16-17 Business Pages (25-07-2013)_Layout 1 7/25/2013 1:03 AM Page 1
take the place of those which fail. — Napoleon Hill 01
BUSINESS Thursday, 25 July, 2013
Privatisation to be transParent, says ishaq Dar
boominG eqUity market ‘Positive’ to $140m investment oUtflow on hUbco Deal KARACHI
Finance Minister Senator Ishaq Dar has said that privatisation is one of the top most policy priorities of the government of Prime Minister Nawaz Sharif and the government would ensure transparency in the process. He made these observations during a presentation by the Privatisation Commission at the finance minister’s office on Wednesday. Dar was briefed about various stages involved in privatisation process and timelines. The minister directed that the schedule should be reviewed and made more realistic so that privatisation can be fast tracked. The finance minister said that privatisation of state-owned entities shall be carried out on fasttrack basis without compromising rules and regulations and in a transparent manner. He directed the Privatisation Commission to identify those stateowned entities that can be privatised in the first stage. The finance minister reiterated that no compromise on the transparency of the privatisation process will be tolerated. Privatisation Commission Secretary Amjad Ali Khan briefed Dar on the progress made so far in the transfer of properties to PTCL. Khan informed Dar that 64 SOEs (state owned enterprises) have yet to be privatised which were approved for privatisation by the previous government. The finance minister accepted a proposal of the Privatisation Commission that while reconstituting the boards of SOEs, one member of the board should be the nominee of the Privatization Commission.
Us to support Diamer bhasha Dam construction: olson ISLAMABAD: US Ambassador Richard G. Olson Wednesday said the United States would support the construction of Diamer Bhasha Dam to help reduce energy problems being faced by Pakistan. He was talking to Finance Minister Ishaq Dar at his office. The ambassador said the USAID would finance the feasibility studies for the construction of Diamer Bhasha Dam. The US support would comfort the international financial institutions, he added. Ambassador Olson termed the recently concluded programme with the International Monetary Fund (IMF) good and said the “US supports the programme”. Dilating on the details of the progress made so far with the IMF, Senator Dar termed them positive, saying negotiations on the size and tranches of the loan were the only issues pending now. Dar also welcomed the interest shown by the US Congress for its support in carrying out feasibility studies for Pakistan’s flagship storage project Diamer Bhasha Dam. During the meeting, the issue of Bilateral Investment Treaty (BIT) between the two countries also came under discussion and the finance minister said that he intended to obtain input from all the stakeholders. APP
HE once volume-starved stocks market of the country appears to have flourished to an extent that the market Wednesday shrugged off a huge but “planned” foreign portfolio investment outflow of $ 140 million from the Hub Power Company (Hubco), the country’s largest independent power producer (IPP). The development drew a mixed reaction, both positive and negative, from the market analysts taking different perspectives of the outflow that, they said, was “planned” thus insignificant for the local bourse. Wednesday saw Dutch investors from the National Power International Holdings BV materializing their plan to pull out of Pakistan’s equity market by selling their entire controlling shares, 17.44 percent or 201.803 million, to local conglomerates.
