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Spend a lot of time talking to customers face to face. You'd be amazed how many companies don't listen to their customers. — Ross Perot

BUSINESS Thursday, 24 October, 2013

Textile exports balloon to $3.5b in 1QFY14

FAISALABAD: Workers are busy to sorting collected silver pieces at Regal road. INP KARACHI: According to data recently issued by Pakistan Bureau of Statistics (PBS) the country's textile exports increased by 16 percent during the month of September. An year-on-year account shows that the exports growth is 15 percent. Amongst the leading contributors in exports, an increase was witnessed in Bedwear swelling by 68 percent YoY to $248 million, Readymade Garments by 24.7 percent to $152 million and Knitwear exports ballooning by 2.3 percent YoY to $190 million. On the other hand Cotton Clothes and Cotton Yarn posted a negative number of 2.4 and 4.7 percent, respectively. Overall in 1QFY14, textile sector exports stood at $3.5 billion, depicting a growth of 10 percent YoY, while are up 20 percent YoY in the rupee terms. "The increased exports is likely to bode well for the textile sector’s profitability in 1QFY14," viewed Sabir Mohiuddin of Shajar Research. Going forward, the analyst said, the sector was expected to benefit from the increased competitiveness due to rupee's weakness and the grant of GSP-status expected in January next year. STAFF REPORT

Circular debt haunts KAPCO's cash purchases KARACHI

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STAFF REPORT

APCO is expected to post a profit after tax of Rs 2136 million with its earning per share standing at Rs 2.42, during 1QFY14. The company's Board of Directors are due to meet Wednesday to discuss KAPKO's financial results for the first quarter of FY14. This marks 22 percent growth compared to Rs 1.754 billion PAT the company had announced in the same quarter in FY13. According to InvestCap analysts, the rise primarily ascribed to 5% depreciation in PKR against the greenback during the period under review con-

tributing to 15% YoY increase in gross profit. A quarterly analysis reveals that EPS would grow by 26%QoQ (Rs2.42 v/s Rs1.93), said the analysts. "The key reason behind this mammoth growth is more than offsetting impact of finance cost against other income," viewed M. Irfan Saeed of InvestCap. The same, he said, was anticipated to drop by 59%QoQ (Rs1803mn) v/s 51%QoQ (Rs771mn) drop in other operating income. The KAPCO received Rs 43 billion from the government in circular debt resolution on June 28. The company utilized these cash flows to reduce its payables to PSO and short term borrowings, said Irfan.

In addition to this, the company was now purchasing fuel on cash basis in order to avoid late payment charges. "This improved liquidity is expected to bode well for the company by reducing its finance cost during 1QFY14," he said. On the other hand, other operating income would also decrease backed by lower receivables from WAPDA. However, net positive impact from this improved liquidity is anticipated during 1QFY14. Going forward, Irfan expects that the rebuilding of circular debt to Rs 150 billion during 1QFY14 would hinder cash base purchasing by the company from PSO as receivables from WAPDA was continuously piling up.

EXPO PAKISTAN 2013 BUSINESS CONTRACTS REACH $700 MILLION KARACHI STAFF REPORT

The 8th Annual Expo Pakistan 2013, organized by the Trade and Development Authority of Pakistan ended with the highest benchmark of USD 700 million worth of business contracts opening innumerous trade opportunities to 70 countries. Out of these international delegates, 44 were international chain and department store delegations such as Lotte Mart& Lotte S. Korea, Elcanto Co. Ltd, Hyundai department store, Shinsegae department store Mydin Mohammed Holdings, Simson Trading and Seherish Manufacturing from Malaysia; Komex s.a, from Poland, Orchestra, France; Sunberg Pvt France; Paritex France; Makona SA Greece; Gentex textiles, Italy; Natori, Co Japan; Marks & Spenser UK; Dubai Textile City; Centerpoint Dubai, M/s Tamurakoma & Co Japan; M/S Renoka textile UAE; Grup Grunhaut Argentina; Tulip garment ltd Bangladesh. On the other hand, there were 523 exhibitors showcasing their products in six halls of Karachi Expo center. These included Engineering Development Board (50 companies), Export Processing Zone Authority (18 companies),

