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BUSINESS Tuesday, 4 June, 2013
KARACHI STAFF REPORT
ARKET observers cite the timely polls on May 11 and the resultant election of a single party with a simple majority as a major contributable factor as the Karachi bourse continues to break all the previous records. The KSE100 Index outperformed the regional markets by posting what the analysts called it an enormous MoM growth of 16.5 percent in dollar terms during the month of May. The equity analysts expect the new government to maintain status quo in terms of taxation in the new federal budget that, they believe, would provide further impetus to the equity market to boom. A significant escalation was witnessed at the bourse during May-13. “Such boost can be attributed to the conduction of election on time which
Dollar under pressure in Asia after mixed data TOKYO
pakistan equity market outperforms regional markets seemed dubious at the time,” viewed Abdul Azeem, an analyst at InvestCap Research. After the ambiguity regarding elections cleared, the market took a U-turn, touching new highs post elections, he added. The benchmark KSE100 index posted a massive growth of 9.6 percent or 1,908 points since the day of the elections. However, during May-13 index posted a growth of 15 percent MoM or 2,841 pints to 21,823 points. “This is the highest level since the inception of KSE100 index,” recalled Abdul Azeem.Moreover, he said, the average turnover in May-13 almost doubled, increasing by 85 percent MoM to 202 million shares per day. The analyst sees two major reasons behind this phenomenal growth in the KSE100 index: Foremost, the formation of the new strong government in the central and the province of Punjab both by a single party, Pakistan Muslim League-Nawaz. “The government with its strong majority is expected to alleviate poverty in the country and make the tough yet important
decision to resolve the energy crises and worst law and order situation in Pakistan,” the analyst observed. Secondly, he said, the significant surge in foreign investment in the stock market also played a vital role during the month, reaching $271 million, including $114 million payment of Unilever, as against $28 million during Apr-13 as foreign investors showed more trust in the new government. On international front, the KSE100 Index outperformed the regional markets by posting what the analyst said an enormous growth of 16.5 percent MoM in dollar terms during May-13. Moreover, the Pakistani equities performed better than the Frontier Market Asia Index which rose by 11.76 percent MoM in May-13. Moreover, the KSE100 index, being listed at the Frontier Market Index (FM Index), outperformed by 12 percent MoM as compared to FM Index growth of 4.47 percent. As far as regional foreign investment is concerned, India remained the leader on
KSe InDex croSSeS recorD 22,000-poInt level KARACHI: The Karachi stock market’s benchmark index on Monday crossed the historic 22,000-point level as investors’ euphoria over hopes that PML-Nled government would revive the economy continues. At 14.02 pm, the Karachi Stock Exchange’s 100-share index was trading at 22,002.58 points, up 179.53 points, or 0.82 percent. Turnover remained impressive at 191.05 million shares. Dealers said that investors’ sentiment was buoyant on hopes that the Prime Minister-elect Nawaz Sharif’s government would focus its efforts towards reviving the economy. Since May 11 general elections in which PML (N) emerged as single-largest party, the market has seen bullish trend. The KSE index has gained a whopping 15 percent in May 2013. OnlinE this front as it was able to attract $3.86 billion during May-13. Likewise, Taiwan ranked second as $2.2 billion was invested in Taiwan’s stock markets during the period. Pakistani markets attracted only $271 million during the said period. “Going forward, we expect the positive
Oil down in Asia as OPEC leaves output unchanged
The dollar was mixed in Asian trading on Monday as it faced pressure from data that showed US consumer spending was down in April although shoppers’ confidence climbed. The greenback gained on the yen as Tokyo’s Nikkei 225 stock index pared back some of its early losses. The index is closely linked with the yen as the currency’s value affects the profitability of Japanese exporters. Credit Agricole said dollar strength was likely to continue. “We expect USD/JPY downside to be increasingly limited and stick to the view that the pair will ultimately resume its uptrend,” it said. In Tokyo morning trade, the dollar bought 100.67 yen, gaining from 100.37 yen in New York late Friday, while the euro was also stronger against the Japanese currency at 130.89 yen from 130.44 yen last week. Against the dollar, the European single currency was slightly stronger at $1.3004, from $1.2996 in US trading.
