Naya Pakistan: Low-Cost Home Loans and Construction Subsidies to Boost Economy

Pakistani Prime Minister Imran Khan has recently announced a new housing construction incentives package that includes down payment assistance and expansion of home loans portfolios by commercial banks at discounted rates for affordable housing for the poor. Shariah compliant financing is also included in it. Pakistan’s mortgage finance to GDP ratio is just 0.25%, among the lowest in the world, according to the World Bank. The average for South Asia 3.4%.  New housing drives a large number of sectors of the economy from banking and building materials to construction and manufacturing of furniture and home appliances. These incentives are designed to stimulate the economy, boost employment and deal with the growing shortage of affordable housing in the country.




Naya Pakistan Housing:

Pakistan government's Naya Pakistan housing program offers Rs. 33 billion in direct subsidies for down payments for the first 100,000 applicants, according to media reports. In addition, the commercial banks are required to allocate 5% of their portfolio amounting to Rs330 billion for construction activities under this program. Pakistan’s mortgage finance to GDP ratio is just 0.25%, among the lowest in the world, according to the World Bank. A person earning Rs30,000 to Rs100,000 can build a house on a 5-marla lot with the mortgage financing at 5% and that of 10-marla at 7%.

Importance of Housing:

New Housing Starts are considered a reliable economic indicator in any country that collects routine economic data. Housing sector drives a large number of other sectors of the economy from banking and building materials to construction and manufacturing of furniture and home appliances.

These sectors, in turn, create jobs, improve people's living standards and widen the tax base. In the United States, for example, homes are the biggest contributors to net worth of Americans. Home equity loans allow people to take out loans for other purposes, including education, business startups and home improvements.  Hence, the governments' interest in pursuing pro-housing policies that ensure secure property rights, set aside land for housing and require banks to offer low-cost home loans.

Secure Property Rights:

Secure property rights are a pre-requisite for a thriving housing sector. Hernando de Soto Polar, Peruvian economist known for his work on the informal economy and on the importance of business and property rights, told Reuters back in 2016 that “(T)here is no such thing as an investment without property rights that are negotiable and transferable”.

In the United States, the world’s largest economy, the most important source of funds for new businesses is a mortgage on the entrepreneur’s house, de Soto wrote in his book “The Mystery of Capital”. He says that secure property rights for world's poor could unlock trillions in 'dead capital'.

Unfortunately, Pakistan's land title system is among the most corrupt in the country. A patwari, the title for the official keeping land records, is among the most resourceful government officials in much of Pakistan.  Patwaris have a well-deserved reputation for corruption. Legally protected and enforced property rights are the key source of the developed world’s prosperity, and the lack thereof is the reason why many nations remain mired in poverty, de Soto has argued.

Housing Finance:

Construction loans and mortgages at reasonable rates are essential for people to afford to build and own houses. Policies promoting discount loans and mortgages are the cornerstone of housing policies in the developed world.

Typical Low Cost Home. Source: Dawn 
In the United States, government-backed mortgage giants like FNMA (Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corp) deploy vast resources to buy mortgages and ensure liquidity in the mortgage market. When lenders make loans for housing based on FNMA or Freddie Mac rules, they are confident they can sell in a highly liquid mortgage market.

Other developed countries also support mortgage financing in similar ways to make housing affordable.  Pakistan’s mortgage finance to Gross Domestic Product ratio is just 0.25%, among the lowest in the world.  The average for South Asia 3.4%. It's much higher in developed nations. It is over 65% in the United States, 40% in France and 20% in Italy.

Mortgage Debt to GDP Ratios in Developed Nation. Source: Urban Institute


Land at Discount Rates:

Land is a significant part of the cost of housing, particularly in or around big cities where land is highly appreciated. The government can help reduce this cost by offering land at discount for affordable housing.  There are news reports that Pakistan government has identified tracts of land to offer it to builders at discount rates for affordable housing.


Summary:

Naya Pakistan housing program offers Rs. 33 billion in direct subsidies for down payments for the first 100,000 applicants and requires the commercial banks to allocate 5% of their portfolio amounting to Rs330 billion for construction activities. Shariah compliant financing is also included in it.  It will boost Pakistan’s mortgage finance to GDP ratio which is only 0.25%, among the lowest in the world, and lower than 3.4% for South Asia. New housing drives a large number of sectors of the economy from banking and building materials to construction and manufacturing of furniture and home appliances. These incentives are designed to stimulate the economy, boost employment and deal with the growing shortage of affordable housing in the country.


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Riaz Haq said…
‘Pakistan's economy may return to positive trajectory this month’
Finance Ministry predicts end to economic downturn, also sees rising inflation

https://tribune.com.pk/story/2257044/pakistans-economy-may-return-to-positive-trajectory-this-month

The Finance Ministry said that, in the previous fiscal year, there was small but positive growth of about 1% in the first quarter. The economic growth accelerated in the second quarter to 2.58%. But it turned negative in the third quarter of the last fiscal year by 0.19% following the COVID-19 pandemic. In the fourth quarter, the economy contracted 4.9%.