The institutional buyers of the foreigners-held equity include three local banks. Habib Bank Limited, Allied Bank Limited and United Bank Limited, the sources said, have bought a major chunk of the Hubco’s stakes. The market sources said the foreign investors had sold out their equities at 28 percent discount at Rs 46 per share as against Rs 64, the prevailing market price of the company’s shares. Senior broker Aqeel Karim Dhedy, the chairman of AKD Group, says the deal was worth $ 140 million. In rupee terms, the deal accounts for Rs 14 billion, given the current rupee-dollar parity standing at Rs 100.7 on the inter-bank market. The market participants were divided when asked for their view on what such a huge outflow of foreign portfolio investment meant for the country’s ailing economy and its boosting equity market. “It can be seen in two ways. Of course, the investment outflow is something undesirable for a country. But when
you have an open economy in and outflows happen to be a matter of routine,” said Nadeem Naqvi, the managing director of KSE. It, he said, also has to be seen that a domestic consortium had bought the foreign stakes in the IPP. Naqvi said by making the purchase the domestic investors had showed their renewed confidence in the government and it policies regarding energy sector. “I take a positive perspective from it,” the managing director said. He said the second phase of the deal was that a future partnership between the foreign and Pakistani investors would be established that would pave the way for more investment inflows in future. “It augurs well for the country as well as the market. Because the foreign equity came to the local investors on a discount rate,” AKD told Pakistan Today. The business tycoon said the company’s dividend once used to be paid in foreign exchange, dollar, would now be
Hubco gets lion’s share of IPPs dues LAHORE NAdEEM SYEd
The lion’s share of the circular debt payments made to Independent Power Producers (IPPs) went to Hubco owned by Dawood Group while Kapco was the second biggest recipient with other stakeholders trailing way behind. According to the list showing the volume of payments made to various IPPs and other stakeholders from both public and private sectors, the government has disbursed over Rs 341 billion to various power companies and related concerns under circular debt. The biggest recipient of the debt payments are IPPs in the private sector who received Rs 270 billion from the Rs 341 billion doled out by the government. Among these IPPs, Hubco is on the top of the list receiving an astronomical sum of Rs 92 billion. According to the break-up, Hubco (RFO) got Rs 75 billion while Hubco Narowal received over Rs 17 billion. The second biggest recipient is Kapco which received Rs 41
billion. Mian Mansha’s Nishat Power (RFO) and Nishat Chunian got Rs 7,080 million and Rs 6,860 million, respectively. Likewise other concerns owned by Mansha, AES (Pakgen) (RFO) received Rs 6,982 billion and AES (Lalpir) got Rs 4,546 million) The total amount received by Mansha Group in this account is Rs 26 billion. Out of total of 26 other recipients, the prominent beneficiaries are Liberty (Gas) Rs 9,906 million, UCH (Gas) Rs 19,261 million, Fauji (Gas) Rs 5,100 million, Atlas Power (RFO) Rs 5,400 million, AGL (Gas) Rs 19,336, Engro Power (Gas) Rs 8,974 million and Laraib Energy (Hydel) Rs 105 million. The list displayed on the Finance Ministry website shows all categories of power producers using furnace oil, gas and hydel sources. Among the power producers in public sector who received the money, SNGPL (Genco-11) got Rs 18,996 million while PPL (Genco-11) received Rs 13,843 million.
PAYMENT TO IPPS/ENERGY SECTOR OTHER ENTITIES ON 28-06-2013 Sr.No. Entity Namae 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31.
HUBCO (RFO) KAPCO (GAS & RFO) AES (Pakgen) (RFO) AES (Lalpir) (RFO) KEL (RFO) SABA (RFO) LIBERTY (GAS) UCH (GAS) ROUSCH (GAS) FAUJI (GAS) HIBIBULLAH (GAS) ALTERN (GAS) AGL POWER (GAS) THE HUBCO NAROWAL (RFO) ATLAS POWER (RFO) NISHAT POWER (RFO) NISHAT CHUNIAIN (RFO) LIBERTY TECH (RFO) ORIENT POWER (GAS/HSD) SAIF POWER (GAS/HSD) SAPPHIRE ELECTRIC (GAS/HSD) HALMORE POWER (GAS/HSD) ENGRO POWER (GAS) FOUNDATION POWER (GAS) SHYDO POWER (HYDEL) LARAIB ENERGY (HYDEL) Total SNGPL (Genco-II) SSGC ((Genco-I & II) Mari Gas (Genco-II) PPL (Genco-II) PSO (Genco-I & III) Total G/Total
Total Ammount Rs. Min 75,000 41,354 6,982 4,546 3,504 9,906 19,261 8,687 5,100 2,540 270 19,336 17,397 5,400 7,080 6,860 6,817 1,307 4,902 4,208 2,522 8,974 7,074 1,159 105 2,70,291 18,996 2,901 13,843 6,130 19,853 71,667 3,41,958
