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BUSINESS Tuesday, 24 September, 2013
pakistan's textiLe exports ContraCt By 9 perCent
In the business world, everyone is paid in two coins: cash and experience. Take the experience first; the cash will come later. — Harold Geneen
Cement dispatChes inCrease 6pC
UBL to launch shariah compliant fund UBL Fund CEO says advisers have approved of this fund as per the guidelines of Shariah
HEAVY RAINS HAVE HALTED CONSTRUCTION ACTIVITIES DURING LAST TWO MONTH KARACHI
Analyst attributes reduced exports to depreciation of Indian Rupee against dollar KARACHI: The country's textile exports contracted by nine percent on month-on-month basis during the month of August, According to Pakistan Bureau of Statistics (PBS). The PBS' recently released exports data show, however, that the textile exports in US dollar terms rose by 3% on a YoY basis. A monthly account shows a decline of 9 percent in textile exports compared to the preceding month of July. "We primarily attribute the reduced exports to the depreciation of the Indian Rupee (INR) against the dollar, while the seasonal effect has also played its part in contributing to the same," said Shajar analyst Sabir Mohiuddin. Overall in 2MFY14, textile sector exports stood at $2.3 billion, a growth of 7 percent YoY, said he. "With the INR gaining strengthen against the US dollar, we downplay the chances of export attrition due to the INR phenomenon," he said. Furthermore, he said, the textile sector was likely to benefit from the increased competitiveness due to the rupee's weakness and grant of GSP-status expected in Jan’14. Nishat Mills Limited is currently trading at FY14 and FY15 PE of 5.1x and 4.6x. "Though, we are yet to initiate coverage on NCL, we expect the stock to benefit from the mentioned factor as well," the analyst said. STAFF REPORT
pia to attain Break even in year’s time: yUnUs KARACHI: The managing director of the Pakistan International Airlines (PIA), Junaid Yunus, has expressed optimism that the national flag carrier would attain break even in a year’s time. He was addressing a news conference at the PIA head office on Monday. Younus pointed out that the management of the PIA has submitted four options to the relevant authorities for the necessary approval. He said that the management would work in coordination with the employees to stem the losses, streamline the affairs of the airline and to make it a viable entity because it is a national asset. “If the PIA has a fleet of 38 to 40 aircraft this will help the airline to stand on its own feet”, the MD remarked. He said that efforts are also being undertaken towards the fuel saving and pointed out that PIA’s fuel bill is to the extent of 56 per cent of its revenue. He also referred to the increasing prices of fuel as well as the upward trend of the US dollars. He maintained that the PIA does not need money and that what it needs is aircraft. “This airline has a lot of potential to stand on its own feet,” the MD remarked. To a question about the losses, he was of the view that the PIA was paying interest to the tune of Rs one billion per month on the loans. Apart from installments of Exim Bank are also being paid. APP
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STAFF REPORT
otal dispatches of cement sector during Sep-13 depicted an impressive growth of 6 percent YoY as compared to same period last year, According to market observers. "The increase in monthly sales is expected to be a result of 11 percent YoY hike in local dispatches to stand at 1,987k tonnes," said Abdul Azeem of InvestCap Research. The local dispatches from South are expected to grow by 32 percent YoY primarily due to boom in construction activities, he said. Heavy rains in the region have halted the construction activities during last two month coupled with tiny government infrastructure spending. Exports on the other hand, are expected to reflect a flattish trend during September 13 and register a marginal decline of 5 percent YoY as manufac-
turers have started orienting their sales on the local front amid higher local demand and impressive local cement prices; depicting an increase of 5.4 percent YoY to Rs 9,431/ton. Cement dispatches for 1QFY14 are expected to clock in at 7,612ktons, down by meagre 1.2 percent YoY due to prolonged monsoon effect this season. "The decline in total dispatches is primarily expected from 3 percent YoY decline in export dispatches, which are expected to clock in at 2,205k tonnes," said Abdul Azeem. Spike in inland transportation cost, lower demand on the export front and unattractive export prices are the key reasons behind export decline. Moreover, dispatches on local front also portray a gray picture as the same is down by 1 percent YoY to 5,406mn tonnes. This is particularly due to gloomy demand from south.
