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Wednesday, 7 November, 2012
SIXTH IMF INSTALLMENT
Pakistan to repay $144.5m ISLAMABAD ONLINE
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ESPITE depressive economic situation of the country, the government will repay $144.5 million sixth installment to the International Monetary Fund (IMF) tomorrow (Thursday) from foreign currency reserves held by the State Bank of Pakistan (SBP). A finance ministry official told Online here on Tuesday that the government will repay a total of $534.3 million to IMF during on going month out of which $144.5 million on Thursday (Nov08) and the remaining $389.7 million on November 23.Pakistan has so far paid back $1.42 billion to the Fund. The official said the country’s foreign exchange reserves will continue to face pressure due to re-payment of IMF loans in the next more than three years as Pakistan is likely to go to the International Monetary Fund (IMF) in fresh loan in current fiscal year 2012-13 to seek loan for the retirement of IMF’s Stand-by Arrangement (SBA) facility. According to the repayment schedule agreed between Pakistan and IMF, Pakistan will repay its obtain $7.6 billion to the IMF till the end of fiscal year 2014-15. The $11.3 billion SBA program had expired on September 30, 2011 and the last two trenches of $3.7 billion could not pay to Pakistan by IMF following Islamabad’s failure to pursue key reforms as well as the emergence of the revenue figures fiasco. Pakistan had enter into a $11.3 billion programme in 2008 with IMF and got disbursements of about $7.6 billion, but failed to get the remaining $3.7 billion due to slippages in performance criteria, leading to suspension of the programme in May 2010 and was ended unsuccessfully on September 30,2011.
OGDCL rigs bidding process in accordance with PPRA rules ISLAMABAD STAFF REPORT
OGDCL rigs tender bidding process has been concluded strictly in accordance with the terms and conditions of the tender enquiry while following the PPRA Rules. The bidders were evaluated as per the given criterion and after necessary processing the lowest evaluated bidder has been awarded the contract i.e. the contract has been awarded to the technically qualified and financially lowest bidder. The distorted information as reported suggests that this has been done at the behest of some interested party and is thus motivated. We have reasons to believe that this is a sponsored arrangement and done with the objective of changing
or influencing the final outcome of the bidding process. It is imperative to mention that OGDCL is the largest listed company of the Country and is also listed on the London Stock Exchange. The company has shown impressive growth in terms of recoverable reserves, production and revenues. The pattern of growth witnessed by the company has necessitated augmenting its exploration infrastructure and minimizing reliance on rental equipment and rigs. In furtherance of this concept the company embarked on the course of acquiring rigs to improve its fleet and drilling capability. It is an attempt to understand the transaction has played in the hands of some elements who have direct interest in this matter and are willing to go to
Remittances stabilising economy: Dr Nadeem ISLAMABAD: State Minister for Overseas Pakistanis Dr Nadeem Ehsan said on Tuesday that the foreign remittances and investment in the country by overseas playing a vital role in stabilizing the economy of Pakistan. Talking to APP, he said the overseas Pakistanis are a great asset of the country, who have assisted Pakistan and government is taking several steps for their welfare. To a question, he said MQM has been playing its leading role to make an enlightened, liberal and welfare state. He said that a stable Pakistan was in the best interest of the world adding that the people in Pakistan must be empowered to play an effective role. APP
Pharma companies want govt to consider price adjustment Bureau rejects mere notification of hardship cases KARACHI: The recent notification for increase in prices of a few hardship cases is a revision and not increase, said Tuesday a spokesperson of Pharma Bureau, a representative body of multinational pharmaceutical companies operating in Pakistan. The spokesperson said due to inflation and rising cost of the input materials it had become impossible for the industry to continue producing quality medicines. He said the revision would merely help the industry to continue producing those drugs at break-even, just to keep them available to the patients as otherwise they would have to buy imported drugs at prices as much as ten times higher than the locally produced drugs. The spokesperson said the recent notification by the government to approve increase in prices of few medicines was long overdue and it is much less than the increase which the industry demanded. However, it would help the companies to keep producing these drugs as most of these were being manufactured at loss. The spokesman expressed the hope that the government would consider the price adjustment request by the pharmaceutical companies as they have not been given an increase for the last 10 years whereas the input and operational costs have increased manifold, making it difficult for the manufacturers to produce many important drugs even at break-even. STAFF REPORT
any length for achieving personal benefits disregarding national interest, truth and facts. It may be added that unprofessional, biased and concocted reporting retards investor confidence and can potentially impair growth of any commercial undertaking; therefore
impartiality, independence, research, reason and professionalism are conditions precedent for investigative journalism. The objective should be to inform the public and not spread rumors and disappointment by relying on unsubstantiated, wrong, motivated and mischievous material.
