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British regulators will have the power to split up banks that fail to separate risky trading activity from retail banking – George Osborne
BUSINESS Wednesday, 6 February, 2013
ship agents association , transporters end rift KARACHI: After a marathon meeting late on Monday night, Karachi Port Trust (KPT) Chairman Jawed Hanif Khan amicably resolved the dispute between the Pakistan Ship Agents Association and transporters over the levy of charges. This was stated by a spokesman of the KPT on Tuesday. He said that in view of the emerging dispute between shipping companies and the transporters, a meeting was called by the KPT Chairman at the Head Office on Monday night. The meeting was attended by Pakistan Ship Agents Association members and transporters, apart from the operations team of Karachi Port Trust. The spokesman said that the purpose of the meeting was to resolve the dispute and the efforts of KPT led by Chairman KPT. He said that it was decided among the participants of the meeting that from 6th February 2013 onward Pakistan Ship Agent Association members will start collection of empty Lading Order/Lading Order (LO/LO) charges at their offices and no cash transaction will be carried over by transporters at the terminals. With regards to the export empty LO/LO charges, it was discussed and demanded that LO/LO charges will be taken by the shipping companies at the time of issuance of Bill of Lading. The shipping agent representatives were of the opinion that they require proper authorisation from their members and for this matter they opined with confidence that the matter can be resolved. Moreover, it was decided that the understanding reached here will be applicable on fresh import / export containers from 6th February 2013. APP
KARACHI: Netty Jetty Bridge jammed after resumption of activity following the end of a strike called by Goods Transport Association.
Public debt rises by a whoPPing 18.4 Percent ISLAMABAD
otal public debt rose by a whopping 18.4 percent by the end of June 2012 compared to the year before with real growth of debt (7.9 percent) greater than the real growth of revenues (3.9 percent), Debt Policy statement 2012-13 revealed. the document notes that public debt stood at 4.9 times of government revenues at the end of the last fiscal year. Ideally, the document added, this ratio should be 3.5 times or lower. While in earlier years public debt stock accounted for almost the same burden from domestic and external sources, the present government has relied increasingly on domestic debt owing to “non-availability of sufficient external financing.” thus domestic borrowings inched from 50.5 percent in 2008-09 to 60.3 percent of total
public debt at the end of 2011-12. Pakistan’s fiscal deficit has shown significant variation, the document further noted, from original budgetary targets. Fiscal deficit in 2011-12 recorded 6.6. percent of Gross Domestic Product (GDP) (excluding one-off payment of Rs 391 billion) against 6 percent (excluding one-off payment of Rs 120 billion) in 2010-11. the higher fiscal deficit added to the public debt and preempted a major chunk of revenue to service it in 2011-12, nearly 40 percent of total revenues were thus consumed in debt servicing against a ratio of 38 percent in 2010-11. the government consolidated Rs 391 or 1.9 percent into public debt in 2011-12 against the outstanding previous year’s subsidies related to the food and energy sectors due to which the public debt to GDP exceeded the threshold (60 percent) and stood at 61.3 percent of GDP. Public debt servicing consumed nearly 39.9 percent of total revenues in 2011-12
against a ratio of 38 percent last fiscal year. out of the total, domestic debt servicing stood at Rs 821 billion against the budgeted estimate of Rs 715 billion. Borrowing from the International Monetary Fund (IMF) accounted for 11.1 percent of Pakistan’s External Debt and liabilities (EDl). as of June 2012 the EDl was recorded at $65.8 billion and represented a decrease of $0.5 billion in comparison with the previous year due to repayment of IMF loans and appreciation of the US dollar against other major currencies. as a percentage of GDP in dollar terms, EDl stock fell by 300 basis points in 2011-12 compared to the year before. the report added that during the first quarter of the current year an increase of $726 million in public and publicly guaranteed debt aggregated to $ 47.1 billion. Multilateral and bilateral loans showed a cumulative increase of $703 million during the first three months of 2012-13 and the IMF outstanding dues declined by $ 333
million in the first quarter. External debt servicing as a percentage of foreign exchange earnings stood at 12.7 percent at the end of 2011-12 compared to 11.4 percent the year before. a generally acceptable threshold is EDl: servicing to remain below 20 percent of FEE, the document added. But with hefty payments against IMF expected during the next two years this indicator, the report added, would rise. the documents further indicated that the soundness of Pakistan’s debt position remains higher than the internationally accepted thresholds. total public debt levels around 3.5 times and debt servicing below 30 percent of the government revenue are generally believed to be within the bounds of sustainability. the government is making concerted efforts to increase revenues and rationalise current expenditure to reduce the debt burden and improve the debt carrying capacity of the country to finance the growth and development needs, the document concluded.