However, the analyst said, local dispatches from north are expected to witness a surge of meagre 1 percent YoY to 4,416k tons during the quarter. As mentioned above, the real estate market is back in the limelight after years of hibernation, surge in remittances and increased urbanisation. Despite higher cement prices, low cost of borrowing is expected to keep the overall cost of different projects at lower levels and is expected to rejuvenate construction activities. "This is foreseen to act as an impetus for increased cement demand going forward," he said. The approaching winter season is expected to subdue cement demand, however, post winter, demand is anticipated to escalate. The main reason behind this is the likely increase in infrastructural development spending in the run-up to the upcoming new projects.
Food exports increase 10.17% in two months COUNTRY EARNED $48.65M BY EXPORTING MEAT AND MEAT PRODUCTS IN FIRST TWO MONTHS ISLAMABAD APP
Food group exports from the country during first two months of current financial year swelled by 10.17 percent and reached at $682.712 million as compared to the same period of last year. During the period from July-August, 2013, different food commodities worth $682.712 million were exported which were recorded at $619.96 million in same period of last year, said the data of Pakistan Bureau of Statistics.
During the period under review, rice exports increased by 27.76 percent and reached at 575,368 metric tons worth $286.605 million against the last year's exports of 345,965 metric tonnes valuing $244.324 million. However, the data revealed that the exports of Basmati rice recorded negative growth of 21 percent in first two months of current financial year. The country was able to export only 104,676 metric tonnes of Basmati rice worth $95 million as compared to 130,191 metric tonnes costing $121.084 million in corresponding
period of last year. Meanwhile, the data revealed that exports of rice other than Basmati registered tremendous increase of 85.03 percent and was recorded at 370,693 metric tons of $191.02 million as compared to the exports of 215,774 metric tons valuing $103.240 million during the first two months of last year. From July-August, fish and fish preparations exports grew by 35.57 percent and country earned $43.311 million by exporting about 19,310 metric tonnes of fish and fish preparations which was recorded at 13,789 metric tonnes worth $31.94 million in same period of last year. The meat and meat preparations exports from the country also surged by 17.84 percent and reached at 15,711 metric tons as against the 11,729 metric tonnes of last year.
KARACHI: The UBL fund managers will be launching the second Shariah compliant fund under its “Constant Proportion Portfolio Insurance” (CPPI) based series by the name of UBL Islamic Principal Preservation Fund II (UIPPF II) this month. This fund has three successful predecessors, one Islamic and two conventional in nature; namely, UBL Islamic Principal Preservation Fund I and UBL Principal Protected Fund I & II respectively, all of which received exceptional investor interest. Mir Muhammad Ali, CEO UBL Funds, during the launch said, “Our Shariah advisers, Mufti Muhammad Hassaan Kaleem and Mufti Muhammad Najeeb Khan have approved of this fund as per the guidelines of Shariah, ensuring that our investors reap Riba-free returns while preserving their principal investments.” UBL Islamic Principal Preservation Fund II, like its counterparts; boasts unique profit lock-in feature whereby the profits can be realised (if any) at various intervals during the two year life of the fund. Along with preservation of the principal investment, the Constant Proportion Portfolio Insurance (CPPI) methodology also aims to provide up to 100% exposure to the equity market as it gets dynamically allocated between the Shariah Compliant Equity and Income/Money Market Mutual Funds. Based on this methodology, the allocation of funds to equities will largely increase in case of a rise in the stock market. While exposure to income/money market will increase in case of fall in the stock market; hence preserving the principal investment. The fund primarily will be investing in UBL Shariah Stock Fund (USSF) to take exposure in Equities, while UBL Islamic Sovereign Fund and UBL Islamic Cash Fund will be used to take exposure in income or money market instruments. The dynamic allocation of the funds provides opportunity for higher returns through participation in equities while aiming to safeguard the capital from downside risk of through participation in Income or money market funds. STAFF REPORT
