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Planning and economic growth Page 3 Pakistan and the trust deficit; first India, now Bangladesh? Page 2 Govt extends tender date to Nov 30 Page 8 Pages: 8

Friday, 25 November, 2011

Govt to support low-cost car manufacturing g

Auto sector now employs 192,000 people directly g Employment in car industry hovers between 5,500-6,000 persons ISLAMABAD JALALUDDIN RUMI


overnment will support manufacturing of a low-cost, energy-efficient and spacious indigenous car which will cost almost three-fourths of other cars in Pakistan with same specifications. engineering Development Board (eDB) should facilitate and support industry in manufacturing a hundred per cent indigenous car which can be termed as a truly national car and which should become a symbol of quality in the world of auto engineering, said Federal Secretary Industries Aziz Ahmad Bilour. Automotive industry has been an active and growing field in Pakistan for a long time. However, it is still not as established to figure in prominent list of top automotive industries. Despite significant production volumes, transfer of technology and localisation of vehicle components remains low. most cars in the country have dual fuel options and run on CnG which is more affordable and cheaper than petrol in the country. Bilour said industrialists need to bring innovation, out-of-box ideas and knowledge-based activities in manufacturing to boost demand for Pakistani products in international market. Proposal for conversion of existing car models into bullet-proof cars was also discussed. the meeting was informed that by using latest technology, locally assembled cars can be converted into bullet-proof cars without adding unnecessary weight and disturbing efficiency of the car. eDB Ceo, Aitazaz niazi proposed that exports of engineering goods from Pakistan, which currently stand at $1.45 billion, can surge up tremendously if engineering companies are facilitated and sponsored to exhibit their products in industrial fairs world wide. engineering companies are currently facing difficulty in exhibiting their products international fairs because of financial constraints. Bilour directed eDB to explore possibility of manufacturing envi-

ronment-friendly hybrid cars which are fast becoming popular in United States with a mileage of 51-53 miles per gallon. According to ministry of industries, Pakistan produced its first vehicle in 1953, at national motors Limited, established in Karachi to assemble Bedford trucks. Subsequently buses, light trucks and cars were assembled in the same plant. the industry was highly regulated until early 1990’s. After deregulation major Japanese manufacturers entered Pakistan’s market thereby creating some competition in this sector. Assemblers of HIno trucks, Suzuki Cars (1984), mazda trucks, toyota (1993) and Honda (1994) in particular, entered once deregulation was introduced. Assembly of Daihatsu and Hyundai cars (1999) and various brands of LCvs and range of mini-trucks commenced recently. Journey of auto industry in Pakistan from 1953 to 2011 has been rough,

tough and sometime very smooth. Car industry saw boom in 2006-2007 when sales touched a record peak of 180,834 thanks to rising car financing up to 7080 per cent by banks due to low interest rates and rising rural buying. Since then the industry has been striving hard to reach same sales level amid high interest rates and Yen appreciation against rupee. But high farm income is giving much support to car sales. Good crops this year will keep car sales brisk despite increase in prices. Car industry has invested over rs20 billion in the last four to five years to meet growing demand. Direct employment in car industry hovers between 5,500-6,000 persons. Auto sector now employs 192,000 people directly and around 1.2 million indirectly and has rs98 billion of investments and contributes rs63 billion as indirect tax in the national exchequer.

In the meeting, representatives of national Fertilizer marketing Limited (nFmL) proposed that their organisation is preparing a Central Digital Distribution System which will facilitate customers and government to keep a track of fertiliser consignments and record of stocks. managing Director Utility Stores Corporation of Pakistan (USC) briefed the meeting about future expansion of USC in which the corporation has planned to open 2000 new stores in the country. Proposal for digitalisation of USC network by preparing a management Information System was also discussed. this system will improve transparency and considerably reduce the operational cost of the corporation. Department of explosives proposed their ideas for ensuring safety and security of life and property of citizens while giving clearance for sale of hazardous material.

Global cotton prices to remain firm on China’s procurement plan KARACHI STAFF REPORT


Fter witnessing a slump in early part of the year, cotton prices seem to have stabilised in recent months, said market observers. this is despite re-emergence of global economic slowdown, credit crunch situation in China and surplus global cotton inventories (approximately 9.8 million bales), they added. “Contributing factors to prices stability are China’s reserve programme for cotton procurement and expected switch from cotton to high yielding soybeans and corn crops,” viewed Furqan Punjani of topline Securities. overall, the analyst said, lint prices during last couple of months had remained in range of $0.9-1.10/lb and same trend was expected to prevail in next couple of months. Being hurt by inventory losses by carrying high priced cotton lint, outgoing quarter was one of the toughest for local spinners, he said. Stabilisation in commodity prices during ongoing quarter has reduced risk of another round of inventory losses, thus normalising gross margins scenario. though lately monetary tightening has become a major concern for entire industrial sector in China, but due to promising export pattern of textile industry demand for the crop seems stable. this is evident from the fact that government of China has shown a consideration to build up their depleted inventories only a few cents below current price levels. With cotton consumption in China expected to remain firm at 45.5 million bales (39 per cent of global consumption) cotton lint prices are anticipated to stand firm in upcoming months. moreover, change in supply side dynamics as farmers have started to rate soybeans and corn crop over cotton for next sowing season in China would also stand as a major prices supporter in long run. Unexpected slow down in volumetric sales in both exports and local markets during FY11 on account of record (post US civil war) cotton prices forced spinners to carry forward huge inventories procured at higher prices.

Dollar reserves shrink to $16.9b KARACHI

Imposition of CNG levy to pave way for LPG businesses g

APCNGA plans to move court against levy g Rs8 per kg price increase in CNG expected ISLAMABAD



overnment’S plan to impose a massive levy of rs140 per mmBtU on compressed natural gas (CnG) will bring its price closer to petroleum products and pave the way for profitable operations of state owned enterprises in the Liquefied Petroleum Gas (LPG) business, an official source said. Government had already directed state owned entities involved in oil and gas sector to start their own LPG production and marketing businesses to curb private sector cartelisation in the sector. State owned Sui Southern Gas Company Limited (SSGCL) has already purchased LPG import terminal of a private sector

company. Source said intention of government is to increase CnG prices to imported LPG price level, so that state owned entities could operate profitability without any threat of losses. reports of standing committee on finance on gas infrastructure development cess bill 2011 and petroleum levy amendment bill 2011 have already submitted to the house. Government plans to pass these two bills during current session. CnG is the most preferred alternate fuel in motor vehicles in Pakistan, following unprecedented hike in petroleum products globally. Share of gas in energy mix has increased to 50 per cent during last few years as industrial sector was using gas for power generation. CnG sector uses only 7 per cent share in total gas supply of 4 bcfd while general industries

utilise 29 per cent share. Pakistan is faced with a gas shortfall of 2 bcfd. Chairman All Pakistan CnG Association (APCnGA) Ghiyas Abdullah Paracha said they would be left with no option other than to move to court as the levy would affect their business. He said the sector was already in trouble as they were operating their gas stations for 15 days in a month. “there is no logic for the imposition of levy.” Paracha appealed to parliamentarians that they should not approve imposition of levy on CnG sector as it will lead to an increase of rs8 per kg in retail price. He warned that if load shedding was not reduced they would seek public support to pressurise government. He said imposition of levy will render null and void all previous decisions of

eCC in which CnG pricing formulas was approved and hence new formula will have to be decided. He said gas load-shedding, low gas pressure, higher utility bills and overall inflation has already destroyed CnG industry and this new increase will push them towards total destruction. He said Petroleum ministry was employing levy to force CnG stations to convert to LPG. more than 3.5 million vehicles ply on CnG that help in an annual saving of $2.6 billion by decline of petroleum imports by 3.8 billion litres per annum. APCnGA estimates that two days gas load shedding in Punjab alone causes an additional burden of rs42 billion per annum on people. CnG sector is the only sector that pays highest gas tariff and contributes rs27.1 billion in advance GSt and rs5.1 billion in advance income tax.



oUntrY’S liquid foreign exchange reserves contracted to $16.961 billion during the week that ended on the 18th of this month, the State Bank reported. this shows a decrease of 0.4 per cent or $70 million when compared with 11th november of the preceding week. then, central bank had stated that the country held $17.031 billion. Before that (up to 4th november) the country’s dollar reserves had shrunk to $17.028 billion. the week under review saw State Bank possessing $13.202 billion, down $67 million from its previous week’s holdings of $13.269 billion. the previous week bank’s forieign exchnage reserves had stood at $13.280 billion. Commercial banks were no exception as they also had their reserves slightly downing, by $4 million, to $3,758.9 million compared to $3.762 billion of last week. SBP chief spokesman Syed Wasimmudin attributes such ups and downs in foreign exchange reserves to growth in banks’ deposits and withdrawals and routine debt repayments.