ISPO-2013 showcases Pakistani exhibitors MUNICH NNI
about 120 sports goods manufacturers and exporters, mainly from Sialkot participated in the world’s largest trade fair of sports goods, ISPo-2013 in Munich, Germany that ended on tuesday. Pakistan trade Development authority (tDaP) sponsored and extended support to new exhibitors from Sialkot under its policy to encourage new entrants in the field of export of Pakistani goods said a press release received from Berlin. Pakistan ambassador to Germany abdul Basit visited Pakistan Pavilion in the exhibition and met the Pakistani exhibitors. While exchanging views with them about the business opportunities that such trade fairs provide, the ambassador said that the quality and the wide range of products displayed by Pakistani exhibitors reflected how business community was making its efforts to keep the economy of Pakistan going despite many difficulties that cropped up in the wake of afghanistan crises. Earlier, the ambassador held a meeting with the Exhibition Group Director of Messe International (the Company that
organizes ISPo every year) Markus Hefter and discussed with him organisational arrangements of the world’s largest trade fair. Hefter informed that Pakistan was one of the most important countries that have been participating in ISPo since 1970, the year ISPo was set up. the ambassador said Pakistan is one of the leading countries that had been producing and exporting quality sports goods to all international brands in the sector. Pakistan Pavilion should be given special treatment by the ISPo management in terms of space allocation and country promotion, he added. Hefter said that this year a photo exhibition showcasing Pakistan’s landscape, its culture and people has also been organised to promote the country. the ambassador also underscored the need of conducting capacity building and training programmes for new entrants. In response, Hefter said the Messe Munich has launched a free online seminar to educate the new exhibitors on how to develop a company profile, organisation and submission of documents, and on other business related issues. Pakistan’s Honorary Consul in Munich Dr. Pantelis Christian Poetis also accompanied the ambassador during the meeting
and visit to the Pakistan Pavilion in the Exhibition. ISPo represents International Sports Business Network and is a
major event for sports goods manufacturers and suppliers all across the world. It provides a convenient meeting ground
for some of the world’s most popular sporting brands and helps in the promotion of new entrants in the market.
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Migrating businessmen drained out around Rs 300 billion from Karachi due to the law and order situation – All Karachi Tajir Ittehad Chirman Atiq Mir
BUSINESS B Wednesday, 6 February, 2013
‘constrained bilateral relations behind less indo-Pak trade’ LAHORE
aaRC Chamber of Commerce and Industry President Vikramgit Singh Sahney on tuesday said that as a consequence of constrained bilateral relations, there has been very little trade between Pakistan and India since inception. He expressed these views while discussing the present state of affairs on telephone with SaaRC Chamber of Commerce and Industry Pakistan chapter Vice President and veteran trade leader Iftikhar ali Malik. He said, “We have abundant resources, both human and natural, possess enriched and fertile land tracts but people of both countries suffered due to failure to fully utilise indigenous resources optimally.” Vikramgit said it was in the vital interest of people of the subcontinent and their governments to fully ensure lasting peace in the region through promotion of trade besides addressing core issues. He said there was a vast scope of close cooperation between the two countries in the fields of agriculture, health, education, engineering, transfer of technological expertise, use of cheaper raw material to help boost industrial competitiveness with a special focus on alleviating poverty in the re-
PPl posts rs 11.02b profit in last quarter
ISLAMABAD: Pakistan Petroleum Limited (PPL) has announced profit of Rs 11.2 billion for the last quarter ended on December 31 2012, registering an increase of 7.19 percent when compared with Rs 10.23 billion in the corresponding period of last year. Besides, the PPL has announced the interim cash dividend at Rs 5.00 per share or 50 percent on fully paid ordinary shares for the year ending June 30, 2013 and in addition, Rs 3.00 per share or 30 percent on fully paid Convertible Preference Shares. In this regard, the company has approved transfer of an amount of Rs 5.00 billion to dividend equalisation reserve from unappropriated profits to maintain dividend declarations. Moreover, the Earning Per Share (EPS) also witnessed a enhancement to Rs 6.71 in the last quarter of 2012 from Rs 6.22 in the last quarter of 2011. The rise in the net profit of the company was due to an increase in net sale by 13.70 percent and a decrease in other operating expenses by 16.27 percent during the period under view. However, the net sales stood at Rs 26.20 billion in the last quarter of the year against Rs 22.60 billion in the same period of last year. The operating expenses recorded Rs 0.88 billion against Rs.1.05 billion last year during the period under view. Apart from this, comparing the results of the second half of 2012 with the same period of last year, the profit of the company stood at Rs 22.32 billion, registering an increase of 9.87 percent against Rs 20.11 billion. APP
gion. He said that currently official trade was about $2 billion per year which could be 5 to 10 times larger directly through the bilaterally legalised procedure instead of a third country. to a question, he said that there were constraints of economic integration which included high tariff rates and non-tariff barriers, and inadequate infrastructure for trade. He said that constraints on visa and cumbersome procedures of payments and customs clearance further limit the scope of trade. Iftikhar ali Malik suggested that both countries had to take initiatives to improve relations and promote bilateral trade. He suggested that to create a level playing field and a win-win situation, a bilateral investment treaty should be finalised to fully facilitate a two-way flow of foreign direct investment between the two countries. He emphasised that the media should also play a positive role in restoring mutual trust and confidence at grass-roots level which was a key to mutual growth and economic prosperity for the overall betterment of people of the region. Malik said, “We are also working on the same lines, which is the manifesto of SaaRC CCI and an all-out effort is being made to boost economic ties among all SaaRC member countries, especially between India and Pakistan.”