Over the complete FY 2019-20, the MEI showed average growth of a negative 0.4%, which coincides with the provisional Gross Domestic Product (GDP) growth published by PBS, it added.

The Ministry of Finance has also said that it was expected that exports would further recover in July and may find themselves within a broad margin around $2 billion to $2.1 billion. Similarly, it was expected that imports would recover in June and July and may find themselves within a broad margin around $3.5 billion to $4 billion.

For July 2020, due to Eid and revival of economic activities, it is expected that workers’ remittances may remain within the range of $1.8 to $2 billion.

The ministry said that domestic economic activities had also accelerated with many businesses beginning operations in accordance with the SOPs issued by the government, and that restaurants and educational institutions were expected to soon follow suit.

The ministry has also highlighted the impact of locust attacks on crops, saying the peak period of the attacks was not yet behind us.

According to the Q Block, in addition to COVID-19, the desert locust situation has worsened and is likely to be at its peak between July 15 and September 15, which will cause crops to suffer.

For this fiscal year, the agriculture sector’s growth is targeted at 2.8% on the basis of better growth in crops, livestock, fisheries and forestry. A meeting of the Federal Committee on Agriculture (FCA), held on July 8, 2020, reviewed inputs’ availability for the 2020 Kharif Crop. It was informed that weather patterns and the availability of water, seed, fertilizers and machinery would be better as compared to last year.

The Consumer Price Index (CPI) inflation rate was recorded at 8.6 year-on-year in June, 2020. Petroleum prices, which had fallen sharply during the last couple of months, again increased during the last week of June, which will have an impact on next month's CPI, said the Finance Ministry.

The deflationary effect of the decline in oil prices was compensated by a depreciation of the USD/PKR exchange rate. Historically, a combined increase of commodity prices and exchange rate depreciation of 1% increases the CPI level by around 0.9% in the long run, said the Finance Ministry.

However, the money supply was increasing in the economy. In the last fiscal year, the M2 increased by Rs3.1 trillion as compared to Rs 1.8 trillion, showing growth of 11.3%. Net Foreign Assets (NFA) of the banking sector also increased by Rs 992.2 billion against the contraction of Rs1.3 trillion in preceding year. Net Domestic Assets (NDA) increased by Rs2.1 trillion, showing growth of 11%.

The Finance Ministry said that the growth rate of M2 was still above pre-corona levels. This is mainly due to increased pace of government borrowing for budget support, as the government was supporting economic activity to curb deflation due to COVID-19. Also, in June, the growth rate of government borrowing remained above pre-crises levels. Historically, an increase of M2 by 1% tends to increase the CPI level by around 0.35% in the long run.
Riaz Haq said…
According to the details shared by Pakistan LNG, PLL was the lowest bidder, which quoted a remarkable rate of *5.7395%* of Brent (approx. USD 2.2/mmbtu) for the cargo. Prices quoted by the other three bidders are Gunvor 7.8421%, PetroChina 8.3500%, Trafigura 10.3811%.

https://propakistani.pk/2020/07/28/pakistan-is-buying-its-cheapest-lng-cargo-ever-at-a-record-low-price/


PLL received an offer for an Aug 27-28 delivery cargo at about $2.20/mmbtu. It is worth mentioning that Pakistan has been out of the spot market in 2020, and this is their first tender since November 2019.

A.A.H Soomro, managing director at Khadim Ali Shah Bukhari Securities told ProPakistani,

This is a game-changer! It’s time for Pakistan to relook at long term LNG contracts and move towards Spot purchase. Let’s assess the possibility of cancellation of the contracts. Bargain in your favor. This solves half of Pakistan’s problems if we speedify the LNG terminals. The economy would grow in leaps and bounds if we reduce energy costs now.

This is lower than the Asian LNG spot price LNG-AS for August which on Friday was estimated to be about $2.35 per mmBtu. The prices are expressed in the document as a “slope” of crude oil prices, a percentage of the Brent crude price, and are typically a pointer for the opaque spot LNG market.

Pakistan LNG has a separate tender to buy two LNG cargoes for delivery in September which closes on August 4.

Fitch Solutions stated that Asian spot LNG prices continue to hover at historical lows as COVID-19 continues to drag economic activity and demand.

The spot prices in Asia have remained depressed accordingly, falling by more than 50% since the start of the year to hit USD 2.5/mmBTU at the time of writing in July, from USD 4.0/mmBTU in January. YTD prices are shown to have averaged USD 2.7/mmBTU, halved from USD 5.4/ mmBTU in 2019 and less than a third of the USD 9.7/mmBTU averaged in 2018.

LNG imports into key importing markets in Asia – apart from China – have registered large y-o-y declines across the board as gas consumption across industry and commercial sectors slowed to a crawl as strict COVID-19 containment measures were observed.

The outlook for LNG prices was hardly rosy coming into the year even before the onset of the coronavirus pandemic, amid a negative backdrop of slowing coal-to-gas switching in China and a milder winter, although it looks to have deteriorated further as energy demand sinks across the region.
Riaz Haq said…
#Steel bars get pricier amid #construction boom in #Pakistan. Price hikes came at a time when #economic activities worth Rs1 trillion & Rs100 billion had been generated in Punjab & Khyber Pakhtunkhwa, respectively, in housing and construction projects. https://www.dawn.com/news/1593040

Manufacturers of quality steel bars increased their prices by up to Rs3,000 per tonne in November on the back of rising raw material costs in world markets and growing strength of the rupee against the dollar.