PASDEC (15companies), Towel Manufacturer Association (15 companies), PRGMEA ( 05 companies), Pakistan Carpet Manufacturer Association (18 companies), , Surgical Instrument Manufacturers Association of Pakistan (10 companies), Sialkot Chamber of Commerce & Industry (10 companies), Sports Goods Association of Pakistan (10 companies), Pharmaceutical (08 companies), Pakistan Footwear Association of Pakistan (10 companies), SAMEDA (18 companies), All Pakistan Gems and Jewellery Association (30 companies), AHAN (15 companies), Pakistan Software Export Board (10 companies), All Pakistan Fruit & Vegetable Association (05 companies) and Sindh Board of Investment (06 companies). Commenting on the huge number of participants and a vast variety of products on display, Eng Khurram Datagigr Khan, Minister of State for commerce said “I am highly impressed by the number of products that are on display this year, some of which I haven’t even seen before, which is an evidence in itself of the success of this expo. I would like to see a bigger expo next year with more focus on sectors like jewelry, textile and agricultural industries.” During Expo 2013, approx. 1447

Business to Business (B2B) meetings were held between buyers and Pakistani exhibitors/manufacturers. Honorable Minister of State for Commerce also met high-level delegations from USA, Poland, Malaysia, Saudi-Arabia, UAE, UK, Japan, Iran, South-Africa, India, Azerbaijan, Thailand, Hong-Kong, Italy, Iran, South etc. Commenting on the success of Expo, Ms. Rabiya Javeri, Secretary TDAP said, “Expo Pakistan is owned by all of Pakistan and as such showcases-in a microcosm-- all the diversity of our products. It provides a platform for local businessmen to display their products and to meet international buyers face to face. This year a large number of B2B meetings and seminars also provided a venue for discussion of future trends and the resolution of any impediments faced by our exporters. The city government and the citizens paid a paramount role in assisting Tdap at each and every step.” Several important export agreements were signed during the four-day Expo that reached upto US Dollar 700 Million. However, major interest was demonstrated by UAE delegations particularly in the Textile/Garment industry. Textile City, an UAE based company, also offered to buy Textile worth USD

100 million with warehousing in Dubai in order to ensure timely delivery. Another, Sourcing head of Max Land mark Group who operates 1351 retail chain outlets in GCC and globally is under negotiation for a deal worth USD 100 million for UAE Market. It may be mentioned that UAE is the only export destination of Pakistan where exports indicated a jump increase of USD 1 billion during 2012 from the previous year. Another major triumph was a big order placement by a leading Japanese importing chain store particularly in home textiles. Besides, major buyer groups are staying back to continue their negotiations and visits to Sialkot, Faisalabad, Lahore to meet manufacturers cum exporters. This means that export business contracts might touch upto USD 1 billion following the Expo. And, for the first time Expo Pakistan was publicized in Argentina’s leading papers as a show stopper. There were two fashion shows held to highlight our booming fashion industry along with a Lok Virsa cultural show. Furthermore the Pakistan Australian Business has just requested that the TDAP fashion show may be replicated at the Mercedes Benz Australian week in April 2014.

Govt to attract foreign investment, promote local industry: Chief BOI ISLAMABAD APP

Chairman, Board of Investment(BOI) Mohammad Zubair on Wednesday said that all steps are being taken by the present Government to attract foreign direct investment and development of local industry. He said the local industry would have to introduce modern technology to get the benefits of new policy formed by the government. He said this while talking to media, after the signing ceremony of new entrant agreement which was signed between Yamaha, Japan and Ministry of Industries in the Board of Investment. The agreement was singed by Secretary Industries,Shafquat Naghmi from Pakistani side, while Mr.Yasushi Ito signed the agreement from Japanese side. On this occasion the Chairman,BOI highlighted the initiative and credibility of the present Government and investment opportunities available in Pakistan. Yamaha was also supported by Minister for Finance, Senator Ishaq Dar and Secretary Industries Shafquat Naghami to materialize this mega project for manufacturing of Yamaha motorcycle plant at Karachi.

FPCCI asks for extension of date for filing income, wealth tax returns ISLAMABAD APP

The Federation of Pakistan Chambers of Commerce and Industries (FPCCI) urged the Federal Board of Revenue to extend the last date for filing Income and Wealth Tax Returns in view of the Eid holidays. In a statement issued by Gulzar Firoz, Acting President of the FPCCI here on Wednesday, it was pointed out that October 30, 2013 is the last date for filing income and wealth tax returns. However, due to the long Eid break, the country's business houses have not been able to finalize their tax returns. In view of the above, FPCCI has called for the deadline for filing income and wealth tax returns to be extended up to November 15, 2013 in order to allow the business community to file their tax returns conveniently.


