PRO 07-05-2013_Layout 1 5/7/2013 12:18 AM Page 1
BUSINESS Tuesday, 7 May, 2013
Improved intra-Asia connectivity key to boosting trade, re-balancing economy ISLAMABAD
SECP to safeguard small insurance, audit firms ISLAMABAD: The new administration of Securities and Exchange Commission of Pakistan (SECP) has decided to safeguard interests of small insurance and audit firms which were penalised during the period of the former SECP chairman. Inside sources said a probe into the wrongdoings of the former chairman revealed that laws were framed to force insurance companies to invest in the stock market making other venues unattractive for them. Similarly, insurance companies were pushed to get their annual audit carried out by specific firms only leaving smaller firms high and dry. The noted audit firms harassed smaller companies on the behest of SECP Commissioner Asif Arif, said sources. All actions taken against smaller insurance sector companies were on the instructions of the top three companies, enjoying around 70 percent share in the Rs 36 billion market. EFU, a leading company, bribed Mr Arif by opening an insurance agency in the name of his wife where a recent probe has unearthed suspicious transactions worth tens of millions, officials said, adding that they were collecting more evidence before taking an appropriate action. Insiders said a director, who had been fired from various departments and is serving SECP without a salary, is facing probe for misusing funds. NNI
SBP to receive textile’s markup support claims till 20th KARACHI STAFF REPORT The State Bank of Pakistan (SBP) has extended the deadline for all banks and DFIs to submit claims of textile exporters against the Payment of Export Finance MarkUp Rate Facility and Mark-up Rate Support for Textile Sector against long term loans from April 15 to May 20, 2013. The extension was notified by the central bank through a circular it issued to the banks and DFIs on Monday. The SBP circular noted that other instructions on the subject shall remain unchanged.
ETTER connectivity between South Asia and Southeast Asia, through hardware and associated software, can unlock the full benefits of closer economic ties between the two sub-regions, according to an interim study report by the Asian Development Bank (ADB). The connectivity would also help rebalance Asian growth toward domestic and regional markets, said ‘Connecting South Asia and Southeast Asia’, a study interim report by the ADB and ADB Institute (ADBI) released at a seminar at ADB’s 46th Annual Meeting. The study shows that South and Southeast Asian economies have grown rapidly during an era of fragile world economic growth beset by risks. This process has been fuelled by expanding regional production networks, integration into the global economy, foreign direct investment (FDI), falling trade and
investment barriers, a commodity boom, and heightened demand from a rising Asian middle class. However, integration of trade and investment between the two subregions, while having made progress, has been relatively limited, hindered by various bottlenecks in trade infrastructure, residual trade barriers and insufficient reg i o n a l cooperation. The time is ripe for a study of South and Southeast Asia connectivity, said Dr Masahiro Kawai, Dean and CEO of ADBI. He added the political reform process in Myanmar made it possible to connect South and Southeast Asia, something which was not feasible a few years ago.
