Cafe & Group Works

07/08/2024

17/11/2020

FDI hits 10-month high
Inflows came in at $317.4m in October against $126.5m last year

akistan received 10-month high foreign investment of $317.4 million in different sectors of the economy in October 2020, particularly power production, 3G/4G mobile internet and oil and gas exploration, according to central bank data released on Monday.

A significant share of investment, estimated at over 70%, flowed into the country from all-season friend China. Most of the investment went to coal-fired power projects, the data suggested.

“Most of the other potential foreign investors are still engaged in fighting Covid-19 and may take some more time to stabilise their economies and then they will resume investment activities around the world, including Pakistan,” Alpha Beta Core CEO Khurram Schehzad said while talking to The Express Tribune.

Besides, global investors continued to pull investment out of government securities like treasury bills and Pakistan Investment Bonds (PIBs) and companies listed at the Pakistan Stock Exchange (PSX).

Foreign direct investment (FDI) surged over 150% to $317.4 million in Pakistan in October 2020 compared to $126.5 million in the same month of previous year, the State Bank of Pakistan (SBP) reported.

Cumulatively, in first four months (Jul-Oct) of current fiscal year 2020-21, the foreign investment increased 9% to $733.1 million compared to $672 million in the same period of last year.

“China is the largest investor in Pakistan for different reasons, which include Beijing’s strategic interest in the shape of China-Pakistan Economic Corridor (CPEC) and Pakistan being a highly potential but largely untapped market for foreign investment,” Schehzad said.

In the meantime, China’s economy has continued to recover from the Covid-19 impact. The world’s second-biggest economy grew 4.9% in the Jul-Sept quarter compared to the same quarter of previous year.

The growth recovery in China allowed it to refocus on CPEC projects in Pakistan. On the other hand, the flow of FDI and remittances slowed down globally amid the Covid-19 pandemic, the analyst said.

Source:

Inflows came in at $317.4m in October against $126.5m last year

16/11/2020

A rare opportunity for exports

Business avenues must be converted into long-term gains, sustainable trade ties

KARACHI:
Recent economic indicators of Pakistan suggest that the economy is currently on the right track as it recovers from the pandemic shock.

Export numbers are increasing, the SBP-IBA Business Confidence Index has returned to the positive zone and manufacturing activities are rebounding. However, the government policymakers must tread more cautiously.

With winter approaching in the northern hemisphere, there is a resurgence of Covid-19 cases in Europe. Positive Covid-19 cases also continue to move upwards in the United States. Several Western governments are forced to impose strict lockdowns, which can further slow down their already struggling economies.

Although the recent announcement of a possible Covid-19 vaccine can alleviate fears of long-term struggle against the disease and its adverse economic impact, short-term challenges to health and economic conditions remain more significant than ever.

Cases in Pakistan are also reported to be going up. The positivity rate is yet again increasing. This can create uncertainty within the business sector. Unfortunately, the lack of adherence to the standard operating procedures, recommended by the National Command and Operation Centre (NCOC), is disconcerting.

Although the worst-case scenario that involves a complete lockdown of the economy is unlikely, uncertainty in business activities can dent the recovering economic conditions.

For instance, firms may face a dilemma in building their inventory, particularly if another economic slowdown is expected. This can significantly increase the cost of doing business, particularly for small and medium enterprises (SMEs) that are usually capacity-constrained and relatively more sensitive to shocks in input and output prices.

Furthermore, as uncertainty increases, certain businesses may report greater rent-seeking activities but also higher prices from essential services such as transportation and other facilities as they seek to reduce time delays.

The monthly summary of export and import figures, published by the Pakistan Bureau of Statistics (PBS), reveals a continued upward trend in exports in October 2020 as they increased 10.16% over September 2020 and 3.07% over October 2019. Exports breached the psychological barrier of $2 billion in October 2020.

However, imports in October 2020 were 11.59% lower than imports in September 2020 and 5.73% lower than imports in October 2019. Trade deficit declined by 28.50% in October 2020 over the value reported in September 2020 and 14.46% over the value reported in October 2019.

Export orders

It is important to mention that the rupee had started to appreciate in value in October 2020. However, export orders were likely to have been placed in advance, before the upward trend in Pakistani rupee against the US dollar.

Reports of orders from leading apparel brands suggest that business opportunities, otherwise destined for more competitive markets in the region, are now favouring Pakistan. These opportunities must not only be tapped for short-term benefits but must be converted into longer-term gains and sustainable trading relationships.