12-13 Business Pages (24-10-2013)_Layout 1 10/24/2013 12:07 AM Page 2

The best minds are not in government. If any were, business would steal them away. — Ronald Reagan

Shahabaz Sharif in Xinjiang to explore solar energy plants

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APP

Chief Minister of Punjab Mian Muhammad Shahbaz Sharif arrived here Wednesday on a two-day visit to explore possibilities of setting up solar energy plants in Pakistan. On arrival, Mian Shahbaz Sharif was warmly greeted by the high officials of the Foreign Affairs Office of Xinjiang Autonomous Region, Ambassador Masood Khalid and a large number of traders and entrepreneurs. Soon after arrival, the Chief Minister met with Mr. Li Jian Hua, the Chief Executive Officer of TBEA Group and later left for inspecting solar energy power plants in Xinjiang and its adjoining areas. The Chief Minister Punjab said that addressing the energy crisis is one of the top priorities of the present government and in this respect he had a lot of expectations from this visit. He appreciated China's keen interest and cooperation in addressing energy crisis and infrastructure development of the country. He pointed out that Pakistan Muslim League (N) government led by Mian Muhammad Nawaz Sharif was committed to addressing energy shortfall thus returning brightness in the country. He said that meeting the energy shortfall will regalvanize economic activity, unleash an era of economic prosperity and brighten the country's future. Shahbaz Sharif said that when our factories and Mills will start getting power supply, they will function with full capacity, thus provide job opportunities to the common man. The Chief Minister appreciated the warm welcome accorded to him on his arrival and said it illustrated the warmth both sides have in our relationship. Later on, Vice Governor Xinjiang province, Mai He Su Ti Kurexi, hosted a banquet in honor of the Chief Minister and his entourage.

BUSINESS B Thursday, 24 October, 2013

Monetary tightening likely as inflation braces to go double-digit KARACHI

URUMQUI

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STAFF REPORT

HE investors in recent months have been more concerned about the inflation after increase in tax rates and energy prices. The State Bank, in its last monetary policy statement, also indicated that inflation would range between 11 and 12% in FY14. This, the analysts said, meant that significant increase in monthly Consumer Price Index (CPI) was expected. "We still believe that SBP’s CPI projection for FY14 is on the higher side," said Topline analyst Zeeshan Afzal. Expecting a double digit inflation in late 2013, the analyst foresees the full year inflation ranging between 9.5 and 10.5% for FY14. For the month of October, Afzal said CPI may rise to 7.9-8.3% due to increase in fuel prices, revision of housing index and surge in perishable food prices on the back of Eid-ul-Azha. In September, this figure was at 7.39% while 7.66% in October 2012. "We expect CPI may surge by 0.9-1.2% MoM in October which is higher than the last month's 0.29% and 0.38% in September 2012," said he. Though food inflation, especially perishable, was expected to show significant upward trajectory on reflection of Eid phenomena, the analyst believes that much of the hike may come from quarterly adjustment of housing index and surge

in fuel prices. "Major contribution to the higher October CPI is likely to come from 4% MoM hike in fuel prices," said Afzal. The considerable increase, he said, was expected to push transportation head, weighing 7.2% in CPI, by 2.2-2.4%. Further, the analysts believe that housing (29.4% weight in CPI) may spike by 1.2-1.9% MoM on the back of quarterly adjustment of house rent. To recall, house rent is adjusted quarterly and spiked 2.5% in 4QFY13 and 1.9% QoQ in 1QFY13. Though prices of vegetables, flour and sugar increased in the month of Eid-ul-Azha, decline in fruit, poultry prices is expected to keep October food inflation in check. "We calculate 1.5-2.5% MoM perishable food inflation (Weight of 4.99% in CPI) and 0.1-0.2% non-perishable food inflation (weight of 29.8% in CPI)," said the analyst. Afzal said that the government's budgetary measures and recent rupee depreciation would push the CPI towards double digit territory in November onwards. Though November's CPI may range in 9-10% there was higher probability that December CPI would be above 10%. "Seeing the inflation, we maintain our stance of further 50bps rise in discount rate with higher probability of increase in November monetary policy statement," said Afzal.