paid in the rupee. Khurram Schehzad of Arif Habib Limited says the outflow was “planned” and “not abrupt”. To him, selling and buying equities was a normal course of investors, foreigners or locals. “That’s part of investment strategy, investors buy when markets are low and sell when markets are high and when they feel they can get returns,” the analyst explained. Asked about the impact, Khurram replied: “I think it won’t be significant as inflows in equity market are strong.” Also, the analyst seconded AKD’s view as a “third point” that the change in the nature dividend payment would prove to be a good omen for the local market. Senior Ahsen Mehanti sees no problem in the foreigners’ offloading of their stakes. “The offloading was based on earlier decision to quit from Hubco and their own assessment on energy policies and compliances in the previous government,” he said. The analyst said the PML-N led government’s new policies on power, which were yet to be approved, appeared to favor more investors in the sector on tariff rationalization and provincial support. “The good thing is its numbers purchased by the three reputable banks,” Mehanti told Pakistan Today. The analyst said the deal at a 30 percent discount to market price had saved the country with foreign exchange. “Outflow is not a positive development but low value sale is a positive development,” he concluded. MD KSE Nadeem Naqvi recalled that during past six months over $ 500 million portfolio investment had come to the country amid positives like Unilever.
Govt buys treatment plant as first mango shipment reaches Japan KARACHI: Pakistani exporters dispatched the first commercial shipment of 550 kilograms of mangoes to Japan on Wednesday. The development encouraged the government which, the officials at TDAP said, has procured a big commercial plant having the capacity to treat 15 tons of exportable mangoes daily. The export of “King of Fruits” came by air after Tokyo had lifted last year a ban on Pakistan’s exports of mangoes that was slapped in March 2011. Before this, 1700kg of mangoes were shipped to that country in 2011 which was a promotional shipment. Japan’s import market is small i.e. they import about 12000 MT from the world; but its requirements are rather strict where they require a special vapor heat treatment of mangoes before importing the commodity. The Far Eastern country is a high value market where Pakistani mangoes could be sold at around $10-12 per kilogram, which is way above the prices obtained from other markets. Pakistan has for the last two years availed the services of a Quarantine Officer of Japan, who comes to the country and supervises the treatment of mangoes before certifying their eligibility for export shipment to Japan. For this purpose, a small plant has been procured and installed by the government at the Karachi Airport to facilitate the above process. STAFF REPORT
Pakistan willing to buying power from India’s Gujarat: Salman NEW DELHI ONLINE
Battling with a severe power crisis, Pakistan is open to buying power from the Gujarat state government, reported Times Now. Pakistan High Commissioner Salman Bashir told Times Now that technical teams from the country have visited two power plants in India, both of which are in Gujarat. “Two plants have been visited, both in Gujarat, one of them is a solar plant,” Bashir said. However, Bashir said that the process of buying energy could only begin once a dialogue process between the two countries gets going. Earlier this month, Pakistan said it wants the resumption of the formal composite dialogue with India to address “mistrust” between the two countries. Referring to the start of back
channel diplomacy with India, Foreign Office spokesman Aizaz Chaudhry said Prime Minister Nawaz Sharif had appointed former diplomat Shahryar Khan to conduct negotiations. Khan has visited India and expressed the Pakistani leadership’s “strong desire” for good neighbourly relations, he said. Officials from the two countries are currently working out dates for the next round of talks between the two sides. Prime Minister Manmohan Singh is expected to meet his Pakistani counterpart on the sidelines of the UN General Assembly session in New York in September. Blackouts lasting more than half a day in some areas have infuriated many Pakistanis, prompting the new prime minister, Nawaz Sharif, to declare tackling the crisis one of his top priorities.
The government sells power below the cost of production but pays subsidies late or not at all. Plants cannot afford fuel. As a result, Pakistan has lost an esti-
mated 5 billion rupees in the last five years, a loss it can ill-afford as it struggles to revive its moribund economy and reduce its budget deficit.