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On Friday, Prime Minister Imran Khan was informed in a meeting of the National Coordination Committee on Housing Construction and Development that 6,000 apartments would be constructed in Karachi under a project called Pakistan Quarters. In the first phase, work would start on 700 residential units at a cost of Rs4 billion over the next three months.

Another meeting on the Karachi Transformation Plan (KTP) presided over by the premier was informed that more than 100 projects worth Rs1.1 trillion have been planned under the programme.

Mughal Iron and Steel Industries Chief Operating Officer Shakeel Ahmed said the company pushed up the price of good quality steel bars by Rs3,000 per tonne in November to Rs114,500-115,000 per tonne.

Ruling out the possibility of increasing the price of long-steel product to cash in on the rising demand in the northern areas owing to construction activities, he said raw material prices have risen to $370 per tonne from $330 per tonne in the last one month. It happened due to various reasons like port congestion and the fear of further lockdowns in world markets.

The management of Mughal Iron and Steel Industries had informed analysts of brokerage houses that the Naya Pakistan Housing Programme (NPHP) can potentially create 6-7m tonnes demand for long steel assuming the government builds 50 per cent of the promised houses.

The company views future demand to come from the China-Pakistan Economic Corridor (CPEC) and the five hydro dam projects. It has already won a contract for three dams. It estimates steel demand of 350,000 tonnes from Bhasha Dam and 250,000 tonnes from Mohmand Dam in the first phase.

Razaque Steels Managing Director Irshad Mowjee, who also serves as general secretary of the National Steel Advisory Council (NSAC), said his company has increased the price by Rs3,000 on two kinds of quality steel bars, which now cost Rs111,500 and Rs116,500 per tonne.

Shredded scrap prices in world markets have risen due to lockdowns in Europe and the United States. The supply of scrap has become scarce, resulting in a hike in international prices. Yards do not have materials and the incoming supply is limited, resulting in the prices going up by $40 per tonne within the last three weeks, he added.

Fearing a further increase in steel bar prices if scrap rates do not come down, he suggested that the regulatory duty on raw materials should be abolished. The duty is not justified on raw materials used in a basic industry as industrialisation is the government’s top priority.

If it is not removed, it will affect the viability of CPEC projects. Cost overruns will happen as steel is a major component, he said.

Mr Mowjee urged the government to remove the additional customs duty of 2pc as competing raw materials are exempted from it. At present, the incidence of tax is around Rs23,000 per tonne, which needs to be reduced, he added.

Shredded scrap is used for manufacturing good quality bars for infrastructure projects. Increasing prices will affect the viability of CPEC projects, he said.

Gadani supplies ship plates that are used as raw material for lower-quality steel bars. Their prices have not increased, thus making bars made from steel billets uncompetitive. This may cause a drop in the production of good quality bars for infrastructure projects, he said.

Riaz Haq said…
Cement, steel prices continue to soar
Uptrend hampering recovery of construction activities in country

https://tribune.com.pk/story/2277008/cement-steel-prices-continue-to-soar

Owing to an expected jump in demand for steel and cement around the globe following the invention of Covid-19 vaccines, the uptrend in local prices for the two commodities has accelerated, which is hampering the recovery of construction activities in Pakistan.

Amreli Steels has announced a hike in the price of rebars by Rs5,000 per ton in addition to an increase of Rs5,000 per ton announced earlier during the month, said JS Global analyst Arsalan Ahmed in comments to The Express Tribune.

“It appears that the decision has been taken on the back of uptick in global scrap prices by almost $60 (Rs9,600) per ton,” he said. “After the recent increase, the price of rebars of the company stands at Rs128,000 per ton.”

Pakistan Association of Large Steel Producers (PALSP) Secretary General Syed Wajid Bukhari said that the price of scrap had soared from $300 per ton in early November 2020 to $450 per ton now due to shortage in the international market.

“The price has risen exponentially and several local mills have stopped buying raw material for now,” he said.

Dawood Hercules Corporation Research Lead Karim Punjani said owing to the rollout of Covid-19 vaccines, the international prices of the two commodities had soared.

“Companies expect demand for their products to skyrocket, hence prices of inputs including coal and steel scrap have hiked across the world,” he said.

Prior to the introduction of vaccines, Covid-19 was denting the global economy, he said. However, following the invention of vaccines, Covid-19 is being perceived as a disease, not a pandemic, which can be contained and losses borne on account of the virus can be recovered.

“This has led to a significant rise in demand,” he said. “Coal was priced at around $80 per ton before the global lockdown was imposed in March and fell to $65 when the lockdown was lifted.”

Given the current jump in demand, the price of coal has jumped to $90 per ton, said Punjani.

He added that local demand for steel and cement also swelled following Prime Minister Imran Khan’s announcement of a relief package for the construction sector.

