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BUSINESS Tuesday, 22 October, 2013
FPCCI demands duty-free access to US markets
ISLAMABAD: The Federation of Pakistan Chamber of Commerce and Industry (FPCCI) on Monday demanded duty free access of Pakistani products to the US markets for helping it offset the colossal economic loss during its war against terrorism. Pakistan economy has so far suffered more than 1 trillion dollars huge loss for the last one decade in its continuing war on terror, FPCCI Chief Zubair Ahmad Malik told APP from Bangkok. Pakistan was the only country in the world which was most affected by this war, he added. The FPCCI wanted duty free trade with the US private sector and not aid. Pakistan could provide the best quality products of international standard to the US markets on buy back-basis, provided its private sector was fully strengthened by the US investors on scientific lines, said Malik. Zubair said US President Barack Obama, in the presence of Prime Minister Nawaz Sharif currently visiting the US, must announce free market access to Pakistani products at zero duty. He also urged the US businessmen to invest in power, IT, agriculture, livestock, engineering and other sectors as manpower in Pakistan is much cheaper. He said the in order to offset the threat of food scarcity, the US must help Pakistan livestock sector, which had the potential to meet an ever increasing demand of the US market with an excellent quality of food, fruit, vegetables, beef and mutton. Zubair said Pakistan was blessed with plenty of natural resources which needed to be explored with the US foreign investment. APP
Success or failure in business is caused more by the mental attitude even than by mental capacities. — Walter Scott
‘Hot aIr InveStment’! economists do not conform as sBp reports 42pc growth in foreign investment KARACHI
F imminent economist like Dr Kaiser Bengali is to be believed, the governments in Pakistan have been deluding the country’s financiallyilliterate masses for more than a decade past. The ruling politicians and economic managers would soon be found boasting about the 42 percent growth in the muchneeded foreign investment flowing into the dollar-hungry country during first quarter of the current fiscal year. The State Bank was the first to boast Monday that during July-September FY2013-2014 the country received foreign investment worth $ 338.6 million, up $ 99.9 million compared to $ 238.7 million of the corresponding period of last year. The analysts attribute this 41.9 percent increase to the offshore investors’ quest for safe heavens like Pakistan’s energy sector. Also, analyst Asfar Bin Shahid believes that the increasing foreign investment was because of the foreign-funded
governments have Been misguiding masses on investment numBers: dr Bengali
investment entails the creation of asset, missing in pakistan’s case since shaukat aziz era
projects that still are under completion thus attracting more dollar inflows. “Increasing prices of oil and gas in international market provide the foreign investors with a safe heaven in Pakistan’s oil and gas sector,” A.B Shahid added. Of the total, the Foreign Direct Investment (FDI) swelled by 85 percent to $ 230.9 million as against $ 124.8 million of FY13. Things, however, are not that rosy for Pakistan as an investment destination as the offshore investors remained risk-averse while trading on the cashstrapped Pakistan’s stocks market that remained volatile during 1QFY14 due to, what AB Shahid viewed, a constantly depreciating rupee. According to central bank, during the period under review the inflow of foreign private portfolio investment in the country contracted by 60 percent to $ 38.8 million from last year’s $ 96 million. On the other hand, the flow of foreign public portfolio investment into Pakistan witnessed a whooping growth of 285 percent to stand at $69 million compared to $ 18 million of 1QFY13. “The foreign portfolio investors re-
mained risk-averse towards the losses they had to incur on account of rupee depreciation at time of withdrawal,” said AB Shahid. The analyst liked increased foreign inflows in Pakistan to a “stable rupee”. Aqeel Karim Dhedi, a leading stocks broker better known as AKD, was upbeat that Pakistan, being a frontier market, would receive sufficient dollar inflows in the next couple of months. “The (share) markets globally suffered more outflows in recent months. Even India was no exception,” said he. Dr Kaiser Bengali, renowned economist and former advisor to Sindh chief minister, came up with an eye-opening view of prevailing conventional trends about investments, foreign or local. Rejecting the governments’ tall claims on increasing foreign investment, the economist basis his comments on the definition of investment that, he said, entails the creation of an asset. “For more than a decade, since Shaukat Aziz’s era, we are hearing the governments boasting about foreign investment growth,” said Dr Bengali. In
