Economy The State Bank of Pakistan (SBP) is scheduled to hold second PIB (Pakistan Investment Bond) auction today for the 2QFY15. The auction target has been set at PkR50bn while the maturing amount is PkR1.67bn. Cut-off for the 3Y, 5Y, and 10Y tenors in the previous auction held on Oct 22’14 stood at 12.48%, 12.98% and 13.45% respectively, while no bid was received for 20Y. (Shajar Research) M2 witnessed a minute increase of 0.58% in FY15YTD to stand at PkR10.03tn as of Nov 07’14. In this regard, NFA posted a reduction of PkR35.3bn to PkR565.4bn, whereas NDA stood at the level of PkR9.46tn. On the cash basis, the government’s borrowing for budgetary support stood at PkR222.9bn vs. PkR453.7bn in the same period last year. It has borrowed PkR142.2bn from SBP (against borrowing of PkR724.7bn last year) and has already borrowed PkR80.7bn from commercial banks (versus a net retirement of PkR271bn). Credit to non-government sector (including PSEs) increased by PkR36.6bn to PkR4.13tn, while private sector credit increased by PkR8.05bn to stand at PkR3.74tn. (Shajar Research) It has been quoted that three day road shows for the sale of Sukuk are scheduled to commence on 23rd Nov’14 and be limited to three cities namely Dubai, Singapore and London. The assets to be pledged as required under Sukuk issue have not yet been determined though the sources speculated that like in 2005 the pledged asset may be the Motorway. The intent at this stage is to issue around US$500mn worth of Sukuk but depending on the interest the issue could well be double the budgeted amount, i.e, US$1.0bn. According to news sources, the rate of return would be less than the Eurobonds which had a rate of return of 7.5% for 5 year and 8.5% for 10 year bonds. The final decision on this however will be made subsequent to the road shows that would enable the government to better evaluate its marketability. (BR) According to PC chairman, the government is eyeing US$1.33bn from the divestment of its shares in the two major banks (HBL and ABL). For ABL, the government is expected to close the transaction by Dec’14. However, for HBL, the financial advisor to the transaction will be appointed within the next two weeks. (TN) Oil & Gas Confusion mounts in the gas sector as the government is still uncertain if it can accommodate the textile industry demand and continue with its recent plan for gas. Finance Minister Ishaq Dar is determined to supply gas to the textile sector against qualms of energy ministers. In the backdrop of this, Ministry of Petroleum and Natural Resources has forwarded a summary to the PM requesting an increase in gas tariff (ex-household) of about 23%. The summary further stated that if the tariff increase is not made, SSGC and SNGPL may face serious financial difficulties (even leading to default). (Jang) Regards, Shajar Research
Posted on: Wed, 19 Nov 2014 08:15:07 +0000
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