He pointed out that instead of absorbing the hike in prices of inputs, companies were passing on the impact to consumers.

“A seasonal impact is also being witnessed with regard to coal prices,” he said. “In winters, hydropower plants observe maintenance shutdowns and countries generate electricity through coal and LNG plants.”

However, some builders have a different opinion about the hike in prices of cement and steel as they claim that the producers are taking benefit of the surge in demand for the two commodities.

“It is a conspiracy against Prime Minister’s Naya Pakistan Housing Scheme as well as the national economy,” said Association of Builders and Developers of Pakistan (ABAD) Chairman Fayyaz Ilyas in a statement issued in the backdrop of a sudden rise in steel and cement prices.

He urged the federal government to take immediate action against the industries which were trying to sabotage the steps taken by the government to revive the national economy.

Even though most of the raw material is local, cement and steel manufacturers have raised prices of their products to Rs625 for a 50kg bag of cement and Rs126,500 per ton of steel, which is not justified.

He was of the view that the cartel of cement and steel manufacturers seemed determined to crush the construction industry.

“Cement and steel are the main inputs for the construction sector but manufacturers of the two products are busy minting money without any justification and authorities are helpless to take any steps against these cartels,” he added.

Riaz Haq said…
Houses, flats for 1,500 Pakistani labourers under Naya Pakistan Housing project

https://www.thenews.com.pk/latest/806196-1500-pakistani-labourers-to-get-houses-flats-today


It is very difficult for the salaried class, workers and laborers to construct or purchase a house in the cities due to soaring prices of land, Prime Minister Imran Khan said Thursday.

He was addressing a ceremony in Islamabad in connection with allotment of 1,500 houses and flats to the working class under the Naya Pakistan Housing programme.

The premier said the government has started the Naya Pakistan Housing project with a new mindset to provide support to these segments of society to own a house.

The ceremony started with a short speech by the PM's aide on Overseas Pakistanis Zulfi Bukhari, who said that in the first phase of this project completed by Workers Welfare Fund, 1008 flats and 500 houses have been constructed.

For the first time, workers and labourers are being provided with their own roof on mortgage basis, Minister for Communications and Postal Services Murad Saeed had said.

Under this scheme, houses will be distributed among widows and disabled, besides labourers on ownership rights to those who are earning less than Rs 0.5 million.

The premier said the government has introduced a legislation under which banks will provide loans on 5% interest rate for the construction of houses.

He said banks have promised to set aside Rs380 billion for this purpose.

Imran Khan said there is a boom in the construction industry due to the incentives given by the present government. He said this will not only lead to wealth creation but also provide job opportunities to the youth.
Riaz Haq said…
Two new #REITs launched in #Pakistan after unveiling of #ImranKhan's #NayaPakistan #construction program. One REIT is focused on building villas and the other on building apartments in #Karachi. Dividend payment tax on REITs cut to 15% from 25%. #economy https://www.bloomberg.com/news/articles/2021-07-01/pakistan-to-see-first-reit-in-years-on-khan-s-construction-push

Pakistan is set for its first real estate investment trust in more than six years as Prime Minister Imran Khan seeks to stimulate the economy through a construction boom.

Arif Habib Dolmen REIT Management Pvt. plans to raise 8 billion rupees ($51 million) via private placements in two REITs for a housing project in Karachi, Muhammad Ejaz, the firm’s chief executive officer, said in an interview Tuesday. It plans to purchase the land in about two months, partly from Silkbank Ltd., he said.

Arif Habib Dolmen had created Pakistan’s only REITin 2015 and the industry, which had gone silent since then, is reviving now on Khan’s incentives and regulatory changes. Pakistan is willing to forgive tax evaders if they invest in construction projects, while banks have been asked to increase their outstanding mortgages by at least 5% by December.

One of the new REITs will focus on villas and the other on apartment buildings and commercial developments. This is a developmental REIT with an expected internal rate of return of more than 30%, according to Ejaz. The older REIT, which holds rental assets including Karachi’s most prominent mall and an office tower, offers a dividend yield of around 12% a year, he said.

Pakistan has been revising rules to make REITs more attractive for investors and developers. Finance Minister Shaukat Tarin in his budget this month lowered the dividend payment tax on REITs to 15% from 25%.

“The government has chosen the right sector for growth,” Ejaz said.

Silk Islamic Development REIT is scheduled to be launched next week for the commercial and apartment building section. Its five equal shareholders are Yunus Brothers Group that owns Lucky Cement Ltd., Fatima Group, Arif Habib Corp., Liberty Group and Arif Habib Dolmen. The second Silk World Development REIT includes real estate developer World Group, which will develop the villas.

