt plans 10-paisa per unit surcharge to cover Neelum-Jhelum cost overruns

·        Tarbela-4 extension: Company suspends contract, may go to international court

·        PSO’s receivables mount to Rs219.4b

·        Foreign reserves decline by $30m

Factors to watch:

·        International Oil prices.

·        PKR vs. US$ movement.

·        Result Season.

SUNRISE CAPITAL (PVT) LTD | 06 January 2017 | TAKE OFF

Cement production capacity projected to rise by 26m tons:

Encouraged by consistent domestic demand and government’s focus on a host of infrastructure projects, the cement industry has planned to increase its capacity by 26.25 million tons over the next two to three years to support a smooth growth of the national economy.Reviewing the six-month performance of the industry, All Pakistan Cement Manufacturers Association Chairman Sayeed Tariq Saigol said sales of the industry rose 8.6% and reached 19.81 million tons in the first half (July-December) of current fiscal year 2016-17. “The growth trend indicates that in the next two years the current production capacity of 46 million tons will be insufficient to meet domestic demand. The industry is making massive investments to add new capacities,”

Govt plans 10-paisa per unit surcharge to cover Neelum-Jhelum cost overruns:

The government is expected to impose 10-paisa per unit surcharge for all electricity consumers for at least 18 months to finance cost overruns of Rs 500 billion Neelum-Jhelum Hydropower Project and extend Rs3 per unit reduction in power tariff for industrial consumers for six months. The official said the 10-paisa per unit surcharge was originally imposed in 2007 when the Neelum-Jhelum project cost was approved at Rs130bn with a sunset clause of Dec 31, 2015. It was envisaged that half of the financing would be generated through this surcharge on every unit of electricity sold to consumers in eight years.

Tarbela-4 extension: Company suspends contract, may go to international court:

The contractor of Tarbela-4 extension project has issued a contract suspension notice to the Pakistan Water and Power Development Authority (Wapda) and has threatened to approach the international court following the government’s move to recover the incentive money paid under a work acceleration plan.The contractor said it would reclaim in the international court the disputed amount of $130 million, which had been settled earlier with the government.The government had committed to paying $50 million as an incentive to the contractor if it succeeded in completing the Tarbela hydroelectric power fourth extension project by June 2017.

PSO’s receivables mount to Rs219.4b:

Pakistan State Oil (PSO) has asked the government to release Rs30 billion immediately, to meet its payment obligation and avoid any untoward situation, as the company receivable to the power companies reaches to Rs219.4 billion.Besides, there is overdue receivable of Rs5 billion to the gas utility company Sui Northern Gas Pipeline Limited (SNGPL) by the PSO for the supply of Liquefied Natural Gas (LNG), official sources told The Nation here. Despite default of the power sector against payment commitment, PSO is continuously supplying furnace oil to the power sector and the overdue reciveable has reached to Rs219.4 billion, the source said. In a letter to the Ministry of petroleum and Natural Resources, PSO said, “During next few days PSO has to make international L/C payments worth Rs18 billion while Rs10 billion will become due towards local refineries. However, due to the huge outstanding receivables, PSO is under severe liquidity crunch and has utilised its borrowing line to the maximum.”

Traders express reservations over CPEC:

 The business community has urged the government to announce a ‘domestic business plan’ along the route of the China Pakistan Economic Corridor (CPEC) in consultation with the concerned industrial associations to take care of local industry so that domestic investor can reap maximum benefit of this mega project.Pakistan Readymade Garments Manufacturers & Exporters Association (PRGMEA) Central Chairman Ijaz Khokhar suggested to set up a CPEC Business Committee or a CPEC Business Wing to update the local industry about the nature of China’s planned industrial units in the country, warning of its adverse effect on local industry and apprehending that such a scenario might turn Pakistan into a purely consumer market. He said that domestic industries are already at risk of being wiped out due to dumping of cheap Chinese products. “We appreciate the government efforts for CPEC which has opened opportunities for industrial cooperation between the two friendly countries. However, it is our opinion that CPEC committee or CPEC Business Wing should be established to safeguard the existing local industry as well as international investors.”

Foreign reserves decline by $30m:

The total liquid foreign reserves held by the country stood at $23,163.6 million on December 30, 2016. According to weekly break-up of the foreign reserves position released on Thursday showed that foreign reserves held by the State Bank of Pakistan (SBP) stood at $18,268.9m, net foreign reserves held by commercial banks are $4,894.7m thus total liquid foreign reserves reached at $23,163.6m. During the week ending December 30, 2016 SBP’s reserves decreased by $30m to $18,269m due to external debt servicing.