This is particularly the case for landbased transportation, both highways and railroads, and the energy infrastructure, he said. The prospect of further liberalisation between ASEAN and major regional economies exists with the start of negotiations on a Regional Comprehensive Economic Partnership (RCEP). Connectivity and associated software refers to physical infrastructure related to transport and energy as well as the linked issue of trade facilitation. Apart from a focus on connectivity particularly cross-border infrastructure and trade facilitation, the study also covers the critical issues of infrastructure financing, trade and investment reforms, and institu-
Ministry of Commerce allows mango exports from from 25th KARACHI STAFF REPORT
The Ministry of Commerce allowed export of mangoes from May 25, said fruits and vegetable traders. Through a notification issued by the ministry, the date for starting export of mangoes has been fixed this year to avoid losses through unplanned and premature export of the fruit, they said. According to All-Pakistan Fruit and Vegetable Importers-Exporters and Merchants Association (PFVA) Chairman Waheed Ahmed, the production of mangoes was being expected at 1.55 million tonnes while the export target of 0.175 million tonnes had been set for this year. “Pakistan may fetch $60 million if the target is met,” he said. Sindh was most affected by climatic hazards, facing 0.15 million tonnes fall in production with an estimated decline of 25 percent in 2013. The production of mangoes in Hyderabad, Tando Allayar, Mityari, Mirpur Khas and others parts of the province was badly affected which also delayed start of the season by around two weeks. Ahmed said with successful introduction in Japanese market in the
past, a limited quantity of Pakistani mangoes would be commercially exported to Japan this year while the fruit will be processed through the existing pilot Vapor Heat Treatment (VHT) plant. In coordination with Trade Development Authority of Pakistan, PFVA would be promoting the processed fruit in the valued Japanese market. International
barriers on trade with Iran also declined Pakistan’s exports to that country, as Pakistani banks have stopped trade services with Iran, which previously was importing 30,000 tonnes of mangoes from Pakistan. The country has suffered a loss of $10 million for not exporting mangoes to Iran, said
Ahmed, adding that illegal trade or smuggling via land routes was not benefiting the country in terms of revenue. Besides, despite being approved for US market, mango exports to America on commercial basis could not take place due to the condition of treating mangoes at a radiation plant near Chicago and unavailability of a direct air-service. Treating/processing the fruit in US, according to Ahmed, not only costs more but also poses a higher risk for exporters. Besides, export of perishable items via sea routes was also not feasible to businessmen in the horticulture sector due to the lengthy transit time. The only way to tap the US market is to provide the radiation facility in Pakistan, preferably in Karachi and Multan. Exports to Australia could also not begin because of a quarantine issue. Though an Australian quarantine team had visited the facilities & orchards in Pakistan to check the quality of the fruit for their market, no development was made in this regard. The Ministry of Commerce and other concerned authorities should move to approach Australian authorities concerned to tap that market, Ahmed said.
KSE 100-share Index up 30 points KARACHI STAFF REPORT
Stock prices witnessed gains at Karachi Stock Exchange (KSE) on the opening day of the week over expectations of general elections to be held as per the schedule on May 11. The benchmark KSE 100-share Index closed 30 points up to 19256.70 at market close on Monday. The market opened in the green zone and at one stage it was seen hovering around 200 points up. However, the intraday correction took away a major chunk of positive gains, leaving the main Index with 30 points up. According to stock market analysts the capital market is upbeat over timely holding of general elections 2013. The stock traders and investors are hoping to see improvement in law and order besides foreign capital flowing into the country after the forthcoming polls.
tions for coordination. The interim report sets out key issues in relation to improving connectivity between South and Southeast Asia and traces their implications. It first reviews evolving economic ties between the two sub-regions and identifies benefits and costs of greater connectivity, then identifies key issues and constraints to greater economic integration. Finally, it explores implications for fostering better connectivity and closer economic integration, as well as the next steps for the study. Key preliminary findings and recommendations include identifying specific gaps in road, railroad, and economic corridor links between the two sub-regions; Myanmar’s potential as an important source of energy trading with South Asia; promoting more automated approaches to trade facilitation; identifying options to expand regional capacity to finance crossborder infrastructure projects; promoting trade and investment liberalisation; and supporting closer cooperation among regional forums related to transport and energy infrastructure.