Riaz Haq said…
#imrankhanPTI's #NayaPakistan #Construction Bet Boosts Investment. #Pakistan’s cement production capacity to grow by 31% to 91 million tons a year after announced expansions are completed. Pak home mortgage grew by 18% to a record Rs. 97.8 billion in May https://www.bloomberg.com/news/articles/2021-07-13/khan-s-construction-bet-sees-cement-firms-boosting-investment

https://twitter.com/haqsmusings/status/1416448327764221952?s=20

#imrankhanPTI's #NayaPakistan #Construction Bet Sees #Cement Firms Boosting #Investment. #Pakistan’s cement production capacity will increase by 31% to 91 million tons a year after the announced expansions are completed. #economy https://www.bloomberg.com/news/articles/2021-07-13/khan-s-construction-bet-sees-cement-firms-boosting-investment

A group of 19 cement manufacturers have seen their shares rise 67% in the past year, compared with the KSE-100 Index’s 30% gain. About 1,000 projects have registered under the government initiative with the boom just about to start on the ground, according to Mohammed Hassan Bakshi, a member of Khan’s Naya Pakistan Housing Program.
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Pakistani cement companies are investing to expand capacity a year after Prime Minister Imran Khan chose the construction sector to stimulate the economy.

Lucky Cement Ltd., Bestway Cement Ltd., and D.G. Khan Cement Co. are among more than half-a-dozen firms to announce plans in recent months. Pakistan’s cement production capacity will increase by 31% to 91 million tons after the announced expansions are completed, according to Insight Securities Pvt.

Khan’s government last year said it will subsidize low-cost housing and forgive tax evaders if they invest in construction projects. Banks have also been asked to increase their outstanding mortgages by at least 5% by December. Cement stocks have outpaced the nation’s benchmark index.

“Construction-related activities have a very, very big multiplier effect in emerging economies,” said Waleed Saigol, director at Maple Leaf Cement Factory Ltd. “The government has realized that the private sector has to play a leading role in getting the wheels turning again.”

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The construction boom is also having other effects. Pakistan’s consumer home finance, which is one of the lowest in South Asia, has increased by 18% to a record 97.8 billion rupees in May, according to Foundation Securities Pvt. The country has also seen its first real estate investment trust in more than six years.

The nation’s economic growth is “supported by a continued strengthening of domestic consumption and resilient manufacturing and construction activity,” Fitch Ratings Ltd. said in May. However, a fresh wave of Covid-19 cases “could disrupt the positive momentum.”

Riaz Haq said…
#imrankhanPTI's #NayaPakistan #Construction Bet Boosts Investment. #Pakistan’s cement production capacity to grow by 31% to 91 million tons a year after announced expansions are completed. Pak home mortgage grew by 18% to a record Rs. 97.8 billion in May https://www.bloomberg.com/news/articles/2021-07-13/khan-s-construction-bet-sees-cement-firms-boosting-investment

https://twitter.com/haqsmusings/status/1416448327764221952?s=20

#imrankhanPTI's #NayaPakistan #Construction Bet Sees #Cement Firms Boosting #Investment. #Pakistan’s cement production capacity will increase by 31% to 91 million tons a year after the announced expansions are completed. #economy https://www.bloomberg.com/news/articles/2021-07-13/khan-s-construction-bet-sees-cement-firms-boosting-investment

A group of 19 cement manufacturers have seen their shares rise 67% in the past year, compared with the KSE-100 Index’s 30% gain. About 1,000 projects have registered under the government initiative with the boom just about to start on the ground, according to Mohammed Hassan Bakshi, a member of Khan’s Naya Pakistan Housing Program.
----------

Pakistani cement companies are investing to expand capacity a year after Prime Minister Imran Khan chose the construction sector to stimulate the economy.

Lucky Cement Ltd., Bestway Cement Ltd., and D.G. Khan Cement Co. are among more than half-a-dozen firms to announce plans in recent months. Pakistan’s cement production capacity will increase by 31% to 91 million tons after the announced expansions are completed, according to Insight Securities Pvt.

Khan’s government last year said it will subsidize low-cost housing and forgive tax evaders if they invest in construction projects. Banks have also been asked to increase their outstanding mortgages by at least 5% by December. Cement stocks have outpaced the nation’s benchmark index.

“Construction-related activities have a very, very big multiplier effect in emerging economies,” said Waleed Saigol, director at Maple Leaf Cement Factory Ltd. “The government has realized that the private sector has to play a leading role in getting the wheels turning again.”

-------------------

The construction boom is also having other effects. Pakistan’s consumer home finance, which is one of the lowest in South Asia, has increased by 18% to a record 97.8 billion rupees in May, according to Foundation Securities Pvt. The country has also seen its first real estate investment trust in more than six years.

The nation’s economic growth is “supported by a continued strengthening of domestic consumption and resilient manufacturing and construction activity,” Fitch Ratings Ltd. said in May. However, a fresh wave of Covid-19 cases “could disrupt the positive momentum.”

Riaz Haq said…
Govt To Provide Loan To Deserving People Under Kamyab Pakistan Programme: Tarin

https://www.urdupoint.com/en/pakistan/govt-to-provide-loan-to-deserving-people-unde-1324411.html

:Federal Minister for Finance and Revenue Shaukat Tarin Wednesday said the government would provide loan to deserving people to set up their business or purchase house through transparent process.

Talking to a private news channel, he said under Kamyab Pakistan Programme, low-cost housing scheme would be launched for lower income groups enabling them to own their houses.

Tarin said the data of deserving beneficiaries was available with department concerned in that regard.