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Friday, 25 November, 2011



n the objection of Bangladesh, european Union move to grant trade preferences, GSP plus status, to Pakistan as an aid measure following last year floods in Pakistan, has been halted. these measures were to facilitate Pakistani textiles exporters to export to european market. In a recent meeting Bangladesh has objected entry of eight items of the clothing sector of Pakistan to the eU market. Pakistan was shocked over the ambigous opposition of Bangladesh in the session of council for trade in goods of Wto held on november 7. unilateral tariff conceSSionS: Pakistan was expecting the two years unilateral tariff concession package proposed for about 75 items to be exported to eU. India announced to withdraw its objection over the facility the eU is willing to give to Pakistan. earlier, India was opposing european concessions to Pakistan to extend this facility. India was opposing proposal with support of vietnam and Peru. trade officials said it was likely that Peru would also drop its reservations. eU had announced concessions for Pakistan on 75 tariff lines on September 16, 2010, which were subject to the Wto wavier. But the proposal was continuously opposed by India in the Wto for the last one year. It was hoped that Pakistani exporters would get access to eU market but now Bangladesh entered the

arena to oppose this scheme. competing with pakiStan: World trade organisation rules say there should be no discrimination and all trade partners must be dealt at par. therefore, eU can not take an exceptional measure for Pakistan, i.e. the eU should treat all Wto members impartially, and any member of Wto can block the deal. Bangladesh competes with Pakistan for textile products in the european market. therefore, Bangladesh Garment manufacturers and exporters Association said that it is worried about this decision. they said Pakistan is a cotton growing country and has an extra advantage that would create an uneven competition, if eU provides trade benefit to Pakistan. on the other hand, Chairman of All Pakistan textile mills Association (APtmA) said that products of the South Asian country, Bangladesh, are more competitive than ours. He said it will not hurt their share because eU is a large and open market for products. moreover, it is categorised as a least developed country and enjoys quota and duty free access to eU market, unlike Pakistan. Further, Bangladesh’s cost of doing business is lower as compared to Pakistan. Pakistan qualifies for market access to the eU on humanitarian grounds similar to Bangladesh. Pakistan was badly hit by one of the worst floods in history, besides bearing the brunt of terrorism. therefore, Pakistan has been given the special favour keeping in consideration

Pakistan’s pivotal role in the war on terror and the colossal harm the economy suffered on account of floods. $23 billion bangladeShi exportS to eu: It is to be noted that Bangladesh exported goods worth about $23 billion to eU, in FY2011. out of the total, the share of readymade garments was more than 80 per cent. Against this, Pakistan exported textile items valuing only $2.5 billion to the eU in the same period. therefore, Bangladesh should not worry with regards to Pak-eU trade deal, Chairman APtmA said. Bangladeshi clothing sector exports increased from $2 billion, a few years back, to $16 billion to the eU. Against this Pakistan’s exports to the eU were $1.5 billion only in the clothing sector in a market of $80 billion. Furthermore, this facility of cut in tariffs is only for two years that would give a small boost to Pakistani exporters. Bangladesh launched a petition to the Wto on the issue and expressed the fear that countries like Bangladesh would be badly affected, if the proposed GSP facility was granted in favour of Pakistan. Pakistan sought eU GSP for 75 items included eight items in which Bangladesh has a big share. these items include leather goods, shoes, knitwear, jeans, home textile and readymade garments. eU was to exempt Pakistani main value added textile and leather products exports from custom duty for the next two years. Further, undenatured

ethyl alcohol of actual alcoholic strength of 80 per cent was also included in the 75 items. trade potential with eu: the exemption will benefit sixty five textile product categories. However, bed linen, with four out of 10 eU imports in that category already exported from Pakistan would not be benefited. the list also includes six items of leather goods and three of footwear. the list includes dried mushrooms and truffles, whole, cut, sliced, broken or in powder, cotton yarn, plain weave cotton fabric, woven fabrics of cotton, twill weave cotton fabric, overcoats, anoraks etc, of cotton, knitted 100 per cent, floor cloths, dish cloths, dusters and similar cleaning cloths, made up articles of textile materials etc. Lifting duties on the products would result in an estimated increase of eU imports from Pakistan to about $150 million. According to original eU proposal announced in october 2010 duty suspensions, if approved unanimously by the Wto, would benefit about 900 million euros, $1.27 billion, to Pakistani exports to eU and Pakistan could boost sales to the eU by 100 million euros. the plan would not only affect mainly textile but also ethanol exports. Cotton and textile account for about two thirds of Pakistan’s exports. exports from Pakistan to eU are currently valued around 3.4 billion euros per annum, 920 million euros of which comes from the 75 items.

The two sides of inequality



roUnD 100 BC, a roman nobleman calculated that it took about 100,000 sesterces a year to live comfortably. that was roughly 200 times the amount of money a poor city dweller needed to eke out a living. If an American needed the same multiple of the subsistence income to join the upper middle class today, the threshold would be $3.5 million. the United States economy has become less equal lately, but it remains much more egalitarian than the ancient roman republic. the modern news on economic inequality is much more good than bad. the good news is very good. the greatest moral problem caused by inequality – the unequal access to the most basic economic goods, those which support life – has become less severe. the portion of the total population that suffers from this bottom-inequality is probably the lowest ever in history. true, we do not know how many ancient romans were on the wrong side of the bottom-inequality, but statistics for the most recent decades are encouraging. In 1970, 26 percent of the world’s population suffered from , according to the Un’s Food and Agriculture organisation. the proportion is now 13 percent – still scandalously high, but the gain in food-equality is clear. nor is food an isolated example. electricity is a relative new development, but the Soviet dream of universal electrification has already nearly become a reality; more than 80 percent of the world’s population can plug in, according to the . Health care and sanitary living conditions are now considered basic goods – and access to them has become more equal. the average life expectancy at birth is 65 or above in countries accounting for roughly 80 percent of the world’s population.

the bad news is on the other end of the income spectrum. there has been an increase in top-inequality – a widening gap between the elite and the rest – in the United States, the UK and a few other countries. the bottom 90 percent in the United States are not exactly suffering; they have been on average for the last few decades. But the rich, especially the very rich, have been getting richer much faster. the top 10 percent of

earners took in 32 percent of the nation’s total income three decades ago. that has risen to 46 percent. the share taken by the top 1 percent has more than doubled, from 8 to 18 percent, according to the . In the UK, the newly published from the High Pay Commission points out that the top 0.1 percent’s portion has multiplied from 1.3 to 6.5 percent. the increase in top-inequality is bad in principle.

no doubt the custom duty exemption will benefit these sectors of Pakistan but the actual beneficiaries will be european countries who will get finest products of the world on cheapest price that can be sold at higher prices in the international markets. multi annual indicative programme: Pakistan and european Union (eU) signed an agreement under which the latter would provide euro 225 million to the former under the multi annual Indicative Programme 2011-2013 for rural and natural resource development, education and human resource development, governance and trade development. Finance minister Dr Abdul Hafeez Shaikh and Dirk niebel, German Federal minister for economic Cooperation and Development and Andris Piebalgs, european Commissioner for Development signed the agreement. Under the arrangement, eU committed a grant of euro 75 million per annum for a period of three years for rural development and natural resources management, euro 90 million, education and human resource development, euro 70 million, governance, euro 50 million and trade development, euro 15 million. eU is cooperating with Pakistan in trade and economic development. now the government should approach Bangladesh to withdraw its objection on Generalised System of Preference (GSP) facility to Pakistan, before the next meeting of Wto that is scheduled on november 30.

People are not different enough in their abilities or in their dedication to work to justify the recent increases in the gap between rich and relatively poor. the damage can be seen in practice. the commission makes a good case that top-inequality reduces social solidarity, making companies less efficient and slowing GDP growth. It also points out, along with the book , that greater top-inequality is associated with societies which have more health and behavior problems. Still, there are four mitigating factorS: First, the allocation of wealth within a society is usually best left to the collective judgement of that society. the people have not, not yet at least, definitively rejected the widening gap between rich and poor. that suggests the problem is not widely perceived as grave. Second, the elite just might be able to do some good with their extra resources. the ancient romans offered bread and circuses and renaissance princes sponsored artists. In modern industrial societies, the financially secure elite could be a helpful alternative to governments for cultural, social and economic initiatives. third, whatever the evil caused by top-inequality in rich societies, it is much less significant than the good news on bottom-equality. As the American and British masses get richer, it becomes harder to argue that they lose out in a morally significant way when the elite gain. even the poverty which causes the social problems identified by the Spirit Level is arguably more spiritual and social than strictly material. Finally, if the people do decide that the recent increase in top-inequality is unjust, the trend can be reversed with much less trouble than bottom-inequality. major social changes are required to increase crop yields or trade in the remaining deprived parts of the world, but the rich can be curbed fairly easily in developed economies. Choose from the following list: shame, taxes, limits on the range of pay inside companies or income caps in the particularly lucrative financial sector. even for the very rich, the sacrifices needed to reduce inequality would be mild. As Bill Gates pointed out, more money stops meaning much after the first few millions. In his words, “it’s the same hamburger”. REUTERS

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Friday, 25 November, 2011


Planning and economic growth

SBP cut – a double-edged sword he stock market has been understandably edgy the past couple of days as the state bank mulls another rate cut, mimicking the regional growthfirst mantra, even as critics warn of added pressure on the fiscal deficit. It’s hard to disagree with stakeholders stressing the futility of such exercises so long as the government is unable to cure its addiction to daily debt, crowding out the private sector from the money market and compromising a promising opportunity to stimulate investment, employment and consumer activity. Also, what might suit thai, malaysian and Australian economies might not necessarily prove the elixir of life for ours. In none of these economies is the centre’s fiscal position so unnecessarily compromised as ours. In none does incorporating an easier monetary outlook fail to impress the private sector. In not one of these examples is the government’s position so ridiculously large in the money


market. And no other capital lets the government willingly feed hemorrhaging state enterprises and make up by borrowing from banks. the interest rate is not just a boardroom decision. It turns the tap, either way, on a host of inter-related factors, and no part of the cycle functions in isolation. those with sound memory will remember how ineffective monetary policy proved all the while the number was jacked up, resulting in an inability to control inflation even as private sector participation nearly ground to a halt. Disrespecting market dynamics on the way down will only exacerbate the problem. If increased liquidity is not quickly channeled into productive investment that engineers the second-round multiplier, it will feed into cost push inflation, choking middle and lower income groups already squeezed by rigid wages and an inhospitable jobs market. the central bank is playing a dangerous game. It’s far more prudent to create the environment where toggling the interest rate is likely to have on-ground results.

