Regal Automobiles Raising Rs. 800 Million Through PSX to Launch Electric Cars in Pakistan

Regal Automobiles Industries Limited has planned to get listed at Pakistan Stock Exchange (PSX) to generate funds of around Rs. 800 million for setting up set up an assembly line for the manufacturing of electric cars in Pakistan.The company will float…

Regal Automobiles Industries Limited has planned to get listed at Pakistan Stock Exchange (PSX) to generate funds of around Rs. 800 million for setting up set up an assembly line for the manufacturing of electric cars in Pakistan.

The company will float an Initial Public Offering of 25 million shares with a share price of Rs. 32, representing 23.3 percent of the total post-IPO paid-up capital having a face value of Rs. 10 per share.

Arif Habib Limited (AHL), Pakistan’s largest securities brokerage, investment banking, and research firm, has been appointed as Book Runner for this Issue.

Initially, 75 percent of the Issue Size, i.e., 18,750,000 ordinary shares, will be allotted to successful bidders, and 25 percent of the Issue size, i.e., 6,250,000 ordinary shares will be offered to Retail Investors at the Issue Price. Any unsubscribed retail portion will be allocated to successful bidders on a pro-rata basis.

The company will also be allocating the funds raised through the agreements signed under the Private Placement for the purpose of investment in the electric vehicle assembly line.

Regal Automobiles Industries Limited was established in 2016 as an automotive assembly under the ambit of the Automotive Development Policy of 2016-2021. Regal has seven variants in the overall product portfolio comprising of 800cc Hatchback, 1500cc and 1800cc Sports Utility Vehicles (SUVs), 1000cc Light Commercial Vehicles (LCVs), 1000cc Family Vans, and 1500cc Passenger Vans.

Background of Regal Automobiles

Regal has been granted the status of a Green Field Industrial Undertaking on 5 July 2017 under Automotive Development Policy, which has allowed the company to avail the benefits, including concessionary duty on import of plant and machinery for vehicle assembly.

The company has entered into a CKD Cooperation Agreement in September 2016 with DFSK Motor Co. Ltd., under which Regal imports the CKDs of the Glory 580, K01, K07 for local assembling at the plant, and CBUs of C-37 for sale in Pakistan. Regal imports the CKD kits and spare parts from the exclusive supplier of DFSK.

Regal Automobiles Industries Limited has entered into a CKD Cooperation Agreement in February 2019 with Lijue Co. Ltd. Regal imports the CKDs of Prince Pearl from the exclusive supplier of Lijue Co Ltd., namely Porvenir Imp and Exp Co. Ltd. for local assembling at the plant and further sale in Pakistan.

The CKD Cooperation agreement also entails providing technical and marketing assistance to Regal pertaining to the market development and after-sales service of 800cc Hatchback. Regal will keep on enhancing the product portfolio through the introduction of new models and engage in localization as part of the agreement and ADP 2016-2021.

Regal’s Financials

Regal drives its topline from assembly and sale of vehicles through authorized dealerships. The revenue stream of the company is primarily dominated by the SUV (Glory 580 Pro Turbo), which generated 55.6 percent of the total revenue of FY2021, which amounts to Rs. 3.288 billion.

The second contributor to the revenue stream is the sale of Hatchbacks under the brand name of Prince Pearl, which generated 31.7 percent of the total revenue stream for FY2021, amounting to Rs. 1.878 billion.

The total capacity of the assembly for the period ended 30 June 2021 was 5,000 units per annum on a double shift basis. This capacity of the company was based on the operation of a single paint shop. The company has installed another paint shop in August 2021 which has increased the capacity to 9,000 vehicles per annum on a double shift basis.

The company sold out 3,429 vehicles in FY20 to have earned a profit of Rs. 274 million. It made a profit of Rs. 209 million merely in the first half of FY22 with sales to be continued.

Future Plans

Regal will set up the Electric Vehicle Assembly line as part of the Strategic Partnership with DFSK Motor Co. Ltd., through which the company has entered into an MOU with an exclusive supplier of DFSK Motor Co. Ltd. named ChongQing Sokon Motor (Group) Imp. & Exp. Co., Ltd. for the import of the Plant and Machinery pertaining to the Electric Vehicle assembly.

