Author Topic: FEDERAL BUDGET 2016-17  (Read 4237 times)

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Offline Valueestimator

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FEDERAL BUDGET 2016-17
« Reply #-1 on: June 02, 2016, 08:14:45 PM »
Here you go.

All budget related discussion, please showcase your talent here.
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FEDERAL BUDGET 2016-17
« Reply #-1 on: June 02, 2016, 08:14:45 PM »

Offline Valueestimator

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Re: FEDERAL BUDGET 2016-17
« on: June 02, 2016, 08:16:27 PM »
Here you go.

All budget related discussion, please showcase your talent here.

http://www.finance.gov.pk/survey_1516.html

Pakistan economic survey 2015-16
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Offline Akko007

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Re: FEDERAL BUDGET 2016-17
« Reply #1 on: June 02, 2016, 08:17:57 PM »
Which sectors will get benefit from upcoming budget. Anybody any idea?

Offline rational.investor

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Re: FEDERAL BUDGET 2016-17
« Reply #2 on: June 02, 2016, 08:21:12 PM »
If all blocks of income of insurance companies are taxed at same rate of 31 % (corporate tax rate), they are screwed big time.
There effective tax rate is quite low near to 10 % for some and EPS will fall 15 to 20 %. Thats a clear fall in value for me.




Offline Valueestimator

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Re: FEDERAL BUDGET 2016-17
« Reply #3 on: June 02, 2016, 09:06:32 PM »
Which sectors will get benefit from upcoming budget. Anybody any idea?

Textiles the most,
2nd should be fertilizer in my view.
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Offline momo

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Re: FEDERAL BUDGET 2016-17
« Reply #4 on: June 02, 2016, 09:15:22 PM »
If all blocks of income of insurance companies are taxed at same rate of 31 % (corporate tax rate), they are screwed big time.
There effective tax rate is quite low near to 10 % for some and EPS will fall 15 to 20 %. Thats a clear fall in value for me.

Can you please show how you're saying their effect tax rate is 10%? It won't have that much of an impact. They've taxed all incomes of banks at 35% but that hasn't had much of an impact on earnings so far. It also depends on how much of their income is from investments are opposed to core operations.

Anyone else have any take on this?

Offline sarmad26

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Re: FEDERAL BUDGET 2016-17
« Reply #5 on: June 02, 2016, 09:18:50 PM »
In my opinion below is the list

Biggest beneficiary of upcoming budget to me

- Textile
- Fertilizer
- Cement
- Steel
- Pharma
- IT industry
- Leather

Biggest losers of upcoming budget

- Insurance
- Packaged Milk
- Packaged Meat

Offline rational.investor

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Re: FEDERAL BUDGET 2016-17
« Reply #6 on: June 02, 2016, 09:52:50 PM »
If all blocks of income of insurance companies are taxed at same rate of 31 % (corporate tax rate), they are screwed big time.
There effective tax rate is quite low near to 10 % for some and EPS will fall 15 to 20 %. Thats a clear fall in value for me.

Can you please show how you're saying their effect tax rate is 10%? It won't have that much of an impact. They've taxed all incomes of banks at 35% but that hasn't had much of an impact on earnings so far. It also depends on how much of their income is from investments are opposed to core operations.

Anyone else have any take on this?

Banks have and will not show a significant impact because majority of their investment is parked in fixed income which was always taxed at 35 %. Only dividend, CGT and mutual fund took the impact. Hence, relatively less impact.

Insurance companies on the other hand rely heavily on their investment income and that is majorly dividends and stocks as they are long term investors. Most insurance companies will incur losses if you exclude investment income.

Effective tax rate can easily be calculated by tax expense/ PBT. For IGIIL its around 16 % and for AICL its 10 %. Just simply apply 31 % and then see their EPS. You will see the impact.

I don't think personally this will go through as insurance companies are still in early stages. Their core profitability is not massive like banks.  Insurance penetration is still one of the lowest in the region as well.

Offline optimistic

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Re: FEDERAL BUDGET 2016-17
« Reply #7 on: June 02, 2016, 10:04:17 PM »
If all blocks of income of insurance companies are taxed at same rate of 31 % (corporate tax rate), they are screwed big time.
There effective tax rate is quite low near to 10 % for some and EPS will fall 15 to 20 %. Thats a clear fall in value for me.

Can you please show how you're saying their effect tax rate is 10%? It won't have that much of an impact. They've taxed all incomes of banks at 35% but that hasn't had much of an impact on earnings so far. It also depends on how much of their income is from investments are opposed to core operations.