Asian markets mostly lower on new Europe fears
HONG KONG AGENCIES
asian markets tumbled on tuesday, bringing a recent rally to a juddering halt, as Wall Street and European shares were hit by political concerns in Spain and Italy. the euro also slumped as Spain’s prime minister was forced to deny corruption claims, while former Italian premier Silvio Berlusconi vowed to throw a spanner in the works of a government austerity drive as his party showed solid gains in polls ahead of a general election. tokyo shares dived 1.90 percent, or 213.43 points, to 11,046.92, while Seoul slipped 0.77 percent, or 15.03 points, to 1,938.18 and Sydney shed 0.51 percent, or 24.8 points, to 4,882.7. Hong Kong tumbled 2.27 percent, or 536.48 points, to 23,148.53. Shanghai reversed morning losses and ended up 0.20 percent, or 4.98 points, at 2,433.13 after the Chinese central bank injected a huge amount of cash into the market to satisfy pre-lunar New Year holiday demand from traders. the losses come after several markets approached highs not seen for several months as confidence slowly
returns, thanks to an easing of the eurozone debt crisis and a pick-up in the US and Chinese economies. However, dealers suffered a blow on Monday when Spanish Prime Minister Mariano Rajoy came under pressure to step down as he becomes engulfed in a corruption scandal. Rajoy has dismissed claims by Spain’s El Pais newspaper that he and other ruling party officials channelled donations into secret payments. the news sent the Spanish cost of borrowing surging, reviving worries about Madrid’s ability to access the debt market to keep functioning. Berlusconi meanwhile said he would refund the money Italians have had to pay for an unpopular property tax if his coalition, headed by his protege angelino alfano, wins a February 24-25 election. Berlusconi, who would take the role of finance minister in a new government, abolished the real estate tax in 2008 but it was reinstated last year as part of Prime Minister Mario Monti’s austerity budget in Italy. the news out of Europe hit the euro, which tumbled in New York late on Monday to $1.3503 and 124.28 yen, from $1.3626 and 126.26 yen earlier in
the day in asia. In tuesday afternoon tokyo forex trade, the euro fetched $1.3485 and 124.52 yen. the dollar bought 92.33 yen compared with 92.11 yen in New York late on Monday. the australian dollar eased to US$1.0409 from US$1.0444 after the country’s central bank held interest rates on hold at 3.0 percent. on Wall Street the Dow, which ended near a record high on Friday, dropped 0.93 percent on Monday, while the S&P 500 fell 1.15 percent and the Nasdaq slipped 1.51 percent. In Europe there were heavy losses on all the main indexes Monday, with london’s FtSE 100, Frankfurt’s DaX and the Paris CaC diving between 1.6 percent and 3.00 percent. Madrid tumbled 3.77 percent and Milan slumped 4.50 percent. on tuesday the markets were mixed. oil prices eased in asia. New York’s main contract, light sweet crude for delivery in March dropped 15 cents to $96.02 a barrel in the afternoon and Brent North Sea crude for March shed 37 cents to $115.23. Gold was at $1,678.01 at 1040 GMt compared with $1,665.40 late Monday.
Pew demands focus on women’s chambers ISLAMABAD: The Pakistan Economy Watch (PEW) on Tuesday said new rules framed to create chambers for women, small traders and cottage industry should be flexible enough to attract the business community. Some clauses in the Trade Organisation Bill 2013 approved by the joint committee of the National Assembly and Senate Standing Committees on Commerce recently will only benefit the business community if it is widely accepted, it said. The current set of rules may prove unappealing for majority of businessmen leaving the whole exercise counterproductive, said PEW President Dr Murtaza Mughal. The legislation for setting up business chambers in every district of the country will only benefit millions of small traders and businesswomen if conditions are relaxed, he said. Dr Mughal said the condition of 150 members for a chamber and 100 members for women’s chambers having a valid National Tax Number (NTN) would be difficult to meet in some small districts. ONlINE
dell going private in $24 billion move
NEW YORK: Dell has reached a deal to go private, the company has announced. Shareholders will receive some $13.65 per share in a $24 billion deal, the New York Times reports, which marks a 25% premium over Dell’s January share price. The privatization deal with Microsoft and private equity company Silver Lake Partners is the biggest since the financial crisis, the Wall Street Journal notes. Once the biggest PC maker on the planet, the struggling Dell is now third; the move comes as founder and CEO Michael Dell hopes to retool his company. The deal incorporates Michael Dell’s own 16% stake, some $700 million from his investment company, $1 billion from Silver Lake, and a $2 billion Microsoft investment. AGENCIES