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July 10, 2017August 29, 2017 omarr77 Global Finance

What are Negative Interest Rates All About

In the backdrop of our rapidly changing global financial environment, it is very frequently that we see advent of new phenomena and policies that have never been witnessed before. Negative interest rates is one of them.

July 10, 2017August 29, 2017 omarr77 Global Finance

A Brief on Indian Demonetization

In a sudden and unprecedented move, on November 8, 2016, the Indian Government banned/ demonetized its ₹500 & ₹1,000 currency notes.

Weekly News

  • Kot Addu Power Company (Kapco), a power generation firm, is mulling to acquire 17.37% stake in Hub Power Company (Hubco). The proposed acquisition would cost Kapco approximately PKR 24 billion based on Hubco’s share value of PKR 119.98.

Pakistan Economy

  • Foreign investors repatriated $1.343 Billion (profit & dividends) during 7-month period Jul17-Jan18.

Textiles

  • World textile exports currently stand at roughly $800 billion. Pakistan’s share is at $12 billion which is 1.5% of total world exports whereas China’s share is 30%.
  • Pakistan cotton production for 2017-18 has been recorded at 11.5 Million bales (63% by Punjab 36% by Sindh) as compared to last year figure of 10.6 Million bales.
  • Pakistan’s textile exports reduced by 10% (from $13.8 billion in 2010-11 to $12.5 billion last year) in contrast to 31% growth by India (from $27 billion to $36 billion last year), 63% by Bangladesh (from $19 billion $32 billion) & 107% by Vietnam(from $15 billion to $31 billion).
  • Pakistan has around 200 garment factories as compared to 4,000 in Bangladesh.
  • Pakistan is the 4th largest cotton producer and 3rd largest cotton user in the world.

Agriculture & Livestock

  • In 2016-17, Pakistan imported 1.98 Million tons of edible oil worth PKR 152.5 Billion while its local production touched 0.45 Million tons.
  • Pakistan exported total 2.28 million metric tons of rice worth $1.06 billion in Jul17-Jan18 period as compared to 1.971 million metric tons amounting to $0.820 million.
  • Agri sector produces 24% of Pakistan’s GDP & employs 50% of workforce.
  • The International Grains Council (IGC) puts Pakistan’s total grains production at 31.3 million tons in 2016-17, compared with 31.1 million the year before.
  • Pakistan is set to import a total of 200,000 tons of grains in 2016-17, down from 400,000 the year before.
  • Pakistan is the 5th largest citrus producer, 10th largest rice producer & 4th largest rice exporter of the world.
  • Rice is country’s 2nd biggest export after textiles.
  • Wheat procurement price was set at PKR 1,300 per 40Kg for the 2016-17 season. Wheat stock as on 28.02.17 was 5.52M tons.
  • Livestock is 60% of total agri in Pakistan, employs more than 35M people & produces almost USD 500M worth of products. Pakistan is the 5th largest milk producer of the world.

Auto Sector

  • The production of motor bikes in the country increased by 16.91% during 7-month period Jul17-Jun18 (rose to 1,091,555 units from 935,951 units in same period of previous year). Honda has the majority share of 59% in production.
  • The automotive industry contributes nearly PKR 50 billion (3% of GDP), employing a workforce of 192,000 directly and 1.2 million indirectly.
  • There are 500 auto-parts manufacturers in the country that supply parts to original equipment manufacturers.
  • Auto sector presently, contributes 16% to the manufacturing sector. Vehicles’ manufacturers directly employ over 192,000 people with a total investment of over $ 1.5 billion.
  • Currently, there are around 82 vehicles’ assemblers in the industry producing passengers cars, light commercial vehicles, trucks, buses, tractors and 2/3 wheelers.

Power

  • Country’s 4th nuclear reactor, Chashma-III of 340MW came online on 29.12.16.
  • Pakistan’s installed capacity was 22,104MW at the end of March 2015 with hydro and thermal capacities occupying 7,097 MW (30%)and 15,480 MW(70%) respectively.

Oil & Gas

  • Present annual LNG supply of Pakistan is 400 MMCFD which is expected to increase to 2,200 MMCFD in next few years.
  • Pakistan’s natural gas production is approx. 4,000 MMCFD while the demand stands at 6,500-8,000 MMCFD.

Sugar

  • Pakistan is 6th largest sugar exporter of the world. It is the 2nd largest agro-based industry of the country with 89 sugar mills spread all over the country and a daily crushing capacity of nearly 0.7M tons.
  • Pakistan’s per capita sugar consumption is 25kg per annum & 60% of the commodity is used in local processed food sector.
  • For 2016-17 season, expected local sugar production is 5.5M tons (extracted from 70M tons sugarcane), carryover stock from last season is 1.2M tons, local annual consumption is 5M tons & excess stock of 1.7M tons is expected next year.

Cement

  • In 2014, Pakistan is world’s 17th largest cement producer and 18th largest consumer. Total installed and operating capacities in the local cement industry were 45.64M tonnes and 34.89M tonnes during FYE 06/2015.
  • In North, there are about 19 cement plant units with annualized cement production capacity of about 37M tonnes (81% of total country capacity) whereas South has about 5 companies with annualized cement production capacity of about 8.6M tonnes (19% of total country capacity).
  • Planned expansion in sector is over 28M tons in the next 5 years taking the total capacity to 72M tons.

Pharmaceutical

  • There are around 400 pharma manufacturing units in Pakistan out of which more than 350 are local entities while over 25 units are subsidiaries of well-known international pharmaceutical brands.
  • Total number of manufacturing companies is around 430 out of which around 406 are national and 24 are multinational companies.
  • Pharmaceutical spending accounts for less than 1% of the country’s GDP.
  • Export turnover of pharma industry in Pakistan in 2015 was US $200 million.

Surgical Instruments

  • Surgical instrument manufacturing is concentrated in the city of Sialkot which exports nearly 90% of its production.
  • Exports have registered a cumulative growth of 20% and stand at USD 332M as of June, 2012.

Banking

  • As on 31.12.16, total deposit stood at 11,203B, Advances at 5,572B, Investments at 7,233B, Avg. spread at 5.02%, Avg. lending rate 8.04%, Avg. deposit rate at 3.02% / ADR at 49.74% & Investment to deposit ratio at 67%.

Telecom

  • In Oct-16, total cell users stood at PKR 135M (3G-33Mn, 4G-2.5Mn), for FY16, Revenues were at 348B (2% YoY growth), Branchless banking accounts at 14.6M accounts, Branchless deposits at 14B & Branchless agents at 0.35M.

Fertilizers

  • Local urea bag price stands at PKR 1,400/bag while DAP price is PKR 2,500/ bag. PKR 200 subsidy per bag currently being allowed.
  • 0.3M tons urea export was allowed till Apr-17
  • International prices of DAP have increased to USD 375/ton in Mar-17, up by +17% from low of USD 320/ton back in Dec-16.

Steel

  • Pakistan demand for steel is around 6-7M tons/ two thirds of which is met by the local sector (600 small and big local players).
  • SALIENT FEATURES OF CPEC

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