The minister further said the incumbent government was providing loan on easy conditions and Kamyab Pakistan Programme beneficiaries could easily access to agriculture and business loans at zero-mark up without collateral.

He said the government under visionary leadership of Prime Minister Imran Khan had strengthened and stabled the national economy through prudent economic policies.

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Kamyab Pakistan Program to bring 3 million families out of poverty: Shaukat Tarin


https://dunyanews.tv/en/Business/614415-Kamyab-Pakistan-Program-to-bring-3-million-families-out-of-poverty-Shau


Finance Minister Shaukat Tarin has said that beneficiaries of Kamyab Pakistan Program would enjoy easy access to agricultural and business loans at zero-mark up without collateral.

He was talking to Prime Minister s Special Assistant on Social Protection and Poverty Alleviation Dr. Sania Nishtar in Islamabad.

The Finance Minister said Kamyab Pakistan Program will provide low-cost housing scheme for lower income groups enabling them to own their houses.

He said the program will bring at least three million families out of the vicious cycle of poverty in the next three to five years.

Riaz Haq said…
#Pakistan's TPL Plans to Raise $500 Million REIT to Gain From #NayaPakistan #Construction Push. It is seeking to raise 60% of the targeted funds from foreign investors, 30% from domestic investors & the rest from its parent TPL #Properties Ltd. #Karachi https://www.bloomberg.com/news/articles/2021-08-31/tpl-plans-pakistan-s-biggest-reit-to-gain-from-construction-push


A unit of Pakistan’s TPL Corp. plans to raise as much as $500 million through a private real estate investment trust, marking one of the largest such fundraisings in the nation’s history.

TPL REIT Management Co. is seeking to raise 60% of the targeted funds from foreign investors, 30% from domestic investors and the rest from its parent TPL Properties Ltd., according to Ali Jameel, CEO of TPL Corp. The hybrid real estate investment trust plans to close the deal by June, and will offer an internal rate of return of more than 30% in local currency, he said.
Riaz Haq said…
Saudi company signs MOU to invest in $12 billion real estate project in Pakistan


https://www.arabnews.pk/node/1968296/pakistan

Sarh Attqnia Company will partner with Javedan Corporation for an urban development project on banks of Lahore’s Ravi river
‘Join us,’ Riyadh-based investor tells other Saudi companies to invest in Pakistan


KARACHI: A Riyadh-based engineering and construction firm has signed an investment agreement in a $12 billion real estate project in the eastern city of Lahore with a Pakistani business consortium, officials said on Monday.
An MOU between Sarh Attqnia Company (SAC) and the Pakistani party, Javedan Corporation, was signed in Karachi on Sunday for the construction and development of the first phase of upcoming ‘Ravi City’ project to be built on 2,000 acres of land along the banks of the historic river Ravi.
The agreement comes hot on the heels of the recently held Riyadh investment conference during the three-day visit of Pakistani Prime Minister Imran Khan to Saudi Arabia last month.
“Investment conference was held in Riyadh where large Saudi companies participated... Fortunately, we got in touch with one of the big developers’ company- Sarh Attqnia- which was looking for some opportunities for development here (in Pakistan) as a partner,” Arif Habib, Chairman of Arif Habib Group of which the Javedan Corporation is a subsidiary, said at the signing ceremony of the agreement.
Habib said the Saudi company would contribute “financially and technically as well.”
Riaz Haq said…
Faseeh Mangi
@FaseehMangi
Pakistan's subsidized house finance scheme data
-260b rupees ($1.5 billion) requested by people
-109b rupees ($600 million) approved for small houses
- 32b rupees disbursed

https://twitter.com/FaseehMangi/status/1474358251068313601?s=20

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Prime Minister Imran Khan on Wednesday formally launched the Naya Pakistan Card initiative, bringing mega welfare programmes of the Pakistan Tehreek-i-Insaf (PTI) government covering health, education, food and agriculture sectors under one umbrella.

https://www.dawn.com/news/1662707


With the launch of Naya Pakistan Card, which covers Ehsaas Ration Programme based on a food subsidy package for low-income families, Kisan Card, Sehat Card and scholarships for students, beneficiaries of various initiatives can avail all services on the same card.

Addressing the ceremony held at the Governor House, Prime Minister Khan said that Kamyab Pakistan scheme was also in the pipeline under which two million eligible families would receive Rs400,000 interest-free loans for self-employment, free technical education to one member of each registered family, Rs2.7 million loan for house construction and free health insurance.

He said the proposed Kamyab Pakistan programme to be launched in the KP province would be extended to other provinces later.


Says a project promising interest-free loan for 2m eligible families is on the anvil

Besides, the government was awarding 6.3m scholarships to students to encourage them to pursue higher education as Rs47bn had been allocated in this regard, he said.