Shaukat Tarin Here are instructive elements in the so called anti capitalism movements across the west. they reflect public anger over the increasing rich-poor disparity that was exposed in the wake of the 2008 recession. the main reason is that while the rich did suffer during the downturn, they also rebounded very strongly. And despite losing large sums through investments in commodity, bond and equity markets, they have recollected well enough for most to record impressive increases in their net worth. However, the same can’t be said of the middle and lower income groups, who have seen their incomes and purchasing power suffer, while employment generation has not nearly been strong enough. Significantly, those protesting this uneven income distribution also realise that the very system whose excesses they are mobilising against has the capacity to restore economic balance if used in the right manner. While the economic pendulum has been allowed to swing sharply to the right, the system has an inbuilt self-correcting mechanism that can remedy such income disparities. our problems, while also revolving around a constantly widening have-have not cleavage, are a strikingly different mix. We are without a credible planning process that can provide a viable blueprint for progress. even constitutionally mandated institutions like the planning commission have been destroyed. Without an institutional planning mechanism, were continue to tread along without a credible longterm vision, which invariably means short-term decision-making is reactionary and ad hoc, failing to address structural weaknesses. therefore our economic, social and security outlook remains compromised. It bears noting that even during our recent


Without institutional planning, the economy will remain trapped in sub-optimal growth South Asia s whispering enemies European debt crisis member of South Asian Association for regional Cooperation met last week in maldives for their 17th annual summit. It is pretty evident that India has the hegemony in the South Asian region which is why all the meetings and cooperation between the countries remain fruitless. We are well aware of the fact that the main driving forces in the region are Pakistan and India and until and unless the relationship between both the countries does not improve, the cooperation at the region level cannot be attained. even though, the bilateral relations have warmed slightly over a few months, but the decades long rivalry still persists to be a hurdle for SAArC.

With Italy following Greece and Portugal into the quagmire of debt crisis, the fact that China is now being touted as their saviour makes it an interesting little situation. However, reading european press, the most bizarre thing that I found was that the europeans wanted to dictate how China should proceed in trying to bail out europe. this clamour has also been echoed by United States of America that is not being able to swallow the pill that China is now the top dog in the global economic matters. europeans are in a mess and it seems as if only China can help, they should let the global dynamics do the talking if they want to escape the situation.



decade of growth, disparities were seen sharply increasing with the rich getting phenomenally richer while poverty could not be addressed meaningfully. Going forward, we need to channel debate towards adopting a near and long term vision in keeping with our particular economic demographics. Yet relevant quarters are without necessary capacity to identify and pursue planned goals. our mainstream political parties no longer develop think tanks and strategic structures within themselves. they continue to be dominated by individuals and there seems little effort to alter a status quo that has survived and thrived over the years. our present dilemma is that not only does the political system not address the economy’s most pressing issues, there is also no political will at the highest level. And without proactive institutional planning, our performance will remain haphazard. Already we have lagged far behind regional economies as Asia’s higheryielding emerging markets lead the international effort to bottom out of the recession. not only have we failed to posture towards addressing our structural problems as a nation, there is also no individual will, be it at the social or political level. In such circumstances, we cannot possibly hope to grow beyond a sub-optimal 3-4 per cent of GDP annually, which is not nearly enough to arrest our unemployment levels. this means the economy cannot accommodate the six odd million entrants in the job market every year. this will bring its own negative social spillover, wasting the population dividend due to lack of proper planning. Without achieving higher growth, we will be left even further behind in the comity of nations. According to recent research, our per capita income is projected to grow to $8,500 by the year 2050, while India’s is expected to balloon to $42,000, magnifying the importance of setting our house in order. With such abysmal growth while contemporaries leapfrog ahead, our economy, social structure, and especially the strategic security position will come under immense strain. not only will we be caught in a low growth cycle, our immediate security will also be compromised. Like those demanding a fairer distribution of resources and income in the west, we must also demand our power centres to develop a planning mechanism that will deliver greater fruits to the middle and lower income groups. When their participation in the economic process increases, investment, saving, spending and job creation also benefit. The writer is a former finance minister



shARI’A mAttERs

Debt, corruption and Islamic banking

Hamayon Dar n last week’s column, I suggested that a political party like Pakistan tehrike-Insaf should adopt the promotion and implementation of Islamic banking as part of its election manifesto. While Imran Khan may not seem like someone interested in Islamic banking and finance, it (Islamic banking and finance) at times attracts interest from the least expected individuals and institutions. Until recently, I used to deliver a one-day training course in Islamic banking and finance at the London-based Chartered Institute of Securities and Investment. on one such train-


ing, I met two individuals from the London metropolitan Police. on my inquiring, they informed me that they belonged to the financial crime branch and were interested to learn about Islamic banking and finance to see if it was linked to financing of terrorism or any other financial crime such as money laundering. Prior to this I didn't expect police to be interested in Islamic banking and finance. today, Islamic banking practitioners come from all ethnic backgrounds (from Americans to the Chinese), nationalities (from ethiopian to South Korean), and from all faith groups (from Jews to Hindus). I would not be surprised if tomorrow Imran Khan decided to embrace Islamic banking and finance, perhaps not for his love for Islam or Islamists but certainly because of the potential contribution that Islamic banking and finance can make to the cause of national debt strategy and elimination of corruption from the Pakistani economy. Islamic banking and finance, being asset-based, should in principle be less prone to financial crime, but it would be fair to assert that it is no more or less vulnera-

ble to abuse by those who look for weaknesses in a financial system to exploit in their favour. However, because Islamic financing is always provided for doing business or trading, it is relatively difficult for the recipients of Islamic funds to "run away" with the money. In international transactions, if equity-based tools of Islamic finance are used to bring foreign capital into Pakistan, technically the new injection of foreign capital into the country will not lead to an increase in national debt. even in the case of the government using sukuk for raising debtbased shari'a compliant capital, the financing will always be tightly linked to an already exiting asset or will be used for creating new assets. this close proximity with the assets being financed makes Islamic banking and finance less prone to corruption. For large transactions, almost always there exists a double due diligence phenomenon (as part of regular banking practices but also an oversight function by the Shari'a supervisory board). there are some industry observers who argue that Islamic financial transactions are

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I would not be surprised if Imran Khan decided to support Islamic banking

more prone to abuse, given that they are more complex. For example, sukuk (a Shari'a compliant equivalent of a bond) structures normally rely on a number of offshore companies (called special purpose vehicles or SPvs), which can potentially be used for tax evasion and similar kinds of financial crime. After all, the famous enron debacle resulted from a complex nexus of SPvs that the company used before it eventually collapsed. While it is true that sukuk-type structures tend to be more complex than conventional bonds, it is primarily because of the lack of legal infrastructure in a number of countries where sukuk have in the past been issued. malaysia provides a good example of a country that has developed a comprehensive framework for the issuance of sukuk. therefore, there sukuk structures tend to be less complicated and consequently less prone to dispute, corruption and fraud. there is a need to study that model for the further development of an Islamic

capital market in Pakistan. once a transparent Islamic capital market is developed, fears of misuse and abuse of Islamic financial structures will diminish. It is important that the government develops a comprehensive plan to privatise the existing banks and financial institutions only through their conversion to Islamic financial institutions. the likes of Abu Dhabi Islamic Bank and many Qatari banks and financial institutions are looking for shopping opportunities out of their respective jurisdictions. Creating an upbeat environment in favour of Islamic banking in Pakistan will certainly attract their attention. Bringing an international class of new investors into Islamic banking in Pakistan will also ease out corrupt practices in the banking sector, by making such institutions less exposed. The writer is a Shari’a advisor to banks and financial institutions and can be contacted at

