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LSMI output increases by 3.55pc in November 2022

The output of the Large-Scale Manufacturing Industry (LSMI) increased by 3.55 percent in

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GLOBALTIMESPAKISTAN

The output of the Large-Scale Manufacturing Industry (LSMI) increased by 3.55 percent in November 2022 as compared to the production of the previous month of the same year.

According to the provisional quantum indices of LSMI for November 2022 released by the Pakistan Bureau of Statistics (PBS), on a month-on-month basis (MoM), the LSMI index went up from 108.45 points in October 2022 to 112.30 points in November 2022.

On a year-on-year (YoY) basis, the production of Large-Scale Manufacturing Industries (LSMI) witnessed negative growth of 5.49 percent, the LSMI index went down from 118.81 points in November 2021 to 112.30 points in November 2022.

Overall the Large-Scale Manufacturing Sector has shown a decline of 3.58% during July-November (2022-23) as compared with the same period of last year. The LSMI during the first five months of the current fiscal year was recorded at 111.41 points as compared to 115.55 points during July-November (2021-22).

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The provisional quantum indices of Large-Scale Manufacturing Industries (LSMI) for November 2022 with the base year 2015-16 have been developed on the basis of the latest data supplied by the source agencies including the Ministry of Industries and Production, Ministry of Commerce and Provincial Bureaus of Statistics.

During the period from July-November, 2022 the sectors showing growth included wearing apparel 4.46 %, leather products 0.06 %, electrical equipment 0.04 percent, furniture 1.53% while other manufacturing grew by 0.17.

Meanwhile, the sectors showing a decline during the period under review included food 1.022%, beverages 0.26%, tobacco 0.57%, textile 2.47% wood products 0.05, paper and board 0.07%, coke and petroleum products 1.02%, chemicals 0.06%, pharmaceuticals 1.34%, rubber products 0.02%, no metallic mineral products 0.95%, iron and steel products 0.04%, fabricated metal 0.09%, wood products 0.05%, machinery and equipment 0.24%, automobiles and other transport equipment 1.27 and 0.36 % respectively.

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Airlines struggle with planes shortage as summer travel set to hit record levels

Airlines struggle with planes shortage as summer travel set to hit record levels

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Airlines struggle with planes shortage as summer travel set to hit record levels

 The global airline industry is facing a summer squeeze, with travel demand expected to surpass pre-pandemic levels while aircraft deliveries drop sharply due to production problems at Boeing and Airbus.

Air carriers are spending billions on repairs to keep flying older, less fuel-efficient jets, and paying a premium to secure aircraft from lessors. But some carriers are still being forced to trim their schedules to cope with the lack of available planes.

At the same time, the number of travelers globally is set to hit historic levels, with 4.7 billion people expected to travel in 2024 compared with 4.5 billion in 2019.

“We can expect a strong performance from airlines throughout the summer with some particularly high airfare,” said John Grant, senior analyst at travel data firm OAG.

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Last December, the International Air Transport Association (IATA) had predicted a 9 per cent annual growth in global airline capacity this year. That estimate looks optimistic following Boeing’s safety crisis.

Passenger carriers will receive 19pc fewer aircraft this year than they expected because of production issues at Boeing and Airbus, said Martha Neubauer, senior associate at AeroDynamic Advisory.

US carriers will receive 32pc fewer aircraft than planned a year ago because several airlines depend on Boeing’s 737 MAX planes, Neubauer said. Boeing’s production has been curbed after a January mid-air panel blowout.

Boeing is reeling from a sprawling crisis that erupted after the Jan 5 Alaska Airlines blowout. Regulators have put a cap on production of the 737 MAX, but the company is not hitting even that level.

As many as 650 Airbus A320neo jets could be grounded in the first half of 2024 for inspections to deal with a flaw with RTX Corp’s Pratt & Whitney engines, RTX said last year.

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In Europe, low-cost airline Ryanair has cut some routes. In the United States, United and Southwest have cut back flying and adjusted hiring and staffing plans.

LEASING MARKET BOOMS

Analysts expect capacity at most US carriers in the second quarter to grow at a slower pace than a year ago. Airlines will update their growth plans and explain how they will offset capacity constraints when they report quarterly results, starting on Wednesday with Delta Air Lines.

Due to the shortage of new planes, the aircraft leasing market is booming. Data from Cirium Ascend Consultancy shows that lease rates for new Airbus A320-200neo and Boeing 737-8 MAX aircraft have hit $400,000 per month, the highest since mid-2008.

Airlines are spending 30pc more on aircraft leases than before the pandemic, said John Heimlich, chief economist at Airlines for America (A4A) that represents major US carriers.

