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Thursday, 27 September, 2012
Entrepreneur confidence traces its nadir Business sentiments drop by 9% to negative 34 g Energy crisis, law and order, inflation, bad governance and high cost of business highlighted as reasons g Majority of businesses oppose MFN status to India, liberal trade regime with Afghanistan g Most do not see Budget FY13 as being positive for their business g Stamp duty on various procurement instruments strongly opposed g
KARACHI ISMAIL DILAWAR
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ITH businessmen attaching fewer expectations from the government authorities the business sentiments in the crises-hit Pakistan have slid to new lows during the recent months. Also, businessmen in Pakistan foresee energy crises, price hike, security issues and poor governance as major challenges they would be facing in the coming months. While leading challenges faced by the Pakistani business entities during the last six months were load shedding, corruption and increase in inflation. Further, most of the business sector entities in Pakistan believe that Islamabad’s conferment of the Most Favored Nation (MFN) status to India and a liberal Afghan transit trade regime would impact the local businesses adversely. A very high proportion of retail business entities, 48 percent, consider MFN status to India would have a negative impact on their business. Only 7 percent of the respondents consider that MFN status to India would result in a positive impact on business. This was revealed by a recent survey conducted by the Overseas Investors Chamber of Commerce and Industry (OICCI) between June and August 2012. FURTHER DETERIORATION: According to the survey, the confidence of the businessmen in the troubled Pakistan further deteriorated during the review period and dropped by 9 percent from negative 25 to negative 34 percent. The OICCI’s sixth Wave Business Confidence Index (BCI) survey, which is conducted bi-annually, showed that Pakistan had been moving deeper in the negative territory on its Business Confidence Index Chart since April 2010 when the business sentiments in the
country were in the positive zone. Major attributable factors for the low business confidence are well known and include energy crises, law and order, high inflation, poor government policies and the high cost of running businesses. The contribution of the above negatives on the index was, respectively, 48 percent, 36 percent, 35 percent, 14 percent and 5 percent. “Despite general perception of growth in turnover and profitability, as suggested by recent corporate results, business sentiment dipped by 9 percent over the past six months due to growing concerns related to energy shortages, worsening security and inflation,” said the OICCI survey.
cline in expectations of business expansion from 34 percent in November 2011 to 19 percent in August 2012. However, in respect of plans for the next six months, 16 percent of respondents expect to expand business and have a positive outlook in increase in sales, profits and return on investment. Of these, the service sector had the highest positive outlook at 33 percent for business expansion, within which finance was the most optimistic sub-sector. In the manufacturing sub-sectors, the auto industry was the most optimistic. A notable feature of the survey was that the perception on government policies had improved by 12 percent from the previous survey.
RETAIL APPREHENSION: It said the sharp drop in business confidence was led mainly by poor sentiments of the retail sector where the BCI score went down from negative 29 to negative 48 percent and of the manufacturing sector which also declined significantly from negative 23 to negative 37 percent. This decline was partially offset by the relatively positive outlook of the service sector where BCI improved by seven percent from negative 24 to negative 17 percent. Apart from increase in negativity, the sixth wave also recorded a shift in opinion of respondents from positive to neutral zone, reflected in the decline of the overall business confidence score. Interpreting the feedback, it appeared that business people have now lowered their expectations from the authorities. In the past six months, energy crisis (load shedding) had been cited as the main factor causing restlessness among the business community, followed by continuing deterioration in the law & order situation, high inflation, governance issues and high cost of doing business.
BCI’S NEGATIVITY: The business community was of the opinion that overall global economic situation improved in the current survey period. However, this does not seem to be reflected in the response with respect to business situation in Pakistan, where the BCI showed further negativity, both in the respondents’ specific industry as well as their own organization. Although the latest survey showed a decline in the number of respondents with positive outlook for the economy, there was significant variation in the opinion pattern between various cities. The reduction in positive outlook and increase in negativity was much more pronounced in Peshawar and Quetta, followed by twin cities (Rawalpindi-Islamabad) and Faisalabad, as compared to the declining sentiments in Karachi, Lahore and Multan.