Anyone else have any take on this?

Banks have and will not show a significant impact because majority of their investment is parked in fixed income which was always taxed at 35 %. Only dividend, CGT and mutual fund took the impact. Hence, relatively less impact.

Insurance companies on the other hand rely heavily on their investment income and that is majorly dividends and stocks as they are long term investors. Most insurance companies will incur losses if you exclude investment income.

Effective tax rate can easily be calculated by tax expense/ PBT. For IGIIL its around 16 % and for AICL its 10 %. Just simply apply 31 % and then see their EPS. You will see the impact.

I don't think personally this will go through as insurance companies are still in early stages. Their core profitability is not massive like banks.  Insurance penetration is still one of the lowest in the region as well.

i have gone through Financial Statement of IGI Life, they have around 11 billions of investments in Fixed PIB / TB, and 2 billions in Mutual Funds, while Jubilee Life Insurance have invested 39 billions in PIB/TB, and 23 billions in listed equities / mutual funds.
TOP Scripts as below: Updated (28th Nov, 2016)
1. Wyeth, 2. SHJS, 3. FFLNV, 4. TGL, 5. BERG, 6. APL, 7. PKGS, 8. EPQL, 9. ISL, 10. FFBL. 11. TRIPF. 12 ASL

I am not perfect. Please do your own research my comments / or views may not prove accurate, nor i advise anyone to act upon on my recommendations, nor i accept any responsibility on me. Your money, your gain / or loss, before investing into any script better you gain sufficient knowledge of business and calculate risk accordingly as per your risk appetite.

Offline optimistic

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Re: FEDERAL BUDGET 2016-17
« Reply #8 on: June 02, 2016, 10:06:00 PM »
i have gone through Financial Statement of IGI Life, they have around 11 billions of investments in Fixed PIB / TB, and 2 billions in Mutual Funds, while Jubilee Life Insurance have invested 39 billions in PIB/TB, and 23 billions in listed equities / mutual funds.

Whatever proposal are in Budget is drastic for insurance sector profitability but surprisingly shares prices did not fall.
TOP Scripts as below: Updated (28th Nov, 2016)
1. Wyeth, 2. SHJS, 3. FFLNV, 4. TGL, 5. BERG, 6. APL, 7. PKGS, 8. EPQL, 9. ISL, 10. FFBL. 11. TRIPF. 12 ASL

I am not perfect. Please do your own research my comments / or views may not prove accurate, nor i advise anyone to act upon on my recommendations, nor i accept any responsibility on me. Your money, your gain / or loss, before investing into any script better you gain sufficient knowledge of business and calculate risk accordingly as per your risk appetite.

Offline Akko007

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Re: FEDERAL BUDGET 2016-17
« Reply #9 on: June 02, 2016, 10:09:57 PM »
Heard Chemical Industry is also getting some sort of favour in this budget. Anybody has some authentic news?

Offline Dehan

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Re: FEDERAL BUDGET 2016-17
« Reply #10 on: June 02, 2016, 10:43:59 PM »
If all blocks of income of insurance companies are taxed at same rate of 31 % (corporate tax rate), they are screwed big time.
There effective tax rate is quite low near to 10 % for some and EPS will fall 15 to 20 %. Thats a clear fall in value for me.

Can you please show how you're saying their effect tax rate is 10%? It won't have that much of an impact. They've taxed all incomes of banks at 35% but that hasn't had much of an impact on earnings so far. It also depends on how much of their income is from investments are opposed to core operations.

Anyone else have any take on this?

Banks have and will not show a significant impact because majority of their investment is parked in fixed income which was always taxed at 35 %. Only dividend, CGT and mutual fund took the impact. Hence, relatively less impact.

Insurance companies on the other hand rely heavily on their investment income and that is majorly dividends and stocks as they are long term investors. Most insurance companies will incur losses if you exclude investment income.

Effective tax rate can easily be calculated by tax expense/ PBT. For IGIIL its around 16 % and for AICL its 10 %. Just simply apply 31 % and then see their EPS. You will see the impact.

