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BUSINESS Wednesday, 25 September, 2013
PBC REPRESENTATIVES STRESS NEED FOR DOCUMENTING ECONOMY AND ENHANCING TAX TO GDP RATIO TO STEER COUNTRY OUT OF CRISIS ISLAMABAD
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he government and the Pakistan Business Council (PBC) are on the same page over the issue of economic revival through a comprehensive future roadmap featuring indigenous growth, energy security, boosting competitive exports, modernisation of infrastructure, social capital development and continuation of polices. Planning and Development Minister Ahsan Iqbal along with economists of the Planning Commission held a session with the PBC representatives on Tuesday to take feedback from the top business forum on the next long-term and medium-term policies the government is devising to put the country on growth path. Addressing the PBC representatives, the federal minister said that the country was passing through serious problems. he, however, expressed the hope that right decisions of today would lead to right results tomorrow. he termed the political stability and
Corporation: An ingenious device for obtaining profit without individual responsibility. — Ambrose Bierce
Govt, pbc on same page for economic revival continuation of policies as a basis for development adding that the nations that ensured political stability have progressed and prospered. he lamented that nothing was done during the past twelve years to formulate sustainable policies and that was why the country was going through serious challenges nowaIf we fail AHSAN IQBAL days. FEDERAL MINISTER devise policies to he said that the government the country would to 15 percent besides focuswould finalise savings. be in serious trouble ing on its Long Term he said that moderniPlan, Vision sation of infrastructure was 10 years down, 2025 and another feature of the govparticularly M e d i u m - Te r m ernment plan as the current Plan 2013-18 with system was outdated, citing in water the consultation of an example of power distribusector stakeholders and best tion system which has lost capabilpractices of other nations. ity to pass on energy to the end he said that the government was consumers. Iqbal said that there was also working on developing a model to chalk need for exploring export markets, adding out a roadmap to secure future and warned that value to county's products to boost that if "we failed to devise policies, the exports. country would be in serious trouble 10 Building of social capital is another years down, particularly in water sector". area where government is looking, he said he said that first thrust of the govern- adding so far much focus has been given ment was energy security through an in- on infrastructure development so there is tegrated energy policy and secondly it need to develop human resources through intends to move away from exogenous inculcating teachings of values and ethics. growth to indigenous growth adding so far he said that private sector being the the growth has been dependent on Inter- engine of economic growth can also play national Monetary Fund, aids and remit- their vital role in the socio economic prostances only. perity of the country. The growth on externalities has not he assured the private sector that govbeen sustainable, he said adding that the ernment would extend all necessary help government wants sustainable growth as facilitator and policy maker in order to through promotion of taxes from 9 percent further their businesses for sustainable
economic growth in the country. he said clerics and religious scholars could play an important role in educating the people about the country's challenges including meeting the Millennium Development Goals, fighting poverty, and issues like malnutrition. On the occasion, the representatives of the PBC assured the minister of their support to government's roadmap for future development. They were of the view that the country had huge resources, adding, “however, what we need is implementation of policies.” They informed the minister that PBC has conducted various studies which could be fruitful for developing the future roadmap. They stressed the need for documenting economy and enhancing tax to GDP ratio to steer the country out of crisis and decrease its dependence on external resources. They also highlighted the importance of focusing on development of rural economy, remittance sector and demographic dividend in terms of youth bunch the country has. They said that large population youth was a challenge as well as an opportunity for the country, so there is need for creating more jobs for them. Both, the planning commission and PBC agreed to share their studies to incorporate these in the upcoming long-term policy for the good future of the country. Among others, the PCB representatives included Chairman PBC, Sikandar Mustafa Khan, Chief executive Officer, Kamran Y Mirza, Abdul Razaq Dawood and other members of the forum were present.
