Good Morning

The State Bank of Pakistan (SBP) has reported that the government raised a collective amount of Rs186.8 billion from the auction of Pakistan Market Treasury Bills (T-bills), and Pakistan Investment Bonds (PIBs), with both auctions held on Wednesday. Sindh Chief Minister Syed Murad Ali Shah, who also holds the finance portfolio, presented a Rs1,241.13 billion budget with a deficit of Rs18.38bn for the financial year 2020-21 in the provincial assembly on Wednesday. The federal government on Wednesday approved Rs19.5 billion worth of supplementary budget to meet its excess expenditures and pick the cost of bleeding enterprises including Pakistan International Airlines (PIA) that was given an additional Rs3.2 billion to remain afloat. The Oil and Gas Regulatory Authority (OGRA) is set to take a decision regarding the requested “gas price hike” so that the financial requirements of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) for the fiscal year 2020-21 (FY21) are met without any constraint.

Market View: The KSE100 Index lost 170.44 points during Wednesday’s trading session. Political uncertainty due to BNP Mengal parting ways with PTI coalition brought about bears in the market. We expect the market to remain stable and range bound in the upcoming session.

Commodities:

Brent oil (USD/bbl): 40.28 (-1.06% D/D)

Crude oil (USD/bbl): 37.36 (-1.58% D/D)

Gold (USD/oz): 1,734.70 (-0.05% D/D)

National News

SBP raises Rs186.8bn from T-bill, PIB auctions

KARACHI: The State Bank of Pakistan (SBP) has reported that the government raised a collective amount of Rs186.8 billion from the auction of Pakistan Market Treasury Bills (T-bills), and Pakistan Investment Bonds (PIBs), with both auctions held on Wednesday.

Budget 2020-21: No new taxes as Sindh presents Rs1.24tr budget

KARACHI: Sindh Chief Minister Syed Murad Ali Shah, who also holds the finance portfolio, presented a Rs1,241.13 billion budget with a deficit of Rs18.38bn for the financial year 2020-21 in the provincial assembly on Wednesday.

https://www.dawn.com/news/1564268/budget-2020-21-no-new-taxes-as-sindh-presents-rs124tr-budget

WB explains why exports crucial to recovery

ISLAMABAD: The World Bank (WB) has recommended that Pakistan ease up import restriction, harness the potential of online marketing platforms, comply with international standards, and upgrade regulatory environment to speed up export recovery.

https://epaper.brecorder.com/2020/06/18/1-page/841071-news.html

BNP-M chief announces withdrawal from PTI coalition govt

Balochistan National Party-Mengal (BNP-M) President Sardar Akhtar Mengal on Wednesday announced his party’s withdrawal from its alliance with the PTI-led federal government over its failure to implement accords with the party.

https://www.dawn.com/news/1564106/bnp-m-chief-announces-withdrawal-from-pti-coalition-govt

ECC approves Rs19.5b supplementary budget

ISLAMABAD: The federal government on Wednesday approved Rs19.5 billion worth of supplementary budget to meet its excess expenditures and pick the cost of bleeding enterprises including Pakistan International Airlines (PIA) that was given an additional Rs3.2 billion to remain afloat.

https://tribune.com.pk/story/2244906/2-ecc-approves-rs19-5b-supplementary-budget/

Broadening of tax base: Government decides to use data of Discos, telecom cos

ISLAMABAD: The government has decided to use data of power distribution companies (DISCOs) and telecom companies for broadening of tax base by making a fully automated system operational from the July 1st, 2020, for sales tax registration.

https://www.brecorder.com/news/1005247/broadening-of-tax-base-government-decides-to-use-data-of-discos-telecom-cos

Federal transfers: Shortfall seriously hits Sindh govt performance

KARACHI: The provincial budget of Sindh, like other provinces, depends mainly upon federal transfers as it constitutes more than 70 percent of the provincial budget. The Government of Sindh sets its development and non-development programs and targets based on the commitment made by the federal government. Any shortfall in this regard seriously impacts the performance of the provincial government.

https://www.brecorder.com/news/1005245/federal-transfers-shortfall-seriously-hits-sindh-govt-performance

Massive hike in gas tariff on the cards

ISLAMABAD: The Oil and Gas Regulatory Authority (OGRA) is set to take a decision regarding the requested “gas price hike” so that the financial requirements of Sui Northern Gas Pipelines Limited (SNGPL) and Sui Southern Gas Company (SSGC) for the fiscal year 2020-21 (FY21) are met without any constraint.

Locusts may damage up to 75pc major crops in one year

ISLAMABAD: While the total value of Pakistan’s major crops of Rabi and Kharif season stands at Rs3,268.7 billion, locust infestation can cause an economic loss of up to Rs2,451 billion or 75 per cent of major crops in a single year.

SBP calls for sustainable, market-led financing of housing projects

KARACHI: The State Bank of Pakistan (SBP) Governor Dr Reza Baqir called a meeting of major banks on Wednesday to discuss sustainable market-led financing of housing projects and mortgages and other measures proposed by the Naya Pakistan Housing and Development Authority (NAPHDA), according to a statement issued on Wednesday.

Tax exemptions cause Rs1.15tr loss in outgoing fiscal

ISLAMABAD: The amount of foregone taxes provided under different heads are estimated to cause loss to the national exchequer to the tune of Rs1.15 trillion in outgoing fiscal year.

https://www.thenews.com.pk/print/674353-tax-exemptions-cause-rs1-15tr-loss-in-outgoing-fiscal

PTI govt vows to control wheat, flour prices

ISLAMABAD: The government would take all possible measures to control wheat prices and overcome any shortage, declared Adviser to Prime Minister on Finance Dr Abdul Hafeez Shaikh at a high-level meeting held at the Finance Division.

https://tribune.com.pk/story/2244913/2-pti-govt-vows-control-wheat-flour-prices/

Pakistan decides to reopen 25% airspace from 20th

ISLAMABAD: The federal government had decided to reopen 25% of its airspace after June 20 to bring back more Pakistanis stranded abroad because of the coronavirus pandemic.

https://tribune.com.pk/story/2244721/1-govt-resume-flights-repatriation-maximum-stranded-pakistanis/

International News

Oil prices drop on demand worries as coronavirus cases rise

Oil prices fell more than 1% in early trade on Thursday as a spike in new coronavirus cases in China and the United States renewed fears that people would stay home and stall a recovery in fuel demand even as lockdowns ease.

https://www.cnbc.com/2020/06/18/oil-markets-coronavirus-in-focus.html

Gold steady as virus cases rise, stronger dollar limits upside

Gold was steady on Thursday as investors remained concerned about a possible slow down in global economic recovery due to a rise in new coronavirus cases in the United States and China, but a strengthening U.S. dollar limited the metal’s appeal.

https://www.cnbc.com/2020/06/18/gold-markets-coronavirus-dollar-global-economy-in-focus.html

Asia Pacific stocks mostly lower as coronavirus concerns linger; Australia unemployment rises in May

Stocks in Asia Pacific mostly declined in Thursday morning trade as investors continue to weigh the implications of a recent uptick in coronavirus cases.

https://www.cnbc.com/2020/06/18/asia-markets-coronavirus-currencies-oil-in-focus.html

KASB Research