Category: Industry

Pakistan Customs (FBR) has seized smuggled goods worth more than Rs. 10 Million at Torkhan Border.

As per details received, a vehicle bearing registration No KAB 465 entered Pakistan through Customs Station at Torkham Border, apparently loaded with yam.

According to the statement released by the FBR, it was subjected to a scanner and subsequent inspection. Upon detailed physical examination of the said vehicle, it was found out that it carried miscellaneous goods including suiting cloth, Indian origin hookah/ chewing tobacco, rat poison, firecrackers and medicine etc, valuing Rs. 10.50 million, involving duty/taxes worth Rs. 7.9 million.

The total untaxed goods along with the vehicle have been seized by Pakistan Customs and FIR has been lodged against the arrested person.

Adviser to PM on Finance and Revenue, Shaukat Tarin has commended FBR for its ongoing crackdown against smugglers and appreciated its continued drive against tax evasion. Similarly, Dr. Muhammad Ashfaq Ahmed, Chairman FBR/Secretary Revenue Division, has lauded the unfaltering determination of Member Customs (Operations), Syed Muhammad Tariq Huda, who has led his team by example.

He also appreciated the Customs staff on duty at Torkham and announced cash awards and recognition certificates for the team. He reiterated his unflinching resolve against smuggling and reaffirmed that team FBR will continue to fight this menace in its all forms and manifestations.

Source: Pro Pakistani

A majority of microfinance banks are struggling to recover loans of significant value after the Covid-19 pandemic and lockdowns hit businesses and the financial capability of their clients across the country.

In the last two years, various indicators of the microfinance sector witnessed a significant slump from the number of loan disbursements, loan values, average loan size, and the penetration rate of the microfinance sector.

The micro, small and medium-sized businesses were adversely affected by the pandemic as many of the borrowers could not maintain income streams from their businesses hence their capability of loan repayment was also compromised.

Hundreds of thousands of borrowers availed the facility of rescheduling loans provided on the directives of the State Bank of Pakistan. As a result, microfinance banks and DFIs are reluctant to give new loans to borrowers except for nano loans or interest-free loans through a government-backed program.

A number of banks will show losses in their balance sheet after a significant number of borrowers will default, said a former president of a leading microfinance bank.

If the situation is not controlled, a few banks may face liquidity issues in the next few months, he added on the condition of anonymity. State Bank of Pakistan (SBP) should support microfinance banks to prevent a crisis and maintain the financing facility for the low-income segment of the country, mainly in rural areas.

COVID-19’s Impact on Businesses

According to a survey study published in 2020 by Pakistan Microfinance Network, 82% of the respondents reported that their businesses had been negatively impacted by the coronavirus pandemic with 66% reporting a significant decline in revenue and 16% reporting some decline in revenue whereas a very small proportion of clients (4%) reported significant or some increases in revenue.

Out of those whose incomes had decreased, more than half (57%) cited market closure as the reason, followed by a decline in market demand (12%) and travel restrictions (11%) impacting mobility to earn a living.

The survey interviewed over 400 borrowers of different microfinance providers. A majority of them (88%) were sole owners of their business whereas only 11% had up to 5 full-time employees.

The pandemic has hurt small and medium businesses including those that borrowed from microfinance banks. As a result, the income resource of various customers could not sustain, said Mohsin Ahmed CEO of Pakistan Microfinance Network.

The rescheduling of the loan facilities also made the situation worst which caused losses to banks ultimately as they have to face the burden of bad debts, he further said. The recovery of rescheduled loans up to the period of six months is possible but very difficult for the extended period up to one year in the prevailing situation.

Banks are working to raise the Tier II capital in order to match the liquidity against the bad debts and it is expected that loans recovery will be made possible with different strategies for affected borrowers, he hopefully said.

Micro, small and medium enterprises account for 90 percent of total economic enterprises and 30 percent of the GDP, contributing over 25 percent of earnings in export, and employ 78 percent of the non-agricultural labor force In Pakistan.

Almost half of the businesses fall in the trading (food, clothing, karyana store, etc.) or services (transport, tailoring, teaching, etc.) sector, followed by agriculture and livestock/poultry at 17% each.

In the last report published by PMN, the number of loans disbursed showed a drop of 29% from the last quarter to stand at 4.5 million.

Loans of over Rs.112 million were disbursed by microfinance providers. The number of active borrowers surged to over Rs. 8 million while the number of savers surged to 72 million.

Source: Pro Pakistani

Federal Minister National Food Security & Research, Syed Fakhar Imam, visited PITB, along with Secretary National Food Security and Research, Tahir Khursheed, Director General, Muhammad Tariq Khan, and Director Technical from National Food Security, Shahid Abdullah.

The Federal Food Security Portal was presented by Chairman PITB, Azfar Manzoor, and DG IT Operations, Faisal Yousaf, along with the team. A complete demonstration of the system was given, explaining how it will enable the importers and exporters to register themselves and initiate their import/export requests without visiting the field offices for submission of applications.