In order to ensure award of scholarships on merit, a special cell was being set up at the PM secretariat to collect students’ data, he announced
Riaz Haq said…
@haqsmusings
·
13h
Unfortunately,
@AtifRMian
only sees #Pakistan’s glass half empty. He refuses to even acknowledge the country’s progress on growing #export & change in #energy mix to lower imports.He ignores transitory high #energy prices causing current account deficits. https://southasiainvestor.com/2022/01/pakistan-economy-not-in-good-place-atif.html
Omer Zeshan Khan
@OmerZeshanKhan
·
8h
Export growth is low end and for limited time (a bonus). Previous Govt did a few things for localisation (car/mobile/edible oil). Haven’t seen these guys doing anything. They are just sitting and talking. Pakistan’s economy is robust enough to feed people while Govt waits.
Omer Zeshan Khan
@OmerZeshanKhan
·

·
Riaz Haq
@haqsmusings
·
3h
#ImranKhan’s #NayaPakistan housing program is a good idea, especially the incentives for small & medium mortgages for the lower middle class. It’s boosting #employment in #Construction & #manufacturing sectors as well as the housing stock http://riazhaq.com/2020/07/naya-pakistan-low-cost-home-loans-and.html
Omer Zeshan Khan
@OmerZeshanKhan
·
2h
Can you name one project under Naya Pakistan Housing?
Riaz Haq
@haqsmusings
Replying to
@OmerZeshanKhan

@Muslims4USA
and
@AtifRMian
#Housing #Mortgage financing in #Pakistan jumped 85% last year, according to the State Bank. “Financing under MPMG picked up momentum in 2021 as approvals for financing by banks grew from near zero to Rs117 billion in 2021”

https://twitter.com/haqsmusings/status/1488166329769070596?s=20&t=6qD3vPwWBkwSxAhRdxw3Tg

https://www.thenews.com.pk/amp/923033-banks-disburse-rs355bln-housing-loans-in-2021

KARACHI: Credit to the housing and construction sector increased by record Rs163 billion or 85 percent in 2021, mainly driven by the central bank’s rules to encourage mortgages and incentives and penalties for lenders with respect to achieving or failing housing finance targets.

Banks disbursed Rs355 billion housing loans in 2021, compared with Rs192 billion in the previous year, the State Bank of Pakistan said in a statement on Thursday.

Disbursement of low-cost housing loans under the Government Markup Subsidy scheme, also known as Mera Pakistan Mera Ghar (MPMG), reached Rs38 billion last year. In December, banks extended Rs9.3 billion loans to the borrowers; highest monthly disbursement since January 2021.

Analysts said tighter monetary conditions usually affect mortgages as the SBP has jacked up interest rates by 275 basis points in three moves since September. Currently, the policy rate hovers at 9.75 percent.

However, the government’s mark-up subsidy scheme looks to remain protected from an upward move in interest rates as the government is providing subsidy to the mortgage clients for the first 10 years.

Habib Bank, Meezan Bank and Bank Al Habib were the top three contributors, said the SBP.

Banks also made significant progress in the provision of financing under MPMG scheme, introduced in 2020, it added.

“Financing under MPMG picked up momentum in 2021 as approvals for financing by banks grew from near zero to Rs117 billion in 2021. The banks have received requests of financing of Rs276 billion from potential customers, which indicates that approvals and disbursements will keep growing in coming months.”

Bank Alfalah emerged as the leading bank with highest disbursement of Rs3.3 billion followed by nine banks with disbursements of over Rs2 billion each. These include Meezan Bank, Bank Islami, National Bank, Standard Chartered Bank, HBFCL, United Bank, MCB Bank, Bank of Punjab and Habib Bank, said the statement.

Financing for housing and construction and particularly under MPMG witnessed impressive growth on the back of many enabling regulatory environments introduced after extensive consultation with stakeholders, the SBP noted.

Further, the SBP said it advised the banks to increase their housing and construction finance portfolios to at least 5 percent of their domestic private sector advances till December 2021, introducing a set of incentives and penalties to ensure compliance.
Riaz Haq said…
#imrankhanPTI: over 70,000 #housing projects worth Rs1.4 trillion have been approved, which will have an overall impact of Rs 7.3 trillion on the #construction industry, and 1.2 million new #jobs will be created. #Pakistan #NayaPakistan https://www.brecorder.com/news/40153680

Prime Minister Imran Khan said that over 70,000 housing projects worth Rs1.4 trillion have been approved, which will have an overall impact of Rs7.3 trillion on the construction industry, and 1.2 million new jobs will be created.

“It is our government’s huge achievement that out of the total 80,000 applications, 35,420 applications amounting to Rs130 billion have been approved. A total of Rs46 billion has been disbursed to 13,407 applicants so far,” he said, while chairing a meeting of the NCC on Housing, Construction and Development, here on Thursday.

He added that applications worth Rs7 billion are being received weekly out of which Rs4 billion are approved and Rs2 billion is being disbursed every week, which shows that the devised system is working efficiently. “PTI’s government has achieved huge milestones regarding provision of low-cost housing to lower and middle-income class,” he added. He further said the government’s biggest challenge was to change the elitist mindset of financial institutions and ensure facilitation of common people in getting loans.

Average loan worth 36 lakhs in the approved and disbursed loans figure shows that the biggest beneficiary of subsidized loans is the middle- and lower-income class, he said.