One of the biggest challenges in recent months faced by the economy is the shortage of agricultural commodities and the resulting inflation. Imports of food group increased 83.03% in September 2020 over the value in September 2019 in dollar terms.

It was driven by a sharp increase in imports of wheat and sugar. There was zero import of wheat in September 2019, which increased to $92.3 million or 392,000 tonnes in September this year.

Sugar imports increased 5,535.62% in September 2020 over the value reported in September 2019. There was also an increase in imports of dry fruits, nuts and soybean oil, exceeding 100% of the value reported in September 2019. A similar trend is reported for imports of food group in the first quarter of FY21 over the same time period in FY20.

With textile exports expected to increase, it is important to note a sharp increase in imports of raw cotton and synthetic fibre. Imports of cotton in September 2020 were 2,248.61% higher than the value reported in September 2019 while imports of synthetic fibre were 135% higher.

This can suggest that there is a significant increase in demand for raw material and intermediate goods by textile producers that is not being fulfilled by domestic growers of cotton. It can also imply that the upward trend in textile exports is not only likely to continue as imports increase but also textile producers are demanding different staples and varieties of cotton that are not typically grown in Pakistan.

This can lead to the much-needed upgrading in the quality of textile products exported from Pakistan as it provides them with an opportunity to move out of exporting low value-added textile products to high value-added apparels that require higher quality cotton and man-made fibre.

This change in composition will allow Pakistani exporters to enter those market segments that were otherwise inaccessible. Furthermore, with the increase in imports of US cotton, it can increase linkages with the US textile industry and provide much-needed support from textile groups for tariff concessions on exports to the US.

Pharma goods

The onset of the pandemic provided opportunities for the exporters of Covid-related medical products to increase their shipments.

Although a few items were initially banned from exports, Pakistan has a small export basket. Its major products include undenatured ethyl-alcohol used as a disinfectant and sterilisation product, surgical and medical equipment, tents for makeshift hospitals and certain protective garments and their likes.

There was an increase of 78.71% in exports of tents, canvas and tarpaulin and an increase of 22.60% in exports of pharmaceutical products in the first quarter of FY21 over the value reported for the same time period of previous fiscal year. However, exports of surgical and medical instruments declined slightly by 1.45%.

A major challenge to Pakistani exporters is the cost of trading and delays at the border. It is imperative that policymakers improve trade facilitation processes and procedures to ensure that all the stakeholders involved in international trade can benefit. Pakistan must make full use of this rare opportunity.

Source:

Business avenues must be converted into long-term gains, sustainable trade ties

11/11/2020

Master Tiles Served With An FBR Notice After Lavish Wedding
Where did all this money come from?

Yesterday, we reported on one of the most extravagant weddings of this year. Master Tiles‘ director’s daughter and Jalal Sons‘ son tied the knot in what is now being called the biggest wedding in Pakistan this year. But things have taken a u-turn as FBR slapped the parties with a notice, asking them to explain their expenditures for the ‘dream wedding.’

The wedding ceremony took place in Rosa Blanca Club, in Lahore. And the decorations were handled by KS Concepts. Photographer Irfan Ahsan provided the families with gorgeous portraits at the event. The cherry on top, however, was the performances by Atif Aslam and Rahat Fateh Ali Khan.

Needless to say, this wedding was beyond magical and something you would not even find in the movies.

Source:

Master Tiles' daughter and Jalal Sons' son tied the knot in a lavish wedding ceremony. The former is now reportedly being served with an FBR notice.

05/11/2020

Cement sales touch record peak in October

LAHORE:
The cement sector has continued to post growth in the current fiscal year as monthly sales touched a record high in October 2020 when mills dispatched 5.735 million tons to consumers.

According to data released by the All Pakistan Cement Manufacturers Association (APCMA), domestic consumption of cement increased 15.83% to 4.859 million tons in October 2020 from 4.195 million tons in October 2019.

Exports registered an increase of 11.58%, going up to 875,266 tons in October from 784,433 tons in the same month of the previous year.

Cement mills based in the country’s north dispatched 4.165 million tons to the domestic market in October 2020 compared to 3.605 million tons in October 2019, an increase of 15.53%. Exports from the northern region came in at 0.283 million tons, higher by 8.54% against exports of 0.261 million tons last year.

There was also positive growth in sales of cement mills based in the southern region, whose domestic dispatches increased 17.70% to 695,221 tons in October 2020 from 590,690 tons in October 2019. Exports from the southern region continued to grow and rose 13.09% to 591,877 tons in October this year from 523,353 tons in October 2019.