The planned project will be located at 3 acres site, which has been allocated within the total freehold land located at 42KM -Multan Road, Manga Mandi, Lahore. The company is planning to inject equity investment for the expansion into the Electric Vehicle assembly line through new equity issuance by way of Pre-IPO Private Placement with a target amount of Rs. 251 million, Initial Public Offering (IPO) with a target amount of Rs. 800 million and Internal Cash of Rs. 73 million.

Any excess funds raised, in case the Strike Price is determined above the Floor Price, would be utilized either to fund the internal working capital requirement of Regal or to make further investment in the expansion of the electric vehicle plant, as may be decided by the directors of Regal.

Source: Pro Pakistani

Finance Ministry Concerned About Increase in Sugar Prices

National Price Monitoring Committee (NPMC) of the Ministry of Finance has expressed concerns about the marginal increase in sugar prices across various cities during a recent meeting. Federal Minister for Finance and Revenue, Mr. Shaukat Tarin, preside…

National Price Monitoring Committee (NPMC) of the Ministry of Finance has expressed concerns about the marginal increase in sugar prices across various cities during a recent meeting. Federal Minister for Finance and Revenue, Mr. Shaukat Tarin, presided over the meeting held at the Finance Division.

The meeting was informed that the increase in price was due to disruption in the supply caused by rain and fog.

NPMC was updated on the prices of wheat flour and the meeting expressed satisfaction on the stability in the wheat flour prices and availability of sufficient stocks of wheat in the country.

The committee was also apprised of the variations in the prices of pulses, and it was informed that except for the prices of Moong pulse, there was an increase in the prices of other pulses, mainly due to exchange rate variations and increase in freight charges. Further, the arrival of locally produced stock of Gram pulse in near future will ease its price.

Economic Advisor Finance Division apprised the NPMC on weekly SPI, which increased slightly by 0.08 percent in the week as compared to the previous week where it decreased by 0.50 percent.

The committee was informed that 33 food items contributed to a decline in the weekly SPI by -0.14 percent, whereas 18 non-food items contributed an increase of 0.22 percent. Prices of seven items registered a decline, which contributed decline in the weekly SPI by 0.46 percent. During the week, prices of tomatoes declined by 0.11 percent, chili powder by 0.26 percent, eggs by 0.05 percent, and others by 0.04 percent.

NPMC was informed that prices of 22 items remained stable and 25 items registered an increase in prices, which contributed to an increase in the SPI by 0.54 percent. Prices of potatoes increased by 0.03 percent, chicken by 0.12 percent, petrol by 0.21 percent, and others increased by 0.18 percent.

It was informed that prices of tomatoes and onion in the last week were at the lowest as compared to their prices three years earlier. The meeting expressed satisfaction with the decline in the prices of the essential items.

The Finance Minister expressed concerns about the increase in the prices of pulses and enquired regarding the production trend of pulses in the world. He directed the Ministry of National Food Security and Research (MoFS&R) to build strategic reserves of pulses, considering the lowest prices of pulses in the international market. He also directed the MoFS&R and provincial governments to take creative measures to ensure a smooth supply of pulses at fair prices.

The NPMC was briefed on the availability of essential goods at subsidized rates at the Sastaa & Sahulat Bazaars across the country. Finance Minister, Shaukat Tarin, lauded the efforts of the Government of the Punjab, KP, and Islamabad Administration in providing key items at discounted prices through arranging Sastaa Bazaars and also expressed satisfaction with the availability of essential items at low rates in Sastaa Bazaars in Sindh and Baluchistan. He also advised the Government of Sindh and Baluchistan to establish Sastaa Bazaars for the welfare of the general public.

In his concluding remarks, the Finance Minister underscored the efforts being made for keeping the prices of essential items in check and measures to ensure a smooth supply of essential commodities throughout the country.

Federal Minister for Industries & Production, Makhdoom Khusro Bakhtiar, Economic Advisor Finance Division, Chief Statistician Pakistan Bureau of Statistics (PBS), Managing Director Utility Stores Corporation, Deputy Commissioner of Islamabad, provincial chief secretaries, and other senior officers participated in the meeting.

