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International Karachi, Friday, June 3, 2011, Jumadi-ul-Saani 30, Price Rs12 Pages 12

Govt to focus on expanding tax network this year Economic Indicators $17.34bn 14.00% $20.15bn $32.26bn $(12.11)bn $748mn $9.05bn $1.53bn Rs 1147bn $59.54bn Rs 5617bn $649.9mn 6.75% 4.10% $1,051 176.22mn

Forex Reserves (28-May-11) Inflation CPI% (Jul 10-May 11) Exports (Jul 10-Apr 11) Imports (Jul 10 - Apr 11) Trade Balance (Jul 10 - Apr 11) Current A/C (Jul 10- Apr 11) Remittances (Jul 10 - Apr 11) Foreign Invest (Jul 10-Apr 11) Revenue (Jul 10 Apr 11) Foreign Debt (Mar 11) Domestic Debt (Apr 11) Repatriated Profit (Jul- Apr 11) LSM Growth (Mar 11)

GDP Growth FY10E Per Capita Income FY10 Population SCRA(U.S $ in million)

247.35 2.33 2.33 2791

Yearly(Jul, 2010 up to 1-Jun-2011) Monthly(May, 2011 up to 1-Jun-2011) Daily (1-Jun-2011) Total Portfolio Invest (21-May-2011)

NCCPL (U.S $ in million)

FIPI (2-Jun-2011) Local Companies (2-Jun-2011) Banks / DFI (2-Jun-2011) Mutual Funds (2-Jun-2011) NBFC (2-Jun-2011) Local Investors (2-Jun-2011) Other Organization (2-Jun-2011)

0.91 -0.76 -2.33 -2.62 0.49 3.57 0.74

Global Indices Index

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Change

12179.81

84.25

Nikkei 225

9555.04

164.57

Hang Seng

23253.84

372.59

Sensex 30

18494.18

114.63

ADX

2672.55

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SSE COMP.

2705.18

38.39

FTSE 100

5886.28

42.33

KSE 100

GDR update Symbols MCB (1 GDR= 2 Shares) OGDC (1 GDR= 10 Shares) UBL (1 GDR= 4 Shares) LUCK (1 GDR= 4 Shares) HUBC (1 GDR= 25 Shares)

$.Price PKR/Shares 2.60 111.62 17.02 146.13 2.00 42.93 1.70 36.49 10.96 37.62

Money Market Update T-Bills (3 Mths) T-Bills (6 Mths) T-Bills (12 Mths) Discount Rate Kibor (1 Mth) Kibor (3 Mths) Kibor (6 Mths) Kibor ( 9 Mths) Kibor (1Yr) P.I.B ( 3 Yrs) P.I.B (5 Yrs) P.I.B (10 Yrs) P.I.B (15 Yrs) P.I.B (20 Yrs) P.I.B (30 Yrs)

01-Jun-2011 01-Jun-2011 01-Jun-2011 20-May-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011 02-Jun-2011

13.43% 13.68% 13.88% 14.00% 13.55% 13.57% 13.79% 14.13% 14.25% 14.00% 14.04% 14.10% 14.24% 14.48% 14.78%

Commodities *Crude Oil (brent)$/bbl 115.49 *Crude Oil (WTI)$/bbl 100.48 *Cotton $/lb 139.09 *Gold $/ozs 1,537.60 *Silver $/ozs 36.74 Malaysian Palm $ 1,130 GOLD (NCEL) PKR 42,731 KHI Cotton 40Kg PKR 9,109 Open Mkt Currency Rates Symbols Buy (Rs) Sell (Rs)

Australian $ 90.60 Canadian $ 87.40 Danish Krone 16.30 Euro 123.30 Hong Kong $ 10.80 Japanese Yen 1.045 Saudi Riyal 22.85 Singapore $ 69.00 Swedish Korona 13.55 Swiss Franc 97.00 U.A.E Dirham 23.35 UK Pound 140.30 US $ 86.10

91.60 88.40 16.70 124.50 11.30 1.071 23.05 70.00 13.90 98.00 23.55 141.80 86.35

Inter-Bank Currency Rates Symbols

Australian $ Canadian $ Danish Krone Euro Hong Kong $ Japanese Yen Saudi Riyal Singapore $ Swedish Korona Swiss Franc U.A.E Dirham UK Pound US $