First tight gas supply delayed till Jul-Aug KARACHI ONLINE
Supply of tight gas from Pakistan’s Kirthar Block in Dadu, Sindh, is expected to start in July-August this year instead of an earlier schedule of May due to a delay in construction of a pipeline to move the gas, an official at the country’s ministry of petroleum and natural gas said on Monday. The Kirthar Block is jointly owned by Poland’s PGNiG (70%) and Pakistan Petroleum Ltd. (30%). Pakistan’s state-run gas utility Sui Southern Gas Company (SSGC) signed the country’s first-ever tight gas sales and purchase agreement with PGNiG and PPL in November last year for supply of 30,000 million cubic feet per day, Platts reported. SSGC is still in the process of laying a 52 km (32.24 mile) pipeline at an estimated cost of Rs 325 million ($3.31 million) to move the gas from the Kirthar Block, the official said. The gas will be sold at $6.50/MMBtu, around 47% lower compared with imported gas price of $12.30/MMBtu but 40% higher than the current price of conventional gas produced in Pakistan. The higher price for tight gas is keeping with the government’s tight gas exploration policy that was approved in February 2011 and renamed as the petroleum policy in 2012. Under the policy, exploration companies have been offered 4050% higher prices for tight gas, compared with the $4.26/MMBtu price for conventional gas announced in Pakistan’s Exploration and Production Policy of 2009. Companies that succeed in recovering gas from tight fields within two years will get a 50% premium over the 2009 price, but if extraction takes more time they will get only a 40% increase. Leases for tight gas fields will run for 40 years, instead of the 30 years for conventional gas assets. Tight gas is typically found in hard rock underground formations that are impermeable and non-porous. As such, exploration and extraction of tight gas is more costly and difficult due to which the exploration companies need to be given the additional incentives, Platts reported. Pakistan’s tight gas reserves are pegged at 40 trillion cubic feet and most of this is believed to be in Sindh, which produces 70% of the 4.2 billion cubic feet per day of the country’s total natural gas output. Pakistan’s current natural gas supply falls short of demand by around 1.2 to 1.4 billion cubic feet per day. The government is also working to import 3.5 million metric tonnes per year of liquefied natural gas (LNG) to meet the energy crisis.
PRO 07-05-2013_Layout 1 5/7/2013 12:19 AM Page 2
BUSINESS B Tuesday, 7 May, 2013
Acumen Fund announces first energy investment in Pakistan ISLAMABAD NNI
Acumen, a pioneering non-profit global venture firm addressing poverty across Africa and in South Asia, on Monday announced its first investment in the growing rural energy sector of Pakistan. Acumen is giving a loan of Rs 86 Million to Aga Khan Rural Support Program (AKRSP) to support the creation of four community managed micro-hydel units in Chitral district of Khyber Pakhtunkhawa (KP) in Pakistan. These plants will provide 24-hour clean electricity to remote, off-grid communities in Chitral district, a region with limited access to electricity. “There is a growing need for reliable power in Pakistan’s rural communities right now,” said, Acumen Fund Pakistan Country Director Farrukh H. Khan. “AKSRP’s community-based model has the potential to provide millions with access to an important basic service and revolutionise the way poor Pakistanis access energy.” Acumen Fund and AKRSP have joined hands to address the pressing energy needs of isolated rural communities in Chitral who are currently not connected to the national grid. Households living in the off-grid villages rely heavily on fuel wood and fossil fuels to meet their daily energy needs, thus adding to environmental fragility. Innovative private and community-based models of energy generation from clean sources can help address the energy crisis in such remote and underserved regions. “We work very closely with the local communities to generate energy that is clean, affordable and reliable. The ultimate objective is to improve the quality of life of local communities by making energy available for small-scale commercial and household uses without burdening precious natural resources such as forests,” said AKRSP CEO Abdul Malik.
Cotton arrivals far below FY13 target
Major Gainers COMPANY Nestle Pak. XD Colgate Palmolive Siemens Pakistan Shezan Inter. MithchellsFruit
OPEN 6982.50 2010.00 642.60 555.15 405.54
HIGH 7331.62 2100.00 674.73 582.90 425.81
LOW 7150.00 2045.00 668.00 582.90 425.81
CLOSE CHANGE 7150.00 167.50 2090.00 80.00 674.73 32.13 582.90 27.75 425.81 20.27
