Morning Buzz for March 21, 2014 – MR Securities

Karachi, March 21, 2014 (PPI-OT): Govt set to sell shares in OGDC, PPL and UBL

According to MR Securities,

After initial setbacks, the federal government is set to offload shares of three entities in international and local capital markets to raise a minimum of Rs137 billion at the present value of shares, which will bridge the shortfall in tax revenues. As a first step, shares in Oil and Gas Development Company (OGDC), Pakistan Petroleum Limited (PPL) and United Bank Limited (UBL) would be offered to general public through capital markets, according to Mohammad Zubair, Chairman of Privatisation Commission (PC).

LNG terminal contract: Cabinet expected to give the final go-ahead
The cabinet, which is slated to meet on Friday, is likely to award a multi-million-dollar liquefied natural gas (LNG) terminal contract to Elengy Terminal Pakistan Limited (ETPL). The prime minister had sent the matter to the cabinet for final approval. The award of contract is expected to pave the way for LNG imports from Qatar on the basis of a government-to-government deal. Earlier, Doha had asked Pakistan to first put in place an LNG handling facility before going for imports.

Proposal to build new shipyards under study
Minister for Finance Ishaq Dar said on Thursday the shipbuilding industry has a huge potential due to long deep-sea shores of the country. Chairing a meeting to discuss a proposal for building new shipyards along Pakistan’s coasts, he said in line with the true potential and ideal location, the shipbuilding industry could contribute to national economic development and poverty alleviation.

Good bargain: Indus Motor announces price reduction
Indus Motor Company (IMC), the makers of Toyota Corolla, has announced a reduction in its vehicle prices up to Rs75,000. The decision to cut vehicle prices has been taken following recent strengthening of the rupee against the dollar in order to pass the benefit on to customers, a press release said.

Plugging loopholes: High-ups consider slashing tax rate to single digit
The Federal Board of Revenue (FBR) is considering a proposal to overhaul the sales tax policy for the next financial year by drastically cutting 17% tax rate to single digit and making it a final liability without allowing input adjustment and refund to the taxpayers.

Stashing away: Forex reserves see $185m increase
Foreign exchange reserves held by the State Bank of Pakistan (SBP) recorded a week-on-week increase of 4% on March 14, according to data released by the SBP on Thursday. The central bank’s foreign exchange reserves increased $185 million to $4.8 billion during the week.

Finance Amend Ordinance drafted: CNG outlets to pay 26 percent tax
The Federal Board of Revenue has drafted a Finance Amendment Ordinance, 2014 to impose 26 percent sales tax (17 percent existing standard sales tax and 9 percent value addition tax) on Compressed Natural Gas (CNG) stations. It is learnt that the FBR has prepared a Finance Amendment Ordinance, 2014 for charging 9 percent value addition tax on CNG. According to legal experts, the Ordinance can only be promulgated if the Parliament is not in session.

ECC to allow import of urea, export of sugar today
The Economic Co-ordination Committee (ECC) of the Cabinet meeting to be presided over by Finance Minister Ishaq Dar today (Friday) will allow import of urea for Kharif 2014 and export of sugar. The sources said, Ministry of Industries and Production (MOI and P) had submitted a summary for the import of 0.35 million tons of urea for Kharif to the last ECC meeting without incorporating the comments of the Finance Division, which is a mandatory requirement under the rules of business.

Energy conservation, efficiency vital to overcome crisis: Straehle
Energy conservation and efficiency are crucial for overcoming the acute energy crisis Pakistan is currently facing. It is important to know how to conserve energy that is being wasted in huge amounts, which results in steep increase in electricity prices for industries and causing high cost of production, hence lower profits and growth, said International Project Co-ordinator of Espire, Martin Straehle, during a workshop on importance of energy efficiency for sustainable growth organised by Espire for journalists here at a local hotel here on Thursday.

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