PRO 27-07-2012_Layout 1 7/28/2012 5:54 AM Page 1
Saturday, 28 July, 2012
Unearthing independent schemes NA body directs OGDCL for independent development schemes
A painful paper cut
Risk-averse banks hold heavily-weighed government papers worth Rs 2.793tn KARACHI
HE cash-strapped government whereas has put the heavilyweighted sovereign guarantees on sale, the commercial banks are the ones to hold much of the risk-free papers that are adding huge sums to the latter’s profits. The funds-starved government auctioned government papers, including Market Treasury Bills (MTBs), Pakistan Investment Bonds (PIBs) and Ijara Sukuk, to the tune of almost Rs 4 trillion by the end of Fiscal Year 2011-12. According to central bank data, the scheduled banks and non-bank corporate investors purchased the government securities worth over Rs 3.95 trillion up to 30th June, 2012. To cater to its ever-burgeoning budgetary needs, the resource-constrained fed-
eral and provincial governments borrowed over Rs 2.793 trillion through selling out government papers to the scheduled banks which, the State Bank said, held 71 percent of the total securities auctioned. The government borrowed over Rs 1.156 trillion from the non-bank lenders including insurance companies, mutual funds and other corporate entities. This accounts for 29.3 percent of total borrowings through the sale of bonds. A break up shows that, the government, through the central bank’s Open Market Operations, auctioned MTBs, PIBs and Ijara Sukuk (Islamic bonds) worth Rs 2.59 trillion, Rs 974 billion and Rs 383 billion, respectively. Of these, the banks bought treasury bills worth Rs 1.94 trillion (75 percent), investment bonds of Rs 510 billion (52 percent) and Islamic bonds of Rs 340 billion (89 percent). This heavy investment in the sovereign
guarantees had cumulatively fetched around Rs 66 billion for the country’s four leading banks including Habib Bank, United Bank, MCB Bank and Allied Bank, during last fiscal year. This amount profit was up 27 percent over FY10. The above four banks contribute over 50 percent share of the listed private banks’ deposits, contribute 70 percent of the market capitalization and represent, approximately, 60 percent of the total branch network in Pakistan. The banking analysts attribute this growth in the banks’ net interest income to higher returns on advances and better yield on the heavily-weighted government papers. As the banks adopt a riskaverse behavior, perceivably due to their rising bad debts, called Non-Performing Loans in banking terms, in the ongoing recessionary climate, the economists foresee disastrous repercussions for the country’s ailing economy. The economic observers are
concerned that whereas most of the economic indicators were setting in the red zone, the banks were not playing their due role in extending a helping hand to the economic mangers to revitalize the troubled economy. The analysts say this risk-averse trend would continue until the government take serious steps to curtail its ever-widening budget deficit that makes the government borrow heavily from the banking system.
A Parliamentary panel on Friday directed the Oil and Gas Development Company Limited (OGDCL) to initiate independent development schemes in the Sindh to avoid the duplication of the amount. Meeting of the National Assembly subcommittee on Petroleum and Natural resources held under the chair of Nawab Ali Wassan in which development and welfare schemes carried out by the oil and gas producing companies in Sindh were discussed. During the meeting officials of OGDCL told the committee that company disbursed more than 320 million rupees for infrastructure development in different areas of Sindh. Officials told that hundred million were spent to establish disaster center in Mirpur Mathelo while 465 million spent for petroleum training center to award technical training to the youngsters. Officials informed that for 2012-13 seven million would be spent to provide free medical facilities to the people of Tando Adam, Bobi Kunar, Qadir pur and other areas. They told that 880 million rupees would be utilized to different projects of gas supply to different areas. Officials said that in several areas of province projects of education and health were initiated in collaboration of government. Standing committee directed the MD OGDCL to continue the projects separately as it would be helpful to avoid doubling of funds.