Ailing BlackBerry agrees to $4.7 billion buyout OTTAWA
per cent of its shares. Watsa resigned from BlackBerry's board when it announced in August its inBlackBerry announced on Monday it has tentions to search for a suitor. Under the proposed deal the consoragreed to a $4.7 billion buyout by a consortium would offer $9 for tium of investors who plan to take the each outstanding struggling Canadian smartphone share, and Fairfax maker private. The company would conThe company said in a formerly known tribute statement that it has i t s “signed a letter of intent as Research In Motion agreement under unveiled a new corporate which a consortium to be led by Fairfax name and a new platform Financial holdings in January as it sought to Limited has offered to acquire the comregain momentum, but pany subject to due its most recent numbers diligence.” Fairfax, a Canadian suggest this has been a firm headed by billionspectacular failure aire Prem Watsa, is already BlackBerry's largest shareholder with approximately 10 AGENCIES
own shares in the transaction. BlackBerry said its board of directors support the plan. A firm deal, once due diligence is completed, is expected to be announced by November 4. It hinges also on the consortium obtaining financing. BlackBerry said it would continue a search for a possibly better suitor in the interim. BlackBerry stock was down six percent to $8.23 before trading was halted just prior to its announcement. Its shares climbed back up to $9.07 in afternoon trading. Analysts meanwhile reacted with measured optimism. “This is probably the best possible outcome of several unattractive options for BlackBerry,” said analyst
Jack Gold of J. Gold Associates. While BlackBerry helped create a culture of mobile users who were glued to the company's smartphones, many of those customers have since moved to Apple iPhones or other device makers such as Samsung, mainly using Android. According to International Data Corporation (IDC), BlackBerry's global market share had slipped to 3.7 per cent in the second quarter, the lowest since tracking began, while Android accounted for nearly 80 per cent. The company formerly known as Research In Motion unveiled a new corporate name and a new platform in January as it sought to regain momentum, but its most recent numbers suggest this has been a spectacular failure. On Friday, the company announced it was laying off 4,500 staff or one-third of its global workforce after a dismal launch of new smartphones earlier this year that were meant to revive BlackBerry.
Expo pakistan to bE hEld in karachi from 26th KARACHI: All preparations are complete for the biggest ever Expo Pakistan which will commence here from September 26. This was stated by an official of the Trade Development Authority of Pakistan (TDAP), on Tuesday. More than 1,000 buyers from about 70 countries are expected to attend the four-day event. The major delegations are expected from Japan, Malaysia, South Korea, Brazil, Poland, Hong Kong, Bangladesh, Libya, China, Bahrain, Azerbaijan, Afghanistan, Egypt, Saudi Arabia, the Netherlands, the US, Morocco, United Arab Emirates. Major interest of the buyers was stated to be in textile, leather, garments, sports goods, surgical equipment, agro-products, engineering goods and traditional items. Besides this, the trade missions have also sent confirmation of 44 international chain stores' participation in the event. Some 550 exhibitors would be showcasing their products in six halls at the Karachi Expo Centre- the venue of the event. The inaugural ceremony of the event is scheduled to take place on September 25. The organisers were of the view that over the last eight years, the Expo Pakistan has developed into a reputable international event where the Pakistani exhibitors showcase their products to the international buyers. APP
pia paid rs 80.81 million finE in last fivE yEars
ISLAMABAD: Pakistan International Airlines (PIA) has paid Rs 80.81 million fine in last five years to various countries on various charges, says a document produced in the Parliament. According to the document Rs 6.14 million were paid in year 2008, Rs 31.27 million in 2009, Rs 16.66 million in 2010, Rs 4.98 million in 2011 and Rs 21.76 million in the year 2012. The fine has been imposed in Doha, Dhahran, Milan, Birmingham, Manchester, London, New York, Toronto, Beijing, Dubai, Bangkok, Hong Kong, Riyadh, Frankfurt, etc. The fine was paid on the charges for detecting forged or no documents, Change of date of birth on passports, expired or re-entry visa, photo change, non submission of original visa by sponsor at airport, Child visa (not traveled with parents) and fraudulent passport from different passengers. The document says that 138 compensation claims have so far been received from the legal heirs of Air Blue air crash victims, all of them have been compensated Rs 5 lac each as per announcement by the then prime minister. APP
SBP’S MONETARY POLICY TO HAVE MACRO-ECONOMIC IMPLICATIONS EXPERTS DON’T FORESEE MAJOR IMPACT ON FINANCE COST OF PSO IN CASE OF INCREASE IN DISCOUNT RATE KARACHI STAFF REPORT
The monetary policy announced by the State Bank of Pakistan (SBP) on September 13 is likely to have important macro-economic implications in the days ahead. According to analysts, a 50 basis points (bps) hike in discount rate to 9.5 percent led by expectations of inflation to settle higher in FY14 were the key highlights of this MPS. "We foresee this to be an indication of a rising interest rate scenario ahead," said the analysts at InvestCap Research. In addition to this, acute depreciation
of the Rupee 5.7 percent against the dollar was also witnessed FYTD. Analysing the impact of these macroeconomic changes on different energy sector stocks, the economic observers said that Pakistan was an oil-deficit country where 60-65 percent of oil needs were met through imports. The PSO's share is 90 percent (hSD and FO) to total fuel imports (11mn tonnes) with a total market share of 63.5 percent. "Because of the absence of currency hedge, PSO suffers an exchange loss of Rs 700 million per 1 percent depreciation of PKR against USD on an annualised basis," said the analysts. The 5.7 percent Rupee depreciation during FYTD is in turn likely to have a major drag on PSO's profitability (Rs1215/share haul) during 1QFY14. "however, we don't foresee any major impact on the finance cost of the company in case of increase in discount rate," they said.