Mega carpet show in Pakistan 150 international delegates arrive to attend the event LAHORE Online
China, the major potential market of Pakistani hand-knotted carpet, will help the carpet industry to enhance its competitiveness and tap the future market of China. Pakistan Carpet Manufacturers and Exporters Association (PCMEA) newly-elected central chairman Akhtar Nazir Khan Cooki stated this while talking to media after receiving Chinese and Indian delegation at Wagha border. After attending a carpet exhibition in India, a Chinese delegation along with Indian carpet industry stakeholders reached Pakistan through Wagha with a view to attend the four-day Pakistan hand-knotted carpet mega show 2013,
being opened on Tuesday, at Pearl Continental Hotel, Lahore. The PCMEA chairman informed that more than 150 foreign delegates mainly from China, India, Nepal, Spain and Germany had reached Pakistan to participate in this exhibition. Cooki said besides participation of regional countries, foreign guests including direct importers, interior decorators, architects, home furnishing companies and colour combination experts from the US, Europe, Far East, Australia, Middle East and Africa have also been invited to attend the event. "So, this will be a huge business activity that would certainly improve the image of the country at international level," he said. The chief organiser of the carpet show and vice chairman of the PCMEA (NZ) Kamran Razi stated that the visiting Chinese delegation would also explore opportunities of joint ventures for encouraging economic activities between the two nations, besides inking a Memorandum of Understanding with the Pakistan
Carpet Manufacturers and Exporters Association. To enable Pakistan to tap the emerging handmade carpet market in China, the delegation has offered research and development assistance to the producers of handmade carpet in Pakistan. On this occasion, representatives of Chinese delegation said that they would be delighted to help the Pakistani carpet industry with its up-gradation, and thereby enabling it to tap the Chinese market. They said China had already laid the foundation for establishment of a business development centre in Pakistan to extend research and development assistance to the Pakistani industry. Kamran Razi said though Pakistan is also in favour of enhancing mutual trade, still it necessitates some foreign direct investment from China. He said that FDI worth around $ 769 million have flown into Pakistan from China over the past five years, and some $ 11.7 million have flown in from Hong Kong.
ENERGY-HUNGRY INDIA IN PIPELINE DIPLOMACY MOSCOW Online
In comforting news for energy-hungry India, the transitional TurkmenistanAfghanistan-Pakistan-India (TAPI) gas pipeline project is turning into a reality with US energy giant Chevron likely to be chosen to construct and run the 1,800 km long pipeline. New Delhi is also seeking to tap hydrocarbons from Russia's vast reserves with a similar pipeline that could link or run parallel to it. India, which is set to become the third largest energy consumer in the world by 2025 after the US and China, has been trying to firm up gas transmission projects with other countries, including one through Iran and Pakistan and from Myanmar, but none of them have worked out so far due to various constraints, reported IANS. The TAPI pipeline now looks set to be concretised with Chevron to be selected to lead a consortium to finance and run the pipeline. Prime Minister Manmohan Singh during his talks with President Vladimir Putin here Monday sought heightened energy cooperation between the two countries. India has stakes in the Sakhalin-1 project, off the east coast of Russia, and is also scouting for energy in the Tomsk region in
The length of pipeline in Turkmenistan, Afghanistan and Pakistan up to the Indian border is 145 km, 735 km and 800 km respectively Siberia. But whatever oil and gas India gets from the two areas, it has to sell to other buyers, as bringing it to India via ship would be too expensive, said an informed source familiar with the bilateral discussions. The money that comes from sale of the Russian gas and oil is then used for purchasing oil for India, the source added. With the TAPI looking to succeed, India would be examining if something similar can be done with Russia, like an oil pipeline from Russia running parallel to it, said another source. In fact, Indian External Affairs Minister Salman Khurhid, during his Moscow visit earlier this month, had pointed to it. In an interview to Voice of Russia after