NOT-SO-GREAT EXPECTATIONS: The above factors have resulted in a de-
BLEAKNESS LIES AHEAD: Decline had been noted in capital investment plans for the next six months, which fell from 69 percent in the previous survey to 55 percent in the current survey. The respondents also indicated no plan to increase employment levels in their busi-
‘Let’s bolster Pak-Saudi trade and commerce relations’ ISLAMABAD ONLINE
Acting President Nayyar Bokhari, Wednesday, said that people of Pakistan had highest regards for Saudi Arabia for being supportive to Pakistan particularly in testing times. He was expressing these views in meeting Minister for Commerce and Industry for Saudi Arabia Tawfiq Bin Fawzan Al-Rabeea and his delegation for participation in the ninth Session of PakistanSaudi Joint Ministerial Commission at Parliament House here on Wednesday. The Acting President appreciated visit of Saudi Commerce Minister despite the tragedy of his son’s death recently. Bokhari said that his visit under such circumstances strongly reflected the goodwill and love which
the leadership and people of Saudi Arabia have for Pakistan. The Acting President extended his thanks for a grant of $ 100 million for the welfare of people of Pakistan announced immediately after visit of the Prime Minister to Saudi Arabia in July this year. He told the delegation that Pakistani were appreciative of the all out support extended to them during 2005 earthquake and 2010-11 floods in Pakistan. He told the Saudi delegation that Pakistan was facing flood situation in areas of Sindh and Balochistan and certain areas of Punjab this year as well. The Acting President said that the meeting of Joint Ministerial Commission will definitely produce good results for benefits of the two
sides and strengthen our trade and commerce relations. Pakistan’s bilateral trade with Saudi Arabia had grown manifold and will get a further boost with an early conclusion of Pak-Gulf Cooperation Council (GCC) Free Trade Agreement as it will give Pakistan enhanced market access in Middle East. He told that Pakistan can export its excess wheat and fine quality rice and other products to Saudi Arabia and other Middle East countries. The Acting President appreciated the regular and substantial inflows of direct investment from Saudi Arabia and reassured that Pakistanis would continue to provide enabling environment for Saudi investment in Pakistan. Bokhari told the delegates that there were ample opportunities of investment especially in the fields of energy, oil exploration, housing and construction, agro-food, telecommunication, infrastructure, textile, power, automotives and spare parts.
ness during next six months. Upon being queried more specifically, approximately 10 percent of respondents indicated planned capital expenditure for capacity and/or productivity expansion. A small percentage of this capital expenditure was being considered for new facility, renovation and improvement in quality. INFLATION IN THE STARS: The biggest factor impacting business in next six months was expected to be inflation. This was followed by fuel prices, uncertain security environment, government policies and rupee devaluation. Volatile law and order situation had been cited as the main reason for fastdeclining local and Foreign Direct Investment (FDI) in Pakistan. Overall, business entities of Karachi followed by Islamabad and Lahore were the main victims of law and order issues. These include street crimes, extortion, kidnapping for ransom, threats and expatriate security. Some 60 to 67 percent of respondents considered Federal Budget 2012-13 not having any positive impact on their business or the overall economy, whereas only 6 percent felt there was a positive impact. STAMPING DUTY: Strong opposition had been expressed by majority of business sector entities about stamp duty being demanded in recent months on various procurement instruments, the levy of Sindh Development and Maintenance Infrastructure, gradual devaluation of rupee and increasing level of extortion money demanded from the trade. The OICCI conducts the largely attitudinal BCI survey every six months, through a leading independent research firm, to measure the sentiments and confidence levels of key stakeholders on different business related matters including the current state of Pakistan’s economy and their own businesses.