FAA CAN REVOKE PILOT’S LICENCE OVER ALCOHOL ABUSE FAA TAKES EMERGENCY REVOCATION ACTION AGAINST PILOT’S AIRMAN CERTIFICATE IF ALCOHOL RESULTS ARE REPORTED ABOVE LEGAL LIMITS KARACHI SPECIAL CORRESPONDENT
Pakistan International Airlines (PIA) pilot Captain Irfan Faiz was caught at Bradford Airport after he reported for duty to operate PK-776 to Islamabad with an alcohol level of 0.41 percent, well above the 0.04 percent limit set for pilots by the Federal Aviation Administration (FAA) and 0.02 percent limit set by British Law. Faiz has violated the conditions for using the Airline Pilots Licence issued by Pakistan’s Civil Aviation Authority (CAA) and has also committed a criminal offence under British law for reporting to duty under the influence of alcohol above the prescribed limit, and thereby endangering
the lives of 180 passengers, other aircrafts in the vicinity, the airport and the airspace he would have flown over, after taking off. The CAA, the regulatory body tasked with issuing licences, can and should have taken disciplinary action against Faiz, by revoking or cancelling his licence after receiving the results of the alcohol concentration report, without waiting for criminal proceedings and a court judgement. The PIA, formed by a statutory act, should also proceed in accordance with its own rules and the laws of Pakistan. The incident is primarily a failure of the CAA to perform its regulatory functions, which include carrying out random checks for drug and alcohol abuse on airline pilots, technicians and other licensed operational staff so that flight safety is not compromised. If the CAA had performed its duties, PIA would not have been slapped with temporary sanctions for operating in Europe and fatal crashes could also have been avoided. There is also a conflict of interest between professional inspectors and senior executives like the director general, who, while being on the payroll of airlines under the CAA’s regulatory control, are assigned important assignments, including the con-
duction of regulatory checks on all airlines in the CAA’s domain. Credible accident investigations have not been conducted even after many fatal accidents and families of those killed in the accidents still await compensation. The International Civil Aviation Organisation (ICAO), the Joint Aviation Requirements (JAR) and the European Aviation Safety Agency (EASA) have published reports that the ratio of a fatal accident is one per million flights and the main cause is an error by the pilot-in-command. According to simulation studies by the FAA and research conducted at Stanford University’s Aviation Safety Laboratory regarding the effects of alcohol consumption, pilot performance can be affected at surprisingly low levels of alcohol in the body. The FAA has enforced an eight hour “bottle to throttle” rule but individual airlines can enforce their own restrictions. Drinking, even before the eight-hour limit, can cause bad hangovers, adversely affecting the performance of pilots. A pilot may stop drinking eight hours before reporting for duty and still may not be eligible to fly if his blood alcohol level concentration is not within the permissible limit. A standard drink of 0.6 ounces of al-
cohol requires two-hour-long metabolism before it is eliminated from the blood. Every year, the FAA conducts over 10,000 random checks on pilots in the US and 12 pilots fail the test on average. Crew members and law enforcement agencies’ personnel deputed at airports can also play a role in preventing tipsy captains and co-pilots from operating flights, such as colleague intervention by a QANTAS pilot in 2012 or an Air Trans pilot in 2011. In 2012, two American West pilots were reported by their colleagues and others and thus prevented from operating a flight. The pilots had consumed alcoholic beverages five and a half hours before the scheduled take off time. The captain was sentenced to five years in prison with the copilot serving a two year term.