co-chairing the Indo-Russian Inter-Governmental Commission (IRIGC), Khurshid said Russia had evinced keenness in participating in a TAPI-like pipeline project. He said all the Russian gas was being exported to Europe and if the TAPI pipeline was extended to Russia, it would help bring the gas to South Asia. During Prime Minister Manmohan Singh's talks with President Putin, both sides are likely to agree on conducting feasibility studies on such a pipeline project. Chevron has sought exploration rights in Turkmenistan in exchange for financing and running the project. Turkmenistan, which was earlier against giving exploration rights to foreign com-
panies, has relented. According to reports, Turkmenistan has offered exploration rights to Chevron for offshore fields and asked the company to swap the gas found for onshore ones and export it to Afghanistan, Pakistan and India under the TAPI project. Asked about Pakistan's opposition to joining the TAPI project over India-Pakistan border tensions, the source said Pakistan needed energy and was equally keen to participate in the project. The TAPI project envisages constructing 1,680 km of pipeline with a total gas capacity of 90 mscmd. The length of pipeline in Turkmenistan, Afghanistan and Pakistan up to the Indian border is 145 km, 735 km and 800 km, respectively.
a B shahid says staBle rupee a must for portfolio investment growth economics, he said, investment meant the creation of an asset, something missing in case of investment inflows into Pakistan for the last many years. “What we have been witnessing (in Pakistan’s case) is what we call ‘hot air investment’,” said the economist adding “Remember how in 2007 the Karachi stocks market had deflated like a balloon?” Dr Bengali went on to say that no government should claim credit on increase in foreign investment which, he said, was a “statistical phenomenon” depending on a positive development in certain sector of the economy. “Investment is based on a lump sum activity” which increases or decreases in accordance with economic activity. Keeping up with his intellectual insight, Dr Bengali revealed that the portfolio investment was no investment. “The stocks market investment is no investment as it does not create a new asset,” said the economist. The former provincial advisor went on to say that even privatization did not eventuate into investment. “Privatization is the change of possession only,” he said.
ICSID orders release of Karkey powership
The Turkish energy company, Karkey Karadeniz ElektrikUretim AS (Karkey), welcomed the decision on its request for provisional measures by the tribunal established under the World Bank-affiliated International Centre for Settlement of Investment Disputes (ICSID) on 16 October 2013. In this decision, the tribunal ruled that it was satisfied pursuant to Article 25 (1) of the ICSID Convention that it has prima facie jurisdiction, and has ordered the immediate release of Karadeniz Powership Kaya Bey (Karkey’s largest powership and one of four Karkey vessels that has been detained in Pakistani waters since April, 2012). Following a hearing on October 8, 2013, the ICSID tribunal ruled that Karkey’s Karadeniz Powership Kaya Bey registered under the Turkish flag should be immediately released from detention and allowed to sail to Dubai for repairs. In the decision, the tribunal stated that the state of Pakistan shall grant all authorizations and clearance required for the vessel’s departure, and shall take any other action necessary or required to allow the vessel to depart lawfully into international waters. A Karkey spokesperson said: “The decision by the ICSID tribunal to order the release of one of our powerships vindicates the position taken by Karkey that the tribunal clearly has jurisdiction under the Turkey-Pakistan Bilateral Investment Treaty (BIT), and that recourse to Pakistani courts is not mandatory under the BIT. The spokesperson also stated: “In light of the decision, a new opportunity has arisen for Pakistan to amicably settle the dispute, especially considering the findings therein regarding the jurisdiction of the tribunal and ICSID.” The company spokesperson said: “Increased economic cooperation between Turkey and Pakistan is in both countries’ best interest. This dispute has clouded the climate for bilateral cooperation and damaged investor and business confidence.