In the first four months (Jul-Oct) of the ongoing fiscal year, 19.321 million tons of cement was dispatched, which was 19.89% higher than the corresponding period of the previous year, when 16.116 million tons were sold. Domestic sales in Jul-Oct 2020 registered a healthy increase of 17.94%, rising from 13.315 million tons to 15.704 million tons.

Exports during the period under review also recorded encouraging growth, increasing 29.15% from 2.8 million tons to 3.617 million tons.

In the southern region (Sindh and Balochistan), the domestic sales growth remained healthy at 12.08% in the first four months as consumption went up from 1.860 million tons to 2.085 million tons this year.

An APCMA spokesperson was of the view that cement consumption could increase further if the government rationalized duties and taxes, and withdrew excise duty. “Government will generate higher revenue even with reduced taxes when cement sales will increase,” he added.

Source:

Mills dispatch 5.7 million tons to consumers

04/11/2020

ADB, Pakistan sign $2m grant agreement to combat Covid-19

Grant will help provide life-saving medical supplies, diagnostic and laboratory facilities among other equipment

ISLAMABAD:
Pakistan and the Asian Development Bank (ADB) signed on Tuesday a $2 million grant agreement to strengthen the country’s efforts to combat the coronavirus pandemic.

Economic Affairs Division Secretary Noor Ahmed and ADB Country Director for Pakistan Xiaohong Yang signed the agreement.

The grant, financed from the Asia Pacific Disaster Response Fund, would help provide life-saving medical supplies, diagnostic and laboratory facilities and other critical equipment for communities affected by the pandemic.

Yang and United Nations Children’s Fund (UNICEF) Pakistan representative Aida Girma also signed the administrative agreement that would enable UNICEF to procure the supplies and equipment using the grant.

“ADB continues to work closely with the Government of Pakistan and development partners to assist Pakistan in sustaining the gains made in combating the pandemic,” the ADB country director for Pakistan was quoted as saying in a statement released following the signing of the agreement.

“The grant to be administered through UNICEF will help strengthen Pakistan’s response to the COVID-19 challenge. Pakistan needs to maintain its strong efforts to contain the pandemic through robust prevention and control measures as well as by ensuring the provision of essential medical and emergency healthcare facilities, considering the recent increase in the infection rates,” the statement further read.

The grant supplements an initial $500,000 provided by ADB through UNICEF to support Pakistan’s procurement of emergency supplies and personal protective equipment (PPE).

The equipment had been delivered to doctors, nurses, and other medical staff in major health facilities prioritised by the government.

“Since the outbreak of the pandemic, UNICEF has been at the forefront supporting the Government of Pakistan in its efforts to mitigate the spread of coronavirus in the country, said UNICEF Pakistan representative Aida Girma.

“More specifically, UNICEF has supported the national response in risk communication and community engagement by ensuring timely and accurate information to families and communities and promoting positive behaviour to reduce the risk of transmission of COVID-19, and procured life-saving medical supplies and personal protective equipment (PPE)," she further said.

"We have also endeavoured to ensure continuation of essential services including immunization and health, nutrition, education, child protection and water, sanitation and hygiene. We appreciate the Asian Development Bank’s continued and generous financial support to UNICEF’s response to the COVID-19 pandemic”, Girma added.

In April, ADB reallocated $30 million from the National Disaster Risk Management Fund (NDRMF) to support Pakistan’s pandemic response. The NDRMF's board of directors allocated an additional $20 million from earned interest from the Endowment Fund capitalised under the project.

In May, ADB approved a $300 million emergency assistance loan to solidify Pakistan’s public health response to the pandemic and help reboot economic activities. The Government of Norway has also contributed a $5.28 million grant to be administered through ADB to strengthen the emergency response system in Khyber-Pakhtunkhwa (K-P) amid the Covid-19 crisis.

In June, the bank approved a $500 million budget support loan to help deliver social protection programmes to the poor and vulnerable, expand health sector capabilities, and deliver a pro-poor fiscal stimulus to boost growth and create jobs.

Source:

Grant will help provide life-saving medical supplies, diagnostic and laboratory facilities among other equipment

03/11/2020

Qatar Imports2004-2020 Data

Imports to Qatar fell 6.4 percent from a year earlier to QAR 7.0 billion in September 2020, as purchases dropped for parts of aero planes (-26.3 pct), motor cars (-29.1 percent) and turbojets, turbo propellers & other gas turbines; parts thereof (-62.3 pct). Imports were down from the US (-36.4 pct), India (-6.2 pct) and Germany (-18.6 pct), while surged to China (60.7 pct) and the UK (10.5 pct).

Source: https://tradingeconomics.com/qatar/imports