Oil prices were lower in Asian trade Monday after OPEC kept its output ceiling unchanged and voiced concerns over weak global economic growth dragging crude demand. New York’s main contract, West Texas Inter-
mediate (WTI) light sweet crude for delivery in July, was down 29 cents to $91.68 a barrel in the afternoon and Brent North Sea crude for July delivery shed 29 cents to $100.10. “It is obvious that the OPEC announcement over the weekend has had a negative impact on oil prices,” said Jason Hughes, head of sales trading in CMC Markets. “The OPEC decision will have a greater downside on Brent than on the WTI in the US because of the supply glut
there,” he added. The Organization of Petroleum Exporting Countries (OPEC), which pumps about 35 percent of global oil supplies, on Friday said it would leave the output ceiling at 30 million barrels per day (mbpd), where it has stood since late 2011, despite actual production exceeding the target. The cartel, comprising nations from Africa, Latin America and the Middle East, is aware that cutting production could raise oil prices and boost their incomes — but that this could also hurt the fragile global recovery. The outlook for global economic growth, and demand for oil, has been clouded by the combined impact of Chinese inflationary pressures, the long-running eurozone sovereign debt crisis and uncertainty over policy for the US economy, OPEC said.
World newspapers mull ‘paywalls’ for survival BANGKOK APP
Global newspaper chiefs have some rare good news to share after years of slumping print sales and advertising revenues — readers appear increasingly willing to pay for online news. Over 1,000 newspaper editors and other media figures are meeting in Bangkok this week as papers continue to shed readers — at least in the older markets — and the shift to the Internet draws more “eyeballs” but lower ad rates. Press freedom, journalist safety, the use of new technology and future trends in print and advertising will all also be discussed at the four-day annual World Newspaper Congress, which runs until June 5. The issue of charging readers for web and mobile content looms largest, with editors casting an envious eye at media groups who have successfully implemented “paywalls” after years of giving away news for free. “The general impression was that it would be impossible to reverse the culture of free (online) content... that people will never pay for it,” said Gilles Demptos of the World Association of Newspapers and News Publishers.
rally at the local bourse to continue during Jun-13,” said Abdul Azeem. Although, he said, the budget for FY14 was to be announced in Jun-13, the newly-elected government was expected to maintain status quo on tax front in the upcoming budget.
InflAtIon DoWn to nIne-yeAr loW In MAy KARACHI STAFF REPORT
The Consumer Price Index (CPI) inflation during last month in May dropped to what the analysts said nine-year low of 5.1 percent. This was compared to 5.8 percent of the preceding month of April. “The number make another low of the rebased CPI index while is the lowest reported reading, including the old base, since March 2004,” viewed the analysts at Topline Research. On month-on-month (MoM) basis, the price hike during the month under review decreased to 0.5 percent as against 1.1 percent in April. “While the number declined to 7.5 percent in 11MFY13 compared to 11 percent in the same period last year,” said the Topline analysts. The analysts attribute this downward trend in the year-onyear (YoY) inflation to reduced gas prices and absence of increase in electricity tariff that, they believe, was keeping the inflation base low. “With another soft inflation reading in May, we estimate FY13 average inflation is likely to stand around 7.5 percent,” they said. This 7.5 percent is significantly lower than 9.5 percent the government had targeted in the outgoing fiscal year budget. Given the current significant ease in inflationary pressures the market observers foresee the central bank keeping the discount rate intact at 9.5 percent in its monetary policy decision for the next couple of months.
Improved security can lead to economic growth: ICCI ISLAMABAD APP
Islamabad Chamber of Commerce and Industry (ICCI) has urged upon the new government to use all available options to improve security situation in the country to ensure economic development. “Pakistan possesses huge potential and it can achieve better economic development,” said ICCI President Zafar Bakhtawari. He expresses this while exchanging his views with Col. (Retd) Azam Qadri who visited ICCI to present his book on Major Shabir Sharif Shaheed (Nishan-e-
Haider) and introduce the business community about the role of some unsung heroes of Pakistan Army. The ICCI President said all the stakeholders should sit together to find out a workable solution to security challenges that will enable the private sector to invest in Pakistan and put the country on better economic growth path. Bakhtawari paid rich trib-
ute to Major Shabir Sharif Shaheed (NH), terming him one of the most courageous military officers and symbol of bravery and valour for the new generation. He also lauded the role of Pakistan Army that has made great sacrifices to defend the country adding the business community would always extend its full cooperation to our armed forces to make Pakistan’s defense further stronger.