Source: Pro Pakistani

Rupee Posts Big Gains Against the US Dollar Following World Bank’s Projections

The Pakistani Rupee (PKR) posted gains against the US Dollar (USD) for the second consecutive day in the interbank market today. It gained 40 paisas against the greenback after hitting an intra-day high of Rs. 175.87 against the latter during today’s o…

The Pakistani Rupee (PKR) posted gains against the US Dollar (USD) for the second consecutive day in the interbank market today. It gained 40 paisas against the greenback after hitting an intra-day high of Rs. 175.87 against the latter during today’s open market session.

It appreciated by 0.23 percent against the USD and closed at Rs. 176.23 today after gaining five paisas and closing at 176.63 in the interbank market on Tuesday, 11 January.

The rupee continued its winning streak against the USD a little less than a day after the World Bank (WB) estimated Pakistan’s GDP growth rate at four percent for 2022-23, benefiting from structural reforms enhancing export competitiveness and improving the financial viability of the power sector.

The global lender explained in its latest report ‘Global Economic Prospects Report’ that the output in Pakistan is expected to grow by 3.4 percent in the fiscal year 2021-22 ending June 2022, and by 4.0 percent the next fiscal year.

The local credit demand has been struggling to catch up since the start of the new year. While the private sector was stimulated in the second half of 2021, supported by a seasonal uptick in demand and an increase in input prices, a comparable projection is yet to materialize as most of the country’s economic sectors look for newer sources of easy money.

Discussing the rupee’s near-term outlook earlier in the day, the former Treasury Head of Chase Manhattan Bank, Asad Rizvi, tweeted, “PPer SBP Data, Credit to Private sector has hit Rs. 1.013tn. Increase in credit flow was for ongoing projects to meet [the] demand for working capital caused by inflation & depreciation of [the] PKR. For new industrial & manufacturing projects @ImranKhanPTI lending should be double”.

The PKR reversed losses against most of the other major currencies in the interbank currency market today. It posted gains of eight paisas against the Euro (EUR), six paisas against the Australian Dollar (AUD), 10 paisas against both the Saudi Riyal (SAR) and the UAE Dirham (AED), and held out against the Pound Sterling (GBP).

Conversely, it lost 54 paisas against the Canadian Dollar (CAD) in today’s interbank currency market after succumbing to market sentiments fueled by Canada’s contentious travel advisory for Pakistan.

Source: Pro Pakistani

FBR to Go through Third-party Security Audit Amid Looming Cyber Attacks

The government has decided to conduct a comprehensive third-party security audit of the Federal Board of Revenue (FBR) to determine any vulnerabilities in the system, as it is constantly subjected to cyber-attacks.Official documents of the bureau have …

The government has decided to conduct a comprehensive third-party security audit of the Federal Board of Revenue (FBR) to determine any vulnerabilities in the system, as it is constantly subjected to cyber-attacks.

Official documents of the bureau have revealed that the FBR system faces approximately an average of 71,000 cyber-attacks in a single month.

This volume has increased sharply over the past few years as the tools and methods available to hackers have become significantly powerful and developed.

The most recent cyber-attack on FBR’s data center occurred on Independence Day last year, 14 August 2021. The data of the previous cyber-attacks depict an increase in the frequency of attacks on days of national significance.

However, because of the security protocol already in place, the cyber-attack in August was restricted to the front end of the data center, and only the virtual machines were affected, which disrupted the day-to-day operations for a few days.

The initial forensic analysis conducted by the security team concluded that the Storage Area Network (SAN), on which the data is stored, has not been compromised, and to date, there is no indication or evidence that any taxpayer data was stolen, altered, or accessed in any way.

FBR took immediate action to restore the network, and the operations of the bureau were resumed quickly. There is an ongoing investigation into the current breach with the help of an internationally renowned cyber security firm. This firm is conducting a deep scan of the entire FBR network, including all machines located in the field formations, to locate the possible point of the initial breach.