Buying

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TT Clean

TT & OD

90.99 87.61 16.50 123.04 11.01 1.059 22.85 69.20 13.71 101.59 23.36 139.95 85.86

91.20 87.81 16.54 123.33 11.04 1.062 22.91 69.36 13.75 101.83 23.50 140.27 86.05

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Islamabad Karachi Lahore Faisalabad Quetta Rawalpindi

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Geithner to meet Republican on debt

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Abbottabad commission challenged

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Economic Survey 2010-11 released

GDP Lags Behind Goal Shaikh says floods, oil prices pushed growth down to 2.4pc, core inflation estimated at 9.5pc, production of crude oil up 1.15pc, LSM grows 1.7pc, Agri-sector up 1.2pc, per capita income rises to $1254 Special Correspondent/ Agencies

Portfolio Investment

Pak-India visa relaxation talks

ISLAMABAD: Pakistan's economy expanded by just 2.4 per cent in the 2010/11 (JulyJune) fiscal year as devastating floods and persistent power shortages curbed its growth. Federal Minister for Finance, Dr Abdul Hafeez Shaikh Thursday said the devastating floods, international oil prices and security situation were the three main factors that hit the country's economy and subsequently resulted in slowdown in growth rate during the fiscal year 2010-11. Addressing a press conference at the launching ceremony of Economic Survey, he said despite these challenges, the growth rate stayed positive. The Finance Minister was flanked by Secretary Finance, Dr Waqar Masood Chairman Federal Board of Revenue, Salman Siddique, Deputy Chairman Planning Commission of Pakistan, Dr

Nadeem-ul-Haq and other officials of the ministry. The GDP for year 2010-11 was fixed to grow at 4.5, however due to the devastating floods that hit the economy badly; the growth rate reduced to 2.4 per cent. "We face challenges but this is the time when all political parties and civil society are

Economic Survery on Page 8-10 determined to lead the country out of these crises," he said adding "with joint efforts we would lead the country out of these crises." Despite all these challenges, the Minister said the several sectors of economy including exports and remittances have shown considerable growth during the outgoing fiscal year. Federal Minister for Finance, Dr Abdul Hafeez Shaikh said that the overall agriculture sector registered growth of 1.2 percent.

SC accepts new loan policy draft

SBP draft ready for waived loan ISLAMABAD: A draft, paving way for issuance of a new State Bank of Pakistan Circular over written off loans was submitted before the Supreme Court on Thursday and according to which all the banks/DFIs would be directed to submit entire record of concessions with the three-member Commission for its examination and consideration. The draft was jointly submitted by the SBP counsel and other counsels representing various banks in line with Court's observation and the consent given by Governor State Bank of Pakistan, Shahid Kardar. The draft was presented before a three-member bench comprising Chief Justice

Iftikhar Muhammad Chaudhry, Justice Muhammad Sair Ali and Justice Ghulam Rabbani seized with hearing of a suo moto case regarding written off bank loans worth Rs 256 billion from 1971 to onward. The draft contained 2 clauses with proposed directions which the SBP would issue. These said:"1. The banks/DFIs are directed to immediately submit entire record of the written off, remitted, reversed, and/ or waived off loans/advances of Rs2.500 million and above, for the period from 1971 to 1991, and Rs25 million and above from 1992 onward to the Commission constituted by the See # 9 Page 11

Remittances push reserves to $17.34b Staff Reporter KARACHI: Pakistan's foreign exchange reserves rose to $17.34 billion in the week ending May 28, from $17.07 billion the previous week, a central bank official said on Thursday. Reserves held by the State Bank of Pakistan (SBP) rose to $13.91 billion from $13.67 billion a week ago, while those held by commercial banks jumped to $3.43 billion from $3.40 billion, said the SBP's spokesman Syed Wasimuddin.

PM vows pro-people budget ISLAMABAD: Prime Minister Syed Yousuf Raza Gilani directed the government's economic team that the forthcoming budget for the financial year 2011-12 should be people-friendly to give relief to common man. He asked that appropriate measures be incorporated in the Budget to ensure economic growth thus leading to reduction in inflation, increase in investment and creation of jobs. The Prime Minister was chairing a special pre-Budget meeting of his economic team at the PM House here this afternoon. While elaborating his vision and priorities of his government, the Prime Minister stressed upon adoption of austerity measures with focused attention on development efforts. Earlier, the Minister for Finance briefed the meeting on the salient features of the Budget 2011-12. Prime Minister Syed Yusuf Raza Gilani said the prices of petroleum products have been reduced to provide relief to the common man. This decision has taken in the wake of decrease in the petroleum prices in international market, he added. Prime Minister expressed these views while talking to Minister See # 12 Page 11