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They are also holding on to jets that are past their useful economic lives and require heavy maintenance that now takes several months, Heimlich said. Repair costs at United, Delta and American were up 40pc last year from 2019.

Increased leasing, repair and labour costs will bite in to profit despite the high demand, Heimlich said. US passenger airlines posted a pre-tax margin of 4.5pc last year, with the bulk of contribution coming from Delta and United.

Fewer Americans are planning to travel on a plane this summer compared with a year ago due to high inflation, a survey by travel website the Vacationer showed. Airline fares are down year-on-year, but have been rising month-on-month. 

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FBR is all set to block SIMS of 0.5m tax evaders

FBR is all set to block SIMS of 0.5m tax evaders

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FBR is all set to block SIMS of 0.5m tax evaders

In a bid to check the practice of tax evasion, the Federal Board of Revenue (FBR) has decided to block the mobile phone SIMs (subscriber identity modules) of the under-filers, sources say.

According to the sources, the FBR has finalised preparations for the purpose in consultation and assistance of Pakistan Telecommunication Authority (PTA) after identifying 400,000 such individuals, as they did not file their returns despite having taxable income.

The move comes after these persons failed to comply with the directions even after receiving the FBR notices on the subject.

On the other hand, there are another 100,000 individuals who have been listed non-filers as there SIMs would also be blocked.

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However, the sources say, the list of 500,000 individuals on whom the authorities are zooming in just represents the first phase and has been given a final shape after detailed discussions involving the FBR, the PTA and the mobile phone operators.

It is reported that the FBR had actually identified two million possible tax evaders, but the mobile phone companies requested that they could not block such a huge number of SIMs in a one go.

The current economic crisis is a result of dismal tax-to-GDP ratio in Pakistan – one of the lowest in Pakistan – which is a product of the government failure to expand the tax base, resulting in an alarming increase in indirect taxation and further burdening those who already pay the amount.

Read more: Plan devised to slap tax on retailers, will generate Rs300bn

In this connection, Prime Minister Shehbaz Sharif recently vowed to increase the tax-to-GDP ratio to 15 per cent in the coming years, while the government is also making progress on imposing tax on retailers in the country.

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With the International Monetary Fund (IMF) pressing Islamabad hard to bring the retail, agriculture and real estate sectors into tax net and reduce the budget deficit, moves like blocking the SIMs are unavoidable.

Islamabad is already desperately looking for another long-term and larger bailout package from the Washington-based lender and will like show some progress on the subject, with Finance Minister Muhammad Aurangzeb leaving for Washington to hold talks in this regard.

The government has already sought bids from the interested parties for the PIA – the biggest lossmaking state-owned enterprise (SOE) – thus meeting another main IMF condition.

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India’s Sensex powers past 75,000, NSE market capitalisation tops $4.81tr

India’s Sensex powers past 75,000, NSE market capitalisation tops $4.81tr

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India's Sensex powers past 75,000, NSE market capitalisation tops $4.81tr

India’s benchmark share indexes hit all-time highs on Tuesday, with the blue-chip Sensex rising above 75,000 for the first time, while the total market capitalisation of NSE-listed companies crossed 400 trillion rupees ($4.81 trillion).

The NSE Nifty 50 was up 0.40 per cent at 22,756.40 as of 10:45 am IST, while the S&P BSE Sensex added 0.46pc to 75,085.01. Both the benchmarks rose about 0.5pc at the open to hit record highs for the second straight session.

Meanwhile, the total market capitalisation of all BSE-listed companies rose more than 400 trillion rupees on Monday.

“Most of the quarterly updates that have come, be it from lenders, auto makers, steel makers, real estate companies, they have been good, that’s driving the positivity in the market,” said Anita Gandhi, director at Arihant Capital Markets.

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Tata Motors gained 1pc, leading auto stocks 0.3pc higher, after the company reported a quarterly rise in its Jaguar Land Rover’s sales.

Realty stocks gained about 2pc, led by a 7pc jump in Godrej Properties to record high levels on higher March quarter sales.

Metal stocks gained 1.5pc, with 13 of the 15 constituents logging gains.

The rise in metal stocks followed a jump in industrial metal prices on expectations of a rebound in worldwide manufacturing, aided by strong data from the US, China and Germany the last week.

IT stocks gained 1.2pc, rebounding from a 1pc drop in the last two sessions.

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The broader, more domestically-focussed small-caps and mid-caps each rose 0.6pc and 0.3pc. They have gained 8.1pc and 4.41pc, respectively, so far in April, recovering from a 4.42pc and 0.54pc drop in the previous month.

“The concerns over unsustainably high valuations in the segments still remain. Earnings will be key in distinguishing quality from momentum-driven names,” Arihant Capital’s Gandhi said. 

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