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Friday, 25 November, 2011

Public exchequer must be saved and no one be given relaxation in this regard



Chief Justice, Iftikhar muhammad Ch

Indian HC vows to address MFN concerns LAHORE



nDIAn high commissioner in Pakistan Sharat Sabharwal has said that business community’s concerns regarding mFn to India will be addressed fully. In this regard a team of Indian experts is visiting Pakistan in the first quarter of 2012 to discuss non-tariff Barriers, he added. Indian high commissioner was speaking at Lahore Chamber of Commerce and Industry. LCCI President Irfan Qaiser Sheikh presented welcome address, while Senior vice President Kashif Younis meher and vice President Saeeda nazar also gave their point of view on trade with India. High commissioner said postmFn agreement implications are under active consideration among concerned authorities of both coun-

tries. He said customs coordination between the two countries is being worked out to sort out all customs procedures related issues. He added that the bottom line for present Indian regime is to promote trade between Pakistan and India in larger interests of people of the countries. He said India was making efforts to resolve visa problems for Pakistani business community and that multiple visas for one year will be issued to businessmen under visa liberalisation policy by the Indian high commission. Draft of said visa policy is likely to be approved by Indian government, he added. He further said that at present visas are granted under 1974’s visa policy of India. However, frequent travellers visiting under business visa are exempted from police reporting. He said Pakistani business community had showed a positive response for promoting trade with

sECP develops databases on equity and debt markets

ing countries for peace and to end poverty," he added. In his welcome address, LCCI President Irfan Qaiser Sheikh said earliest removal of non tariff Barriers will largely consolidate business community efforts as most of the businessmen are not fully aware of Indian standards and quality parameters which also vary from city to city. Pakistani exporters have to spend a lot of time and money to obtain certain certifications and fulfill requirements of clearing; but still they fall short of conforming to any particular condition, he added. He said there are numerous conditions for getting shipments cleared which include agriculture permits, phyto-sanitary certificates, Indian standard of quality, licensing requirement for import of vehicles, textile specific barriers, health and safety regulations and many more. It is hoped that this area will be taken

care of in near future by Indian government with special preference given to Pakistan. He said it can be said without a doubt that potential gains from increased economic integration between India and Pakistan are large. trade between the two countries is unnaturally small and scope for gains from increased trade correspondingly large. It goes without saying that due to tight visa policy, bilateral trade between India and Pakistan has remained undersized and averages around $1.7 billion over the past 3 years through regular channels. Whereas overall volume of trade between India and Pakistan through irregular channels like Dubai, Singapore and etc is estimated to be around over three billion dollars per annum. According to some estimates, trade with India has the potential to be anywhere between 8 to 10 billion dollars. “If trade between

speakers at Punjab university’s seminar apprehensive about mfN



India and Indian government also made strenuous efforts for increasing bilateral trade volume from $2 billion to $6 billion plus. Sharat Sabharwal pointed out that a separate gate and other facilities were being established at Wahgah/Atary border for handling of export cargo 12 hours daily. establishment of a separate gate would also provide hurdle-free transportation facilities at the border, he added. Sharat Sabharwal disclosed that a well-equipped check post worth rs1.5 billion had been established at Pak-India border which will facilitate bilateral trade between the countries. He said bilateral trade was on top of the agenda and Indian experts will help overcome energy crisis in Pakistan. Indian and Pakistani business communities are willing to promote economic and trade relations with idea of enhancing volume of bilateral trade between the neighbour-

eCUrItIeS and exchange Commission of Pakistan (SeCP) has developed various databases that include a wide range of information relating to equity and corporate debt markets of the country. SeCP has taken the decision in order to ensure the provision of accurate and timely information relating to performance and dynamics of capital market to various stakeholders. the databases include, information regarding equity securities for the time period ranging from as earlier as 1992 and relates to public offerings and issue of shares. It further contains information relating to debt instruments and securities including, listed and privately-placed term finance certificates, commercial papers, sukuk and securitised structure debt instruments.

lahore: Speakers at Punjab University’s seminar on opening trade with India warned that by awarding mFn status to India in haste and without approval of parliament, government would endanger Pakistan’s economy, culture and traditions. Pakistan Steel mills former Chairman General (r) muhammad Javed, Pakistan Association of Automotive Parts Accessories manufacturers (PAAPAm) Chairman Syed nabeel Hashmi, Dean of Social and Behavioral Sciences Punjab University Professor Dr muhammad Hafeez, Agri Forum Pakistan Chairman Ibrahim mughal and ‘together For tomorrow’ President Dr muhamad Asim addressed the seminar. they underscored that bureaucracy was creating a bogey of consumerism. Consumer interest was a fake argument as India still provides subsidy to its industries and any country under Wto providing subsidy, could not be given mFn status they proclaimed. they pointed out that India ‘officially’ opened its markets for Pakistan in 1996 by granting it mFn status. However, its peculiar Pakistan specific import tariffs and trade barriers restricted Pakistani exports to very low levels, they added. “now we would open our markets for India if we pride it with mFn status,” said General (r) Javed adding that with our liberal import policy, Indian goods would flood our markets without corresponding increase in our exports. General (r) muhammad Javed said it is very unfortunate that government policies do not match national interest which is creating chaos and panic among masses. He urged people and media to play their due role in bringing positive change in the country. PAAPAm Chairman, Syed nabeel Hashmi, said Pakistani bureaucracy is making important economic decisions in haste. Commerce Secretary, Zafar mahmood, is consoling Pakistani manufacturers by proclaiming that he will put many industries in negative list. But on the other hand, in his visit to India he said that negative list will be valid for a year only. He said government of Pakistan is making Pakistan a trading economy at the cost of revenue-generating local industries. nabeel suggested that in the first phase, trade with India should be initiated with import of raw materials, machinery and equipments, moulds and dies etc. Further, transfer of technology through Joint venture and technical Assistance Agreements should be allowed he added. this would make Pakistani auto industry competitive, he concluded. STAFF REPORT

KSE recovers by 95 points on renewed interest in commodity scrips KARACHI STAFF REPORT


He Karachi stocks market got rid of a dayslong bearish trend on thursday that saw the benachmark 100-share index gaining 95.44 points. the market observers attribute the recovery in the oversold market to the investors’ renewed interest in commodity scrips. “Stocks showed recovery in oversold market on renewed interest in commodity scrips,” viewed Ahsan mehanti, a director at Arif Habib Investments. the day saw the KSe 100share index recovering to 11,729.41 points as compared to 11,633.97 points of the previous day. the intraday high and low stood, respectively, at 11,755.15 and 11,571.74 points. the trading volumes also rose by 17 million shares and were recorded at the ready-

counter at 50.796 million shares against Wednesday’s 33.656 million. the turnover had dipped to a record low of 28 million during two trading days. the trading value also gained some face and jumped to rs2.5 billion against rs1.2 billion of the previous day. the market capitalisation slightly increased and was counted at rs3.052 trillion compared to rs3.02 trillion a day earlier. In total 321 scrips were traded, of which 129 gained, 103 lost and 89 remained unchanged. “Sentiment remained bullish led by oil and fertliser scrips,” mehanti

said adding that “(the investors’) expectations loomed over possible gas reserves discoveries in Zin block of the oGDC.” Bank Al-Falah appeared as a volume leader on the day and counted its traded shares at 8.073 million at the highest per share rate of rs12.05. the bank’s share price set in the green zone by upping to rs11.99 after opening at rs11.95. other top 10 best performers included Fauji Fertiliser Bin Qasim, Jahangir Siddiqui Company, Azgard nine, Fauji Fertiliser XD, Fa-

tima Fertiliser Company, engro Corporation, Lotte PakPtA, oil and Gas and Arif Habib Company SD. these scrips recorded their traded shares at 5.8 million, 3.4 million, 3.3 million, 3.3 million, 3.0 million, 1.7 million, 1.5 million, 1.4 million and 1.3 million, respectively. According to analysts, the day witnessed thin activity as the investors remained cautious after global commodities and stocks continued thursday to fall on uncertain growth prospects in the world’s economic centers namely europe, United States and China.

“Strong valuations in Pakistan oil and Gas sector, resumption of gas supply to fertiliser producers and positive expectations for banking sector earnings outlook played a catalyst role in positive close at KSe,” said Ahsan mehanti. on the future market, the turnover climbed to 8.167 million against 6.429 million of the previous day. the futures scrips that were rated as plus numbered 106, whereas minus scrips numbered 33 and 1 remained unchanged. FFBL-nov was volume leader of the day with 1.022 million of its shares traded.

