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Pm orders rationalising gas tariff

bUSineSS Friday, 28 June, 2013

Pak-imf talks begin today ISLAMABAD ONLINE

Pakistan would formally request for a $5 billion fresh loan package from the International Monetary Fund (IMF) in policy level talks likely to begin from today (Friday). Finance Minister Ishaq Dar would lead the Pakistani team and Frank Jeffery would lead the IMF delegation. Sources said Pakistan would formally request for a fresh loan of three to five billion dollars from the IMF, as already announced by the finance minister. As Pakistan and the IMF are holding technical talks under Post Programme Monitoring (PPM) in Islamabad, officials of the finance ministry, economic affairs division and State Bank of Pakistan briefed the fund on Monday on budgetary targets and economic situation of the country. Media reports said the government has assured IMF that it would achieve budgetary targets for the next financial year. It informed the fund that the country would achieve GDP growth target of 4.4 percent, budget deficit of 6.3 percent and revenue collection target of Rs 2,475 billion in fiscal 2013-2014. Sources said Pakistan might face tough conditions from IMF like imposition of reformed general sales tax (GST) and increase in power tariff for a new loan programme, which would be a challenge for the new government of Pakistan Muslim League-Nawaz (PML-N). The visiting IMF team has so far taken a ‘soft stance’ on the promised fiscal adjustments of 2.5 percent of GDP by reducing the budget deficit from 8.8 percent in 2012-13 to 6.3 percent in the fiscal year 2013-14. The fund has extended its visit to Pakistan until July 4, starting from June 30. The commerce ministry on Monday briefed the IMF team on exports target of the country wherein SBP gave a briefing on the monetary policy of the country. The finance minister was to leave for Dubai on Monday night to attend a twoday conference, which would be held jointly by the US Department of State and Pakistan’s Ministry of Commerce on June 25-26. He would join talks with IMF following his return to Pakistan. Pakistan took $7.6 billion loan in 2008 under the SBA, which was later increased to $11.3 billion, but the country was not eligible for the last two disbursements of $3.2billion due to its failure to comply with performance criteria.

ISLAMABAD

P

APP

RIME Minister (PM) Nawaz Sharif on Thursday directed the Ministry of Petroleum to rationalise gas tariffs to safeguard the common man’s interest and give domestic consumers precedence in gas distribution formula other sectors. Chairing a highlevel meeting convened to discuss gas shortfall at the PM Secretariat, Sharif said all resources be exploited and all avenues explored to overcome gas shortfall in the country. He said different options to import gas from

neighbouring countries should also be examined. The PM was told that work on Iran-Pakistan (IP) gas pipeline project and Tajikistan-Afghanistan-Pakistan-India (TAPI) gas pipeline project is in progress and that India was also interested in exporting LNG to Pakistan. The meeting was informed that domestic consumption of gas constituted 28% of total national use of the natural resource. The meeting was further informed that in order to bridge the gap between demand and supply, load management of gas was done, particularly so during the winter season when demand increased exponentially. The meeting was attended by Minister for Water and Power Khawaja Asif, Minister for Petroleum Shahid Khaqan Abbasi, Punjab Chief Minister Shahbaz Sharif, Minister of State for Petroleum Jam Kamal Khan, Special Assistant to the Prime Minster Dr Musadiq Malik, senior officials from the PM’s office and the petroleum ministry.

Political positives keep PKR stable against regional peers KARACHI STAFF REPORT

Ever since the United States (US) Federal Reserve chairman announced that the US central bank would slowly do away with its quantitative easing program on the back of improvement in the US economy, many currencies have seen their value coming down against the greenback. In Asia, this impact was further fueled by a weak Chinese production data coupled with sell-offs in capital markets. Contrary to this downward trend, the Pakistani rupee did not face the same situation. In the last one month the Pak Rupee (PKR) shed only 0.6 percent against the US dollar. This shows that PKR is stable at a time when the greenback is globally high in demand, said analysts at Topline Research. Asian currencies recently tumbled to 21-month low after a US monetary policy meeting on June 20, 2013 announced its plan to slow down the monthly bond purchase spree of $85 billion. Improvement on US economic front means that the quantitative easing should conclude

in 2014 as long as economic improvement stays in line with the Federal Reserve’s estimates. Furthermore, reports of contraction in Chinese manufacturing segment has also put additional burden on regional currencies. As a result emerging market currencies such as Indian Rupee, Malaysian Ringgit, Philippine Peso and Thai Baht fell sharply in the last few weeks. “At the time when regional currencies are experiencing a free fall against a strengthening dollar,

