Despite war-hit economy, Pakistan's Consumer confidence matches Global average.
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| Source: The Nielsen Group, October 2010 |
Friday, December 31, 2010
Pakistan: Treasury Single Account (TSA) - Status Update
The transition to the Treasury Single Account (TSA), a structural benchmark set by IMF, is not yet completed. Due date already lapsed in June 2009.
Objective of TSA is effective control of cash which is a key element in monetary and budget management. Since the central bank acts as a fiscal agent to the government, the custody of the TSA in most countries is with the central bank. However there have been instances, particularly in Latin American countries, where a large publicly owned commercial bank operates the TSA. But by in large, It Is with the central bank around the world including India.
How is TSA implemented in India?
India has TSAs established both at the federal and state government levels. Under an agreement entered into by the federal government with the Reserve Bank of India (central bank), general banking business consisting of receipts, collections, payments and remittances on behalf of Central Government is carried on by the Reserve Bank of India as its Banker. At places where the branches of Reserve Bank of India does not exist, the banking business of line Ministries is handled by the commercial banks (which include both State-owned and private banks) as agents of the Reserve Bank of India on turn over commission basis. At the federal government level, the TSA main account at the Reserve Bank of India is supplemented by subsidiary ledger accounts to record and control payments attributable to individual line ministries. The transaction banking services (for both revenue collection and payment disbursement) is mainly provided by a number of commercial banks, and the transaction accounts in these banks are operated on a zero-balance basis and set-off at the end of the business day with the respective subaccount of the TSA. [IMF]
Progress in Pakistan:
In recent FSR by SBP (14 December 2010), govt. reiterated that it is seeking technical help from the World Bank for smooth transition to TSA. No time line is given.
In the case of Pakistan, government deposits held with various banks amount to Rs 539 billion as of September 2010, forming a share of 11.7% in the total deposit base. Out of these, deposits of PSEs amounted to Rs 316 billion at September 2010 and form a share of 6.8% in total deposits.
NBP, BOP, HBL, AKBL, BAFL, UBL banks will be most affected banks, in case of complete implementation of TSA.
I believe that govt. deposits shift will be gradual & from the period it starts, aforementioned banks asset growth will also come under pressure, for shorter to medium term.
The impact of implementing TSA can be significant for above banks, in terms of deposit mobilization competition from CDNS (National Savings).
Objective of TSA is effective control of cash which is a key element in monetary and budget management. Since the central bank acts as a fiscal agent to the government, the custody of the TSA in most countries is with the central bank. However there have been instances, particularly in Latin American countries, where a large publicly owned commercial bank operates the TSA. But by in large, It Is with the central bank around the world including India.
How is TSA implemented in India?
India has TSAs established both at the federal and state government levels. Under an agreement entered into by the federal government with the Reserve Bank of India (central bank), general banking business consisting of receipts, collections, payments and remittances on behalf of Central Government is carried on by the Reserve Bank of India as its Banker. At places where the branches of Reserve Bank of India does not exist, the banking business of line Ministries is handled by the commercial banks (which include both State-owned and private banks) as agents of the Reserve Bank of India on turn over commission basis. At the federal government level, the TSA main account at the Reserve Bank of India is supplemented by subsidiary ledger accounts to record and control payments attributable to individual line ministries. The transaction banking services (for both revenue collection and payment disbursement) is mainly provided by a number of commercial banks, and the transaction accounts in these banks are operated on a zero-balance basis and set-off at the end of the business day with the respective subaccount of the TSA. [IMF]
Progress in Pakistan:
In recent FSR by SBP (14 December 2010), govt. reiterated that it is seeking technical help from the World Bank for smooth transition to TSA. No time line is given.
In the case of Pakistan, government deposits held with various banks amount to Rs 539 billion as of September 2010, forming a share of 11.7% in the total deposit base. Out of these, deposits of PSEs amounted to Rs 316 billion at September 2010 and form a share of 6.8% in total deposits.
NBP, BOP, HBL, AKBL, BAFL, UBL banks will be most affected banks, in case of complete implementation of TSA.
I believe that govt. deposits shift will be gradual & from the period it starts, aforementioned banks asset growth will also come under pressure, for shorter to medium term.
The impact of implementing TSA can be significant for above banks, in terms of deposit mobilization competition from CDNS (National Savings).
Thursday, December 30, 2010
MSCI Indices - YTD Return
| MSCI Indices | YTD* Return |
| BRIC | 5% |
| EM (EMERGING MARKETS) | 14% |
| EM ASIA | 14% |
| EM EMEA | 19% |
| EM LATIN AMERICA | 9% |
| EM ex ASIA | 14% |
| ASIA: | |
| CHINA | 1% |
| INDIA | 16% |
| INDONESIA | 27% |
| KOREA | 22% |
| MALAYSIA | 31% |
| PHILIPPINES | 27% |
| TAIWAN | 15% |
| THAILAND | 49% |
| LATIN AMERICA: | |
| BRAZIL | 1% |
| CHILE | 40% |
| COLOMBIA | 41% |
| MEXICO | 24% |
| PERU | 48% |
| EMEA: | |
| CZECH REPUBLIC | -10% |
| HUNGARY | -12% |
| POLAND | 11% |
| RUSSIA | 17% |
| TURKEY | 19% |
| EGYPT | 6% |
| MOROCCO | 11% |
| SOUTH AFRICA | 27% |
*YTD: January 2010-24 December 2010
Source: MSCI
EMEA region performed well, relatively because China & Brazil equity returns were subdued during whole year.
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