Pakistan and India is liberalised the volume of exports of these commodities to India can take a quantum jump.” Similarly, there is a great potential for export of fish, resins, animal and vegetable fats, beverages, spirits, vinegar, leather and leather goods, carpets, and tobacco. Similarly, Pakistan can import cotton seed, meat, dairy products, vegetables, fruits, tea, tanning, dyeing extracts, chemical products, rubber and rubber products, raw materials and semi finished products etc. SAArC Chamber vice President Iftikhar Ali malik, LCCI former Presidents Shahzada Alam monoo, mian tajammal Hussain, mian Anjum nisar, former KCCI President Qaiser Ahmad Sheikh, former Senior vice Presidents Abdul Basit, Sohail Lashari, former vice Presidents Aftab Ahmad vohra and Shafqat Saeed Piracha also spoke on the occasion.

wheat price increase condemned LAHORE STAFF REPORT


AKIStAn Flour mills Association (PFmA) has strongly criticised government’s decision to increase wheat support price from rs950 to rs1,050 per maund. PFmA has warned government that if rs100 increase is not withdrawn, flour millers will be compelled to launch countrywide strike. Addressing a news conference former PFmA Chairman Asim raza Ahmad said instead of controlling fertiliser prices, government had increased flour price that would only inflate flour prices in urban centres and hurt flour milling industry. He pointed out that profiteers were minting money, around rs700 to rs800 per bag, through fertiliser black-marketing but nobody was stopping their hand. He indicated that the country already had wheat stocks of around 10 million, of which 5.5 million is surplus from domestic need. He said Punjab Food Department had around 4.6 million tonnes, Pakistan Agricultural Storage and Supplies Corporation (PASSCo) had 2.5 million tonnes, Sindh Food Department had 1.5 million tonnes, Khyber Pakhtoonkhwa held 0.25 million tonnes while private sector was holding 1.5 million tonnes. Asim said government had made a similar mistake in the past when it increased wheat support price from rs600 to rs950 per maund. though famers got relief from the government decision but it forced urban masses to buy expensive flour and negatively affected local flour milling industry. Local wheat products had already become uncompetitive in international market, further price increase would ultimately stop wheat products exports from Pakistan, he underlined. He stressed that it was really unfortunate that Pakistan had surplus wheat stocks but it could not export due to high price in the country. He pointed out that many countries were offering wheat to Pakistan at $230-$260 per tonne at Karachi port, but by increasing prices government was compelling masses to buy wheat and its products at exorbitant rates. He urged government to immediately withdraw its decision; otherwise flour millers would announce a countrywide protest. He further stated that government should control fertiliser prices to reduce prices of all grains. responding to a question, Asim estimated that rs100 increase in wheat support price would increase 20kilogram flour bag price by rs80 to rs90 per bag.

Profit for e-paper_Layout 1 11/24/2011 10:30 PM Page 5

Friday, 25 November, 2011

I think and hope that the thinking will evolve and that the ECB should play an essential role to re-establish confidence


foreign minister france, Alain Juppe

Sarkozy to press Merkel on ECB after bond fiasco StRASBOURG



rAnCe pressed Germany on thursday to let the european Central Bank act decisively to halt a stampede out of euro zone government bond markets that has raised doubts about the survival of the single currency. French President nicolas Sarkozy met German Chancellor Angela merkel and new Italian Prime minister mario monti in Strasbourg, seeking a tradeoff between eU treaty change to impose greater fiscal discipline on euro zone states, demanded by Germany, and more emergency help from the central bank. French officials hoped Berlin would relent in its opposition

to a bigger crisis-fighting role for the eCB after Germany itself suffered a failed bond auction on Wednesday, highlighting how investors are wary even of europe's safest haven. "there is urgency (for eCB intervention). We will talk about it today in Strasbourg," French Foreign minister Alain Juppe told France Inter radio before the crisis summit of the euro zone's three biggest economies in the eastern French city. "I think and hope that the thinking will evolve and that the eCB should play an essential role to re-establish confidence," Juppe said. Sarkozy took a step toward merkel this week by agreeing to amend the european Union's treaty to permit intrusive powers to change national budgets in euro area countries that go off the rails. But the German leader has so far maintained her line that the treaty forbids the politically independent eCB from acting as lender of last resort to buy government

bonds. With contagion spreading fast, a majority of 20 leading economists polled by reuters predicted that the euro zone was unlikely to survive the crisis in its current form, with some envisaging a "core" group that would exclude Greece. In signs of public resistance to austerity in two southern states under eU/ImF bailout programs, riot police clashed with workers at Greece's biggest power producer protesting against a new property tax, and Portuguese workers staged a 24-hour general strike. Credit ratings agency Fitch downgraded Portugal's rating to junk status, saying a deepening recession made it "much more challenging" for the government to cut the budget deficit, highlighting a vicious circle facing europe's debtors. Fitch cut Portugal to BB+ from BBB, which is still one notch higher than moody's rating of Ba2. S&P still rates Portugal investment grade. German Bund futures fell to their lowest level in nearly a month after Wednesday's auction, in which the German debt agency found no buyers for half of a 6 billion euro 10-year bond offering at a record low 2.0 percent interest rate. Bond investors are effectively on strike, interbank lending to euro area banks is freezing up, ever more banks are dependent on the eCB for funding, and depositors are withdrawing increasing amounts from southern european banks. A special report by Fitch on Wednesday suggested France had limited room left to absorb shocks to its finances, such as a new downturn in growth or support for banks, without endangering its triple-A credit status. monti's presence in Strasbourg marked Italy's return to grace in europe

after the era of scandal-plagued former prime minister Silvio Berlusconi, who resigned this month. the new prime minister was expected to discuss with merkel and Sarkozy the economic reforms planned by his government of technocrats. Keeping Italy solvent and able to borrow on capital markets is vital to the sustainability of the euro zone. Wednesday's German bond auction pushed the cost of borrowing over 10 years for the bloc's paymaster above those for the United States for the first time since october.

GERMAN EXPOSURE Finance minister Wolfgang Schaeuble's spokesman said the auction did not mean the government had refinancing problems and few on financial markets disagreed. Some analysts said Berlin just needed to offer a more attractive yield. But it was a sign that, as the bloc's paymaster, Germany may face creeping pressure as the crisis continues to deepen. one senior ratings agency official said it could give Berlin cause to re-examine its refusal to embrace a broader solution. "It's quite telling that there has been upward pressure on yields in Germany it might begin to change perceptions," David Beers of Standard & Poor's told a conference in Dublin. merkel has shown no sign of bending to calls, most notably from France, to allow the eCB to act more decisively. She has said the eU treaty bars the eCB from acting as a lender of last resort and printing money to buy government debt. She rejected joint "euro bonds," dismissed a proposal to mutualise the euro zone's debt stock, and rebuffed attempts to allow the bloc's rescue fund to borrow from the eCB or the ImF. German economy minister Philipp roesler of the Free Democratic junior


coalition partner called on thursday for parliament to jointly reject euro zone bonds "because we don't want German interest rates to rise dramatically." Yet at the same time, merkel has declared that the only answer to the crisis was "more europe" and won endorsement from her party to press for a fully fledged european political union based around the euro zone. With time running out for politicians to forge a crisis plan that is seen as credible by the markets, the european Commission presented a study on Wednesday of joint euro zone bonds as a way to stabilize debt markets alongside tougher fiscal rules for member states. the borrowing costs of almost all euro zone states, even those previously seen as safe such as France, Austria and the netherlands, have spiked in the last two weeks as panicky investors dumped paper no longer seen as risk-free. "Bunds are starting to lose their appeal because markets have to believe the euro bonds story and Germany is very close to starting, essentially, to guarantee the debt of other countries," said Achilleas Georgolopoulos, strategist at Lloyds Bank in London. the crux of an acceleration of the crisis in the past month was Italian bond yields' jump to levels above 7 percent widely seen as unbearable in the long term, despite stop-go intervention by the eCB to buy limited quantities.

STABILITY BOND outside the euro zone, a top British financial regulator said British banks should make contingency plans for a potentially disorderly break-up of the currency area, or the exit of some countries, as the sovereign debt crisis rages on. "Good risk management means planning for unlikely but severe scenarios and this means that we must not ignore the prospect of a disorderly departure of some countries from the euro zone," Andrew Bailey, deputy head of the Prudential Business Unit at the UK's Financial Services Authority, told a conference. In a reuters poll conducted over the last 10 days, 14 out of 20 prominent academics, former policymakers and independent thinkers agreed the euro zone's make-up would change. A new "core" euro zone with fewer members received qualified backing from 10 economists as a possible solution, with seven of them saying Greece should be excluded from it.