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BUSINESS B Thursday, 25 July, 2013
risk-aversion puts to question banking sector outlook KARACHI
REDIT off take of the banking sector remained essentially stagnant in 1HCY13, witnessing a minute increase of 0.3% MoM despite the State Bank’s recent discount rate-cut to 9 percent. On an annual basis, however, the head showed some movement, though growth remained muted where advances of the scheduled banks increased by 3% YoY by Rs129bn in Jun-12 to Rs3.869 trillion. “The torpid growth in advances can be explained by a lack of willingness on part of the banks to lend to the private sector given the hazy security situation along with the presence of alternate avenues available to banks to park their assets in the form of riskfree government securities,” viewed Muniba Saeed of InvestCap Research. The analyst believes that this risk-free investment alternative, government papers, provided the banks with an opportunity to avoid the growth-oriented private borrowers while parking their assets. Deposits on the other hand depicted a lush trend where the head hiked by 9% CYTD13 to reach
Rs7.316 trillion in Jun-13. On yearon-year basis, the trend was more thriving as deposits stepped up by 14%. Whilst deposits showed a healthy growth and advances remained subdued, the banks relied increasingly on investments, the latter thus illustrated a healthy trend rising by a major 30% YoY to reach Rs 4.129 trillion. Consequently, the ADR of scheduled banks declined to 53% in Jun-13 as compared to 58% in Jun-12. The investment deposit ratio alternatively witnessed a sharp increase, rising to 56.43% in Jun-13 as compared to 49.53% in Jun-12. Muniba said banking spreads for outstanding
CORPORATE CORNER lG announces second quarter 2013 financial results LAHORE/SEOUL: LG Electronics (LG) has reported solid positive net income in the second-quarter as a result of improved performance in a majority of its business units. LG’s mobile phone business shipped 12.1 million smartphones between April and June, the highest ever in the company’s history. Revenues in the 2013 second quarter rose 10.1 percent year-over-year to KRW 15.23 trillion (USD 13.58 billion), reflecting strong sales increases in most of LG’s business units. Second-quarter operating profit of KRW 479 billion (USD 426.92 million) and net profit of KRW 156 billion (USD 139.04 million), while down slightly from the same period last year, improved significantly from the previous quarter. The LG Home Entertainment Company reported revenues of KRW 5.5 trillion (USD 4.91 billion), an increase of 6.4 percent from the previous quarter and virtually unchanged yearover-year. Second-quarter operating profit of KRW 107 billion (USD 95.37 million) increased from the previous quarter thanks to stronger sales in developing markets and successful new models, but declined compared to the same period last year due to intense competition and slower demand resulting in a lower average selling price. With continuing weak demand globally and expected increased competition, the company is investing in the premium and large-screen TV market with the expansion of Ultra HD TV and OLED TV products in developed markets. PR
Ptcl launches leadership programme for employees’ evolution ISLAMABAD: The Pakistan Telecommunication Company Limited (PTCL) on Wednesday launched a top-end leadership programme for its junior and middle managers, aimed at effectively meeting current and future strategic business requirements. The initiative, entitled “Future Leaders” is also aimed at developing a strong leadership pipeline. The output of this two-year programme will feed into the Leadership Excellence Programme, targeting the top management, thus providing adequate bench strength for PTCL’s future leadership requirements. The programme offers a rich blend of developmental interventions and activities including experiential learning, educational courses at reputed institutes,
lending and deposits leveled at 6.35%, down by 79bps YoY, in Jun13 as deposit rates descended down to almost 5% (81bps YoY decline). “However, such positivity was more than offset by the step down witnessed in lending rates during the same period, down by 160bps YoY to 11.35%,” said the analyst. The average spreads for 6MCY13 consequently reached 6.25%, lower by 102bps as compared to 7.27% in 6MCY12. Spreads for fresh deposits and gross disbursements witnessed a massive 97bps decline on a monthly basis as deposit rates slid by a massive 106bps MoM to 5.11% in Jun-13.