The documents revealed that once this has been figured out and remedial actions have been taken, a comprehensive third-party security audit would be carried out to determine any remaining vulnerabilities. A comprehensive action plan to counter the vulnerabilities is being put together, and its execution will be monitored closely.

The federal cabinet has endorsed the operational emergency declared by the Chairman FBR and Secretary of Finance, under which FBR has been authorized to undertake emergency procurement of cyber-space and information security-related hardware, software, and services to protect the organization from such future attacks. Economic Coordination Committee (ECC) has already approved bridge financing of Rs. 3,860 million for this purpose.

Despite these precautions, it is pertinent to mention that the threat landscape is evolving at a faster pace than the organizations trying to protect themselves. Therefore, while initial procurements may protect FBR for the short and medium-term, continued investment into the IT system is required to protect and allow the organization to evolve into a true data-driven digital organization in the longer term.

Source: Pro Pakistani

EU GSP+ Review Mission to Visit Pakistan Next Month

garments, bed linen, terry towels, hosiery, leather, sports & surgical goods, etc duty-free access in the EU market.The committee was informed that 66 percent of tariff lines from Pakistan benefit from tariffs (duty-free access), coveri…

garments, bed linen, terry towels, hosiery, leather, sports & surgical goods, etc duty-free access in the EU market.

The committee was informed that 66 percent of tariff lines from Pakistan benefit from tariffs (duty-free access), covering the top 10 product sectors of export to the European Union — all except cereals like rice. It was further informed that the rest of 24 percent enjoyed the Most-Favored Nation (MFN) tariffs. The scheme included a concession to Pakistan whereas no reciprocal concession was given to the European Union.

Pakistan’s exports to the European Union have increased by 47 percent from USD 6,095 million in 2013 -14 to USD 8,943 million in 2020-21, while the country’s imports have marked an increase of one percent from USD 4,545 million in 2013-14 to USD 4,588 million in 2020-21.

The panel was told that the total volume of Pakistan’s trade with the European Union has increased by 27 percent from USD 10,640 million in 2013-2014 to USD 13,531 million in 2020-21. The trade balance has increased in favor of Pakistan from USD 1,550 million in 2013 -14to USD 4,355 million in 2020-21.

The Advisor revealed that a meeting between an official of the Ministry of Commerce and a Director General of a Mexican company named SENASICA was held. He said the Mexican company’s official had proposed that Pakistan might extend an invitation to SENASIZA and OIRSA for a visit of an expert delegation to Pakistan. He added that the Ministry of Commerce had requested the Ministry of National Food Security and Research and the Department of Plant Protection to work on this proposal at the earliest.

The committee recommended introducing trade in Pakistani Rupees on all indigenous items.

The Senate panel decided to conduct meetings with the Ministry of Commerce on the tariff compositions. Secretary Commerce Ministry informed the committee that the tariff compositions for the financial year 2022-2023 would be finalized before 31 March 2022.

Senator Zeeshan Khanzada said the tariff composition was under the ambit of the Ministry of Commerce, so the Federal Board of Revenue (FBR) should not bypass the Ministry while determining the tariff rates as observed in the Money Bill 2021.

The committee recommended that the powers to determine the tariff composition should be shifted to the Ministry of Commerce.

Deputy Chairman Muhammad Mirza Afridi inquired about the mechanisms adopted to determine the tariff. Secretary Commerce informed the committee that the tariff compositions were determined with the consultation of the National Tariff Commission (NTC) and an economists team.

The committee was informed that Mexico imposed a ban on rice import from Pakistan due to the detection of Khapra beetle (a destructive pest of grain products) in some shipments. It was told that a technical expert from Mexico had visited Pakistan in December 2014, however, the ban was not lifted.

Speaking on the issue, Senator, Saleem Mandviwalla said, “a stock of 600 million dollars in Mexico was present at that time.” He said, “all the countries were able to lift the ban except Pakistan.”

The Chair directed the authorities concerned to provide information on the Textile Policy Review in the next meeting.