S Korea's Kia sees small drop in Q2 net profit
South Korea's second largest automaker Kia Motors said Friday its second-quarter net profit fell 2.8 percent from a year earlier due to losses on shareholdings in affiliates. Net profit in April-June was 1.09 trillion won ($954 million) compared to 1.12 trillion won a year earlier, the company said. Sales rose 8.4 percent to 12.6 trillion won, while operating profit jumped 18 percent to 1.2 trillion won. For the first half net profit rose 10.4 percent year-on-year to 2.3 trillion won on the back of strong overseas sales. The company sold 1.39 million units globally in the first six months, up 12 percent from a year earlier. Kia is an affiliate of South Korea's largest automaker Hyundai Motor. The two together form the world's fifth-largest carmaking group by sales.
Draghi drags oil up SINGAPORE AGENCIES
A pledge by European Central Bank president Mario Draghi to "do whatever it takes to preserve the euro" supported the single currency as well as crude prices in Asia Friday, analysts said. New York's main contract, light sweet crude for delivery in September, was up nine cents to $89.48 a barrel and Brent North Sea crude for September delivery gained five cents to $105.31. Draghi's rousing vow of support for the single European currency issued late Thursday inspired crude traders to enter the market again, analysts said. "Markets cheered after European Central Bank president Mario Draghi said yesterday that the ECB is ready, within its mandate, 'to do whatever its takes to preserve the euro'," DBS Group Research said in a report. Draghi's statements helped boost the euro against the dollar, lending support to dollar-priced oil. The euro was trading at $1.2277 in early Asia trade Friday from $1.2280 in overnight trade. The single currency had climbed to a twoweek high of $1.2330 following Draghi's pledge. Draghi's remarks also fuelled speculation the ECB would make further bond purchases to help bring down high sovereign borrowing costs, particularly for Italy and Spain.
Traders, industrialists condemn power tariff hike. Yep. Again… KARACHI STAFF REPORT
The traders and industrialists in this commercial hub have rejected what they called it the fresh unjustified raise in power tariff allowed by Nepra to KESC. Patron In-Chief Korangi Association of Trade and Industry (KATI) S.M Muneer, Chairman Ehtesham Uddin, President All Karachi Industrial Alliance (AKIA) Mian Zahid Hussain, Vice Chairmen Hasham A Razzak Tariq Malik and Chairman Press and Media Committee, Syed Johar Ali Qandhari in a joint statement condemned the government’s anti-industry act of allowing the KESC yet another increase that they said would have a killing affect on the already ailing economy. They said industry was already struggling hard to survive due to the frequent increases in utilities and POL prices and imposition of other levies and surcharges, the government has allowed another bombshell to kill the industry. “Frequent Increases in utilities tariffs have already created chaos for general public, trade and industry and now it seems that government is willfully creating hurdles in country’s economic survival”, Ehtesham said adding that the country is facing severest power crisis of its history and in such unpleasant circumstances, the approval of summary to further increase power tariff by Rs1.60 per unit will prove the death knell to the industry.
The industry’s representatives said that business community fear that export targets fixed by the government can in no way be achieved if present trend of rapidly increasing utility tariffs and power crisis continues. Exporters materialize their orders in advance and unprecedented increase in utility tariffs incur them losses in the form of increased cost of manufacturing, they said dding that prolonged unscheduled electricity outages have compelled the export-oriented Industry to the verge of collapse, they added. They demanded of the government to immediately reverse the decision in greater interest of the country and nation. CoTTage indusTry; herein lies The soluTion: The Lahore Chamber of Commerce and Industry Friday urged the government to facilitate the ailing cottage industry to offset the financial losses it has been suffering because of unprecedented and unscheduled electricity load-shedding and intervention by various provincial departments. The LCCI President Irfan Qaiser Sheikh was talking to a 25-member delegation of cottage industry belonging to Daroghawala and Sultan Mehmood Road Industrial areas and headed by Chairman All Pakistan Cottage Industry and Small Traders Ghulam Sarwar Malik. Haji Sultan Mehmood Sabri, Haji Barkat Munir were prominent among the delegates.