Another 37b in the bowl Rs 798m interest accrued as government borrows over Rs 37b via PIB auctions KARACHI STAFF REPORT
The cash-strapped federal government Wednesday borrowed over Rs 37 billion from the banking system to cater its ever-burgeoning budgetary needs. The federal finance ministry raised the amount through the central bank which auctioned the Pakistan Investment Bonds (PIBs) of 3 to 20-year tenors. The central bank held auction of PIBs of 3-, 5-, 10- and 20-year maturity on Wednesday with, respective, coupon rates of 11.25, 11.50, 12 and 13 percent and the settlement date of September 27. In response to the auction, the primary dealers, comprising mostly the otherwise cash-strapped banks, bid a surplus amount of Rs 86.400 billion their prime focus being in the shortterm, three years, bonds against which over Rs 33.040 billion were offered. The bidders tended not to go for long term investment as they did not bid against the 20-year papers at all. However, of the bids offered the State Bank accepted bids having a face value of Rs 37.501 billion with per annum effective Weighted Average Yield ranging from 10.5635 percent to 11.5776 percent. The fresh borrowing might be comforting the now fundsstarved government which would however have to repay the borrowed amount along with interest amounting to Rs 797.961 million over a decade coming ahead. The resourceconstrained governments in the center and provinces have extensively been borrowing from the scheduled and central banks leaving little or no liquidity with the latter for the growthoriented private sector.
Lure tourists, enhance economy President vies to make tourism sector most vibrant area of economy ISLAMABAD APP
President Asif Ali Zardari has urged all associated with tourism industry to undertake every effort for the promotion and transforming this area into one of the most vibrant sector of the economy. “Fortunately, Pakistan is bestowed with enormously rich natural as well as man-made cultural treasures. From the relics of Indus Civilization to the traces of famed Gandhara Civilization, our rich cultural heritage, enchanting landscape spreading over the warm beaches to deserts and fertile plains to the awesome mountain peaks, we offer the tourist across the world a unique and diversified destination to visualize journey of mankind through ages and the splendid beauties of nature,” the president said in his message on the occasion of ‘World Tourism Day’. The President said that unfortunately the country had not been able to exploit full potential of this magnificent treas-
ure due to variety of reasons. In present day context, he said when there was greater realization for the need to integrate promotion of tourism with energyefficient practices and to reduce carbon footprints for a healthier environment and sustainable development, the need for promoting tourism on modern lines was even greater for countries like Pakistan, which were far behind the developed nations in fully developing tourism into a robust industry and to ensure that the growth of industry was accompanied by adoption of energy efficient practices. The President said that World Tourism Day each year was a reminder of the important role played by the tourism industry in the socio-economic development of the country and its contribution in bringing the people of different parts of the world closer to each other by fostering a better understanding for the foreign cultures and way of life.
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Soneri Bank now offers MoneyGram services across Pakistan KARACHI: Soneri Bank will now facilitate the delivery of MoneyGram payments to beneficiaries through its extensive branch network, which covers most of the high home remittance volume receiving areas in Pakistan. PRESS RELEASE
Jinnah Institute’s roundtable on ‘free expression on the internet and its limits’
ISLAMABAD: The internet is a unique medium that presents new challenges and questions for Pakistani state and society, especially when dealing with issues like the YouTube video that sparked violent protests across the Muslim world. This was the view of participants at a roundtable on free expression on the internet in Pakistan and its limits, organized jointly by the Jinnah Institute and the Initiative on Internet & Society at the Lahore University of Management Sciences. The session began with a presentation Abid Hussain Imam of the Department of Law and Policy at LUMS on laws and conventions that apply to the internet in Pakistan. Professor Imam highlighted the unique nature of the internet as a medium, and how it is not forced on the consumer of information. Rather, the consumer has to actively seek content on the internet, which raises interesting questions about liability and responsibility. The presentation was followed by a lively discussion on the issue, in which many participants agreed that freedom of speech is not an absolute value and its interpretations vary across societies and cultures. These variations require states and companies to come up with appropriate legal and policy responses to ensure respect for all individuals and communities and protect them against hate speech and incendiary content. PRESS RELEASE