The Chairman committee directed the Ministry to hold meetings and pursue the list of banned items and make a way forward on the subject on the issue of adding non-Afghan origin goods which included perishable goods auto parts, spare parts, and tobacco in the allowed list of trading goods

Senators Fida Muahmmad, Danesh Kumar, Palwasha Muhammad Zai Khan, and Muhammad Abdul Qadir along with senior officials from the Commerce Ministry and the attached departments attended the meeting.

Source: Pro Pakistani

PSW Introduces New Feature for Subscription of Companies with Foreign Members

Pakistan Single Window (PSW) has introduced a new feature to enable the subscription of companies having only foreign nationals as directors.The new functionality allows both local and foreign-owned companies that do not have a Pakistani national as “D…

Pakistan Single Window (PSW) has introduced a new feature to enable the subscription of companies having only foreign nationals as directors.

The new functionality allows both local and foreign-owned companies that do not have a Pakistani national as “Director” or “Authorized Representative” registered with FBR or SECP to subscribe to the PSW system and conduct cross-border trade transactions.

The new feature also allows the Pakistani nationals being Principal Officers of such companies to complete biometric verification for PSW subscription as long as they are registered in the FBR/SECP database. In case neither Director nor Authorized Representative is a Pakistani national, the subscription will be completed based on an electronic verification of the banking information.

The PSW subscription module was formally launched in November 2021 by the Finance Minister, Mr. Shaukat Tarin. The PSW subscription module is fully integrated with the government databases for performing electronic Know-Your-Customer (KYC) protocols. It offers a completely paperless solution for online subscription and registration of individuals, products, and entities for compliance with customs and other regulatory requirements.

“We continue to upgrade our services and enhance the scope of different products to meet user requirements,” stated the CEO of PSW, Mr. Aftab Haider, while speaking on the rollout of the new update. “The system is being developed to ensure ease of doing business in Pakistan, and we look forward to continuous feedback from the business community for the system’s improvement,” he added.

Pakistan Single Window (PSW) is an initiative of Pakistan’s federal government to transform the trade and industry ecosystem, and it is expected to be formally inaugurated in March 2022.

Source: Pro Pakistani

Pakistan’s Economic Fundamentals Remained Stable Despite COVID: Governor SBP

Pakistan’s economic fundamentals and overall performance remained stable during the COVID-19 pandemic, said Governor State Bank of Pakistan (SBP) Dr. Reza Baqir.Addressing ‘The Future Summit’ in Karachi, Dr. Reza Baqir reflected on how Pakistan’s econo…

Pakistan’s economic fundamentals and overall performance remained stable during the COVID-19 pandemic, said Governor State Bank of Pakistan (SBP) Dr. Reza Baqir.

Addressing ‘The Future Summit’ in Karachi, Dr. Reza Baqir reflected on how Pakistan’s economy performed during COVID-19 and how the country’s economic fundamentals remained stable despite the restraints caused by the pandemic.

The Governor SBP governor stated, “Pakistan’s experience during the Covid-19 pandemic stands out globally, and I, as a Pakistani, feel proud about the country’s coronavirus journey.”

He explained that Pakistan was confronted with historic economic challenges and had to, on several occasions, approach the international lenders for funds because of fiscal deficit and current account deficit.

He remarked how Pakistan managed to reduce its debt-to-GDP ratio as compared to advanced economies where it climbed by 18 percent on average, while the debt-to-GDP ratio in emerging markets increased by 10 percent.

“Our GDP growth during Covid was negative 0.5 percent, as compared to other countries that saw GDP decline of negative 5-10 percent. The reason behind Pakistan’s low decline was the proactive response of the government,” said Baqir.

Regarding the ominous rise in Pakistan’s current account deficit, the Governor SBP cited the surge in prices of commodities in international markets. The surge in global commodity prices, according to him, should be recognized as both a global and domestic concern.

He further mentioned the country’s reserves, which served as an indicator to predict pressure on the balance of payment and exchange crises. He said, “in 2019, Pakistan’s gross reserves were about the same as its negative forward position, meaning that we stood at [a] net nil position. Currently, despite the COVID-19, we have increased our net foreign exchange buffers.”