PKR has maintained its stability,” said Topline analysts adding that: “We believe that change in political canvas is the prime reason behind the rejuvenated investor confidence that has brought $59 million to Pakistan’s stock market in the past 30 days, and $208 million since elections while PKR has depreciated by only 0.6 percent in the past month”. The cumulative foreign inflow of $1.2 billion, including Jan-May net foreign direct investment (FDI) of $761 million and YTD FIPI of $410 million, has helped in easing the burden of IMF repayments worth $1.4 billion, they added. Talks ongoing with the visiting IMF team regarding a fresh loan of $4.5-5 billion also kept PKR stable. “This coupled with other likely inflows from US and Saudi Arabian oil facility is likely to provide stability to Pakistan’s forex reserves and help the country make IMF payment of $1.8bn in 1HFY14,” analysts said. However, in order to compete in the exports market, some decline in PKR cannot be ruled out, they said.

Polish firm starts gas Production in Pakistan

WARSAW: Polish firm PGNiG commenced production of natural gas from two wells in the Rehman field, located in the Kirhtar licence, Sindh. The gas is being fed to the Pakistani transmission system. Initially, during test production, the wells will provide around 100 million cubic metres of gas per year. Test production is scheduled to continue for 22 months. Natural gas resources in the Kirthar licence area have been estimated at approximately 12 billion cubic metres. PGNiG’s interest in the licence is 70%, with Pakistan Petroleum Ltd holding the remaining 30%. The Kirthar licence, which was acquired in 2005, is located in southern Pakistan, in the western part of Sindh. The field’s entire output will be purchased by Pakistani authorities. After Norway, Pakistan is the second country where PGNiG has launched production from its own fields. ONLINE

Pakistan eyes US market ISLAMABAD APP

Pakistan seeks tariff concessions and greater access to United States (US) market in order to boost gross domestic production (GDP) growth in coming years, senior government officials and diplomats said. Talking to Khaleej Times on the sidelines of second US-Pakistan business opportunities conference, they were confident of positive outcomes and quick progress on key issues to remove tariff barriers and obstacles, hurting bilateral trade and investment. “This meeting is a sequel to the London conference held in October, which was a good start and we need to build on and further the positive bilateral trade between US and Pakistan,” Munir Qureshi, secre-

tary, ministry of commerce, said. Pakistan and the US have made significant progress on bilateral Trade and Investment (BIT) treaty at the second US-Pakistan business opportunities conference. Javed Malik, former ambassador and adviser to Prime Minister Nawaz Sharif, said progress on BIT was encouraging and the two sides would soon sign the agreement. He said there was wide scope for US and Pakistani businessmen to increase cooperation in various key sectors like energy, agriculture, education, IT and telecom, among others. Responding to a question on the USPakistan conference, Malik said it was a very successful event, which laid down foundations of better understandings and future cooperation. He said Prime Minister Nawaz Sharif was committed to promoting e-government in order to facilitate businesses and citizens of the country. He said the third US-Pakistan business opportuni-

ties conference was likely to be held in Pakistan, however there no decision had been made. He said Pakistan urged the US government to extend the period of Generalised System of Preferences (GSP) for more than one year as it was presently renewed on a yearly basis. “We are very keen to see Pakistani textiles gain access to the US market on favoured terms or at least on similar terms as offered to other least developed countries. This would have negligible impact on domestic US manufacturing, but will help Pakistan in reclaiming some of its lost market share,” he said. Currently, Pakistan’s exports under the GSP programme stand at $195 million, which is five percent of Pakistan’s total exports to the US. “There is immense potential to increase this figure many folds,” he observed. Pakistan’s share of the US global imports of textile and apparel products cur-