TURNOVER 420 600 24,800 900 1,500
2199.99 1715.00 736.00 341.00 241.60
2150.00 1613.50 733.01 323.00 237.14
2150.00 1632.58 736.00 323.00 237.17
-100.00 -65.42 -35.00 -17.00 -12.45
100 1,600 200 68,000 5,900
9.09 17.60 136.40 10.25 59.75
8.95 16.65 133.05 9.80 58.15
9.01 17.48 135.07 9.94 59.02
0.04 0.88 1.50 -0.10 0.77
11,047,000 8,379,000 7,871,200 5,407,500 4,774,000
Major Losers Bata (Pak) XD Wyeth Pak Ltd Island Textile Clariant PaK. Pak Services
2250.00 1698.00 771.00 340.00 249.62
Volume Leaders Fauji Cement Inter.Steel Ltd. Engro Corporation TRG Pakistan Ltd. Dawood Hercules
CCORDING to ginners, cotton arrivals till May 1, 2013 stood at 12.92 million bales against 14.81 million bales during the corresponding period last year. Initially the government had set the cotton production target of 14.6 million bales for the financial year 2013 (FY13) season. However, the production figure implies a decline of 12.8% year-on-year (YoY), said market analysts. According to Pakistan Cotton Ginners Association (PCGA) data, cotton arrivals during the current season remained subdued posting a decline of 12.8% YoY. “The main culprit behind this phenomenal decline in the total cotton arrivals of the country was heavy rainfall in lower parts of Punjab during the season causing the arrivals to slide by 22% YoY to 9.51million bales, with Punjab contributing 82% to the total cotton arrival last year,” said In-
vestCap analyst Abdul Azeem. However, the analyst said, improved water availability in the Sindh, supported the overall cotton production in the province. The cotton arrivals in the province grew by an immense 27% YoY to 3.41million bales, he said. With clarity on the cotton supply front at the end of the season, average cotton prices on the local front have posted an increase of 3.61% YoY to Rs 6,027 per manud (1 maund = 37.5 kg). During April, 2013, cotton prices remained subdued, declining by a minimal 0.7% month-on-month (MoM) to Rs 6,739 per maund. However, during April, 2013, it touched the 18-month high of Rs 6,900 per maund. On the international front, average cotton prices have reduced by 18% YoY to 86 cents per pound as of May, 3, 2013. During April 2013, Cotlook A Index declined by 1.8% MoM reaching 92.79 cents/lb. Abdul Azeem said the better yarn price on international and local front was expected to be beneficial for some companies, NML and NCL in particular, as they had already purchased their stock of cotton required for the next season.
8.97 16.60 133.57 10.04 58.25
Interbank Rates USD GBP JPY EURO
PKR 98.3318 PKR 153.0043 PKR 0.9902 PKR 128.8442
Forex BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Kuwaiti Dinar Qatar Riyal Omani Riyal Bahraini Dinar Australian Dollar
99.50 127.91 152.31 0.9827 96.72 12.49 26.75 26.25 343.41 26.90 254.53 259.49 99.86
SELL 99.75 128.24 152.57 0.9893 98.06 12.67 26.90 26.40 348.72 27.13 256.19 261.57 102.08
LAHORE: Muhammad Azam Dar, winner of Zong’s CarNama offer, receives the car keys from Zong CSC Manager Talha Ejaz. PR
reciprocal codeshare services to Etihad’s Abu Dhabi hub and select points in North America served by Air Canada via its Toronto hub. The two parties have commenced discussions to finalize details with the objective of introducing codeshare services in the third quarter 2013. The agreement will also allow frequent flyer mileage accrual on codeshare flights by members of Etihad Guest and Aeroplan programs and reciprocal premium lounge access at Toronto and Abu Dhabi airports for eligible passengers of both airlines. This announcement follows the recent decision by the Governments of the UAE and Canada to restore the previous visa regime which means Canadian nationals can once again obtain a free visa on arrival in the UAE. PR
Sunsilk collaborates with fashion gurus for collectible bottles
Kraft Foods changes name to Mondelez Pakistan Limited
KARACHI: Pakistan Russia Business Council (PRBC) Chairman Farooq Afzal, Pakistan Japan Business Forum (PJBF) Secretary General Kaleem Faooqui, Consul General Bangladesh Ruhail Alam Siddiqui and Mirza Ikhtiar Baig celebrate the 65th anniversary of Pak-Russia diplomatic relations. PR
Etihad Airways and Air Canada to introduce codeshare services KARACHI: Etihad Airways and Air Canada have signed a Memorandum of Understanding (MoU) for a commercial cooperation agreement that will enhance travel services between the United Arab Emirates and Canada. While the two carriers currently have interline agreements in place for passenger and cargo services, Etihad Airways and Air Canada intend to offer customers throughchecked bags, reciprocal codeshare services and frequent flyer benefits. The MoU provides for