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Don't worry about people stealing your ideas. If your ideas are any good, you'll have to ram them down people's throats. — Howard Aiken
$322m under CSF deposited in bank: SBP ISLAMABAD Online
Pakistan has received 322 million dollars from the United States under the Coalition Support Fund (CSF). According to the State Bank of Pakistan Spokesman Umar Siddiq, the US had paid the $322 million under CSF and this amount had been deposited in the SBP account. With the deposit of this amount the foreign reserves of the country had again risen to above 10 billion and now Pakistan had 40 days of foreign exchange reserves.
Pakistan releases 75,000 tons of wheat to WFP
Pakistan has released 75,000 metric tons of wheat to the United Nations World Food Programme (WFP). A WFP press release issued on Monday said this completes the entire donation of 150 thousand metric tons pledged by the government of Pakistan for 2013. The WFP recently concluded delivery of 75,000 tons of wheat to families affected by law enforcement agencies operations in the country's north-west. This year's donation‚ valued at 5.5 billion rupees‚ demonstrates Pakistan government's strong commitment to helping the people in need. The WFP Pakistan country director said international donors had so far provided 29 million dollars out of the total requirement of 43 million dollars for misery-stricken people in Pakistan.
LCCI listens to members' grievances LAHORE APP
On the first Complaint Redress Day of its history, the Lahore Chamber of Commerce and Industry on Monday got a good response and received 10 complaints from the LCCI members pertaining to mediation, trafficrelated problems, non-issuance of loans to small businessmen and complicated tax procedures. LCCI President Engineer Sohail Lashari, Senior Vice President Mian Tariq Misbah and Vice President Kashif Anwar listened the complaints, while Executive Committee Member Haji Muhammad Akram and former EC member Rehmatullah Javaid were also present. The first three complaints were filed against non-payment of dues. Salman Inamullah of M/s SK Traders; Assad Butt of M/s Professional Construction Services (Pvt) Limited and M/s Multi Business Services complained about non-payment their dues from certain business entities in Pakistan and abroad. The LCCI president referred them to LCCI Mediation Centre for further action while on the third case, it was decided to write letters to the Ministry of Commerce and the Ministry of Foreign Affairs. Next came up the issue of traffic congestion in Badami Bagh Auto Market which was presented by former EC Member Waqar Ahmad Mian, who sought the LCCI office-bearers' help for deputation of traffic wardens to streamline traffic flow. Quite a few members spoke about complicated tax procedures and the LCCI President assured them that tax officials would soon be invited to the Lahore Chamber for a meeting with the LCCI members facing troubles while dealing with taxation issues.
Despite debt drama, US still outshining europe LONDON
f Wall Street's record high is a signpost, the US economy has every chance of pulling further ahead of a stuttering Europe despite new battles to come in Washington over the government's budget and debt ceiling. Far from sapping animal spirits, the last-gasp pact to avert an unprecedented US default has raised hopes that politicians will learn from the public's hostile reaction to the standoff. The S&P 500 closed on Friday at an all-time peak of 1,744.50. "There's probably more confidence now that next time around there won't be this kind of brinkmanship, that there won't be another shutdown and that there certainly won't be a default," said Ira Kalish, chief global economist for Deloitte, the professional services organization. "So my expectations would be for a return of consumer confidence and of business willingness to invest and employ," he said. The ‘next time around' is not far away. Congress has approved funding for the government until January 15 and has authorized it to keep issuing debt until February 7. David Folkerts-Landau, group chief economist at Deutsche Bank, said the episode had inflicted deep wounds on the Republican party, which wanted changes in Democratic President Barack Obama's healthcare reforms, and on Congress. "As a result, chances for meaningful progress in the upcoming budget negotiations have im-
proved. Another government shutdown and debt ceiling showdown next year seem less likely," he said in a note. FED ON HOLD FOR NOW: Folkerts-Landau said sentiment indicators were likely to rebound now that a deal in place, helped in part by expectations in financial markets that the impact of the budget standoff will cause the Federal Reserve to delay winding down its bond buying, now running at $85 billion a month. September's employment report will be issued on Tuesday, and normally the 180,000 rise in nonfarm jobs that economists expect would revive talk of an early start to Fed 'tapering'. Instead, economists suspect the Fed will not act until December or January at the earliest because economic data for October will be clouded by the government shutdown. Peering through the fog, Kalish said declining weekly jobless insurance claims suggested the labor market was in good shape. He also took heart from rising output of capital goods. "I'm cautiously optimistic that things are getting better and that the fundamentals of the US economy are gradually improving," he said. The same cannot be said with much confidence about the euro zone. The bloc's purchasing managers' index is likely to edge up to 52.5 in October from 52.2 in September, but bank lending to the private sector is expected to shrink further. Indeed, the Centre for Economic Policy Research in London said on Saturday that it was too soon to conclude that the 17-nation single currency area had emerged from the recession that began in the third quarter of 2011.