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It is not the employer who pays the wages. He only handles the money. It is the product that pays the wages. — Henry Ford
ppCBL signs moU on branchless banking with it Butler e-services
textiLe exports Up 7.24 perCent in two months TRADE DEFICIT DURING JULYAUGUST IS RECORDED AT $3.295BN (2013-14) AGAINST DEFICIT OF $3.400BN IN JULYAUGUST (2012-13) ISLAMABAD
LAHORE: PPCBL signed a memorandum of understanding (MOU) on Branchless Banking with IT Butler e-Services today in the committee room, PPCBL Head Office, The Mall, Lahore. The MOU was signed by Syed Talat Mahmood, President/ CEO PPCBL and Mr. Dr. Muhammad ManshadSatti, CEO, IT Butler e-Services. Syed Talat Mahmood, President/ CEO PPCBLwelcomed IT Butler management to PPCBL. It is a beginning of a wonderful partnership he said and as a technology partner, IT Butler will help develop state of the art branchless banking network and consequently PPCBL will be able to serve a wider segment of the market. Dr. Muhammad Satti CEO IT Butler thanked CEO and the Head IT of the PPCBL for the opportunity. He introduced his company to the audience and gave a brief overview on the terms of the memorandum. PRESS RELEASE
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HE textile exports from the country increased by 7.24 percent during the first two months of current fiscal year against the exports of same period of last year. On year-on-year basis, textile exports during August 2013 increased by 3.42 percent in August 2013 when compared to the exports of August 2012. The overall textile exports during July-August (2012-13) were recorded at $2.305 billion against the exports of $2.149 billion during July-August (2011- 12), according to Pakistan Bureau of Statistics (PBS). The textile products that witnessed surge in trade included raw cotton, exports of which increased by 496 percent by going up from $5,590 million during the first two months of last year to $33.357 million during the current year. Exports of cotton yarn also increased by 16.77 percent from $333.911 million last year to $389.921 million this year while the exports of cotton cloth increased by 7.71 percent from $434.277 million to $467.774 million. Exports of yarn other than cotton yarn increased by 3.43 percent to reach at $8.511 from
$8.229 last year while the exports of bed wear increased by 5.13 percent from $300.768 million to $316.192 million. According to PBS data, the exports of tents, canvas and tarpaulin increased from $1.3 million to $1.344 million, an increase of 1.89 million while exports of readymade garments increased from $298.209 million to $324.628 million, showing increase of 8.86 percent. The exports of made up articles (excluding towels and bedwear) during the period under review increased by 6.47 percent to $104.766 from $98.398 million during last year. The products that witnessed negative growth in exports included cotton (carded or combed), exports of which declined by 71.79 percent, from $0.319 million to $0.09 million whereas the exports of knitwear decreased by 1.07 percent from $389.374 million to $385.197 million. Exports of towels also decreased from $128.582 million last year to $119.682 million this year, showing negative growth of 6.92 percent whereas the exports of art, silk and synthetic textile decreased by 2.16 percent from $72.845 million to $71.269 million. The exports of all other textile commodities increased by 6.59 percent, from $66.251 million last year to $70.856 million this year. Meanwhile, on year-on-year basis, textile exports during August 2013 increased by 3.42 percent in August 2013 when compared to the exports of August 2012. The Textile exports in August 2013 were recorded at $1.095 million against the exports 1.059 million. However, on month-on-month basis, the textile exports decreased by 9.43 percent by going down from $1.209 billion in July 2013 to $1.095 billion in August 2013, the PBS data revealed.