The LCCI President while assuring the cottage industry delegation of his full support said that the LESCO Chief would be informed of the situation being faced by these small businessmen and would asked to ensure power supply for at least 8 to10 hours at a stretch. The LCCI President said that the high rates of electricity being charged from them and longer hours power cuts have totally destroyed the small businesses therefore the government should come up with a package of incentives in shape of cut in electricity tariff and power outages duration. He said that it is beyond the understanding of the Lahore chamber of commerce and industry that why these clusters of the cottage industry have not so far been given the industrial area status. He said that the government must understand the importance of cottage industry in the country as it is not only generating revenue for the government but also providing jobs to million of people. He said that it was very unfortunate that while preparing schedule for power cuts the LESCO authorities do not consult the stakeholders. He said that Darogawala Industrial area that has yet not been granted the status of industrial area despite repeated assurances by the government is a hub of cottage industry and now-a-days these small businessmen are sitting idle only because of senseless power cuts by the LESCO.
Railways on track? Steps being taken to overcome present crisis-like situation g
Several steps are being taken to overcome present crisis-like situation being faced by Pakistan Railways,a source in Ministry of Railways told APP on Friday. The source said that Railway Administration's strategy includes repair and maintenance of existing locomotives and procurement of new locomotives through revenue/PSDP budget, bank loans, as well as, private sector participation. Pakistan Railways, he said, is making efforts to get sufficient funds from the Government for rehabilitation of required locomotives, rolling stock, and purchase of spares parts and fuel etc. The source informed that Pakistan Railways is inviting private sector to participate in different activities of P.R i.e rehabilitation of aging locomotives, development of Dry Ports and commercial Management of Passenger trains etc. He said that at operational level, steps are being taken to control the deficit and the initiative of ECO train has been taken to capitalize through establishing international linkages. New agreement with Pakistan State Oil has been done for uninterrupted supply of fuel and three trains (Shalimar, Rohi and Hazara Express) have been outsourced while a new train (Business Express) has been launched as a joint venture with the private sector. Moreover efforts are underway to outsource additional trains, and efforts are being made to recover outstanding amount due from other departments/companies. New signaling system is being installed on the network to minimize detentions and saving in fuel expenditure. The management is reaching out to the private sector to utilize idle capacity in the Railway system through the Track Access Policy. Rail fares on both freight and passenger sides have been increased although much less than proportionately, to recover some of the costs from increase in the prices of petroleum and petroleum products, he added.
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ADB peers into crystal ball Forecasts slowdown in Pacific economies g
Growth in the Pacific region is expected to run at 6 per cent in 2012, but slow to 4.2 per cent in 2013 due to lower growth in resource exporting countries that weigh most heavily in regional averages. It is released in the latest Pacific Economic Monitor, released by the Asian Development Bank (ADB). “Pacific economies are weathering persistent troubles in the eurozone, but they need to broaden and build resilience in their economies,” said Xianbin Yao, Director General of the ADB’s Pacific Department. “To support this agenda, ADB is continuing its efforts to assist Pacific economies in making long-term infrastructure investments and undertaking necessary policy reforms to achieve stronger and more inclusive growth in coming years." Economic troubles in the eurozone continue to have only modest and indirect effects on Pacific economies, owing to the relatively greater importance of economic developments in Australia, Japan, New Zealand, and the United States in driving Pacific growth. While the eurozone crisis drags on, relatively stronger performance in these countries appears to be moderating the impact on Pacific economies. Slowing growth in the People’s Republic of China, however, is expected to have greater implications for the Pacific, mainly due to its strong ties with Australia, the main trading partner of many Pacific economies. The slowdown forecast for the Pacific in 2013 is expected mainly due to lower growth in resource exporting countries, such as Papua New Guinea (PNG), Solomon Islands and Timor-Leste, which weigh most heavily in regional averages.
Bears are macroeconomic connoisseurs KSE sheds 27 points as investors remain apprehensive about security and macroeconomic situation g
02 Business Major Gainers COMPANY
Rafhan Maize Prod. UniLever Pak Wyeth Pak Limited Mithchells Fruit Shezan Inter.