Speaking on the occasion, Col. (Retd) Azam Qadri said that he was writing 5-6 more books to highlight the role of Pakistan Army’s soldiers who rendered invaluable services and even scarified their lives for their motherland. The book “What more can a solider desire” is a candid account of Major Shabir’s acts of valour and bravery he displayed throughout his military career and during the two Pakistan-India wars of 1965 and 1971. Major Shabir embraced martyrdom on December 6, 1971 while firing and engaging the Indian tanks in the Sulemanki Sector.
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BUSINESS B Tuesday, 4 June, 2013
SBp simplifies expansion procedures for money exchangers KARACHI STAFF REPORT
HE State Bank of Pakistan on Monday amended its rules regulating the expansion of the exchange firms. The new regulations notified by the regulator via a circular are aimed at simplifying the procedure of network expansion of the exchange companies and to consolidate existing instructions on network expansion. “The following policy is hereby circulated for meticulous compliance,” said the SBP circular. 1. AnnuAl neTwoRK expAnsIon plAn (Anep) An Exchange Company (EC) desirous of opening new branches, franchises, payment booths and currency exchange booths shall submit an Annual Network Expansion Plan (ANEP) duly approved by its Board of Directors by 30th September of each year for the next calendar year (Jan-Dec) on prescribed format. In-principle approval to ANEP for the next calendar year shall be granted by the Exchange Policy Department keeping in view the compliance status and inspection rating
of the exchange company. In principle approval granted under ANEP shall be valid only for one year. Financial Health, Corporate Governance, Anti Money Laundering Issues, future earnings prospects etc. shall form the eligibility criteria for approval of ANEP. In case of non-compliant or marginally compliant exchange company, approval for network expansion may not be considered. 2. CApITAl A d e q u A C y foR neTwoRK expAnsIon In addition to the criteria defined above, the following criteria related to capital adequacy shall be observed for network expansion: CoMpAny’s neTwoRK: Branch Franchise Payment Booth/Currency Exchange Booth
Rs. 5,000,000/- per branch Rs. 3,000,000/- per franchise Rs. 2,000,000/- per PB/CEB It may, however, be noted that the above criteria is only for calculation of capital adequacy of the company in relation to their entire network. Exchange Companies shall be free to assign any amount of capital to any of their outlets. 3. TeMpoRARy CuRR e n C y e x CHAnge BooTHs AT HAjI CAMps In order to facilitate Haj Pilgrims, the exchange companies may establish their own Currency Exchange Booths (CEB) at Haji Camps during Haj Season, subject to the following terms and conditions: For establishing the said booths at Haji Camps, an NOC will have to be obtained by the exchange company from Ministry of Religious Affairs prior to approaching SBP for
approval. The booths will be setup temporarily during Haj season only. 4. ReloCATIon of ouTleT Exchange companies may relocate any of their outlets during the year within city/town under intimation to the State Bank of Pakistan. However, before commencement of operations at the new location, prior approval of the State Bank shall be required for which the company shall submit the related documents. 5. ClosuRe Exchange companies shall be free to close any of their existing outlets without obtaining prior permission of the State Bank. Information regarding closure of the outlet should be published in a leading newspaper at the time of closure and original license/permission letter of the outlet must be surrendered to SBP within 15 days from the date of closure. 6. pRoCessIng fees A processing fee of Rs. 25,000/- will be charged for each application for the establishment/relocation of each outlet. Exchange companies shall submit the above fees related to them and their franchises/third party PBs through DD/PO drawn in favor of the State Bank of Pakistan.
Major Gainers COMPANY Colgate Palmolive Wyeth Pak Ltd Shezan Inter. Indus Dyeing XD Murree Brewery
OPEN 1810.00 1487.00 685.40 546.40 315.00
HIGH 1889.00 1561.35 719.67 569.98 330.75
LOW 1751.00 1500.00 700.00 565.00 320.01
CLOSE CHANGE 1889.00 79.00 1561.35 74.35 719.67 34.27 567.49 21.09 330.75 15.75
TURNOVER 3,200 1,800 1,500 200 11,300
370.00 696.00 190.00 157.00 292.00
368.60 696.00 181.00 150.00 281.80
368.60 696.00 181.00 150.32 287.14
-19.40 -17.70 -9.00 -6.68 -5.49
300 100 1,500 4,200 31,100
6.05 15.49 12.47 14.35 12.14
4.16 13.90 11.73 13.32 11.31
4.30 14.19 12.30 13.89 11.59
-0.86 -0.61 0.39 0.12 -0.22
118,334,500 38,544,000 25,150,500 22,357,500 20,771,000
Major Losers Pak Services Island Textile Sunrays Textile XD Pak Gum & Chem. Clariant PaK.