The company has no long-term bank borrowing whereas the short term borrowing has reduced from Rs 50 billion to Rs 30 billion after circular debt settlement (28 June 2013). On the other hand, lower valuations backed by higher discounting factor will have a significant impact. Going forward, higher expected inflation will lead to higher operating costs for PSO and other OMCs. The sector has al-
ready demanded a pricing mechanism shift from fixed rate to percentage terms. The Petroleum Ministry has assigned this task to the Pakistan Institute of Development economics to determine fair margins for OMCs. "however, keeping in view the continuously rising POL prices, we don't expect any change in pricing mechanism or margin hike in near term," said the analysts. They said APL was likely to take minimal impact from the depreciating rupee as the company had no
significant POL imports. A debt-free balance sheet will add nothing to finance cost in case of interest rate increase. however, the valuation impact can come from a higher discounting factor. The expected impact of such a movement in the aforementioned macro-economic variables is somewhat mixed for NCPL and the power sector as a whole. The higher expected inflation and rupee depreciation will increase earnings of the power companies as their tariff structure is indexed to the said variables. “however, we anticipate that the rising PIB yields will augment the opportunity cost of investing in IPPs and decrease their valuations therefore affecting the scrip's attractiveness," said they and added, "Going forward, we anticipate that company valuations will be downward sticky if macroeconomic variables move as expected." At an aggregate level, market can also face some pressure on the back of these unfavourable movements, they said.
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Everyone has an invisible sign hanging from their neck saying, 'Make me feel important.' Never forget this message when working with people. — Mary Kay Ash
british council looks to orchEstratE ‘skills rEvolution’ in south asia LOnDOn
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KuNwAR KhulduNE ShAhId
he British Council organised a two-day conference here in London titled, “The Quest for excellence; The Skills Revolution in the UK and South Asia” that culminated today. The British Council in collaboration with the Royal Society of Arts (RSA) hosted the Social Asia Policy Dialogue on Skills, which ran the whole gamut from defining skills to making sure a policy is formulated to unlock potential in the region especially with the emergence of the demographic dividend in the region. Speakers and participants from all over South Asia and the UK, numbering up to around 150, were invited in the two-day conference to share their insights and devise policies and recommendations for the British Council to ensure that the region not only embraces the potential of vocational training, but works towards optimising the potential for the benefit of the South Asian economies. The British speakers tended to focus on sharing their insights extracted from UK’s own experience with regards to skill, which according to British Council, CeO, Martin Davidson, moves “from a state led approach to one that balances the public and private sector with an emphasis on employer ownership of programmes”. Discussions over the past couple of days included topics such as A Global Skills Marketplace: Challenges and Opportunities; Key Trends in South Asia; Youth Unemployment and Skills Mismatches; Skills Standards; Reaping the Demographic Dividend; engaging Industry in Skills Development; Skills for economic Growth, Prosperity and Social Inclu-
sion; Moving to a Demand Led Skills System; Lifelong Learning – Meeting the Demand; Knowledge economy or Know-how economy and From Bricks to Online Click. each of the topics was thoroughly dissected by knowledgeable speakers and I’d be sharing the data and the insights gathered from the discussions in this space in the near future as well, since the issue is especially relevant to the current situation in Pakistan. One of the reports shared during the conference was a custom research report for the British Council by The economist Intelligence Unit (eIU). This report titled, “Skills development in South Asia: Trends in Afghanistan, Bangladesh, India, Nepal, Pakistan and Sri Lanka” would be focused upon especially in this space, since it provides a detailed analysis with regards to developing skills in the region and how things might pan out in the next couple of decades as well. It is very important for Pakistan – and South Asia in general – to figure out a way to make its ever increasing labour force employable in the future. And for that the perceptions and the mindset with regards to vocational training needs to change prodigiously. It was pointed out that we have to focus on making sure that we make our future generations well equipped to deal with jobs and vacancies that haven’t been created as yet. And the best way to do that is to bolster the potential that hasn’t been tapped as things stand, and make the work force as versatile and adaptable as possible, so that they can face the challenges that lie in the wait. More on all of this to come… The writer is Business Correspondent, Pakistan Today. Email: khulduneshahid@gmail.com; Twitter: @khuldune