CORPORATE CORNER LG establishes new hD standard in mobile handsets

capacity to meet policyholder and contract obligations. At the same time, risk factors are considered minimal, and the impact of adverse business and economic factors is expected to be extremely small. PRESS RELEASE

beginners. PRESS RELEASE

PC and marriott Karachi promote groom packages for Amir Adnan

microsoft launches mEA windows Phone 7 Challenge

lahore: LG has come up with a new breakthrough in the form of “true HD IPS” display. true HD IPS display made its world debut on the new optimus Lte smartphone in Seoul, Korea, where both the phones and displays set a new standard for best-inclass resolution on a 4G connected device. the new smartphone’s 4.5–inch true HD IPS display, developed in close collaboration with sister company LG Display, offers advanced resolution, brightness and clarity and shows colours in their most natural tones. PRESS RELEASE

PACRA assigns Ifs rating of ‘AAA’ to state Life Insurance karachi: Pakistan Credit rating Agency (PACrA) has maintained the Insurer Financial Strength (IFS) rating of “AAA” (triple A) to State Life Insurance Corporation of Pakistan (SLIC). the rating denotes SLIC’s exceptionally strong

iSlamabad: microsoft Gulf has announced the start of an exciting competition with the official launch of the meA (middle east and Africa) Windows Phone 7 Challenge. meA Windows Phone 7 Challenge is a student technology contest which has been conceived to attract entries from students across middle east and Africa. As part of the competition, contestants need to send innovative contest entries based on microsoft Windows Phone technologies that address the theme: ‘Imagine a world where technology helps solve the toughest problems’. PRESS RELEASE

samsung launches multiview mv800 Camera lahore: Samsung electronics Co Ltd has recently launched an innovative and compact digital camera with the name of multiview mv800. It is the perfect combination of style and ease-of-use, which enables social extroverts to capture and record all the highlights of their activities. this multi-view camera is available in colours like vivid red, stylish black and snow white and offers the best-in-class imaging technology that ensures premium results, even for the

karachi: A memorandum of Understanding (moU) has been signed at Pearl Continental Karachi, between mr Amir Adnan, famous Fashion Designer, mr rolf r. Bauer, Director of operations, Hashoo Group of Hotels, mr rehan Faiz Pirzada, executive Assistant manager, Pearl Continental Karachi and mr mirza mansoor, General manager, Karachi marriott Hotel for promoting exclusive packages for Amir Adnan grooms. PRESS RELEASE

LAhORE: Director Ali Akbar Group, Saad Akbar handing over the key to Distributor Target, Zari Markaz. PRESS RELEASE

kARAchI: Mr Yasin haider Rizvi – Vice President TOTAL Oil Pakistan heading Lubricant Business Society of Pakistan (LBSP) seminar at Sheraton on “Opportunities and challenges of Virgin and Used Oils in Pakistan”. PRESS RELEASE

NEW DELhI: S Masood hashmi, President and cEO of Orientm Mccann Erickson, Pakistan with Prasoon Joshi, chairman and cEO, Mccann Worldgroup India, EcD, Mccann Erickson, APAc Region and chairperson Mccann Global creative council at ADASIA 2011 held at Taj Palace, New Delhi, India. PRESS RELEASE

Profit for e-paper_Layout 1 11/24/2011 10:31 PM Page 6

Friday, 25 November, 2011

06 Markets top 10 sectors

49% 09% 10% 04% 04%


01% 03% 01% 03% 17%

Real Estate Investments

Construction & Materials Electricity Banks

Fixed Line Telecommunication

Oil & Gas

Financial Services

Personal Goods

Equity Investment Instruments

STOCK MARKET HIGHLIGHTS Index 11729.40 3056.94 2635.27

KSE-100 LSE-25 ISE-10

Change +95.43 +32.42 +26.61

Volume 41,341,966 1,134,449 68,500

Market Value 2,533,096,420 37,187,937 1,925,270

top 5 perForMers sector wise

Major Gainers Company Rafhan Product Bata (Pak) Ltd. Pak Oilfields Ltd. Fauji FertilizerXD Attock Petroleum

Open 2600.16 745.07 352.88 168.30 400.43

High 2700.00 782.00 360.98 176.00 408.00

Low 2540.00 708.00 351.50 167.25 396.50

Close 2684.75 770.00 360.18 175.52 406.68

Change 84.59 24.93 7.30 7.22 6.25

Turnover 15 11,805 990,650 3,317,726 35,721

2810.98 86.44 88.01 115.41 46.02

2899.00 82.12 87.85 116.10 48.20

2700.00 82.12 85.00 112.35 43.72

2759.94 82.12 85.04 112.60 43.72

-51.04 -4.32 -2.97 -2.81 -2.30

168 886 20,401 319,942 42,287

Volume Leaders Bank Al-Falah Fauji Fert Jah.Sidd. Co. Azgard Nine Fauji Fertilizer

11.95 57.15 5.40 3.34 168.30

12.05 58.70 5.79 3.52 176.00

11.90 56.70 5.36 3.11 167.25

11.99 58.49 5.54 3.45 175.52

0.04 1.34 0.14 0.11 7.22

8,073,761 5,891,916 3,405,019 3,344,003 3,317,72

Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)

Per Tola (PKR) 55,753.00 51,608.00 1,051.00 1025.00

Per 10 Gm (PKR) 47,850.00 44,245.00 902.00 880.00

Per Ounce US$ 1,698.00 – 35.05 –





412.75 127.68 23.89 7.38 97.00

406.10 125.01 23.22 7.19 93.15

406.99 125.37 23.22 7.25 93.74

-4.15 -1.35 0.00 0.05 -2.26

18,325 226,908 1 1,147,404 47,325

15.48 29.90 5.25 156.74 39.35

15.00 29.45 5.00 155.00 38.50

15.00 29.51 5.25 155.18 38.62

0.00 -0.34 0.25 -1.16 -0.46

1,002 252,944 1,000 2,897 15,788

Oil and Gas Attock Petroleum Attock Refinery Burshane LPG XD Byco Petroleum Mari Gas Co.XB

411.14 126.72 23.22 7.20 96.00

Agritech Ltd. Arif Habib CoXDXB SD Bawany Air Products Clariant Pakistan Dawood Hercules

15.00 29.85 5.00 156.34 39.08

1.51 9.20 33.86 10.80 6.97

1.59 9.48 33.00 11.00 7.25

1.46 9.06 32.18 10.77 6.97

1.48 9.06 32.53 11.00 6.97

-0.03 -0.14 -1.33 0.20 0.00

1.91 52.50 1.95 14.18 6.00

28.15 3.10 39.88 9.00 89.50

AL-Ghazi Tractors Bolan CastingXD Ghandhara Ind. Hinopak Motor K.S.B.Pumps

87.6404 136.2897 1.1357 117.3856

169.86 28.00 6.94 96.11 26.95

2.19 52.52 1.98 13.70 6.50

1.90 52.40 1.95 13.70 6.00

1.90 52.49 1.95 13.70 6.00

-0.01 -0.01 0.00 -0.48 0.00

3,005 1,288 100 500 1

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

International Oil Price WTI Crude Oil


Sell 88.00 117.94 136.78 1.1354 85.23 11.33 23.93 23.42 87.16

Brent Crude Oil


Agriautos Industries Atlas Battery Ltd. Atlas Honda Ltd. Bal.Wheels XD Dewan Motors

60.27 172.01 125.27 26.00 2.15

28.60 3.15 40.50 9.38 92.00

27.80 2.85 39.00 8.53 85.03

27.86 3.11 39.34 9.38 88.55

-0.29 0.01 -0.54 0.38 -0.95

14,445 110,806 1,261 502 17,243

AL-Noor Suger Mills Bawany Sugar Clover Pakistan Colony Sugar Mills Crescent Sugar

55.09 11.10 51.41 1.90 12.00

55.09 12.00 53.00 1.90 13.00

172.00 28.55 7.40 95.76 27.13

168.00 28.00 7.34 91.31 25.61

60.99 172.01 126.00 25.99 2.60

0.00 0.00 0.44 -0.35 0.00

68 4,001 500 11 418

60.27 172.01 125.00 24.84 2.13

0.00 0.00 -0.27 -1.16 -0.02

50 100 500 537 79,586

109.00 111.18 145.05 145.58

0.69 -4.44

1,170 203

60.27 172.00 125.00 24.70 2.11

110.49 111.43 150.02 150.00

AL-Abid Silk Mills Diamond Ind. Hussain Industries Pak Elektron Ltd. Tariq GlassXD

23.34 8.20 3.90 4.20 8.65

23.60 9.03 3.90 4.40 8.89

Amtex Limited Artistic Denim XD Ashfaq Textile Azam Textile Azgard Nine

1.31 19.50 7.10 1.35 3.71

1.44 19.45 8.10 1.40 3.85

29.94 29.94 3.74 3.74 127.13


29.94 29.76 3.80 3.80 127.50

169.86 28.00 7.38 95.76 26.95

Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. Highnoon (Lab) IBL HealthCare XD

102.51 76.66 69.25 29.29 12.78

103.20 78.00 69.90 29.50 13.29

P.T.C.L.A Pak Datacom LtdXD Telecard Limited Wateen Telecom Ltd WorldCall Telecom