Sunsilk Lounge on the Red Carpet during the prestigious event. Designed by the kingpins of Pakistani Fashion Industry and each of the bottles comprise diverse specification and distinctive features which will be unveiled everyday during the entire four day event in the most opulent and lavish style. The idea of collaborating with the fashion pundits for the special collectible bottles was brought forward by Catalyst PR & Marketing. SUNSILK ‘SOFT & SMOOTH’ BY MARIA B Day 1 of the PFDC Sunsilk Fashion Week marked the unveiling of Sunsilk ‘Soft and Smooth’ Fashion edition by none other than the undisputed queen of Pakistan’s fashion industry Maria Belal, known as Maria B. “My bottle is bold, happy and full of shine” Says Maria B. SUNSILK “HAIR FALL SOLUTION” BY HSY Day 2 of PFDC Sunsilk Fashion Week marked the unveiling of Sunsilk “Hair Fall Solution” Fashion Edition by the most stylish fashion icon and “King of Couture” Hassan Sheheryar Yasin. “Glamour, Movement, Shine” HSY explains his design in three words. SUNSILK “THICK & LONG” BY MAHEEN KARDAR ALI (KARMA) Day 3 of PFDC Sunsilk Fashion Week, Sunsilk Fashion Edition “Thick & Long” designed by the brilliant Maheen Kardar Ali of Karma was unveiled. PR
LAHORE: With the objective of revolutionizing the visage of mainstream fashion industry in Pakistan, Sunsilk being the lead sponsor of PFDC Sunsilk Fashion Week aims to establish new standards that can provide the fashion industry of Pakistan a novel and enlightened direction, begetting further progress and innovation. Sunsilk’s constant and unwavering support for the event testifies for its commitment, determination and confidence that the brand has shown towards encouraging new and fresh talent in the industry throughout all these years. However, this time the audience had something more interesting and fascinating to experience that will make this year’s event worth remembering. A highlighting feature taking place at PFDC Sunsilk Fashion Week 2013 year is the showcase of special Sunsilk collectible bottles in the
KARACHI: Kraft Foods Pakistan Limited, the market leader in chocolate and powdered beverages, announces that it is changing its name to Mondelez Pakistan Limited, effective from April 29, 2013. Mondelez Pakistan Limited is a wholly owned subsidiary of Mondelçz International, Inc. (NASDAQ:MDLZ). Mondelçz International is a world leader in chocolate, biscuits, gum, candy, coffee and powdered beverages. The company comprises the global snacking and food brands of Kraft Foods, Inc., which were spun off in October to create Mondelçz International. Mondelçz International’s portfolio includes several billiondollar brands such as Cadbury and Milka chocolate, Jacobs coffee; LU, Nabisco and Oreo biscuits, the Tang powdered beverage and Trident gum. Mondelçz International has annual revenue of approximately $35 billion and operations in more than 80 countries. PR
Samsung introduces the GALAXY S 4
LAHORE: Samsung Electronics Pakistan announced the launch of fourth generation GALAXY S, the GALAXY S 4, designed to get you closer to what matters in life and bring your world together. Understanding what matters most to us in our lives, the Samsung GALAXY S 4 was developed to redefine the way we live and to maximize our fulfillment of life. This sleek and innovative smartphone makes every moment of life very meaningful; it understands the value of relationships, enabling true connections with friends and family. It believes in the importance of an effortless user experience, making your life easy and hassle-free; and, it empowers your life, helping take care of your well-being. The beauty of the phone is the highly crafted design encompassing a larger screen size and battery, minimized bezel; all housed in a light (130g) and slim (7.9mm) shape. The Samsung GALAXY S 4 is slimmer yet stronger, with less to hold yet more to see. It has come up with simply unreal beauty. At launch, two color options will be available - Black Mist and White Frost; with a variety of additional color options to follow later this year. “With the GALAXY S 4, Samsung is again going to enhance the way we live,” said JK Shin, President and Head of IT & Mobile Communications Division at Samsung. “All the innovative features of GALAXY S 4 were developed based on the insights and needs we found from our consumers all around the world. Following the successful GALAXY S series, this phone is yet another great proof point of peopleinspired innovation. At Samsung we’ll never stop pursuing innovation conceived by people, so we can inspire them in return.” PR