Lucky to invest some fortune The group intends to buy 12% more stakes in ICI Pakistan KARACHI
L
Major Gainers OPEN COMPANy Nestle Pakistan Ltd. 4150.00 Bata (Pak) Limited 963.53 Island Textile 295.10 Mithchells Fruit 331.00 Service Industries 183.48
HIGH 4200.00 1011.50 309.85 344.00 191.10
LOW 4150.00 970.01 309.85 344.00 184.00
CLOSE CHANGE 4200.00 50.00 999.25 35.72 309.85 14.75 344.00 13.00 190.00 6.52
TUrNOvEr 40 900 200 100 18,900
985.00 850.00 211.00 250.00 258.00
913.00 850.00 205.16 244.50 251.50
913.00 850.00 205.16 244.75 255.68
-47.71 -12.00 -10.79 -6.25 -4.74
500 150 2,400 1,100 84,800
19.72 9.30 48.60 6.24 19.99
19.38 8.80 47.61 6.02 19.00
19.67 9.02 48.38 6.10 19.97
0.31 0.24 0.52 0.11 0.98
9,386,000 5,493,500 4,248,000 3,893,500 2,888,000
Major Losers Wyeth Pak Limited Siemens Pakistan Pak Gum & Chemical National Foods Indus Motor CoXD
ISMAIL DILAWAR
UCKY Holdings Limited (LHL), a group of five companies which recently acquired controlling stakes in the ICI Pakistan Limited, intends to buy 12 percent more shares of the paint giant through public offer. LHL, comprising Lucky Cement, Gadoon Textile Mills, Lucky Textile Mills, Yunus Textile Mills and YB Pakistan, had on June 12 acquired over 70.019 million ordinary shares of the ICI Pakistan at a huge cost of over Rs 700.194 million. The group, however, intends to acquire 12.1 percent or over 11.169 million more shares of the target firm, ICI Pakistan, said Standard Chartered Bank, the group’s financial advisor and manager to the offer, in a communiqué with the stakeholders. The new acquisition is to be carried out through Initial Public Offering (IPO). “Up to 11,169,796 ordinary shares of Rs 10 each of the target company consisting 12.1 percent of the total issued and paid up share capital is proposed to be acquired through the public offer process,” the bank added. The Lucky group had acquired 70,019,459 shares from the ICI Omicron B.V. Also, in line with the Regulation 6(4) of the Listed Companies (Substantial Acquisitions of Voting Shares
Business 02 960.71 862.00 215.95 251.00 260.42
Volume Leaders P.T.C.L.A Maple Leaf Cement D.G.K.Cement Fauji Cement Tariq Glass Ind.
19.36 8.78 47.86 5.99 18.99
Interbank Rates
and Takeovers) Regulations 2008, the LHL Wednesday notified its revised and updated pubic announcement of intention to purchase 75.81 percent voting shares of the ICI Pakistan. “It has been decided that the shares of ICI Pakistan Limited would be acquired by certain other group companies in addition to Lucky Cement Limited through Lucky Holdings Limited,” the Standard Chartered Bank said. In the LHL Lucky Cement holds 75 percent shares, Gadoon Textile Mills 1 percent, Lucky Textile Mills 1 percent, Yunus Textile Mills 18 percent and YB Pakistan 5 percent.
US Dollar UK Pound Japanese Yen Euro
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
Now or Never IMF calls for action now to secure global recovery ISLAMABAD ONLINE
Christine Lagarde, Managing Director of the International Monetary Fund(IMF) has urged policymakers to use the window of opportunity offered by recent policy decisions— and to take the actions needed to achieve a decisive turn in the global crisis. “This time, we need a sustained rebound, not a bounce. If this time is to be different, we need certainty, not uncertainty, she said, adding we need decision makers to be real action takers. We need delivery,” she said in a speech at the Peterson Institute for International Economics. She described recent initiatives by major central banks as “big policy signals in the right direction”—the European Central Bank’s OMT bond-purchasing program, QE3 by the U.S. Federal Reserve, and the Bank of Japan’s expanded Asset Purchase Pro-
94.6895 153.3023 1.2191 121.9222
gram. At the same time, Lag a r d e warned that the global economy is still fraught with risks and policy uncertainty is weighing growth down. The IMF continues to project a gradual recovery, but global growth will likely be a bit weaker than anticipated even in July, she said.