10.80 34.50 0.96 1.85 1.11

55.09 11.10 51.41 1.63 12.99

0.00 0.00 0.00 -0.27 0.99

35 1 100 14,431 771

23.34 8.20 3.80 4.20 8.65

23.34 8.20 3.90 4.25 8.65

0.00 0.00 0.00 0.05 0.00

2 2 6 8,650 10

1.30 19.00 8.10 1.34 3.62

1.38 19.01 8.10 1.35 3.66

0.07 -0.49 1.00 0.00 -0.05

26,864 74,958 5,000 5,200 672,596

29.80 29.55 3.71 3.65 127.00

29.89 29.61 3.75 3.65 127.23

-0.05 -0.33 0.01 -0.09 0.10

9,000 34,500 1,286,500 1,354,000 12,000

102.74 76.66 69.00 29.38 13.18

0.23 0.00 -0.25 0.09 0.40

6,920 100 3,312 3,502 9,773

102.50 76.66 69.00 28.70 12.80

10.95 34.50 1.00 2.00 1.17

10.70 34.00 0.89 1.82 1.05

10.74 34.50 0.90 1.88 1.06

-0.06 0.00 -0.06 0.03 -0.05

873,286 50 179,056 2,098,153 74,429

0.36 37.11 0.68 1.63 17.01

0.42 37.15 0.68 1.71 17.00

0.32 37.00 0.64 1.63 16.61

0.32 37.01 0.65 1.70 17.00

-0.04 -0.10 -0.03 0.07 -0.01

3,307 416,249 164,679 232,001 300,022

62.23 10.95 5.69 12.07 29.87

62.80 11.00 5.80 12.31 30.00

62.10 10.80 5.62 12.00 29.75

62.23 10.86 5.65 12.04 30.00

0.00 -0.09 -0.04 -0.03 0.13

216 77,973 350,983 5,499,424 71,128

Electricity Genertech Hub Power Co.XD Japan Power K.E.S.C. Kohinoor Energy

Banks Allied Bank Ltd Askari Bank B.O.Punjab Bank Al-Falah Bank AL-Habib







Non Life Insurance 52.35 11.10 51.41 1.63 12.99

Fixed Line Telecommunication

Beverages Murree Brewery Co. Shezan Int’l


Pharma and Bio Tech

Automobile and Parts Buy 87.30 116.74 135.50 1.1283 83.09 11.09 23.78 23.29 84.70


Future Contracts

General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass LtdXD MACPAC Films Packages Limited


Personal Goods 71,503 2,002 16,754 5,352 205

Construction and Materials Al-Abbas Cement Attock Cement Bal.Glass Berger Paints Buxly Paints


Household Goods

Industrial metals and Mining Dost Steels Ltd. Huffaz Seamless Pipe Int. Ind.Ltd. Inter.Steel Ltd. Siddiqsons TinXD



Food Producers

Industrial Engineering

Interbank Rates US Dollar UK Pound Japanese Yen Euro



Major Losers Nestle PakistanXD Hinopak Motor Packages Limited Habib Bank Ltd XD IGI Insurance Ltd.


Adamjee Ins Atlas Insurance Century Insurance Cres.Star Insurance EFU General Ins

47.94 36.49 7.23 2.40 36.61

47.59 36.49 6.80 2.99 36.51

46.80 35.27 6.36 2.00 36.50

47.07 36.49 6.51 2.01 36.51

-0.87 0.00 -0.72 -0.39 -0.10

15,293 2 10,100 1,123 1,713

13.50 1.40 65.53

14.50 1.40 65.53

0.00 0.00 0.00

2 1 157

0.25 16.40 15.97 1.25 0.86

-0.10 0.00 -0.06 0.00 -0.23

36,032 101 2,207 4 631

Life Insurance American Life East West Life Assur EFU Life Assur

14.50 1.40 65.53

14.50 2.34 68.80

Financial Services AMZ Ventures A Arif Habib Investmen Arif Habib Ltd. Dawood Cap.Man XB Dawood Equities

0.35 16.40 16.03 1.25 1.09

0.33 16.40 16.29 1.29 1.07

0.25 15.56 15.96 0.75 0.83

Equity Investment Instruments 1st.Fid.Leasing Mod 1.52 Allied RentalModXDXB 21.64 Atlas Fund of Fund 5.86 B.R.R.GuardianXD 2.00 Cres. Stand.ModXD 0.49

1.53 22.45 5.85 2.00 0.44

1.53 21.64 5.85 1.72 0.34

1.53 21.64 5.85 2.00 0.42

0.01 0.00 -0.01 0.00 -0.07

2,500 1 29,600 493 69,931

13.00 31.00 35.80 32.17 14.00 68.01 1.36 68.50 115.00 4.00 8.01 24.11 56.90 29.70 14.55 6.96 2.00 10.60 0.80 1.90 1.02 17.01 19.51 67.50 26.44

13.02 31.00 36.00 32.17 14.14 69.00 1.49 69.00 115.96 4.01 8.50 25.37 59.69 29.70 15.46 7.96 2.03 10.81 0.82 2.01 1.08 17.44 19.69 68.86 26.44

-0.12 0.00 -0.17 0.00 -0.58 0.00 0.09 -0.73 0.00 0.06 0.10 0.00 0.00 -0.63 0.00 0.00 0.01 0.12 0.02 0.13 0.03 0.24 0.08 0.32 0.00

6,090 100 20,59 280 13,152 5 273,110 4,134 122 9,551 16,928 305 1 16,240 63 309 111,186 595,488 173,000 572,733 225,075 15,390 7,317 9,301 201

Miscellaneous Century Paper Pak Paper Prod. Security Paper Pakistan Cables P.N.S.C.XD Pak.Int.Con. SD TRG Pakistan Ltd. Murree BreweryXDXB Shezan Inter.XD Pak Elektron Ltd. Tariq GlassXD Khyber Tobacco Pak Tobacco Co. Shifa Int.Hospitals Hum Network XD Media Times Ltd P.I.A.C.(A) P.T.C.L.A Telecard Limited Wateen Telecom Ltd WorldCall Telecom Sui North GasXDXB Sui South GasXDXB EFU Life Assur AKD Capital Ltd.XD

13.14 31.00 36.17 32.17 14.72 69.00 1.40 69.73 115.96 3.95 8.40 25.37 59.69 30.33 15.46 7.96 2.02 10.69 0.80 1.88 1.05 17.20 19.61 68.54 26.44

13.38 31.95 36.90 32.25 14.80 69.89 1.50 71.00 115.96 4.24 8.90 25.37 59.69 30.44 16.44 8.96 2.12 10.83 0.86 2.02 1.09 17.50 20.20 69.99 27.27

Mutual Funds fund



Alfalah GHP Cash Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Income Fund Atlas Islamic Income Fund Atlas Money Market Fund Atlas Stock Market Fund Crosby Dragon Fund

501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800

501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500

NAv 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500




HBL Money Market Fund HBL Multi Asset Fund HBL Stock Fund IGI Income Fund IGI Stock Fund JS Principal Secure Fund I JS Principal Secure Fund II KASB Cash Fund

100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000

100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000

NAv 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087

Profit for e-paper_Layout 1 11/24/2011 10:32 PM Page 7

Friday, 25 November, 2011

closing bell





Your sense of belonging is heightened today, and you should find that you enjoy the artistic and communal elements of your surroundings even more than usual. Share the passion!

Try not to believe the hype today -- remember that not all that glitters is gold. You may be the only skeptical voice in the chorus, so make sure that you're able to stand your ground.

Try not to come on too strongly today -- people are resistant to anything they perceive as preaching. Your energy is better spent on gentle persuasion or even on solo projects.




Try not to worry too much about it, but you've got a problem at home that needs a remedy. It may involve bringing in someone from outside, though too much socializing won't help.

You may find it difficult to handle someone's minor complaints or silly quibbles, but that's no reason to let yourself go off the deep end! Just kick back and let them prattle for now.

Try doing whatever you can to overcome tension at the workplace or even at home today. Silly jokes, changes in topic or even launching a fight can help to make life easier in the long run.




You've got big ideas, and now is the best time for you to spin them out and see where they might lead. You might not have to take action quite yet, as planning is more important.

You need to deal with your instincts today -they are almost certainly leading you in the right direction. It might not feel perfectly right, but that's why you have to simply have faith.

You feel just right today -- things are really looking up! Your great energy helps you to find new ways to get things done and impress all the right people. All you have to do is turn on that smile!




Things are looking bleak -- but you have to persevere! Failure can only come if you walk away or otherwise give up, but you can easily move past this dark phase to make a difference.

Make a new friend or work connection today -- your social energy needs exercise! You may find it easier than usual to say hello to that cute stranger, too, so go for it if you want!

Someone thinks they know better than you -- and that doesn't feel good, of course. The thing is, they probably have some measure of power over you, so the best you can expect is a compromise.







hOW TO PLAY fill in all the squares in the grid so that each row, column and each of the squares contains all the digits. the object is to insert the numbers in the boxes to satisfy only one condition: each row, column and 3x3 box must contain the digits 1 through 9 exactly once.

adults allows always apparent birthday business craft dour effect emerge fire great house lets little master matters months more

nearby policy post proof provide puns purpose rapid saws scheme several similar spend spite switch teach towns truth

Today’s soluTions


chESS White to play: play and mate in 3 moves 8

crossword solution

5 Sad regent (anag) — disaffected (9) 8 Bitterness — digestive fluid stored in the gall bladder (4) 9 Interrogate (8) 10 central American country, formerly British honduras (6) 11 Erase (6) 13 Dirty (6) 15 Offhand — informal (6) 16 Deep fissure in a glacier (8) 18 Mislay — fail (4) 19 Anxious (3,2,4)







5 4 3









chess solution


1.Qxc6+ [1.nxc7+ rxc7 2.Qxc6+ rxc6 3.rd8#] 1...bxc6 2.Nxc7+ Rxc7 3.Rd8# *


sudoku solution

1 Over and above what is usually expected (8) 2 French cubist painter, d. 1963 (6) 3 Mean (6) 4 Exploit (4) 6 Piece of dining-room furniture (9) 7 hopeless endeavour (4,5) 12 Lethargic (8) 14 Gloomy (6) 15 Intelligent (6) 17 Electrical unit of measurement (4)