fruit and vegetable exports witness increase in two months ISLAMABAD APP
Fruit and vegetable exports from the country during the first two months of current financial year increased by 35.88 percent and 15.32 percent respectively as compared to the same period of last year. From July-August (2013) 82,357 metric tons fruits of different varieties worth $58.85 million was exported as against 85,597 metric ton costing $43.31 million of same period last year, said that data of Pakistan Bureau of Statistics. According the data about 78,255 metric tonnes of vegetable worth $27.21 million was exported in first two months as compared to the exports of 56,316 metric tons valuing 23.60 million of same period last year. During the period under review, country earned $0.2154 million by exporting the leguminous vegetable (pulses) showing increase of 122.29 percent as compared to last year. The pulses export was recorded at 1,202 metric tonnes valuing $0.969 during July-August 2012. however, the data revealed that wheat export registered negative growth of 89.54 percent and reached to 6,983 metric tons of $2.56 million which stood at 80,497 metric tons of $24.55 million. From the period from July-August, 2013, sugar exports also decreased by 19.10 percent as about 52,752 metric tons sugar worth $25.26 million was exported which stood at 57,281 metric tons of $ 31.23 million during same period of last year. About 1,190 metric tons of tobacco valuing $3,983 million was exported which was up by 647.28 percent as compared to 168 metric tons costing $0.553 million exported during same period of last year. From JulyAugust, fish and fish preparations exports grew by 35.57 percent and country earned $43.311 million by exporting about 19,310 metric tons 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 tons of last year.
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BUSINESS B
Wednesday, 25 September, 2013
Major Gainers COMPANY Island Textile Indus Dyeing Ismail Industr Fazal Cloth Mills National Foods
OPEN 976.50 885.00 190.00 123.00 356.00
HIGH 999.00 893.99 197.90 129.00 369.95
LOW 999.00 890.00 190.00 128.98 355.01
CLOSE 999.00 893.99 197.90 129.00 362.00
CHANGE 22.50 8.99 7.90 6.00 6.00
TURNOVER 600 200 1,000 300 4,600
6000.00 5100.00 4200.00 1535.00 505.00
6000.00 4805.08 3825.00 1490.00 500.05
6000.00 4884.63 3843.80 1490.00 500.05
-200.00 -173.34 -169.30 -40.00 -18.95
100 1,100 1,280 200 400
6.98 12.99 56.70 7.18 8.94
5.95 12.36 53.56 6.20 8.42
6.86 12.42 54.00 7.18 8.64
0.56 -0.31 -2.06 1.00 0.13
27,763,000 21,036,000 14,926,000 13,645,500 10,424,500
Major Losers Nestle Pak. 6200.00 Rafhan MaizeXD 5057.97 Wyeth Pak Ltd 4013.10 Colgate PalmolivXDXB1530.00 MithchellsFruit 519.00
Volume Leaders Telecard Limited 6.30 B.O.Punjab 12.73 National Bank. 56.06 Nimir Ind.Chemicals 6.18 P.I.A.C.(A) 8.51
Interbank Rates USD GBP JPY EURO
PKR 106.2264 PKR 169.8029 PKR 1.0740 PKR 143.2038
Forex UK Pound Sterling US Dollar Euro Australian Dollar Canadian Dollar Japanese Yen Saudi Riyal UAE Dirham China Yuan
BUY
SELL
171 107.75 144 100.1 103.4 1.057 28.45 29.15 16.5
171.25 108 144.25 100.25 103.65 1.075 28.7 29.4 16.75
inflation may clock in below 8% in september KARACHI: Incorporating the price trends of the weekly Sensitive Price Index (SPI) data, the analysts anticipate that inflation for the month of September 2013, measured by the CPI (Consumer Price Index), may clock in below 8 percent (7.6-7.9 percent) compared to 8.5 percent recorded last month. The analysts at Shajar Research view that reduced food prices post-Ramadan and flash floods were likely to dilute the impact of the 3 percent average increase in the petroleum prices. however, they said, the expected soft inflation number had no material impact on our assessment of the next Monetary Policy Statement (MPS) due to be announced in Nov ember 2013. STAFF REPORT
CORPORATE CORNER haier launches fully automatic washing machine KARACHI: Great news for busy, harried housewives on a tight budget. Haier launches a most attractively priced, highly affordable, fully automatic washing machine in the Pakistan market. In developing the machine Haier designers and engineers had two main objectives in mind, namely affordability and ease of operation. And they seem to have succeeded brilliantly in meeting those objectives. The machine which is in stores now, has a whole host of really functional and useful features, all designed to make life easier for the busy housewife by taking the hassle out of washing clothes. To start with the machine is fully automatic with a ‘set and forget system’. You dump in the washing, push a few buttons on the digital control penal to set the desired cycle and let the machine do the rest. And unlike other machines this one won’t need to be reset in case of power interruption. It restarts and resumes the wash cycle from exactly the point from where it was disrupted. A really useful feature that allows you to start the wash cycle and go shopping without worrying whether the washing has been completed. PRESS RElEASE