388.00 713.70 190.00 157.00 292.63
Volume Leaders B.O.Punjab(R) B.O.Punjab Fauji Cement Jah.Sidd. Co. TRG Pakistan Ltd.
5.16 14.80 11.91 13.77 11.81
Interbank Rates USD GBP JPY EURO
PKR 98.5232 PKR 150.3463 PKR 0.9823 PKR 128.2870
Forex BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal
99.70 128.17 150.67 0.9850 94.89 12.56 26.90 26.40
SELL 99.95 128.21 151.62 0.9953 96.58 12.79 27.15 26.60
CORPORATE CORNER competition featuring Indian and pakistani entrepreneurs to air on Geo tv pakistan The Atlantic Council launched a new cross-border business plan competition ‘Startup Dosti ’ on June 3 to facilitate cross-border investment and collaboration. The launch event at the UK parliament will feature remarks by Andrew Stephenson MP, chair of the All Party Parliamentary Group on Pakistan, and others. The competition will connect entrepreneurs from India, Pakistan, and Startup Dosti provides business support and seed funding to high-potential, early stage startups in India and Pakistan. A partnership between SEED Ventures (Karachi-London), the Indian Angel Network (New Delhi), and the Atlantic Council (Washington, DC), the competition will be televised by GEO TV in Pakistan and an Indian broadcast partner. Contestants will have the opportunity to win seed funding ̶—and incubation, mentorship, and access to business resources ̶—if they successfully convince a cross-border panel of seasoned investors to support their enterprises. “GEO TV Network is pleased to partner with the Atlantic Council to highlight the spirit of entrepreneurs from Pakistan and India,” said Sulaiman S Lalani, executive director, GEO TV Network. “Startup Dosti will interconnect the entrepreneurial communities across India and Pakistan, thus creating a platform for exchange of ideas, mentoring, assistance in access to markets, and perhaps funding,” said Padmaja Ruparel, President, Indian Angel Network. The competition is the flagship program of the Dosti Partnership, a wider regional project connecting established young entrepreneurs and rising business leaders from India, Pakistan, and the global diaspora to develop cross-border businesses and continue improvements in bilateral relations. “We at the Atlantic Council view India and Pakistan as vital partners,” said David Kirk, Young Atlanticist Program Director, Atlantic Council. “Building bridges between young entrepreneurs in the two countries, and with peers in the Atlantic community, is one of our top priorities.” PR
Kashf Microfinance Bank announces acquisition by fIncA Kashf Microfinance Bank Limited (KMBL) today announced an equity injection of Rs 824.7 million by FINCA Microfinance Cooperatief UA (Netherlands). With this transaction, FINCA becomes the majority shareholder of KMBL, acquiring 82.8 percent of the shares. Speaking at a
ceremony in Islamabad to mark the occasion, M Mudassar Aqil, CEO of KMBL, characterised the transaction as an ideal match of FINCA’s global reach with KMBL’s local depth. “KMBL was founded to serve the citizens of Pakistan with the financial tools everyone needs to fuel their productivity and create a better life. Now, with a strengthened capital base and with the technical support made possible from FINCA’s 28-year history of global leadership, KMBL stands today even better positioned to fulfill our mission of job creation and poverty alleviation.” Speaking at the same ceremony, FINCA’s President and CEO Rupert Scofield described the acquisition of KMBL as the ideal pathway into Pakistan for FINCA, given the two institutions’ shared mission and values, and the technical skills of the local team. KMBL’s Founder and Managing Director of Kashf Foundation, Roshaneh Zafar welcomed FINCA and emphasised that this partnership will enable the bank to establish new thresholds in the microfinance industry in Pakistan. PR
QAtAr Airways increases frequency in pakistan Qatar Airways, the national airline of the State of Qatar, is strengthening its commitment to Pakistan with a 60 percent frequency increase. Starting June 1, Qatar Airways will be operating 28 flights each week instead of 14 to three cities in Pakistan – Karachi, Lahore and Peshawar. The Doha-based airline will double its frequency on the Karachi route by introducing two flights a day from the current daily flights; Lahore from four to seven flights a week; and Peshawar securing an additional flight to three services each week. Qatar Airways Chief Executive Officer Akbar Al Baker explained the importance of growth in Pakistan, saying: “We have had a well-established operation in Pakistan for many years, but have always been looking to increase frequency and now thanks to new agreements in place between the relevant authorities, we can soon enjoy more capacity between Qatar and “our customers can expect more choice from next month when we increase frequency to three key cities in Pakistan adding convenience for both business and leisure travellers. “Passengers now have greater access to a number of routes in the airline’s extensive network of global destinations via our hub in Doha.” Among the 127 destinations currently served by Qatar Airways are London, Paris and Frankfurt, Milan, Jeddah, Madina, Beirut and Istanbul – all better connected from Pakistan with the convenient timing of the additional flights. All flights from Pakistan are operated with an Airbus A330 in a twoclass configuration of up to 248 seats in Economy and up to 36 in Business Class. Qatar Airways has so far launched four destinations this year – Gassim (Saudi Arabia), Najaf (Iraq), Phnom Penh
