Foreign bonds spike in range of 1-6 pct
Pakistan’s US dollar-denominated Eurobonds and Sukuks staged an outstanding rally in global markets on Wednesday in the wake of ending the political deadlock over the formation of the government in the centre, outperforming emerging-market peers on the day.
According to the data compiled and reported by JS Global Research, Pakistan’s foreign bonds spiked in the range of 1-6 percent on the day, overcoming almost all the losses the bonds had recorded post-election upset in Pakistan.
Speaking to source, Chase Securities Director of Research, Yousuf M Farooq, said the chances of the formation of the new political government have increased following a joint press conference on the subject by Pakistan Muslim League – Nawaz (PML-N) and Pakistan People’s Party (PPP) top leadership, ending the two-week-long political crisis in the country.
Government restructures gas priority
The caretaker government has decided to change the gas priority order by placing the process industry at the top along with domestic consumers. It has also changed the priority order of the fertiliser sector by placing it in the second category along with the power sector.
Earlier, the fertiliser industry was placed in the third category. The export-oriented industry was placed in the second category in the old policy. However, the caretaker government has removed it from the second category and placed it in the fertiliser sector.
In the first category, the government had added domestic and commercial consumers, including tandoor and industry processing only. The power and fertiliser sectors have been placed in the second category, industry (captive power) in the third, cement in the fourth, and CNG in the fifth category.
Karachi business leaders highlight safe city project
Business leaders in Karachi highlighted the critical role of the Safe City project in revitalising business activity and restoring investor confidence in the city, which serves as the economic engine of Pakistan.
They argue that the implementation of a safe city initiative in Karachi holds the promise of transforming the city into a secure and business-friendly environment, akin to the success witnessed in global business hubs like Singapore.
Two-day Pak pharma and healthcare expo
Punjab Governor Muhammad Balighur Rehman, addressing media at the inauguration of the two-day Pak Pharma and Healthcare Expo at Lahore’s Expo Centre, underscored the importance of a balanced regulatory framework for the pharmaceutical industry, according to a statement release on Wednesday.
He stressed that while the caretaker government’s initiative to deregulate medicine prices was commendable, regulations should not be overly stringent, risking the departure of pharmaceutical companies from the industry.
Ineligible hiring at Pakistan’s export-import bank
The Federal government has decided to hire a new head of Pakistan’s Export-Import (Exim) bank amid a disclosure of discrepancy in the age of the incumbent president, which should have made him ineligible for the appointment four years ago.
Sources in the Ministry of Finance told that a decision has been made to expedite the process for the appointment of the chief executive officer and the president of the Exim Bank of Pakistan. This decision was taken after it surfaced that the incumbent chief executive did not meet the eligibility criteria at the time of his appointment in December 2019, according to officials.
FBR collection surges to PKR 5.150 trn
The Federal Board of Revenue has collected Rs5.150 trillion from July 2023 to mid-February 2024, compared to Rs3.973 trillion over the same period last fiscal year, reflecting a 30 percent growth. Tax refunds increased by over 28 percent during this period, as stated in a press release issued by the finance ministry on Tuesday.
Domestic tax growth has been approximately 40 percent, while import duty and related taxes grew by 16 percent from July 2023 to January 2024. The surge in revenues coincided with GDP revival and enhanced scrutiny of FBR collections. However, growth in import taxes decreased due to downward adjustments in import tariffs over the years and recent restrictions on import licenses imposed by the state bank.
Revenue collection from imports reflects improvements in import valuation, yielding Rs151 billion, along with a significant 69 percent growth in anti-smuggling efforts.
Revenue mobilisation from domestic taxes now accounts for over 64 percent of total revenues collected, while the share from import taxes has declined to 36 percent from over 50 percent three years ago. This revenue growth was driven by various sources of taxation. Income tax collections surged by 40 percent, from Rs1.751 billion to Rs2.447 billion. Major contributors included banks, the petroleum and POL sector, the textile industry, the power sector and various service sectors.
Rupee increases
The Pakistani currency resumed its uptrend after a day of nominal losses, partially regaining to Rs279.50 against the US dollar in the interbank market on Wednesday amid the beginning of the end of the political crisis over the formation of the government in the centre.
According to the State Bank of Pakistan’s (SBP) data, the domestic currency regained 0.02 percent or Rs0.07 against the greenback on a day-to-day basis.
In total, the local currency has increased by 9.87 percent or Rs27.60 over the past five months to date compared to its record low closing at Rs307.10/$ in the first week of September 2023.
Market talks suggest that the supply of foreign currencies has remained higher than demand in the interbank market. A report suggests an uptrend in export earnings in the first 15 days of the ongoing month of February. Moreover, overseas Pakistanis are believed to be sending higher workers’ remittances to their family members and friends these days ahead of the beginning of Ramazan in the second week of March 2024.