PMEX to launch collateral management body for warehouse receipts KARACHI STAFF REPORT
The Pakistan Mercantile Exchange (PMEX) is in the process of launching a collateral management company for the storage, certification and issuing warehouse receipts. This was stated by Faisal Malik, business head of agricultural products at PMEX, while addressing a seminar jointly organized by the PMEX, Karachi Stock Exchange (KSE) and Institute of Capital Markets (ICM) on the commencement of AGRI Commodities physical deliverable trading here at the KSE Monday. Malik explained investment opportunities and benefits of agricultural commodities futures trading at the PMEX to brokers and general investors. He said the futures contract at PMEX is an agreement between two parties to buy or sell a commodity at a certain time in the future against an agreed price. The PMEX official said the futures contracts can be useful when marketing grains because they can be a temporary substitute for an intended transaction in the cash market that would occur at a later date. In the absence of a proper risk-management tool, banks are reluctant to fund farmers. If they do, the interest rates are very high. The trading of Rice (IRRI-6) and wheat has already started on PMEX. Earlier, Nadeem Naqvi Managing Director
KSE, Javed Hassan CEO ICM, Maroof Moulvi of M.M Group of Companies, Majeed Adam Director PMEX and other agriculture related personnel were present on the occasion. Naqvi opened the seminar by welcoming the guests and explained in detail the importance of commodities in developed economies. He welcomed the steps taken by PMEX on introducing AGRI commodities in their portfolio and encouraged the local players to use these hedging products being offered by the country’s capital markets. Speaking on the occasion, Javed Hasan CEO of ICM said PMEX is the only organization in Pakistan which provides a centralized and regulated system for future trading and is regulated by Securities and Exchange Commission of Pakistan. He welcomed the launch of new contracts at PMEX and maintained that PMEX has a long way to go in the development of commodities trading in Pakistan. Maroof Moulvi of M. M. Group mentioned that his company has been extensively engaged in the process of market development and believed that their role as a market-maker and liquidity provider would be remembered for long period of time.Sani-e-Mehmood Khan, General Manager KSE, added that the availability of futures markets and hedging facilities reduces the risk perception, and with banks willing to provide easy loan to farmers makes the Exchange based futures commodities trading, an easy bit.
Caution before US vote keeps Asian shares steady TOKYO AGENCIES
Asian shares and the dollar steadied on Tuesday with investors’ risk appetite curbed by uncertainty over the outcome of the tight U.S. presidential election and renewed doubts over Greece’s political ability to push through severe fiscal reforms. Risk-aversion underpinned the dollar near a two-month high against a basket of major currencies of 80.843 hit on Monday, while pressing the euro down 0.1 percent to $1.2782, near Monday’s two-month low of $1.2767. The MSCI index of Asia-Pacific shares outside Japan was nearly unchanged, pulled higher by a 0.3 percent rise in Australian shares and a 0.2 percent increase in South Korean shares, but countered by weakness in most other Asian equities. Hong Kong’s Hang Seng Index fell 0.6 percent, dragged down by a drop in the index heavyweight HSBC Holdings. “The main focus is the U.S. election,
and uncertainty ahead of that is going to keep markets, including Japanese stocks, in a range,” said Kenichi Hirano, operating officer at Tachibana Securities. Japan’s Nikkei average fell 0.4 percent. US President Barack Obama and Republican challenger Mitt Romney are essentially tied, but the Democrat has a slight edge in some of the pivotal states where the election will be decided, according to Reuters/Ipsos polling. If the election is too close to call in a number of states and the result is delayed, it could roil markets as it did in the protracted 2000 election battle. Analysts have said Obama’s re-election is perceived as negative for equities, while markets see Romney as stock-friendly. Implications from the outcome of the election may differ by asset class, but markets broadly will be faced with the risk of higher volatility due to difficult negotiations over a “fiscal cliff,” the $600 billion worth of tax hikes and spending cuts set to kick in next year, which threat-
ens the U.S. economy. In addition to the U.S. election, investors need to be mindful of the potential for renewed stress in Europe and China’s political leadership transition, Morgan Stanley said.
“Markets are currently beset by opposing (positive and negative) factors, with the weight of upcoming risk events now turning us decidedly more cautious ... Risks of a messy negotiation around
the fiscal cliff are likely to increase volatility at minimum,” it said in a research note. China’s ruling Communist Party will unveil its new top leadership team as the Chinese congress convenes on Nov. 8, but expectations for stimulus from the new administration look to be unfounded, given the timeline of the prolonged political transition that ends in first quarter 2013, Morgan Stanley said. For Asia this session, investors will eye whether the Reserve Bank of Australia’s will announce another interest rate cut in its decision due at 0330 GMT. Market views are divided. The Australian dollar was steady around $1.0365. U.S. crude futures were down 0.1 percent at $85.59 a barrel and Brent inched up 0.2 percent to $107.92. Asian credit markets were subdued with investor risk aversion intact, leaving the spread on the iTraxx Asia ex-Japan investment-grade index little changed from Monday.