(Cambodia), Chicago (USA) and Salalah, Oman (May 22). PR
pakistan likely to get access to tIr KARACHI: Pakistan’s accession to the International Road Transport (TIR) Convention is yet to be taken. However, the decision in this regard is in the process of negotiations thus pending. It was communicated to the delegation of Federation of Pakistan Chambers of Commerce and Industry (FPCCI) led by its Vice President Naveed Jan Baloch during the course of the training held in Ankara, Turkey recently organised by the Government of Turkey in collaboration with the Union of Chambers and Commodity Exchanges of Turkey (TOBB). The FPCCI delegates were briefed comprehensively about the TIR Convention by representatives from Turkey’s Ministry of Customs and Trade, the Ministry of Transport, the customs authorities, the private sector and the International Road Transport Union (IRU), Geneva about the implications for Pakistan of acceding to the TIR Convention. It may be mentioned that Pakistan has been engaged. The TIR Convention is a multilateral treaty that would enable an international customs transit system, linking Asia to Europe through the road route. The TIR Convention has already been signed by 68 member states (including the European Union), and is being used by these countries to conduct international road transport operations successfully. FPCCI delegation was informed that acceding to the TIR Convention may help boost export opportunities for Pakistan to Turkey and Europe significantly, because under the rules of the Convention, Pakistani trucks would be able to carry consignments all the way to Europe in a safe, efficient and timely manner. PR
Sialkot industry mulling solar energy options A Japanese solar-energy producing company has offered solar energy technology to the Sialkot business community for helping the industry cope with the burning issue of prolonged and worst energy crisis. A Japanese delegation made this offer during an important meeting with Sialkot businessmen held at Sialkot Chamber of Commerce and Industry (SCCI) here today. SCCI’s former President Naeem Anwar Qureshi presided over the meeting. He said that the solar –energy technology by the Japanese company could be helpful in curbing the menace of energy crisis from exportoriented Sialkot city. A Japanese delegation jointly led by Ms. Magumi Tamura and Mr. Reiko Kazama, today, visited Sialkot Chamber of Commerce and Industry (SCCI) here today. The delegates
discussed in details the matters of mutual interest with Sialkot businessmen, besides, discussing the business prospects in solar energy equipment and home appliances, in this regard. PR
Habib University board of governors meets
Habib University’s Board of Governors assembled in Karachi this week for a series of events: a dinner hosted by Rafiq M Habib, chairman, Habib University that gave the Board of Governors the opportunity to network with noted businessmen, media owners and philanthropists, followed by a Principal’s dinner where the Board met with owners & principals of numerous high schools, and a media & press conference that introduced our board to local media in Pakistan. Welcoming the guests, Wasif Rizvi, president of Habib University, acknowledged the board of governors present and spoke of how far the board has come from a large group in September 2012 to this day to a selected number. Rizvi conveyed his appreciation to the board for being a part of the venture and sharing their global expertise, knowledge and invaluable feedback in the University’s progress. The members of the board of governors discussed how ‘Yohsin’ (thoughtful self-cultivation) has become a concept deeply engraved in each of their lives. They spoke of the tireless and continuous work the cause requires and of their firm belief in it. PR
fanta rocks - Search for young rock Stars Fanta, the most fun-filled Orange Sparkling brand, has launched a talent hunt in schools across Pakistan to find young gifted singers for recording a Fanta song and music video. The initiative, appropriately named ‘Fanta Rocks’ will be spearheaded by renowned Rock Band Noori, and will extend to nearly 250 schools, reaching out to an estimated 250,000 school children between the ages of 12 and 18. The initiative will short-list 3 singers who will then be called to ‘Fanta Rock Station’ in Lahore to compose, sing and record a Fanta Song with Noori. PR