rently stands at around three percent. It has seen little change since the quotas were removed in 2005 while market share of other Asian exporters including China, Bangladesh, Vietnam and Cambodia have grown exponentially. Pakistan’s textile and apparel manufacturers have a mutually complementary relationship with the US cotton industry. In recent years, Pakistan’s annual average cotton import from the US is worth $300 million, which may grow significantly once preferential access is granted. “We have set up Special Economic Zones (SEZ) for private investors, public sector and private-public joint ventures. Investors should come and invest in these zones as their income is now exempted from income tax for 10 years instead of five years. There is no bar on profit repatriation and all foreign investors will be treated at par with local businessmen,” he added. Responding to a question on investment in energy sector, he said the govern-

ment was considering setting up LPG terminals in the country. “We have discussed LPG terminals in details at the conference and invite US, European and UAE investors to install these units in the country.” Stephen Snyden, chief executive of an IT company, said Pakistan offered a congenial environment for investment in IT. He said the workforce available in Pakistan was of international standards. He mentioned that the labour cost is half of the cost incurred in employing equally skilled workforce in India. A Pakistani business delegate in IT, Raza Saeed, apprised participants that out of $500 million advertisement market, only one percent ($5 million) is being covered by online advertisement. “So, there is a wide gap which can be covered through investment in this sector,” he added.


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bUSineSS B Friday, 28 June, 2013

aPcnga rejects 9% hike in gst ISLAMABAD

GST hike ups inflation to 7.15 percent in June

NNI

KARACHI

The All Pakistan CNG Association (APCNGA) on Thursday said the decision of the government to jack up General Sales Tax (GST) on sale of CNG by nine percent is unjust and unilateral. Stakeholders were not taken into confidence regarding the decision to revise GST on Compressed Natural Gas (CNG) which came as a great surprise, said APCNGA Supreme Council Chairman Ghiyas Abdullah Paracha. In a statement, he said all gas consuming sectors including a majority of other sectors were paying 17 percent GST, adding that CNG sector was already the most taxed sector. He said the procedure to collect GST needed improvement as CNG operators had been denied adjustments in GST on purchases of diesel and electricity. Paracha said the decision will increase retail price of CNG, which will hurt 3.5 million motorists using the fuel and 80 million people who use the economical fuel on a daily basis. Despite being heavily taxed, the CNG sector was being denied provision of natural gas to run operations, said Paracha. He said some influential elements were bent upon bankrupting CNG station owners to deprive masses from economical fuel and to realise a plot to import costly liquid gasses.

STAFF REPORT

T

HE Consumer Price Index (CPI) inflation is expected to settle during the month of June at 7.15 percent year-on-year (YoY) compared to last month’s 5.13 percent YoY, said the analysts. On a monthly basis CPI is expected to clock in at 1.96%, they added. “An increase in General Sales Tax (GST) by from 16% to 17% imposed in the budget is the main culprit behind the significant increase in inflation during June, 2013,” viewed InvestCap analyst Abdul Azeem. Moreover, he said, food inflation during the month (higher 2.4% MoM) is expected to be the major contributor, despite the government directive of no increase in GST on essential food items. By incorporating the June, 2013 data, full-year CPI inflation on a moving average basis is expected to conclude at 7.5% for FY13, down by 2% from an initial target of 9.5%, he said. The shrinking spread of banking industry, after 50 basis points (bps) decline in policy rate to 9% urges banks to introduce new schemes for consumer loans, personal loans and car financing.

The cheaper and readily available consumer financing is expected to increase the purchasing power of consumers which ultimately caused inflation to surge, said Abdul Azeem. Moreover, he said, the present expansion in broad money supply was largely due to higher government borrowing for budgetary support owing to heavy debt servicing and subsidies. Monetary expansion with heavy borrowing leads to dipping private sector growth and provides high inflation potential, he added. Moreover, another factor is the presence of external risk, where any pressure on foreign reserves by net imports and repayments of foreign loans could magnify its impact on currency depreciation leading to high domestic inflation. “We expect the interest rates will remain stable at current level and no further easing during 1HFY14 is likely,” the analyst added. “Analyzing the prevalent trend of the CPI, coupled with the latest numbers released, we expect CPI for FY14 will remain in the range of 9.0% to 9.50%,” said the analyst. During FY13, he said, the monthly average CPI remained at 0.58%. Even after assuming 0.75% inflation in each month of FY14, the resultant CPI is likely to settle around 9% YoY on a moving average basis.