BUy
SELL
94.50 120.53 151.55 1.2025 95.01 11.99 25.61 25.11 96.71
95.00 121.67 152.94 1.2135 96.39 12.17 25.82 25.27 99.05
Zwickl takes helm of Siemens Pakistan KARACHI STAFF REPORT
Gunter Zwickl has taken over Siemens Pakistan as Chief Executive Officer (CEO) of the engineering firm, it emerged on Wednesday. The decision was taken by the company’s Board of Directors, in its September 25th meeting, after Bernhard Niessing, Zwickl’s predessor, resigned from his post. Zwickl is set to take charge from the first of next month as Bernhard’s resignation would be taking effect from September 30. Bernhard, however, would continue to remain on the company’s board as a member. Another appointment stamped in the Siemens Board meeting was that of Mohammad Rafi as a company secretary.
CORPORATE CORNER National leadership being invited to NetSol to promote IT industry: Salim Ghauri LAHORE: NetSol Technologies Ltd, Chairman and CEO, Salim Ghauri had said that purpose of inviting national leadership to NetSol Technologies was to promote the importance of Information Technology (IT) industry in Pakistan and its future role in shaping up country’s economy. He was talking to media after the visit of Pakistan Tehrik-e-Insaf (PTI) Chief Imran Khan the other day. Salim said it was the right time to apprise the national leadership of the advantages of the IT industry for the economic growth of Pakistan, he added. PRESS RELEASE
Lahore Stock Exchange elects four member directors LAHORE: The Lahore Stock Exchange Limited elected four member directors for a period of three years, in its Extra-ordinary General Meeting (EOGM) held here at the LSE building on Wednesday. Six candidates had submitted their nomination papers for the four seats of member directors at LSE Board. However, before start of the EOGM, Dr. Arslan Razaque and Syed Asim Zafar withdrew their nomination papers, therefore, remaining four candidates Ammar-ul-Haq, Asif Baig Mirza, Mirza Ejaz Ullah Baig and Omar Khalil Malik were elected unopposed. It was the first election of member directors after the LSE’s demutualization. PRESS RELEASE
The Designers multi-brand store exhibition at Dubai Ladies Club
home from abroad) six lucky winners won free return tickets from the Middle East, came to Pakistan and met their loved ones and were even invited as guests on the Omer Shariff show. PRESS RELEASE
Pakistan State Oil holds its 36th Annual General Meeting
Launch of Nida Azwer label in New Delhi
LAHORE: The Designers multi-brand store located on 26th Street will be holding yet another exclusive and much talked about multi-designer exhibition at the Dubai Ladies Club with no less than the who’s who of Pakistan’s fashion gentry. The exciting lineup of designers for this exhibition includes renowned brands such as prêt prince Rizwan Beyg, king of couture Umar Sayeed, and top designer Sonya Battla. Other designers bringing forth exclusive collections are high end and renowned designers such as Nomi Ansari, Zainab Sajid, Mohsin Ali and upcoming designers such as SNL, Aisha Alam, Rashk, Teeze and more. PRESS RELEASE
Western Union’s unique campaign: Pardes Sey Apney Ghar KARACHI: A special program for Western Union’s unique campaign: Pardes Sey Apney Ghar (Come
KARACHI: The nation’s leading Energy Company, Pakistan State Oil (PSO) convened its 36th Annual General Meeting at a local hotel. The event was chaired by Chairman-Board of Management (BoM), Sohail Wajahat Siddiqui, who congratulated the shareholders on being the proud owners of the nation’s first trillion rupee company. PRESS RELEASE
LAHORE: Renowned designer Nida Azwer on 20th September showcased her collection at the launch of The PFDC Bolveard in New Delhi India. Model and actress Sonya Jehan was the show stopper for Nida Azwer. PRESS RELEASE
New flagship store of Borjan was inaugurated by Umair Hussain in the presence of Business Manager Naveed Shahzad and Development Manager Tahir Yasin.
Thursday, 27 September, 2012