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Tuesday, 24 September, 2013
Major Gainers COMPANY Wyeth Pak Ltd Island Textile Nestle Pak. Indus Motor CoXD Khyber Tobacco
OPEN 3822.00 930.00 6184.00 315.35 284.27
HIGH 4013.10 976.50 6200.00 330.00 298.48
LOW 3670.00 940.00 6200.00 320.00 270.06
CLOSE CHANGE 4013.10 191.10 976.50 46.50 6200.00 16.00 329.00 13.65 294.00 9.73
TURNOVER 27,880 900 60 6,400 600
5000.00 1530.00 5094.95 220.00 185.26
5000.00 1530.00 4845.00 218.50 185.26
5000.00 1530.00 5057.97 218.55 185.26
-119.00 -65.00 -42.03 -11.45 -9.74
60 40 1,000 4,900 300
6.64 3.26 56.31 4.80 12.80
5.90 2.92 54.18 4.10 12.56
6.30 2.95 56.06 4.41 12.73
0.61 -0.13 1.45 0.39 -0.02
28,256,000 10,586,000 9,308,000 6,179,500 5,030,500
Major Losers Unilever FoodXD 5119.00 Colgate PalmolivXDXB1595.00 Rafhan MaizeXD 5100.00 Sapphire Fiber 230.00 Linde PakistanXD 195.00
Volume Leaders Telecard Limited WorldCall Telecom National Bank. Colony Mills Ltd B.O.Punjab
5.69 3.08 54.61 4.02 12.75
Interbank Rates USD GBP JPY EURO
PKR 105.8471 PKR 169.7893 PKR 1.0697 PKR 143.0418
Forex UK Pound Sterling Euro US Dollar Canadian Dollar Australian Dollar Japanese Yen Saudi Riyal U.A.E Dirham China Yuan
BUY
SELL
170.3 143 106.9 103 100 1.057 28.35 28.9 16.5
170.55 143.25 107.15 103.25 100.25 1.075 28.6 29.15 16.75
CORPORATE CORNER nokia Care and pakkuwait takaful introduce mobile phone takaful
compartment. “Today’s busy consumers need appliances that help to make their lives easier and more convenient,” said Seong-jin Jo, president and CEO of LG’s Home Appliance Company. “With a strong commitment to excellence and technological innovation, we will continue to bring home appliances to market that enrich peoples’ lives.” PRESS RELEASE
Japan pavilion to showcase latest brands at expo pakistan 2013 KARACHI: Nokia Care and Pak-Kuwait Takaful Company Limited (PKTCL) have joined hands to introduce mobile phone insurance for Nokia Customers for the first time in Pakistan. This Takaful policy focuses on accidental damage and loss of phone due to snatch on armed-hold up. Jahanzaib Sarfaraz, Director of Global Customer Care (GCC), representing Nokia Care commented, “We are taking a step forward by considering the security conditions of the country to provide a better and more reliable mobility experience to our customers, Nokia Care continues to provide greater care to its valued customers by offering reliable mobile phone Takaful (insurance) policy. He added this newly introduced policy is an attempt to expand on the already available spectrum of Nokia Care service and will give our customers the added sense of security to get a new mobile phone in case of accidental damage or loss.” Moreover, Imtiaz Bhatti, Managing Director & CEO of Pak-Kuwait Takaful co Ltd, said, “We are proud to have joined hands with Nokia Care, as it is one of the most preferred mobile phone brands in Pakistan. This new agreement will help us to extend our mobile phone Takaful policy to a large number of Nokia customers in Pakistan.” PRESS RELEASE
KARACHI: Japan External Trade organization (JETRO) in collaboration with prominent companies representing Japanese products in various in various industrial and commercial sectors of Pakistan will set up JAPAN PAVILION in Hall no. 6 at the 8th Expo Pakistan going to be held from 26-29 September, 2013 at Expo Center Karachi. Prominent sectors that have attracted Japanese investments and entrepreneurs include; Automobiles, Engineering, Consumer Items, etc. There will be number of participating companies representing Japanese products this year including Toyota, Honda, Suzuki, Hino, SONY, DENYO, Ricoh, Brother, CASIO, Pulton, VENN, Unicima, Fujitsu, Wacom, CKD, Miyawaki, Ohkura and many others with their latest version of products under one roof. PRESS RELEASE
Brazilian Food Festival opens at islamabad marriott
LG delivers over 1m door-in-door refrigerators worldwide SEOUL/LAHORE: LG Electronics (LG)announced that it has sold over one million Door-in-Door™ refrigerators worldwide since its introduction in 2010, a significant achievement in the home appliance industry. The company’s innovative double layered Door-in-Door™ feature enhances consumer convenience, providing quick access to frequently used items while also helping to prevent cold air from escaping the main refrigerator