3533.60 7325.00 955.45 300.19 216.65
3710.00 7360.00 988.00 315.19 227.48
3410.00 7350.00 988.00 309.00 222.00
3710.00 7360.00 988.00 315.19 227.48
176.40 35.00 32.55 15.00 10.83
200 160 50 5,700 7,400
Major Losers Unilever Food Hinopak MotorXD Engro Corporation Millat Tractors Pak.Int.Cont SD
2890.00 72.09 98.93 508.91 155.40
2850.00 71.50 99.25 508.00 156.00
2850.00 70.00 96.00 506.50 153.52
2850.00 70.00 96.92 507.00 153.54
-40.00 -2.09 -2.01 -1.91 -1.86
40 2,000 1,037,500 8,600 400
KARACHI STAFF REPORT
AKISTAN Stocks closed lower amid thin trade on investor concerns for uncertain macroeconomic situation, security concerns regarding Nato supply routes and limited foreign interest ahead of release of pending US Coalition Support Funds, as viewed by Ahsan Mehanti, Director at Arif Habib Investments Limited. The Karachi Stock Exchange (KSE) 100share index declined 26.88 points or 0.18 percent to close at 14, 526.41 points as compared to 14, 553.29 points of the previous session. The KSE 30-share index shed 11.04 points to close at 12, 581.70 points as compared with 12, 592.74 points. The market turnover was down to 58.339 million shares after opening at 81.467 million shares. The overall market capitalization declined 0.02 percent and traded Rs 3.708 trillion as against Rs 3.714 trillion. Losers outnumbered gainers 98 to 121, while 20 stocks were unchanged. Mehanti added that the activity remained thin despite strong corporate earnings outlook and recovery in global stocks and commodities. The KMI 30-share was decreased by 5.16 points to close at 24, 983.36 points from its opening at 24, 988.52 points. The KSE allshare index closed with a loss of 14.19 points to 10, 222.70 points as against 10, 236.89 points. Pakistan Telecom Company (P.T.C.L.A) was the volume leader in the share market with 7.288 million shares as it closed at Rs 14.26 after opening at Rs 14.77. D.G.K Cement traded 6.811 million shares as it closed at Rs 45.90 after opening Rs 45.47. Jahangir Siddiqui Company traded 5.888 million shares as it closed at Rs 16.04 from its opening at Rs 16.22. Maple Leafn Cement traded 3.203 million shares and closed at Rs 6.25 as
P.T.C.L.A D.G.K.Cement Jah.Sidd. Co. Maple Leaf Cement Engro Foods Ltd.
14.77 45.47 16.22 5.76 68.56
14.80 46.05 16.48 6.33 69.90
14.15 45.15 15.93 5.75 68.56
14.26 45.90 16.04 6.25 69.50
-0.51 0.43 -0.18 0.49 0.94
7,288,000 6,811,000 5,888,500 3,203,500 2,399,000
Interbank Rates US Dollar UK Pound Japanese Yen Euro
94.5778 148.2602 1.2080 116.0943
against its opening at Rs 5.76. Engro Food Limited traded 2.399 million shares as it closed at Rs 69.50 as compared to its opening at Rs 68.56. He said that the concerns for rising circular debt in Pakistan Energy sector, revenue loss to fertilizer sector on gas supply worries played a catalyst role in bearish sentiment at KSE. On the future market, the turnover up by over four million to 19.443 million against 15.694 million shares of second last working day of the week Thursday. The Rafhan Maize Prod and Unilever Pakistan, up Rs 176.40 and Rs 35.00, led highest price gainers while, UniLever Food and Shahtaj Sugar Mills, down Rs 40.00 and Rs 3.28 respectively, led the losers.
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
94.30 115.70 147.80 1.1976 93.03 12.00 25.63 25.13 97.66
95.10 116.71 149.04 1.2076 94.32 12.17 25.82 25.27 99.94
LONDON: Sahibzada Jahangir, senior leader of Pakistan Tehreek-e-Insaf in the UK, receives the Diamond of the Community Award for his outstanding services in Trade & Democracy.