I don't think personally this will go through as insurance companies are still in early stages. Their core profitability is not massive like banks.  Insurance penetration is still one of the lowest in the region as well.
As per ur view it will take at least 1 year to get it operational again.
"Suno sab ki, laiken Dehan apna apna"

Offline optimistic

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Re: FEDERAL BUDGET 2016-17
« Reply #11 on: June 02, 2016, 11:15:47 PM »
No negative impact on entire insurance sector i have seen today almost all shares closed green, if there is increased taxation proposal prices should take tool.
TOP Scripts as below: Updated (28th Nov, 2016)
1. Wyeth, 2. SHJS, 3. FFLNV, 4. TGL, 5. BERG, 6. APL, 7. PKGS, 8. EPQL, 9. ISL, 10. FFBL. 11. TRIPF. 12 ASL

I am not perfect. Please do your own research my comments / or views may not prove accurate, nor i advise anyone to act upon on my recommendations, nor i accept any responsibility on me. Your money, your gain / or loss, before investing into any script better you gain sufficient knowledge of business and calculate risk accordingly as per your risk appetite.

Offline aftab6274974

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Re: FEDERAL BUDGET 2016-17
« Reply #12 on: June 02, 2016, 11:44:00 PM »
No negative impact on entire insurance sector i have seen today almost all shares closed green, if there is increased taxation proposal prices should take tool.
Jis tarah IGIIL me sale chali thee 206 py, khuch theek nhi lag raha mujhy  :[ :[

Offline stuka

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Re: FEDERAL BUDGET 2016-17
« Reply #13 on: June 02, 2016, 11:57:54 PM »
Only construction segment achieved its growth target even surpased it. Ab isay tax krny ka kira b is liay he ho raha. Pr lgta nahi k kr skain gy

Offline stuka

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Re: FEDERAL BUDGET 2016-17
« Reply #14 on: June 03, 2016, 12:00:03 AM »
Which sectors will get benefit from upcoming budget. Anybody any idea?

Textiles the most,
2nd should be fertilizer in my view.
Ishaq dar himself said agriculture did realy bad so we will give some relaxation for it in budget.
Fertilizers ko boost mil skta kuch

Offline Zamid

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Re: FEDERAL BUDGET 2016-17
« Reply #15 on: June 03, 2016, 12:53:45 AM »
Which sectors will get benefit from upcoming budget. Anybody any idea?

Textiles the most,
2nd should be fertilizer in my view.
Ishaq dar himself said agriculture did realy bad so we will give some relaxation for it in budget.
Fertilizers ko boost mil skta kuch
Textile, Fertilizer & Technology.

Offline Shakir123

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Re: FEDERAL BUDGET 2016-17
« Reply #16 on: June 03, 2016, 01:09:32 AM »
Pharma and steel and ptc

Offline momo

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Re: FEDERAL BUDGET 2016-17
« Reply #17 on: June 03, 2016, 11:20:22 AM »
If all blocks of income of insurance companies are taxed at same rate of 31 % (corporate tax rate), they are screwed big time.
There effective tax rate is quite low near to 10 % for some and EPS will fall 15 to 20 %. Thats a clear fall in value for me.

Can you please show how you're saying their effect tax rate is 10%? It won't have that much of an impact. They've taxed all incomes of banks at 35% but that hasn't had much of an impact on earnings so far. It also depends on how much of their income is from investments are opposed to core operations.

Anyone else have any take on this?

Banks have and will not show a significant impact because majority of their investment is parked in fixed income which was always taxed at 35 %. Only dividend, CGT and mutual fund took the impact. Hence, relatively less impact.

Insurance companies on the other hand rely heavily on their investment income and that is majorly dividends and stocks as they are long term investors. Most insurance companies will incur losses if you exclude investment income.

Effective tax rate can easily be calculated by tax expense/ PBT. For IGIIL its around 16 % and for AICL its 10 %. Just simply apply 31 % and then see their EPS. You will see the impact.

I don't think personally this will go through as insurance companies are still in early stages. Their core profitability is not massive like banks.  Insurance penetration is still one of the lowest in the region as well.
As per ur view it will take at least 1 year to get it operational again.

Rational Investor, I agree. I don't think it will go through either.

Dehan, what are you referring to?

Offline Valueestimator

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Re: FEDERAL BUDGET 2016-17
« Reply #18 on: June 03, 2016, 11:36:48 AM »
Guys, in business one need to look at which of the additional costs can be passed on to the consumers. If cost cannot be passed on than it reduce margins and hurt share price. cement companies have seen huge cost increase when electricity rate went up but they passed such additional cost to consumers same is the case with fertilizer companies.

only the export oriented sector cannot pass additional cost to the international buyers as they can buy same product from other country. insurance sector will simply increase the premium rate on insurance policies.
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