networking with internal and external management experts for broadening learning horizons. PR
nbP receives top bank ranking in Pakistan KARACHI: National Bank of Pakistan has been ranked once again by The Banker as the top bank of Pakistan in its ‘Top 1000 World Banks’ ranking for 2013. ‘Top 1000 World Banks’ evaluates the largest bank holding companies on the basis of Tier 1 capital, aiming to track banks at their highest capital regulated consolidation level. This ranking has been setting the industry benchmark since 1970 by providing comprehensive intelligence about the health and wealth of the banking sector. The Banker is the premier resource for the world’s investment, retail and commercial banking sectors. It is the key source of data and analysis for the industry, providing global financial intelligence since 1926. PR
cathay Pacific set to fly to maldives KARACHI: Cathay Pacific Airways has announced that it will launch a new four-times-weekly service to the Maldives, one of the most-sought-after getaways in the world for leisure travellers. The new service is scheduled to commence on 27 October 2013, subject to government approval. To ensure passengers enjoy the maximum comfort for their journey to the Maldives, Cathay Pacific will use an Airbus A330-300 aircraft equipped with its award-winning Business Class, new Premium Economy Class and Long-haul Economy Class cabins. Flights will depart from Hong Kong to Malé International Airport every Wednesday, Thursday, Saturday and Sunday. PR
karachi marriott enthrals faithful with sumptuous iftar dinner KARACHI: The Marquee of Karachi Marriott gets all enthralled with rozadars and the feast starts at iftari that is followed by a lavish dinner. The menu is extravagant including Pakistani and Continental delights, live barbeque, and a large spread of desserts and salads along with live counter of pakora and samosas where the guests fill their plates with delights of Ramadan kareem. There is a special menu for the children that include their favorite mini burgers and French fries. Marquee is the favorite of all the families in town during
To Muniba, excessive exposure to risk-free investments though might be a temporary relief for the banking sector, the same has, however, put the sector’s outlook in question. In a report published recently, Moody’s Investor Service, announced the preservation of its negative outlook on Pakistani banks due to the increased exposure of the latter to government debt. The outlook was backed by the rationale that the banks’ excessive exposure to the country’s Caa1-rated sovereign credit risk has put the asset quality of the banks in question. Followed by the banks preference to decide against lending to the risk inherent consumer class, the recent slash in discount rate has further strained the banks margins as is also evident by the contracting spreads. “Going forward we see the banking sectors outlook to be hinged upon the monetary stance unveiled by the SBP in the upcoming monetary policy,” the analyst said. Also, she said, though a decline in savings rate was expected to offer scheduled banks, the much needed breather, such a step by the SBP can be flagged as a distant possibility. “We expect to see a reversal in SBP’s monetary easing stance going forward,” she said.
Major Gainers COMPANY Siemens Pakistan MithchellsFruit Attock Refinery Treet Corporat Bhanero Tex.
OPEN 710.00 500.00 236.42 188.96 336.00
HIGH 745.50 514.95 248.24 198.40 344.99
LOW 702.00 501.00 242.10 192.00 340.00
CLOSE 745.50 514.95 248.24 198.40 344.95
CHANGE 35.50 14.95 11.82 9.44 8.95
TURNOVER 3,500 600 911,200 69,000 300
6300.00 391.00 616.00 404.00 1950.00
6300.00 354.54 590.00 390.00 1900.00
6300.00 357.50 600.00 394.15 1910.00
-160.00 -15.70 -15.00 -9.85 -8.81
100 1,700 450 6,300 280
14.32 60.01 15.57 4.26 10.40
13.45 58.00 15.10 3.65 9.90
13.64 60.01 15.19 4.02 10.03
-0.39 2.85 0.01 0.44 -0.03
35,641,500 19,903,500 19,094,000 17,167,000 16,083,000
Major Losers Nestle Pak. Liberty Mills Shezan Inter. National Foods Wyeth Pak Ltd
6460.00 373.20 615.00 404.00 1918.81
Volume Leaders B.O.Punjab National Bank. Fauji Cement Media Times Ltd Lafarge Pak.
