Federal Minister for Finance Dr Abdul Hafeez Shaikh Tuesday said the federal cabinet had approved three important bills related to the SBP Amendment Bill 2021. These bills were aimed at granting autonomy to the central bank, abolishing corporate income tax bill for fetching tax revenues up to Rs140 billion and fixing cash bleeding state-owned enterprises (SOEs) bill under the IMF program.

Ministry of Energy (Petroleum Division) has proposed an increase of 6.8 percent in margins of Oil Marketing Companies (OMCs) and dealers on petroleum products on the basis of core inflation, official sources told Business Recorder.

The Federal Government is all set to pass on another startling increase of Rs 3.50 per unit in tariff of Discos, under FCA from November 2019 to June, 2020, reportedly as a ‘prior’ condition of the International Monetary Fund (IMF). This increase will be in addition to FCA of January 2021 and recent increase of Rs 1.95 per unit in base tariff.

KASB Market View

PSX continued the plunge today as well by falling 1.8% to ~44,250 and Rs ~23b traded. The decline remained sharp as investor voiced concerns over sharp selling from Mutual Funds yesterday amid excessive leverage in the market. Similarly, fears of tax reversals/new taxes in Money Bill approved by the Prime Minister may also dampen market sentiment as investors await full & final impact of govt measures to increase taxation. To recall: Next fiscal year tax target is ~Rs 6tn.

While the temporary selling from mutual funds might subsidy in few days, Senate Chairman election this Friday might (hopefully) reduce political temperatures. Individual investors are still on the buying spree. IMF’s expected tranche/approval would pave way for global bond issuance & reduced credit risks. Valuations are attractive for medium term given the current risk-free rate, currency stability & earnings growth. It’s time to withstand the turmoil. Fruits shall follow.

National News

Cabinet approves SBP Amend 2021 related three bills: Hafeez

Federal Minister for Finance Dr. Abdul Hafeez Shaikh Tuesday said the federal cabinet had approved three important bills related to the SBP Amendment Bill 2021. These bills were aimed at granting autonomy to the central bank, abolishing corporate income tax bill for fetching tax revenues up to Rs140 billion and fixing cash bleeding state-owned enterprises (SOEs) bill under the IMF program.

https://www.thenews.com.pk/print/801841-cabinet-approves-sbp-amend-2021-related-three-bills-hafeez

44 SOEs to be privatized, liquidated

The federal cabinet has approved the State-Owned Enterprises (SOEs) Bill 2021 proposing governance reforms in the management and oversight of cash bleeding public sector. A detailed report titled “State-Owned Enterprises Triage: Reforms & Way Forward” stated that the government categorized SOEs into a different list of companies that would be kept part of the public sector while 44 companies would be privatized or liquidated in phases.

https://www.thenews.com.pk/print/801840-44-soes-to-be-privatised-liquidated

Rs70-140bn corporate tax exemptions to go, says FBR chief

Federal Board of Revenue (FBR) Chairman Javed Ghani Tuesday said the government would withdraw corporate income tax exemptions within the range of Rs70 to Rs140 billion through the proposed Income Tax (Second Amendment) Bill, 2021. He clarified that all these measures of withdrawal of exemptions would be applicable from July 1, 2021.

https://epaper.brecorder.com/2021/03/10/1-page/872890-news.html

6.8pc hike in margins of OMCs, dealers proposed

Ministry of Energy (Petroleum Division) has proposed an increase of 6.8 percent in margins of Oil Marketing Companies (OMCs) and dealers on petroleum products on the basis of core inflation, official sources told Business Recorder.

https://epaper.brecorder.com/2021/03/10/34-page/873251-news.html

Another big hike in power tariffs anytime soon

The Federal Government is all set to pass on another startling increase of Rs 3.50 per unit in tariff of Discos, under FCA from November 2019 to June, 2020, reportedly as a ‘prior’ condition of the International Monetary Fund (IMF). This increase will be in addition to FCA of January 2021 and recent increase of Rs 1.95 per unit in base tariff.