BUSINESS B Tuesday, 22 October, 2013
Major Gainers COMPANY OPEN nestle pak. 6500.00 siemens pakistan 905.00 attock petroleum 421.51 millat tractors XdXB 433.73 pak oilfieldsXd 443.40
HIGH 6550.00 923.90 434.97 443.00 452.75
LOW 6200.00 905.02 427.00 431.00 448.25
CLOSE CHANGE 6550.00 50.00 917.50 12.50 431.93 10.42 440.58 6.85 450.20 6.80
TURNOVER 100 1,100 100,800 17,400 224,750
4300.00 321.18 297.50 281.00 205.99
4100.00 305.13 272.56 266.00 190.21
4150.00 305.13 272.56 266.00 191.06
-50.00 -16.05 -14.34 -14.00 -9.16
180 11,200 400 500 361,800
1.75 11.52 2.55 10.77 1.44
0.69 10.70 1.30 10.48 1.20
0.91 11.52 1.31 10.56 1.24
-0.78 1.00 -0.99 0.22 0.03
20,456,000 14,169,000 12,154,000 4,635,500 4,507,000
Major Losers wyeth pak ltd 4200.00 indus motor coXd 321.18 pak services 286.90 khyber tobacco spot280.00 national refin Xd 200.22
Volume Leaders askari Bank(r) spot1.69 fauji cementXd 10.52 pak elektron(r) spot2.30 B.o.punjab 10.34 f.nat.equities(r) 1.21
Interbank Rates usd gBp Jpy euro
pkr 106.3631 pkr 172.0211 pkr 1.0843 pkr 145.5367
Forex uk pound sterling euro us dollar canadian dollar australian dollar Japanese yen saudi riyal uae dirham china yuan
169.05 144.25 106.65 102.10 101.75 1.087 28.1 28.8 17.25
170.25 144.5 106.9 102.35 102 1.18 28.35 29.05 17.4
CORPORATE CORNER meezan Bank, masterCard sign agreement to launch masterCard titanium Debit Card
KARACHI: Meezan Bank, Pakistan’s first and largest Islamic bank, has entered into an agreement with MasterCard to launch the MasterCard Titanium Debit Card for its customers. Meezan Bank’s collaboration with MasterCard will cater to the specific demands of its high net worth customers and offer a vast range of benefits including free access to Airport lounges across the Middle East, as well as other rewards. The signing ceremony was attended by Mr. Irfan Siddiqui, President & CEO - Meezan Bank, Mr. Ariful Islam, Deputy CEO - Meezan Bank, Mr. Omer Salimullah, National Manager Alternate Delivery Channels – Meezan Bank, Mr. Raghu Malhotra, Divisional President - MasterCard & Mr. Aurangzaib Khan, Country Manager - MasterCard. Speaking at the occasion, Mr. Irfan Siddiqui said: “The MasterCard Titanium debit card will be a significant addition to the Bank’s portfolio and provide a wide range of additional benefits to our customers within the bounds of Shariah.” PReSS ReleASe
accountancy profession in Pakistan must adapt to thrive in the face of technology advancements LAHORE: The Pakistan and global accountancy profession will be impacted significantly by 10 technology trends, claims an in-depth report from ACCA’s Accountancy Futures Academy (the Association of Chartered Certified Accountant) and IMA (Institute of Management Accountants) called “Digital Darwinism: thriving in the face of technology change”. The top 10 technologies with the potential to reshape the accountancy profession and business landscape considerably are mobile; big data; artificial intelligence and robotics; cyber security;
educational; cloud; payment systems; virtual and augmented reality; digital service delivery and social. Informed by interviews with global academics and experts in accountancy and technology, alongside a survey of over 2,100 ACCA and IMA members around the world, the report asked respondents to what extent they expect developments in technology to transform the way accountants and the finance function do business over the next decade. The report also asserts that advances in technology will also demand new skills and competencies from accountants and finance professionals, from change management to knowledge of data extraction tools in the mining of business intelligence. When asked about the impact of big data on business, 77 per cent of South Asian respondents – including Pakistan - say this will be influential, compared with 91 per cent of Australians and only 52 per cent of those in the UK. South Asian respondents also say that big data would demand new skills, with 79 per cent confirming that the profession will need to use tools to support data modelling and analysis, and 85 per cent saying skills will be needed to deal with data mining to help with business intelligence. PReSS ReleASe