CORPORATE CORNER JCR-VIS reaffirms ratings of NBP at AAA/A-1+ KaraChi: JCR-VIS Credit Rating Company Limited (JCR-VIS) has reaffirmed the entity ratings of National Bank of Pakistan (NBP) at ‘AAA/A-1+’ (Triple A/AOne Plus) with ‘Stable’ Outlook. The credit ratings assigned to NBP take into account standalone financial strength of the bank as reflected by market share of 13.7% in terms of domestic deposits at end-Dec’11, adequate liquidity and capitalization levels. Ratings also incorporate the sovereign ownership of the bank, the outstanding guarantee of the Government of Pakistan (GoP) as security against deposits and the bank’s status as treasury to the GoP.
The Designers presents a special showcase for Ramzan KaraChi: To celebrate the festivities of Ramzan, The Designers will be showcasing a special collection of semi-formal, formal designer-wear brands along with exquisite jewelry for a 15 day exhibition. Known for housing some of the country’s top designers, the leading multi brand store in Karachi recently launched its outlet in Dubai to reach out to international buyers. The Ramzan Exhibition will be hosting luxury brands to display their latest collections to gear up for Eid celebrations, including the lively Chaad Raath shopping. Participating in the exhibition will be some of the Pakistan’s top designers.
ternship Training Programme. Managing Director NTDCL Mr Naveed Ismail distributed the certificates among the internees at WAPDA house, here today. While addressing the gathering of young engineers, Mr Naveed Ismail stressed upon the phases of learning and said that process of learning should continue through education, academics and researches with a aim to enhance growth, technical and managerial skills.
ISLAMABAD: Federal Minister for Communication Dr Arbab Alamgir Khan meeting a delegation of Contractors Association of Pakistan in National Highway Authority.
‘Resettling the Indus’ completes first phase of flood-rehabilitation lahore: Coca-Cola Pakistan and Resettling the Indus Foundation (RtIndus) are proud to announce the successful completion of Phase One of the flood rehabilitation project, with the completion of 25 houses in one and a half months. As part of its global initiative towards providing sustainable living environments for the communities it operates in, based on the “Live Positively” philosophy, Coca-Cola Pakistan joined hands with Resettling the Indus Foundation (RtIndus) to rebuild houses destroyed by the 2010 floods in Southern Punjab. Rs. 2.5 million was granted by Coca-Cola Pakistan for the project to be utilised against rehabilitation and rebuilding efforts. This project is one of the numerous corporate social responsibility projects by Coca-Cola Pakistan. Mr John Seward, general manager of Coca-Cola Pakistan, lauded the efforts of the RtIndus team, “We hope to do more for those residing in communities which have suffered great devastation over the past few years and don’t have the means to rehabilitate themselves.
Karachi: The Surmawala shopping festival is on till Eid evening at a local mall in Clifton. Picture shows Chief Guest M.Azeem Qureshi, presenting gift to a lucky winner.
Superior University inaugurates Pakistan’s first private sector Aviation Lab at Superior University Aviation Department. Superioir Group of Colleges Chairman Ch Abdul Rehman, Registrar and Project Director are present at the occasion, Head of Department is giving a briefing about recently imported jet plane engines.
LAHORE: Haji Bashir Ahmed Chairman Sitara Group, Mian Mohammad Adrees CEO Sitara Chemical Industries inaugurating the exhibition of Rajah’s by Sitara.
Tena Durrani’s Eid Collection NTDCL awards certificates, stipends to 121 young engineers KaraChi :Tena Durrani, the brand known for bringlahore: National Transmission and Despatch Company Limited (NTDCL) awarded certificates and stipends to 121 successful young engineers of various leading universities of Pakistan under one month In-
ing subtle and feminine cuts into vogue, will be exhibiting an Eid collection consisting of a new range of semi-formal and formal attire. The brand developed a reputation for bringing a versatile selection of custom outfits perfect for women of all ages.
ISLAMABAD: First meeting of OGDCL new Board of Directors being presided under the Chairmanship of Shafi Arshid at OGDCL House.
KARACHI:Mr.Francis Campbell, Director UK Trade and Investment and British Deputy High Commissioner, visited Giorgenti New York, an American based fashion clothing brand,opened its newest retail Flagship store, located in the posh Clifton locality.
Saturday, 28 July, 2012