14.03 57.16 15.18 3.58 10.06
Interbank Rates USD GBP JPY EURO
PKR 100.7950 PKR 154.8715 PKR 1.0068 PKR 133.4526
Forex BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal
Ramadan and at the same time the corporate sector invades the Marquee equally to enjoy the festivities of Ramadan. The lavish iftar dinner is then followed by the lucky draw in which gift hampers are given away to the lucky winners. PR
sheraton karachi says thank you to cabbies with ‘iftar for cabs’
KARACHI: Starwood Hotels & Resorts celebrated Iftar with taxi drivers from across the Middle East as part of its ongoing commitment to the Holy Month of Ramadan. Now in its fourth year, Starwood’s ‘Iftar for Cabs’ campaign brought more than 34 hotels from across the region including Sheraton Karachi Hotel together for a worthy cause. During the hour of Iftar, packs of food and beverages were distributed to cab drivers at the main entrance of each hotel. Catering teams at each hotel prepared Iftar packs which included a diverse selection of food and beverage items. Associates from across various departments within the hotels, including Catering, Administration and Guest Services joined forces to bring the ‘Iftar for Cabs’ initiative to life. “Iftar for Cabs is our way to say thank you to the cab drivers across the Middle East. This initiative in now in its fourth year and represents the spirit of the Holy Month of Ramadan. We are extremely proud of all our associates who came together yesterday to make this year’s ‘Iftar for Cabs’ another big success and I want to thank them for their continued support.” said Guido de Wilde, Senior Vice President & Regional Director, Starwood Hotels & Resorts. PR
samsung products win buyers laboratory Pick awards KARACHI: Samsung Electronics Co., Ltd, today
104.00 135.62 157.55 1.0194 99.25 13.07 28.00 27.49
SELL 104.25 135.89 157.82 1.0296 100.94 13.31 28.25 27.74
announced its Mono, Color Laser and Multifunction (MFP) Printers have won at the Buyers Laboratory (BLI) Pick awards. The Xpress M2875/2825 series and ProXpress M4020ND printers won in the Performance category while the CLP-6260 FW, CLX-6260FD, and CLP-680 Series printers triumphed in the Environment category. The printers received Outstanding Achievement awards, the independent authority’s highest accolade. “Samsung’s Mono, Color Laser and Multi-function printers reflect our commitment to create powerful, attractive products that meet consumer demands for performance, cost efficient and energy efficiency,” said Joosang Eun, Senior Vice President of Sales and Marketing at Samsung Electronics. “We are honored by the awards from BLI and we consider them excellent recognition for our continued effort in discovering new possibilities in printer innovation.” Samsung collects three awards for product performance Three of Samsung’s monochrome devices took home awards in the Personal Printer, Personal MFP and A4 Small Workgroup Printer categories, confirming the devices’ reliable, affordable and eco-friendly attributes. PR
engro eximp launches engro bharosa KARACHI: Engro Corporation’s wholly owned subsidiary Engro Eximp has launched Pakistan’s premiere wholesale outlet of top quality rice under the aegis of ‘Engro Bharosa’. Engro Bharosa is a chain of fair price outlets of top quality rice produced by Engro Eximp at its Muridke plant. The plant is located in the heart of the Basmati rice growing area and was commissioned in 2010. This integrated rice complex has the ability to procure more than 150,000 tons of paddy during season and process and sell 70,000 tons of high quality Basmati rice per annum. Engro Eximp entered the rice processing business in 2010 with a view to bring value addition to the agriculture sector of the country. With a primary focus on buying rice paddy from farmers rather than middlemen, the Company’s inclusive business model concentrates on improving the competitiveness of Basmati rice for farmers to ensure enhanced yield/acre and reduction in cost of production/ton to benefit the farmers. The key strategy is to increase farm productivity and quality by enhancing the capabilities of the farmers with the effect that in 2012 the total paddy bought directly from farmers was worth USD 20 million. Following the processing of this rice the product was being marketed to international markets. PR