ranking in the milk industry and used Nestlé’s growth and investment in the industry as an example of the potential that exists. Nestlé has established one of its largest milk reception facilities in Pakistan along with many milk production plants across the country, with the latest investment being the $140 million milk drying plant in Sheikhupura that was inaugurated in 2013. Thanking the Prime Minister for showing confidence in Nestlé and providing a conducive business environment, Magdi Batato, Managing Director, Nestlé Pakistan, reiterated the organization’s commitment to Pakistan and its consumers. “We are in Pakistan for the longterm, and are part of its economy. We believe that we can create value for our shareholders by doing business in ways that specifically help address global and local issues in the areas of nutrition, water and rural development, having a positive impact on our consumers, employees and suppliers. This is what we call Creating Shared Value. We rely on the government to continue to provide a favorable policy and economic environment for the dairy industry. We remain committed to providing our consumers with high value and quality products.” PRESS RElEASE
ptcl awarded ‘best hr practices in telecom sector’ award
nestlé md welcomes pm’s interest in processed milk industry LAHORE: Magdi Batato, Managing Director, Nestlé Pakistan, thanked the Prime Minister, Mian Nawaz Sharif for recognizing Nestlé’s contribution to the Pakistani dairy industry during his recent visit to Turkey. While speaking at the Pak-Turkey Business and Investment Forum in Istanbul, the Prime Minister specifically highlighted Pakistan’s top global
ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL) has been presented with the ‘Best HR Practices in Telecom Sector” award at
the 4th Global HR Excellence Awards 2013, held in Karachi. The event recognized and highlighted various organizations that have excelled in HR practices and contributed positively by setting high standards in the field of HR. PTCL’s integral HR initiatives and practices were acknowledged as the best in the telecom industry. PTCL Executive Vice President (EVP) Talent Management & Learning, Shahzad Safdar Khan received the award on behalf of the company from senior parliamentarian, Mir Hazar Khan Bijrani. The award is recognition of the company’s Human Resource (HR) practices and dynamic initiatives undertaken for organizational development and talent nurturing & management. The event hosted a good mix of seventy leading organizations from the banking, telecommunications and SME sector as well as other corporate entities operating in Pakistan. PRESS RElEASE
included a panel discussion on ACCA Research & Insights paper, “Setting high professional standards for public sector enterprises around the world.” The session panelists included M. Abdullah Yusuf, chairman, PICG, Dr KhaqanNajeeb, DG, ERU, Ministry of Finance, Mohsin Ali Chaudhry, project officer, CG Project for Afghanistan& Pakistan- Sustainable Business Advisory, International Finance Commission and Syed Asad Ali Shah, managing partner, Deloitte Pakistan. PRESS RElEASE
bop launches bop debit mastercard
acca holds moot on corporate governance in public sector enterprises LAHORE: ACCA Pakistan in collaboration with CIPE organised a conference on corporate governance in public sector enterprises on 24 September 2013 at Serena Hotel, Islamabad. The conference commenced with Moin Fudda, country director, CIPE, giving the opening remarks on the agenda. “The Public Sector Enterprises (PSEs) are major source of public sector employment but at the same time lack of corporate governance has pushed most of these organisations into losses. Perhaps the only way out is implementing a strong code of corporate governance.” Syeda Sabah Rashid, senior financial management specialist, World Bank, Dr Tariq Hassan, attorney & advocate, International Legal Services and Nazar Shaheen, Executive Director, corporatization & compliance, Securities & Exchange Commission Pakistan (SECP) were the keynote speakers. The conference also
LAHORE: Keeping in view its vision of a customer-focused bank with service excellence, BOP opens new doors of convenience for its customer base of over 700,000 customers. BOP has an extensive network of 306 branches across Pakistan with over 126 ATMs. BOP will be the first bank in Pakistan going for Master Debit Card issuance over 1Link. This will also be BOP’s first set of branded debit cards. Customers can now also use their debit cards globally at all MasterCard accepting POS locations and ATMs. MasterCard is accepted worldwide at over 36 million locations. Coming from one of the largest networks of payment cards, MasterCard debit card is an emblem of convenience, accessibility and control. PRESS RElEASE