https://epaper.brecorder.com/2021/03/10/1-page/872883-news.html

Discos tariff up by 90 paisas for Jan

National Electric Power Regulatory Authority (Nepra) has increased power Distribution Companies (Discos) tariff by paisa 90 per unit for January 2021 under monthly fuel price adjustment formula to be reflected in bills of March 2021.

https://epaper.brecorder.com/2021/03/10/1-page/872884-news.html

Hub Power acquires ENIs upstream operations

Hub Power Holdings Limited (HPHL), a wholly-owned subsidiary of the Hub Power Company Limited (HUBCO), together with ENI’s local employees (in a 50:50 joint venture), has executed definitive agreements to acquire all the upstream operations and renewable energy assets owned by ENI in Pakistan, a bourse filing said.

https://www.thenews.com.pk/print/801710-hub-power-acquires-eni-s-upstream-operations

Pakistan to set up wholesale electricity market

Pakistan finally moves towards setting up the wholesale electricity market; following digitising upstream energy sector with the help of the United States of America. This was made possible as the United States Mission to Pakistan on Tuesday officially handed over an innovative new metering system to the government of Pakistan to help network and market operators better manage the national power grid.

https://www.thenews.com.pk/print/801713-pakistan-to-set-up-wholesale-electricity-market

CCP Issues Show Cause Notice to Hyundai Pakistan for Deceptive Marketing

While concluding an inquiry, the Competition Commission of Pakistan (CCP) issued a show-cause notice to Hyundai Nishat Motor (Pvt) Limited for, prima facie, deceptive marketing practices in the marketing campaign for its new SUV ‘Hyundai Tucson’ that was found to be in violation of Section 10 of the Competition Act, 2010.

https://propakistani.pk/2021/03/09/ccp-issues-show-cause-notice-to-hyundai-pakistan-for-deceptive-marketing/

Rs85bn accord for construction of Balakot Hydropower Project signed

In an important development for the country’s energy sector, the Khyber Pakhtunkhwa government has signed a contract agreement for the construction of 300-megawatt Balakot Hydropower Project with a Chinese company.

https://profit.pakistantoday.com.pk/2021/03/09/rs85bn-accord-for-construction-of-balakot-hydropower-project-signed/

Steel prices increase Rs3,500/ton second time in month

Prices of locally-produced cold rolled coil (CRC) of various flat steel grades were further increased by Rs3,500/ton, second time in a month because of rise in rates in the international market, dealers said.

https://www.thenews.com.pk/print/801708-steel-prices-increase-rs3-500-ton-second-time-in-month

ISL approves capex of Rs 1.23 bln for a debottlenecking project to enhance the finishing capacity of CRC

The Board of Directors of International Steels Limited (ISL) in its meeting held today has approved a capital expenditure of Rs.1.235 billion for a debottlenecking project to enhance the finishing capacity of Cold Rolled Coils and sheets by 120,000 tons per annum using Temporary Economic Refinance Facility (TERF) and Long Term Financing Facility (LTFF) offered by State Bank of Pakistan. As per the company’s notice to PSX, the project is expected to be completed by August 2022.

https://mettisglobal.news/isl-approves-capex-of-rs-1-23-bln-for-a-debottlenecking-project-to-enhance-the-finishing-capacity-of-crc

Theres no shortage of cotton yarn, claims APTMA

The All Pakistan Textile Mills Association (APTMA) has claimed that there is no shortage of cotton yarn in the domestic market. He said that yarn import was allowed from all over the world except India in response to their restriction on import of Pakistani products.

https://epaper.brecorder.com/2021/03/10/34-page/873255-news.html

Govt to Withdraw Income Tax Exemption on IT and IT-Enabled Services

The government has decided to withdraw income tax exemption available to IT services and IT-enabled services through the Income Tax Amendment Bill, 2021. As a replacement, the Federal Board of Revenue (FBR) will give 100 percent tax credit to the “IT Services”.

https://propakistani.pk/2021/03/09/govt-to-withdraw-income-tax-exemption-on-it-and-it-enabled-services/

Non-Fungible Tokens

-Word of the Day-

Non-Fungible Tokens or NFTs are unique cryptographic tokens that cannot be replicated. They can be used for a variety of transactions, financial and non-financial, and are expected to create new trading markets in the future