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Morning Briefing (May 07, 2012)
Morning Briefing (May 07, 2012)
Key News:
FED on Cement, beverages likely to be phased out in the Budget 2012-2013 which is likely to be out by June 1 with a total outlay of Rs 3 trillion. The
government faces prime challenges of fiscal deficit, increasing inflation, energy crisis and debt servicing in the upcoming Budget 2012/13. The Sensitive Price Indicator (SPI), for the week ended May 3 has registered a decrease of 0.14% over the previous week for the lowest income group. With the sovereign default by the government on payments, the eight independent power producers (IPPs) are in a dilemma how to persuade the government to honor its sovereign commitment as they do not want to exploit the issue internationally, fearing severe repercussions for the country. At least two power plants running on oil with a combined capacity of around 425 megawatts have shut down a day after government defaulted on its contractual obligation. The government has failed to pay Rs 34 billion to eight IPPs. The Auditor General of Pakistan (AGP) has unearthed that state-owned oil and gas explorer Pakistan Petroleum Limited (PPL) invested an amount of Rs30.92 billion in various bank deposits, term finance certificates (TFCs), Pakistan Investment Bonds (PIBs) and mutual funds without getting the approval of the Finance Division and termed it illegal whereas PPL management says it has the right to take decisions. The National Electric Power Regulatory Authority (Nepra) has raised the power tariff by Rs6.03 per unit; on account of fuel adjustment charges for four months from October 2011 to January 2012. A sub-body of the Economic Coordination Committee (ECC) has authorized Interstate Gas Systems (ISGS) to sign the Gas Sales Purchase Agreement (GSPA) with Turkmenistan on May 23, as a step forward in the implementation of the Turkmenistan-Afghanistan-PakistanIndia (TAPI) gas pipeline project. Statistics Secretary Sohail Ahmad has accepted responsibility for ignoring laid-down procedures while changing the methodology for compiling national accounts following refusal of the governing council of Pakistan Bureau of Statistics to endorse the exercise. 2.8% is the growth achieved this year after the change in base of national accounts. Pakistan State Oil (PSO) Managing Director Naeem Yahya Mir may lose his job because of accusations of poor performance and ignoring directives of the presidency and prime ministers secretariat. Swelling receivables of PSO, which have gone beyond Rs200 billion, have also been a factor behind the vulnerable position of Mir. The Securities and Exchange Commission of Pakistan (SECP) has launched an inter-Company Registration Office (CRO)electronic inspection servicewhich would enable the stakeholders to electronically inspect the record of the companies including scanned/archived version of physical record. The Oil and Gas Regulatory Authority (Ogra) has raised questions over Sui Northern Gas Pipelines Limited (SNGPL)s request for an increase of Rs31 billion in its revenue requirement for the financial year 2012-13 on different accounts including supply of free gas to employees, expansion of pipeline network and higher cost of retaining employees. The requested increase of Rs31 billion in the asset base for earning revenues had not been supplemented with additional volume of gas. Overseas Private Investment Corporation (OPIC), an agency of the US government, has proposed that Pakistan should strike $30 billion LNG import contract on long-term basis to secure financing from international lenders. Earlier, OPIC and World Banks affiliate International Finance Corporation (IFC) had also committed $370 million financing to local firm 4Gas for Mashal LNG project, which includes establishing a terminal at Port Qasim. The government has eased a ban on sugar export, for the second time in three months, and allowed millers to export 200,000 tons while also deciding to procure a same quantity for maintaining buffer stocks for domestic consumption. The Pakistan Electric Power Company (PEPCO) has yet to ascertain a comprehensive strategy to recover its receivables amounting to Rs 360 billion from public holding offices as well as other power consumers. Ministry of Finance (MoF) has informed the legislators that currency notes valuing Rs 1.166 trillion have been printed during last four years. The European Union (EU) banks have committed to provide substantial financing for the construction of Munda Dam as experts have estimated the construction cost of the project at $1.4 billion. Federal Minister for Water and Power, Syed Naveed Qamar, has asked Pakistan Agricultural Storage and Services Corporation (PASSCO) to finalize the modalities for export of one million tons of wheat to Iran on the basis of talks held in Tehran between Pakistani and Iranian authorities last month. After elimination of negative list for trade with India, the key local industries will still be protected with the sensitive list being maintained under SAFTA. This was communicated to the auto manufactures after their concerns over future of auto assemblers when free trade with India is initiated. As revenues fall behind targets, the tax authorities have sought the governments permission to waive penalties and withdraw cases registered against individuals who obtained illegal sales tax refund provided they return the money estimated at Rs42 billion. The State Bank of Pakistan (SBP) has registered a decline of Rs11.6 billion, or 3.1 percent, in its profitability mainly due to operating losses; decline in exchange rate and increase in the interest expenses for FY2010/11, according to an audit report on Saturday.
Gross Buy Rs
2,130,700,746
Gross Sell Rs
-369,409,421
Net Buy/(Sell) Rs
1,761,291,325
USD
19,569,904