Profit for e-paper_Layout 1 11/24/2011 10:32 PM Page 8

Friday, 25 November, 2011

fBR has unearthed duties and taxes’ evasion of over Rs55 billion as 28,000 containers carrying commercial cargo under the Afghan transit trade (Att) went missing on route from Karachi Port to Afghanistan



Chairman fBR, salman siddique


Govt extends tender date to Nov 30 ECC to discuss sugar procurement issue on Nov 28 g PsQCA denies certifying sugar from PsmA g tCP seeks help from PsQCA to certify sugar g




overnment had issued a tender to buy at least 0.2 million tonnes sugar from local market, and now it has extended the date of tender to 30th november. Issue of certifying the sugar to be bought from Pakistan Sugar mills Association (PSmA), however, is still unresolved. Pakistan Standards and Quality Control Authority (PSQCA) has denied to certify quality of sugar to be procured by trading Corporation of Pakistan (tCP) from local mills. this is due to the fact that mills of PSmA were not certified by the authority. As government itself has included sugar in list of compulsory items required to be certified from PSQCA through an act of Parliament, certification of the kitchen item before procurement has become a challenge for the concerned authorities, sources said. According to sources, under the unresolved quality issue, concerned authorities which were to finalise the matter before 22nd november have extended date for tender issued by tCP to the end of this month. economic Coordination Committee (eCC) was also likely to discuss the issue in its scheduled meeting on 28th november. In reply to a recently sent letter from tCP, in which the corporation had sought PSQCA’s help in certifying quality of locally produced sugar, the authority has refuses to approve standard of the products saying that the mills were not certified. there was already a court’s stay over certification of quality and standards of sugar produced by PSmA as local sugar millers had gone to Supreme Court of Pakistan against PSQCA. According to sources, PSQCA in its letter sent to tCP, has made it clear that no organisation can produce listed item without getting license from the authority. Both products (sugar) and bags were needed to be certified by PSrCA. Despite all arrangements made by eCC and tCP, to procure limited sugar from the local millers through the recently issued tender, government is yet to take final decision about procurement as there was confusion over quality issue. Since tCP has already made it

Reduction in exports alarming: Chairman APtmA LAHORE STAFF REPORT


HAIrmAn All Pakistan textile mills Association (APtmA), mohsin Aziz has said massive decline in textile exports in the month of october, both in value and quantity terms, is alarming and this trend is likely to continue in the month of november. He cited that ImF’s latest report has also endorsed APtmA concerns regarding sluggish economic trends, particularly rising trade deficit amidst dwindling exports. He said exports may drop further in coming months due to unfavourable circumstances. According to him, textile exports despite having increased in value terms during last four months of current fiscal year, still declined in quantity terms in october. exports of cotton yarn, cotton cloth, knitwear, bed wear, towel and readymade garments have registered decline by 26 per cent, 32 per cent, 26 per cent, 28 per cent, 12 per cent and 14 per cent respectively, he added. Chairman APtmA said short supply of energy was the major reason behind drop in exports, as textile industry has been denied gas supply for 120 days during 2011 against much lesser days during previous year. Further, he said, high interest rate was restricting industry expansion. According to him, a

reduction of 150 basis points to produce export surplus has failed in pushing credit off-take, which means interest rate is still on higher side and both commercial and industrial borrowers are reluctant for further financing. Chairman APtmA said interest rate the world over ranges between zero to one per cent and the discount or policy rate is not more than 8.5 per cent in the regional economies against Pakistan, where it is still in the double digits; 12 per cent. He said ImF is also of the opinion that improvement in employment and living standards is not achievable unless economic reforms take place by ensuring industrial expansion and new set ups with reduction in interest rates. He said SBP should reduce discount rate by 250 basis points in upcoming monetary policy on november 30th to ensure single digit mark up in the country. According to him, curbing inflation should be the priority of government but still it should not be at the cost of industrial growth; as reduction in discount or policy rate would not affect inflation and instead it would be helpful in creating new jobs. Chairman APtmA has urged government to ensure uninterrupted energy supply to industry forthwith, besides reducing mark up to single digit to let industry expand and perform to contribute in national economy.

wAPDA to ensure early completion of 969 mw-Neelum Jhelum Project LAHORE STAFF REPORT

W mandatory in its documents that quality of the products should be as per standard of PSQCA, certification of kitchen items has become an issue for concerned authorities. In recently issued Gallop tender notice of tCP for purchase of 200,000 mt sugar, it was mentioned that bids should be in sealed envelops for a minimum quantity of 5,000 mt and maximum of 20,000 mt white sugar packed in polypropylene woven sacks. this is to be done as per detailed specification and PSQCA approved standards as mentioned in tender documents. However, sources said that as both

PSQCA and tCP were government organisations, there should be a way out to resolve quality issue. Until quality issues were resolved procurement of sugar from PSmA would be gross violation of government’s acts and also procurement rules of tCP. It is worth mentioning here that earlier PSmA had greatly appreciated government’s decision procure 200,000 tonnes sugar, from local millers as the move would indirectly help growers. the association had received bids of minimum price of rs65 and maximum of rs66 per kg in an open public tender.

Ater and Power Development Authority (WAPDA) has decided to deploy state-of-the-art tunnel boring machines (tBms) for on-schedule completion of the strategically important 969 mW-neelum Jhelum hydropower project. Deployment of tBms on the project will reduce the construction period by about two years, resulting in an estimated benefit of rs90 billion. Chairman WAPDA, Shakil Durrani, expressed these views during his visit to neelum Jhelum hydropower project. He was accompanied by member (Water) WAPDA, Syed raghib Abbas Shah and Chief executive officer/managing Director neelum Jhelum hydropower company, Lt Gen (r) muhammad Zubair. Chairman inspected the diversion tunnel at nauseri, where river neelum was diverted in october 2011 to initiate construction of the weir. He also visited other components of the project including weir site, de-sander, main tunnels, etc. Speaking on the occasion, the chairman

said neelum Jhelum is a priority project of WAPDA’s least-cost energy generation plan. Since completion of the project is vital for the country, WAPDA is taking all possible measures for the purpose including deployment of two tBms on the project. the tBms being imported from Germany by the contractor are expected to reach Pakistan by January 2012, he added. Lauding the efforts of the project authorities, the chairman said completion of the tunnel to divert river neelum, is a landmark in implementation of the project. the diversion tunnel was completed in october in record time of two years. neelum Jhelum Hydropower Company Ceo/mD, briefing the Chairman, said that overall progress on the project stands at 27 per cent. He further said about 17-kilometer long tunnels have so far been constructed. these include both access and main tunnels. the project is scheduled to be completed in 2016. on completion, the project will provide about 5.15 billion units of electricity annually to national Grid. Benefits of the project have been estimated as rs45 billion per annum. the project will pay back its cost in about 7 years.


Pakistan’s exports to Sri Lanka in jeopardy g

Pakistani export of Kinnow, Onion, potato to suffer most g 60 pc reductions in Kinnow export to sri Lanka expected KARACHI



eSPIte the Free trade Agreement (FtA) signed between Pakistan Sri Lanka, the export of commodities like fruit and vegetables from the former to the latter are going to be badly affected as the foreign country has imposed ‘Special Commodity Levy’ on imports. the recently imposed levy has started affecting the exports of agricultural prod-

ucts to Sri Lanka which may reduce the over all exports of the country, exporters told Profit. It is worth mentioning here that the foreign country is the major importer/buyer of Pakistani onion, Potato and Kinnow. A Special Commodity Levy was imposed by Sri Lanka on Imported Agricultural Products such as Green Gram, Black Gram, and others to protect its domestic farmers. the levy was imposed for three months. After the new levy, the duties on many export items from Pakistan have

been doubled as the duty on Kinnow has increased from $2.19 per 13 kilograms to $4.47. the duty on onion has increased from 9 cents to 22 cents per kilogram while the levy on Potato has increased from 4.5 cents to 30 cents per kilogram in the foreign country. According to sources in fruit and vegetable exporters market, under the new duty the export of Kinnow to Sri Lanka is feared to be reduced by 60 per cent during the current season as the South Asian country is considered a major market for

Pakistani fruit. the fresh move is likely to affect the expected 13000 to 15000 tonnes of Kinnow export to Colombo this year, they said. Pakistan had exported almost 35000 tonnes potato last year. Interestingly, according to sources, there is no additional duty on imports of Pan, Chalia, Coconut Powder, Pineapple, and others from the foreign country in Pakistan. According to the sources, the fresh move of Colombo was against the spirit of the Pak-Sri Lanka FtA which ensures free trade and reduced duty on im-

ports. “the concerned authorities like ministry of Commerce, trade Development Authority of Pakistan and others should immediately take up the issue with Sri Lankan government to avoid negative impacts on Pakistan exports,” they said. “All Pakistan Fruit and vegetable exporters, Importers and merchant Association has also planned to visit the Counsel General of the foreign country to express their concerns about the fresh development in Colombo,” they added.


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