The exchange rate and policy rate, according to Baqir, are tools we can utilize to keep the current account deficit at a sustainable level. He said the average exchange rate in 2021 remained unchanged from the previous year despite various fluctuations.

“The advantage of having a responsive exchange rate is that it acts as a natural shock absorber, and CAD remains at a sustainable level,” he said.

Source: Pro Pakistani

Govt Set to Pass Mini-Budget Tomorrow

The Pakistan Tehreek-e-Insaf (PTI)-led coalition government has finalized the preparations to get the Finance (Supplementary) Bill, 2021 passed from the National Assembly on Thursday.Talking to media, Advisor to Prime Minister on Parliamentary Affairs…

The Pakistan Tehreek-e-Insaf (PTI)-led coalition government has finalized the preparations to get the Finance (Supplementary) Bill, 2021 passed from the National Assembly on Thursday.

Talking to media, Advisor to Prime Minister on Parliamentary Affairs Dr. Babar Awan, said the National Assembly would approve the mini-budget in its session on January 13.

Nonetheless, opposition leaders have strongly opposed the mini-budget in their speeches. They, and the important PTI allies such as Muttahida Qaumi Movement and Grand Democratic Alliance, have demanded the removal of taxes proposed through the mini-budget on essential consumer items.

Meanwhile, Prime Minister Imran Khan has also been busy convincing different party leaders to vote for the mini-budget. He met Moonis Elahi, a leader of the Pakistan Muslim League Q, and Member National Assembly (MNA) Ali Zaidi.

The government needs a simple majority in the National Assembly for the approval of the mini-budget, and the coalition parties will play an important role in this regard.

Sources believe that the coalition parties and some members from treasury benches have reservations over the mini-budget as they fear it would cause inflation and the public would face the consequences.

On the other hand, the opposition parties also want to reject the mini-budget and they are optimistic that they will succeed in the Parliament.

Looking at the numbers in the National Assembly, the PTI-led coalition government has a simple majority in the Parliament. It will be important for the treasury bench to ensure all members of coalitions parties are present in the house to vote.

Commentators say that the Prime Minister will have to take a vote of confidence in case the mini-budget fails in the National Assembly like the last year. The Prime Minister had taken a vote of confidence from the National Assembly when the PTI had lost the election of the Senate on an Islamabad seat.

According to the official estimates, the government wants to impose taxes and duties of Rs. 343 billion through the mini-budget. The officials believe that out of the total amount, Rs. 280 billion would be refunded or adjustable taxes. They say that tax on import of machinery will be refundable and government estimates indicate that Rs. 120 billion will be the refundable amount on import of machinery. They also believe that Rs. 160 billion will be refundable from the pharmaceutical industry. Around Rs. 70 billion will be generated from the import of luxury items.

Sources said the documentation of the economy was the main priority of the government instead of raising tax through the mini-budget. This is the exact line of the International Monetary Fund as it wants to eliminate the distortions in the tax system of the country due to tax exemptions granted to strong and powerful lobbies.

The meeting of the Executive Board of IMF is expected on 28 or 31 January 2022.

Source: Pro Pakistani

FBR Begins Budget Preparation Exercises for FY23

Starting its budget preparation exercises for the fiscal year (2022-23), the Federal Board of Revenue (FBR) has sought customs-related proposals from all the Chambers of Commerce and Industry by March 31, 2022.In this regard, FBR has issued a letter to…

Starting its budget preparation exercises for the fiscal year (2022-23), the Federal Board of Revenue (FBR) has sought customs-related proposals from all the Chambers of Commerce and Industry by March 31, 2022.

In this regard, FBR has issued a letter to all Chambers and invited their proposals which may cover three areas i.e. changes in Customs Tariff rates, Rules/Procedures, and Customs Act, 1969.

In order to enable the Customs Wing of FBR to properly process and evaluate each proposal, three separate formats have also been sent to the Chambers for preparing the proposals on MS Excel Sheets.

FBR has suggested that the provision of the existing customs tariff rates/law may carefully be studied/consulted while formulating the proposals. The proposal, wherever required, may be supported with the statistical data, etc so that it is not dropped on account of any such infirmity.

Source: Pro Pakistani