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Budget 2017-2018

Budget Details

78 replies to this topic

#1
Rehan sh

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    INSHALLAH import duty will increase in this budget

    http://jang.com.pk/j...2015/u51121.htm.
    Note:Do your due diligence before making any investment decision.

    Thank You & Regards
    Rehan Sh


    #2
    Malik.

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    Posted Image

    Edited by Malik., 28 May 2015 - 05:52 PM.


    #3
    saadazeem

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    Sugar price increase for ramzan package.

    #4
    Malik.

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    http://www.dawn.com/...-psdp-next-year

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    Mansoor

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    The Bell


    Strategy: Awaiting a tough FY16 Budget

    Pre-budget jitters keep the index down in May

    The benchmark index lost 2% in May, mainly due to budgetary news flow with hike in CGT news and possibility of super tax dampening sentiments despite a higher than expected discount rate cut. Volumes of KSE-100 index dipped by a hefty 45% MoM to 108mn in May.

    Small cap sectors rise MoM while Banks falter


    Engro, UBL & PPL contributed the most in terms of index points fall during May. Sector wise return shows Pharmas, Autos and Telecom sector outperforming the most amongst the key sectors, while Banks fell the most. Foreigners were net buyers of USD15mn in May. The biggest net buy during the month came from Individuals (USD34mn), while Companies were the biggest net sellers (USD68mn).

    Markets rising momentum has slowed down considerably in 2015


    Despite the positive macro news flow, the benchmark index growth has slowed down considerably in both FY15TD and CY15TD to 11.5% and 2.9%, respectively, showing the lowest growth since FY12. Most of the ingredients for buoyant market remain in place due to low DR & CPI along with stable external account outlook. As alternate fixed income returns continue to drop, we see interest shifting towards equities.



    Elixir Research
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    #6
    Mansoor

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    KSE to benefit from sustained earnings growth amid improving macros


    Consolidation, reforms to continue!

    The Budget for FY16 will be announced by the Finance Minister on June 5th, 2015. Given the backdrop of low inflation, robust foreign inflows, IMF’s quantitative targets under the EFF, we would be looking for clear signals from the FY16 budget on the following themes: i) plan to follow pre-guided deficit reduction targets (4.3% of GDP in FY16B vs 4.9% in FY15E), including subsidy reduction and emphasis to increase tax revenues i.e. SRO exemptions withdrawal, increasing tax for non-filers and taxing sectors’ niches, ii) efforts to boost investment-GDP, where public sector-led development projects particularly for infrastructure and energy sector should be a prime focus given the recent landmark development with respect to the CPEC (China-Pakistan Economic Corridor).



    Growth vs stabilization tradeoff

    Overall, FY16 budget outlay is projected at PKR 4.7trn, to be up 10% compared to FY15 budget outlay of PKR 4.3trn. Tax revenues are expected at PKR 3.1trn, to be 19% higher, or PKR 500bn (1.6% of GDP) of additional taxes/exemption withdrawal, than FY15’s revised target of PKR 2.6trn. This is being planned to be achieved through reducing 1/3rd of tax exemptions or PKR 120bn, higher tax on non-filers and broadening tax net with sectors/niches previously untaxed (withdrawal of zero-rating etc.). Fiscal deficit target at 4.3% for FY16 stands aggressive given limited tax growth so far and planned growth in development expenditure alongside compulsory allocations for defense and debt servicing (~40% of total expenditure). As for macro targets, inflation is to remain between 5.5%-6% while the GDP target is being set at 5.5% versus revised 4.2% in FY15E. We view the GDP target as aggressive where a sustainable growth over 5% requires aggressive structural reforms.



    Budget to produce mixed impacts for capital market

    We highlight FY16 budget is to be mixed/neutral for the capital market. In this regard, while the probabilities being high for: i) a higher CGT regime (2.5% from current levels of 1-2 years gains’ tenure and no tax beyond), and ii) no cut in Bonus tax with iii) higher tax for non-filers and iv) imposing ST on untaxed segments, all hint towards short-term negative impacts on the KSE, positive expected measures such as: a) 50% mandatory dividend payout for companies having free reserves more than 40% of paid-up, B) faster than planned decline in corporate tax rate to 30% from current 33% for non-banking companies, and iii) any decline in GST rate (though with moderate probability) should support the KSE.


    Outlook and Recommendation


    We expect declining leverage for corporate sector (manufacturing in particular) with weak inflation outlook and expected increase in GDP growth with stable domestic currency outlook amid sustained foreign inflows should be taken as larger positives benefiting the capital market in the medium to long term.


    Key sectors expected to benefit from improved macros are both leverage as well as dividend yield plays. These include Cement (LUCK, DGKC, & ACPL), Fertilizer (ENGRO, EFERT, & FFBL), IPPs (HUBC & KAPCO) and a select of Oil & Gas stocks (PSO & POL). We continue to keep a cautious stance on Banks given recent aggressive monetary easing as well as proposals to impose 35% tax on all of the earnings of banks i.e. capital gain, dividend income, (1-5% estimated earnings attrition across AHL Banking Universe).




    AHL Research

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