In the last three years of the government, a 148 percent increase in housing finance and expected approval of Rs517 billion till December 2022, reflects the steps taken by the government to facilitate low-cost housing and construction industry, he added.

Housing Finance: Growth, but!

The prime minister said that in line with the manifesto of the PTI, the government is moving in the direction to add one percent every year in the housing finance against our GDP that will result in a construction boom and provision of houses to the lower and middle income class.

The meeting was briefed that for the very first time in the history of Pakistan, a sustainable ecosystem for low-cost housing has been developed and implemented, which has enabled the sector to achieve exponential growth.

The Foreclosure Law has been implemented in letter and spirit and long-term loans (up to 20 years) with subsidized mark-up (as low as only two percent) are being given. In addition to that a cost subsidy of Rs300,000 for low-income housing schemes and 90 percent tax waiver has resulted in encouraging the private sector, which is actively participating in the construction of housing units under the schemes.

The projects include urban, peri-urban, urban regeneration, government-funded and private sector projects.

The meeting was also briefed about the transparent and automated process to receive and process the applications, which has resulted in targeting the needful lower and middle-income class.

This is being ensured by the development of one-window digital portal with automated application tracking system by development authorities.

The meeting was also briefed on figures regarding the total low-cost housing construction activity so far after 2018. A total of 161,924 low-cost housing units were approved, out of which 45,191 units are under construction and 20,898 units have been completed, which is significant, bearing in mind that before the subsidies by the government, foreclosure law and low-cost housing schemes by the PTI’s government, the sector was in a shambles.

A break-up of the government financed low-cost housing projects was also given according to which 4,000 units in Farash Town, 4,000 units in LDA City, 1,320 units in Jalozai, 245 units in Raiwind, 324 units in Sargodha and Chiniot, and 1,800 units at Angoori Road are being constructed with completion deadlines before the end of 2022.

Riaz Haq said…
#Pakistan #cement production has grown from 35 million metric tons in 2015 to 55 million metric tons in 2021. #CPEC #NayaPakistan #housing #infrastructure #construction #exports https://www.globalcement.com/news/item/13839-update-on-pakistan-march-2022

https://twitter.com/haqsmusings/status/1504176499032616960?s=20&t=bRjXPJL-GLBVBoMhFkJVwA

Update on Pakistan, March 2022 - Cement industry news from Global Cement

https://www.globalcement.com/news/item/13839-update-on-pakistan-march-2022

(Graph in the article shows Pakistan cement production growth from 35 million tons in 2015 to 55 million tons in 2021)

Data from the All Pakistan Cement Manufacturers Association (APCMA) shows that cement despatches have been steadily growing since the mid-2010s with a blip in 2020 caused by the start of the Covid-19 pandemic. The upward trend has been driven by local sales. Exports have generally grown at the same time, with more variance, but they are yet to regain the high of nearly 11Mt reported in 2009. On a rolling annual basis, local sales have remained steady since mid-2021 but exports have been slowly falling. In April 2021 they were 9.17Mt but by February 2022 they were 7.33Mt. For the February 2022 figures APCMA blamed this on the growing cost of production, rising international freight rates, mounting coal prices and a trade ban with India. On that last point for example, Pakistan-based producers exported 1.21Mt of cement to India in the 2017 – 2018 financial year before exports stopped after February 2019. Despite a brief respite in the spring of 2021 talks are still ongoing to resume trade with India.

On the corporate side the country’s largest cement producer by capacity, Lucky Cement, drew the same conclusion as the APCMA with its half-year results to 31 December 2021. Its local sales volumes were down a little but its exports were down a lot. It noted that the reason its local sales were falling but national industry local sales were up slightly was due to some competitor plants being non-operational in the previous year. However, the company managed to keep sales revenue and earnings increasing year-on-year by successfully combating growing input costs with price rises. Bestway Cement, the country’s other large producer, reported a tougher situation in the second half of 2021, with both local sales and export volumes down. This was attributed to a boom in construction activity in the second half of 2020 as Covid-19 lockdowns were eased. Demand for cement since then was said to be ‘sluggish’ due to inflation and high commodity prices. It also pinned its marked fall in exports on political and economic instability in Afghanistan. However, turnover and operating profit were both up due to higher selling prices.

Elsewhere in the sector news since the start of 2021, Pakistan’s exports to South Africa remained stymied in early 2020 due to a review of ongoing tariffs and the government decision to restrict infrastructure projects to only using locally produced cement. On the sustainability front the APCMA started to set out its decarbonisation strategy in November 2021. It may have a long way to go given that a think tank reported earlier in the year that the cement sector was the largest emitter of coal-related CO2 emissions in the country, even more than power generation. Alongside this plenty of capacity additions have been announced. Lucky Cement started commercial cement production at its 1.2Mt/yr integrated Samawah cement plant in March 2021. Various new cement plants and upgrades to existing plants have been proposed by Bestway Cement, Cherat Cement, Fauji Cement, Kohat Cement Company, Lucky Cement and Maple Leaf Cement. Finally of note to a sector troubled by energy prices, in September 2021 the Pakistan International Bulk Terminal said it was going to upgrade its coal handling capacity to around 17Mt/yr by 2024.

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