Major Gainers COMPANY Colgate Palmolive Attock Petroleum Siemens Pakistan Exide (PAK) Lucky Cement

OPEN 1750.00 539.80 623.04 442.03 202.97

HIGH 1837.00 565.00 639.99 455.00 213.00

LOW 1663.00 545.00 621.01 449.99 203.50

CLOSE CHANGE 1835.00 85.00 557.72 17.92 639.99 16.95 450.50 8.47 210.69 7.72

TURNOVER 7,800 81,500 550 1,600 1,754,200

1601.00 262.44 270.00 331.50 323.99

1600.00 243.27 257.00 308.10 305.00

1600.50 244.43 257.61 313.18 313.41

-19.50 -11.64 -8.05 -6.92 -5.60

100 3,389,200 10,200 96,700 2,968,600

21.55 12.38 19.56 13.50 10.58

20.60 11.50 18.35 12.33 9.70

21.37 11.68 18.86 12.54 10.04

0.37 0.09 0.30 -0.79 0.38

19,973,500 16,943,000 11,890,000 11,416,000 10,999,500

Major Losers Wyeth Pak Ltd MCB Bank Ltd.XD Service Ind.Ltd Clariant PaK. P.S.O.

1620.00 256.07 265.66 320.10 319.01

Volume Leaders P.T.C.L.A Jah.Sidd. Co. Bank Al-Falah B.O.Punjab TRG Pakistan Ltd.

21.00 11.59 18.56 13.33 9.66

interbank Rates USD GBP JPY EURO

PKR 98.8918 PKR 151.9275 PKR 1.0141 PKR 128.8956

Forex BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal

100.30 128.86 152.14 1.0139 94.27 12.65 27.10 26.59

SELL 100.55 129.09 152.38 1.0243 95.94 12.89 27.35 26.84

SINDH BOI WOOS MALAYSIAN INVESTORS, ENTREPRENEURS ISLAMABAD APP

Sindh Board of Investment (BoI) Chairman Zubair Motiwala on Thursday invited Malaysian investors to come to Pakistan and explore possibilities of investment and joint ventures in Sindh because of its “thriving industrial base, natural resources, well developed infrastructure, competitive

human resource, two major ports, sophisticated communication network, modern financial and services sector and investor-friendly policies”. “We assure you that you would get the most promising destination for business and investment in Sindh,” he said while addressing a roundtable discussion attended by more than 30 business leaders and investors in Kuala Lumpur, read a statement.

Pakistan High Commissioner to Malaysia Shahid Kiani and Pakistan’s honourary investment counsellor in Malaysia Datuk Salim Fateh Din were also present. Motiwala said Sindh being the second largest province of Pakistan was playing a pivotal role in national economic and development agenda. He said the province had the country’s largest port city in Karachi and comprised 23% of Pakistan’s

population and 18% of its land area. “With 23% of country’s population, its contribution to the national GDP is around 33% while the province collects 70% of Pakistan’s income tax and 62% of sales tax,” he said. He said Sindh had also emerged as a hub of business and investment opportunities because of its rich natural resources. “Its competitive advantage rests on its strategic location as major seaports, along

with its extensive industrial infrastructure, 350 km long coastline and the potential to generate renewable energy, abundant fertile land, plenty of agricultural, natural and mineral resources, better educational system, a young and educated workforce and a politically strong and stable government had given the impetus for some of the world’s leading multinational corporations to set up base in Sindh,” he said.

CORPORATE CORNER

ISLAMABAD: Dr Qadeer Khan presents the 1st FPCCI Achievement Award to Khalil Sattar, CEO of K&N’s, for his outstanding contribution to national economy and advancement in field of poultry. PR

Vice President (DSVP), Emirates SkyCargo. He takes over from Ram Menen, who retired from Emirates in early June. He previously served as DSVP for Revenue Optimisation and Distribution. Richard Jewsbury assumes the role of DSVP Revenue Optimisation and Distribution after serving as Senior Vice President (SVP) Commercial, Europe & Russian Federation. Adnan Kazim takes on the role of DSVP, Planning, Aeropolitical and Industry Affairs a move from his role as DSVP Planning & Research. Salem Obaidalla, formerly SVP Australasia assumes the role of SVP Aeropolitical and Industry Affairs. PR

