Pakistan Budget_Initial Impressions - Much ado about nothing, (AKD Research, Jun 12, 2020)
Pakistan Budget: Initial Impressions - Much ado about nothing!
- To an uncharacteristically calm lower House, Federal Minister of Industries and Production Mr. Hammad Azher tabled a ‘status-quo’ budgetary policy for FY20-21.
- Highlighting prevailing imbalances (~11% tax to GDP ratio, stagnant over last two decades) and imprudent economic approach adopted by previous governments, the budget speech was short on major taxation measures, while the expected focus on COVID-19 response was present in developments outlays.
- Budget’21 envisages a total budgetary outlay of PkR7,294.9bn, down 11%YoY from Budget’20.
- Net revenue receipts have been projected at PkR3,699.5bn with total tax revenue at 5,464.3bn. Of this, FBR collection target is projected at PkR4,963bn for FY21 versus PkR3,908bn in FY20, where we view the target as quite optimistic given the current economic slowdown
- Other Taxes have been projected at PkR501.3bn with bulk of PkR450bn coming from Petroleum levy, where we view this amount as highly unlikely.
- Budget deficit for FY21 has been forecasted at PkR3,195bn or 7.0% of GDP versus 9.1% for FY20. That said, AKD estimates point towards a budget deficit north of 10% in FY20. In addition to required austerity, limiting fiscal deficit to 7.0% is contingent on revenue targets where as stated above, we remain skeptic on GoP meeting its target
- GDP growth for FY21 is projected at 2.1% versus –ve0.4% of GDP in FY20. At the same time, long term GDP growth is projected to reach 4.5% by FY23.
- CPI is projected at 6.5% for FY21 with long term average at 6.2% (FY21-FY23).
Sazgar Engineering Works Limited is engaged in the manufacturing and sale of automobiles, automotive parts and household electric appliances. The Company is a manufacturer of compressed natural gas (CNG) four-stroke auto rickshaw (three wheelers) and automotive wheel rims. The Company's auto types include royal deluxe mini cab, deluxe mini cab, tempo delivery van, seven seater and deluxe XL. The Company designs molds, tools, jugs and fixtures of all types for sheet metal components. The Company also sells home appliances, which include air conditioners, microwave, washing machines and fridges. The Company's Royal Deluxe Mini Cab is primarily designed for International Markets with four Stroke Water Cooled, and is available with CNG and Gasoline fuel options. The Sazgar Tempo Delivery Van has the capacity of up to 450 kilograms of weight and consists of 200 cubic centimeters (CC) engine. The Sazgar 7 Seater has the capacity of carrying six passengers in addition to the driver.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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