ISLAMABAD: The Brazilian Food Festival was launched at the Islamabad Marriott Hotel on September 21 and will continue for the next three days. Brazilian Ambassador Alfredo Leoni and the General Manager of IMH Jan Verduyn inaugurated the festival and cut the ribbon at the ceremonial ribbon cutting. The opening proved to be a success and was enjoyed by several visitors who were not only able to savor the best of Brazilian delicacies
prepared by Chef Marcelo Shambeck and Sous Chef Rodrigo Orlandi, who were flown in from especially from Brazil, but also enjoyed popular Brazilian songs which were performed by Gabriel Titan a hit singer and musical performer coming directly from Rio De Janerio. PRESS RELEASE
hBL signs agreement with masterCard pakistan
KARACHI: HBL entered into an agreement with global payments and technology company MasterCard to offer its customers state of the art payment solutions.HBL is now a certified MasterCard issuer providing its customers with a larger product suite to choose from. The occasion was presided over by Nauman K. Dar, President and CEO HBL and Raghu Malhotra, Division President - Middle East and North Africa, MasterCard. Also present on the occasion were Sima Kamil, Head – Branch Banking HBL, Aamir Kureshi, Head – Consumer Banking HBL and Aurangzaib Khan, Country Manager Pakistan -
MasterCard along with senior executives of both organisations. Speaking at the occasion, Nauman K. Dar said, “As Pakistan’s largest bank, HBL continues to fortify its leading position in the market by offering greater convenience and flexibility in the payment service area. This partnership with MasterCard will help cement our commitment to our customers of delivering value driven payment solutions.” PRESS RELEASE
diCoda develops multi ims sim platform KARACHI: DICODA has developed a Multi IMS SIM platform that will enable Pakistani Mobile Companies to offer an amazing service to their clients (end-users). Now when one travels abroad one will be able to keep the Pakistani SIM is the handset and on arrival in a new country automatically get a local number. Any calls or SMS to your Pakistan Mobile Number will be delivered to you no matter which country you are in and whichever number you are using. Moreover, if you have (for example) a U.K number also on your SIM card, your friends and family can call you from UK on that number even if you are in Pakistan and pay costs only of a local call! Same for U.S.A. or any other country whose number is on your SIM! So, in one go, the end-user has reduced roaming costs, made it cheaper for the people in foreign lands to contact him and the concerned MNO earns revenue and keeps the client, even when the client is not in Pakistan. PRESS RELEASE
Ufone launches Upaisa - the most convenient financial service in the country ISLAMABAD: Ufone, an Etisalat group company, recently launched its branchless banking services under the brand name ‘Upaisa’. Ufone has always been a leader in innovation and being one of the most progressive telecom companies of Pakistan, promises to deliver financial services in a way never before seen in the market. With Upaisa, customers have access to the easiest way to conduct their financial transactions. The financial services that come under the Upaisa brand include Mobile Account, Money Transfer and Utility Bills Payment. These services are not limited to Ufone subscribers alone; in fact customers of any mobile network operator can use Upaisa over the counter service. Salman Wassay Chief Commercial Officer Ufone said “We are the last to enter the mobile financial services area but we have a product that is sure to speak to the masses. Customers have a lot to look forward to, and as always Ufone is sure to offer services no other telecom provider has offered yet or in the near future.” The management team from Etisalat, Ufone, PTCL & Ubank were also present at the launch ceremony. PRESS RELEASE