Major Gainers COMPANY OPEN Wyeth Pak Ltd 4100.00 Bata (Pak) 1700.00 Bhanero Tex. XD 375.00 Service Ind.Ltd XD 281.99 Murree BreweryXDXB 286.33

HIGH 4305.00 1785.00 393.75 296.08 300.40

LOW 4225.00 1725.00 393.75 282.99 290.00

CLOSE CHANGE 4305.00 205.00 1785.00 85.00 393.75 18.75 296.08 14.09 299.75 13.42

TURNOVER 1,040 4,160 100 15,800 2,500

5050.00 910.00 126.65 112.50 246.75

5050.00 900.00 126.60 110.16 239.50

5050.00 900.00 126.62 110.90 240.11

-196.67 -14.78 -6.63 -5.05 -4.01

20 950 500 12,400 407,100

27.24 8.51 12.94 22.75 10.94

26.50 7.33 12.31 21.70 10.46

26.98 7.35 12.35 22.41 10.51

0.53 -0.98 -0.16 0.54 -0.23

16,679,500 14,550,000 12,115,500 8,179,000 6,929,000

Major Losers Rafhan MaizeXD Siemens Pakistan J.D.W.Sugar Mehmood Tex XD Lucky Cement XD

5246.67 914.78 133.25 115.95 244.12

Volume Leaders P.T.C.L.A Lafarge Pak. Fauji CementXD Bank Al-Falah B.O.Punjab

26.45 8.33 12.51 21.87 10.74

Interbank Rates USD GBP JPY EURO

PKR 106.4734 PKR 171.9759 PKR 1.0937 PKR 146.5287

Forex Australian Dollar Canadian Dollar China Yuan Euro Japanese Yen Saudi Riyal U.A.E Dirham UK Pound Sterling US Dollar

BUY

SELL

101.75 102.75 17.25 144.75 1.087 28.1 28.8 171.25 106.5

102 103 17.4 145 1.18 28.35 29.05 171.5 106.75

Pakistan envoy sees visible improvement in investment ties with Malaysia ISLAMABAD APP

Pakistan expects to see a visible improvement in investment relationship with Malaysia in the next one year amid the new government's pro-business policies, says Pakistan High Commissioner to Malaysia, Shahid MG Kiani in an interview with state-owned Bernama News Agency of Malaysia. He said the government, led by Prime Minister Nawaz Sharif, aimed to woo foreign investments to revejunate the economy and restore investor confidence by offering various incentives,says a message received from Pakistan High Commission to Kuala Lumpur (Malaysia) here today. "Pakistan has a robust trading relationship with Malaysia for over 56 years and now we are focusing on boosting the relation."I'm sure there will be a visible improvement in investment," he said.

Besides welcoming investments from Malaysia, Kiani said, the Pakistani government was also keen to learn from Malaysian government institutions like the Employees' Provident Fund, Permodalan Nasional Bhd and Tabung Haji. "We don't have such investors supported by the government (in Pakistan), therefore we are keen to work and learn as there are serious considerations to set up similar agencies in Pakistan," he said. Kiani said Minister in the Prime Minister's Department, Datuk Seri Idris Jala, also visited Pakistan recently to assist and advise the government on improving the systems in the government and public corporations. He said Malaysia was the largest foreign investor in Pakistan with US$656 million in 2008. It, however, declined sharply to US$2.3 million in 2012 due to economic difficulties in America and Europe, he said.

Nevertheless, he said, there were economic opportunities amid the current difficulties as Pakistan was a fast-developing country with huge population and needed capacity to support its development. Kiani said with the Pakistan government's commitment to bring stability and open trade policy, Malaysian investors should start explore the wide-ranging business and investment opportunities in Pakistan. "There are also Pakistani companies willing to venture and invest abroad. "Therefore we need to share the opportunities available in Malaysia. "On the other converse, Malaysian companies could use Pakistan as the export platform amid its abundant raw materials and cheap labour," he said. He said among the potential industries to watch in Pakistan were infrastructure and construction, property development, agriculture and livestock as

well as energy. The high commissioner said most Pakistani companies were keen on jointventures and this will help Malaysian companies to easily expand into Pakistan. Kiani said among the industries that Pakistani firms were interested in Malaysia were medical devices, tools and machinery as well as Islamic banking and capital market. Kiani said Pakistan's Honorary Consul-General to Penang, Datuk Abdul Rafique Karim, will identify potential investments in the region, especially in high-technology manufacturing and medical devices. He said there were plans to organise Kinnow Mandarin fair in Penang in early January next year to tap the growing market, especially during the Chinese New Year. Kinnow Mandarin, the premier citrus fruit of Pakistan, is cultivated extensively in Punjab.