Kamata Pakistan joining hands with PvtC to facilitate blue collar workers
LAHORE: A contract signing ceremony between Kamata Pakistan and Punjab Vocational Training Council (PVTC) was organized at the PVTC Head Office today. On behalf of Kamata Pakistan, Mr. Muhammad Junaid Saleem, CEO Kamata Pakistan signed the contract with, Mr. Faisal Ijaz Khan, Chairman PVTC. Under the contract, PVTC will share data/profiles of its vocational trainees with Kamata Pakistan for exploring job opportunities. Kamata Pakistan will link these potential employees with employers, thus offering matchmaking services. The collaboration is one of its kinds to open new avenues for the unemployed and new labour market entrants who lack social and informal networks for securing jobs. Studies reveal that workers skilled in vocational trade have limited access to employment networks restricting their ability to find relevant
jobs. On the other hand, employers sometimes face immense difficulties in finding the right worker. Kamata Pakistan has provided a platform for blue collar workers to get access to job opportunities and blue collar employers to choose the best worker from a pool of job seekers. In pursuing its aim, Kamata Pakistan has joined hands with PVTC to open job opportunities for its graduates. PReSS ReleASe
Continental Biscuits brings oreo to Pakistan
KARACHI: Continental Biscuits Ltd. (CBL), the makers in Pakistan of the LU brand of biscuits and an exclusive affiliate of global snacks group Mondelēz International (previously known as Kraft Foods), is proud to announce today that it has brought the iconic Oreo biscuit brand to Pakistan. Oreo is the world’s favourite biscuit; CBL now plans to make Oreo a favourite in Pakistan by leveraging the global scale and expertise of Mondelēz International, along with CBL‘s strong track record, excellence in biscuit manufacturing and marketing, and a splendid history in Pakistan. Oreo is being made in Pakistan by CBL with same world class quality standards, magic formula and ingredients, while being sold at affordable prices to a wide variety of consumers – reasons due to which it is fast becoming as much loved in Pakistan as it is around the world. CBL invested PKR 1.1 billion (USD 11 million approx.) to build a state-of-the-art Oreo production line at its manufacturing plant in Sukkur, making it the largest biscuit-production facility in the country. As the production line is fully automated from the initial production process to the biscuit’s packaging, with no human interaction, the facility is the first of its kind in Pakistan. The line can produce as many as 4 million biscuits per day or 3 tonnes of biscuits per hour! Speaking on the occasion of Oreo’s debut in Pakistan, Mr. Hasan Ali Khan, Managing Director and Chairman of CBL, said: “We are delighted to bring the world’s favourite biscuit to Pakistan. For us, this is the beginning of another wonderful journey to make Oreo the no.1 biscuit brand in Pakistan. Our vision of locally producing Oreos clearly signals our intent at dominating the local biscuit market and also highlights the importance of Pakistan as a biscuit manufacturing base.” PReSS ReleASe