nbP launches foree home remittance services

emirates announces new senior management appointments LAHORE: Emirates, one of the world’s fastest growing airlines, recently announced new appointments to senior management roles within the organization which mirror the company’s growth and expansion. Adel Al Redha has been named Executive Vice President (EVP) and Chief Operations Officer, responsible for Engineering, Flight Operations, Service Delivery and Airport Services. Al Redha has been with Emirates since 1988 and previously served as EVP Engineering and Ops and has held several other roles within the organisation. Thierry Antinori has been named Executive Vice President and Chief Commercial Officer responsible for Commercial Operations, Revenue Optimisation, Skywards, Destination and Leisure Management and Emirates SkyCargo. With more than 25 years in the aviation industry, he joined Emirates in 2011 as EVP of Passenger Sales Worldwide. Nabil Sultan, who has held numerous commercial roles in his 20 years with Emirates, has been appointed Divisional Senior

provides Forex & Remittance Services to its clients globally. NBP already has Home Remittance arrangements with leading exchange companies of UK such as Dollar West & AN Express. PR

uth pack premiers World War Z for its customers KARACHI: Ufone, the leading cellular company in the country, hosted an exclusive premier of the much awaited Hollywood movie ‘World War Z’ for its valued Uth Pack customers in Lahore, Karachi and Rawalpindi. The newly launched Uth pack by Ufone not only has brought this movie to Pakistani Cinemas, but also offered a chance to win free premier passes to its customers for subscribing to the bundle called the TNT bundle. The Uth pack facebook contest winner also got a chance to watch the movie. On the other hand, Uth Pack also gave free movie tickets against a recharge of rupees 1000. Each customer got 3 free movie tickets against a recharge of Rs.1000/-. The offer was valid from service centers as well activation points. PR

Ptcl offers one month free usage for new eVo customers KARACHI: National Bank of Pakistan is aggressively expanding its outreach to facilitate overseas Pakistanis across the globe. In this regard and to further explore new strategic avenues Mr. Khalid Bin Shaheen, SEVP/Group Chief - NBP and Chairman NBP Exchange Company Limited recently launched home remittance services through Lotus Forex (P) Ltd. UK. Mr. Shaheen is seen inaugurating the service in London (on right) along with Mr. Subbiah Venkatachalam, Senior Official of Lotus Forex (P) Ltd. Lotus Forex (P) Ltd – UK is a part of Orient Exchange Co. (UAE) and is recognized as the number one agent of Western Union Money Transfer in the Asia Pacific Region. It has 80 locations in 7 countries and

ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL), the largest ICT service provider in the country, has announced one month free usage for all new EVO 3.1Mbps customers. The new offer enables customers to enjoy one month free video streaming, web casts, online games and a host of other applications. Customers can avail this offer till 20th August 2013. To further facilitate the existing inactive EVO customers, PTCL is offering a 15 day trial of all EVO services (500 Mb free internet usage or 15 days, whichever comes first) with exemption on previous outstanding dues. The reconnect offer is applicable for all EVO Dongle, EVO Nitro, EVO Wi-Fi Cloud, EVO Nitro Cloud and EVO Tab customers, who have not recharged their accounts since 1st March

2013. Omer Khalid, PTCL Executive Vice President (EVP) Wireless Services commented at the launch “Through constant innovation, wide range of products and the most economical packages, PTCL EVO has become one of the most powerful brands in Pakistan. This offer is an attempt to reward our valued customers and to appreciate their support in making PTCL EVO a successful brand”. PR

farmers advised to use best quality hybrid corn seeds

LAHORE: The farmers must use the best quality hybrid seeds to enhance the yield of corn or maize, which is widely used as food and feed, as low quality hybrids can result in huge losses in production. Though after the introduction of hybrid maize in Pakistan, farmers have gradually shifted to high-yielding hybrid maize from traditional or open pollinated varieties (OPVs) but most of the farmers fail to get the desired production because of use of substandard hybrids and old farming practices. The adoption of best quality hybrids is also important because the weather patterns are changing and farmers desperately need such seeds to could cope with the harsh weather conditions, fit in changing crop rotations and most importantly provide the much-needed economic benefits to the farmers especially the small ones. This was the upshot of discussions between Monsanto Pakistan’s agricultural experts and a large number of farmers who visited the hybrid corn field trial sites in Sahiwal. The field site - “DeKalb Learning Centre” - serves as a learning centre for farmers. PR

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