CORPORATE CORNER Etihad Airways brings an aerial spectacular to Sydney Opera House’s 40th birthday KARACHI: An Etihad Airways Airbus A340-600 today performed a low-altitude aerial salute to Sydney Opera House as part of the iconic venue’s 40th birthday celebrations. The aircraft operating the commemorative flight – EY9240 – flew at approximately 2000 feet over the World Heritagelisted venue and along the Sydney Harbour foreshore at 10.50am (Australian Eastern Summer Time). The fly past was watched by more than 10,000who had gathered at Sydney Opera House for a special ‘Cake and A Song’ event to celebrate the venue’s actual birthday. James Hogan, Etihad Airways’ President and Chief Executive Officer said: “As a partner of Sydney Opera House we are delighted to be part of its 40th birthday celebrations. “On behalf of the Etihad Airways’ 16,500 staff worldwide, I extend our best wishes to the Government of New South Wales, Sydney Opera House Trust, and the people of Sydney on this special occasion. “We are immensely proud to be the official international airline of Sydney Opera House and to support its mission to create, produce and present the most acclaimed, imaginative and engaging performing arts experiences from

Australia and around the world.” In command of the historic flight on A6-EHK (the aircraft registration) was chief pilot of the airline’s A340/330 fleet, Captain Giorgio Evangelisti. He was joined in the cockpit by Captain Gregory McCarthy and First Officer John Redward. The Abu Dhabi-based airline is a major partner of the world-renowned performing arts venue which is famously located at Bennelong Point on the Sydney Harbour foreshore. Its sponsorship of Sydney Opera House is the airline’s most valuable and most significant arts and cultural investment worldwide. PRESS RElEASE

Ms Noryate Bte Abdul Rahman, Cargo Manager Singapore, accepting the ‘Overall Carrier of The Year’ award on behalf of Emirates SkyCargo from Mr Willie van Heusden, Chairman of the Federation of Asia Pacific Air Cargo Associations (FAPAA), at the Payload Asia Award 2013. PR

More than 150 student teams to take part in Shell Eco-Marathon Asia 2014 About 157 student teams from 16 countries across Asia and the Middle East are preparing to hit the streets of Manila, Philippines in February 2014 to compete in the fifth annual Shell Eco-marathon Asia. The mileage competition will welcome a record number of participating teams this year, as it moves for the first time from the Sepang International Circuit in Kuala Lumpur (Malaysia) to Luneta Park in the heart of Manila (Philippines). Representing Pakistan are 15 teams from the country’s top 11 engineering schools, namely: N.E.D University of Engineering and Technology, National University of Sciences and Technology (NUST), Ghulam Ishaq Khan Institute of Engineering Sciences and Technology, FAST National University, Iqra University,Karachi, Gulshan, COMSATS Institute of Information Technology, Sahiwal, Air University, Islamabad, University of Engineering and Technology (UET), Pakistan Institue Of Engineering and Applied Sciences, Mehran University of Engineering and Technology, Jamshoro, Pakistan Institue Of Engineering and Applied Sciences The teams have been designing and building their energy-efficient vehicles for more than a year. Success is not measured by speed – it is measured by who can

drive a set distance on the least amount of fuel and become the most fuel efficient team by thinking creatively about energy efficiency and putting new ideas into practice. “Shell Pakistan is honoured to be a part of this great effort to design and build energy-efficient vehicles in the face of ever growing energy demands of an expanding population and economy”, said Natasha Qamar, Communications Advisor at Shell Pakistan. PRESS RElEASE

KARACHI: Zong team members handing over relief goods for Balochistan earthquake victims to Pakistan Red Crescent Society (PRCS) officials. PR

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