Additionally, the authorized persons will use the mobile application at the entry/exit points for the inspection of commodities, whereas the importer/exporter will receive Phytosanitary Certificate on the spot. Overall, this portal will help the government in collecting first-hand information and making timely decisions on import and export policies.

The department will also be able to use this system as a field officer performance monitoring tool.

Source: Pro Pakistani

The Resource Group TRG International (TRG) has informed TRG Pakistan that its board has approved the allocation of its liquid assets to its shareholders.

According to Topline Securities, TRG International’s board has approved the allocation of liquid assets worth $120 million to the company’s shareholders.

The portion of liquid assets is inclusive of $10 million in deferred cash, along with 5.4 million shares of IBEX Limited (IBEX) which is worth $72 million, based on the last closing of $13.4 million at Nasdaq.

To recall a certain research filing on the acquisition of E-Telequote, Topline Securities had mentioned that TRG International sold its E-Telequote business and TRG Pakistan would receive $105-120 million (Rs. 34-38 per share) against the sale. Investors were waiting since then as the company had not presented them with any buyback or cash dividend options.

Considering all the facts and speculations, TRG will either distribute the liquid assets through cash dividends to the shareholders or will simply announce a buyback. Topline suggests that the chances for a buyback are slim due to regulations, and if TRG decides to announce a cash dividend, it could do so by presenting Rs. 33-35 per share value based on assets worth $110 million.

Regardless of the option that TRG proceeds with, the process and structure for the utilization of the abovementioned allocation are expected to be finalized by 31 December 2021, and TRG will make the announcement in due time.

Source: Pro Pakistani

The Pakistani Rupee (PKR) continued its historic decline against the US Dollar (USD) for the fourth day in a row and depreciated by 10 paisas against the greenback in the interbank market today. It hit an intra-day low of Rs. 177.95 against the dollar during today’s open market session.

The local currency depreciated by 0.06 percent against the USD today and closed at another all-time low of Rs. 177.71, following its loss of 18 paisas when it closed at Rs. 177.61 in the interbank market on Thursday, 9 December.

The local currency has lost 1.13 percent on a month-to-date basis after recording another historic low today, and it has depreciated by 11.18 percent on a calendar-year-to-date basis. It notably continues its dismal run and has dashed the market’s hopes for an immediate recovery despite numerous fiscal fulfillments over the week.

Rupee Spillover

The Rupee continues its historic plunge as market players are finally coming to grips with the fundamental understanding of how loan facilities usually work in times of inflation and economic uncertainty. While borrowing usually helps governments determine how debt servicing can be improved for future benefits, the usual pullbacks of unsupervised market practices, coupled with the uninvited fiscal handicaps, heap pressure on financial instruments, including the currency.

To that effect, Pakistan’s borrowing from multiple financial sources has doubled during the first five months of the ongoing fiscal year. The government’s borrowing for budgetary support increased by 108 percent to Rs. 104 billion in the first five months of the current fiscal year to control the widening fiscal deficit.

The State Bank of Pakistan (SBP) has also had huge inflows of $3 billion from Saudi Arabia recently, which pushed the reserves to $25.1 billion. From 5 to 26 November, the foreign exchange reserves were depleted by over $1.5 billion. The SBP’s reserves declined by $1.31 billion and commercial banks’ reserves decreased by $211 million.

The outflow of the reserves was reported due to the heavy payment on account of the debt payments to various financial institutions. On the other hand, higher imports bill, the smuggling of dollars, and the purchase of dollars through commercial banks and open markets also impacted this trend.

Commenting on the local unit’s tumble to another historic low, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, remarked, “Net Reserves with SBP is up after receiving $3bn deposit, but during the week due [to] payments, it was reduced by $352mn to $18.658bn”.

He added, “To ease pressure on PKR, the size of settlement needs to be curtailed, as constant borrowing add[s] burden to the GOVT KITTY & increases DEBT”.

The PKR had a mixed showing of trends against the other major currencies. It posted blanket losses of two paisas against the Pound Sterling (GBP), and two paisas against both the UAE Dirham (AED) and the Saudi Riyal (SAR) in today’s interbank currency market.

Conversely, the rupee appreciated against the Australian Dollar (AUD) and the Canadian Dollar (CAD) and posted respective gains of 32 paisas and 53 paisas in today’s interbank currency market.

Source: Pro Pakistani

The Adviser to the Prime Minister on Commerce and Investment, Abdul Razak Dawood, announced on Friday that Pakistan’s exports had registered the fastest growth rate in South Asia in November 2021.

He tweeted that Pakistan’s exports had grown by 33.5 percent in November, which is higher than Bangladesh’s exports that had grown by 31.3 percent, and had surpassed India’s growth of 26.5 percent in the same month.

Congratulating exporters for this achievement, Dawood said, “This has been made possible by the hard work of our exporters and they deserve praise for this accomplishment”.

Pakistan’s exports during the month under review rose to a historic monthly high of $2.903 billion as compared to $2.174 billion during the corresponding period last year, while the target for November 2021 was $2.6 billion.

Furthermore, Pakistan’s exports increased by 27 percent to $12.365 billion during the first five months of the current financial year against $9.747 billion during the same period last year.

Source: Pro Pakistani