"The higher inflows of remittances and current account transfers have helped the rise in foreign exchange reserves," said Wasimuddin. Pakistan's forex reserves have grown steadily thanks to higher export proceeds as well as record inflow of remittances, hitting an all-time high of $17.95 billion during the week that ended on March 26. Reserves have since eased slightly on debt repayments. ISLAMABAD: Pakistan and Remittances from overseas World Bank (WB) Thursday See # 10 Page 11 signed three agreements amounting to $115.50 million for financing projects in different sectors. The amount would be utilised for Additional Financing for Punjab Education Sector Project ($50 million), Additional Financing for Third Partnership United States said. for Polio Eradication Project Ambassador Husain Haqqani ($41 million) and Additional also asked Pakistan's critics not Financing for PIFRA-II ($24.50 to confine their discourse to aid million). results but view the important The agreements were signed, US-Pakistan relationship in a Secretary, Economic Affairs holisitc perspective. Division, Abdul Wajid Rana and, "If the United States opens its Country Director World Bank, market for Pakistan more, it Rachid Benmessaoud while See # 8 Page 11 See # 13 Page 11

Aid not on Pakistan wish list: Haqqani WASHINGTON: Pakistan has no desire to depend on foreign assistance forever but seeks greater trade for its sustainable development and US providing easy access for the country's products would both spur economic progress and serve common security interests, Islamabad's envoy to the

However, he added that due to devastating floods the growth in major corps, witnessed negative growth of 4 per cent. The manufacturing sector also grew by 3 per cent despite increase in oil and energy prices while the services sector witnessed positive growth of 4.1 per cent. He said that the investment to GDP ratio was recorded at 13.4 percent during the year against 15.4 percent last year adding that security and high input rates were the main hurdles in investments. He said that the Federal Board of Revenue has set the revenue collection target of Rs 1588 billion during the current year, out which the Board has already collected Rs 1316 billion. He said that the Board was confident that it would be able to collect the remaining Rs 272 billion by June-end. Shaikh said that the exports have witnessed historic growth

Pak, WB sign $115.5mn pacts

of 28 per cent by increasing He said that the export fig- bank barrowings have declined from $18.8 billion last year to ures are expected to cross the by Rs 16 billion during the cur20.2 billion during July-April $24 billion figure this year. rent year as compared to last (2010-11). He said that government's See # 11 Page 11

Budget 2011-12 today

Hopes and fears as budget nears ISLAMABAD: The National Budget for the Fiscal Year 2011-12, envisaging growth rate acceleration, economic stabilization, employment generation, broadening of tax base and relief to the common people, will be presented in the National Assembly on June 3 (Friday) afternoon. Federal Minister for Finance, Dr Abdul Hafeez Shaikh after the approval of the Budget 2011-12 from the Federal Cabinet will announce the budget, sources in the Ministry of Finance said. Enhancing revenues to minimize dependence on external finances, cutting down the government expenditures, enhancing growth through a new growth strategy and job creation will feature in the upcoming budget. The consolidated outlay of the next year budget is likely to be about Rs 3.8 trillion whereas revenue target is estimated at about Rs 1.9 trillion. The budget will also address

the issues of energy generation, social sector development and revenue enhancement besides major reforms will be introduced for improving governance and boost private sector investment. Amid domestic and international challenges, the realistic GDP growth target will be 4.2 percent while in the outgoing fiscal year 2.4 per cent GDP growth is likely to be achieved against the target of 4.5 per cent. The growth in FY 2011-12 will base primarily on revitalizing the industrial sector by curtailing energy shortages and high interest rates that are presently discouraging the private sector from investing. This year, the budget will also focus on infrastructure, human capital, promotion of investments and exports and agriculture sector development. Emphasis will also be made on normalizing agriculture activity and maintaining good See # 5 Page 11

Oxfam warns

Food cost fueling poverty in Pakistan ISLAMABAD: In connection with 'Dharti Campaign' Oxfam launched a farmer's charter of demands urging the government to adopt agricultural reforms to better protect the poor and landless farmers, here on Thursday. Representatives of the program i.e. 'Oxfam's Land Rights and Economic Opportunities' from all of the four provinces including tenants established such charter of demands after holistically observing the problems of farmers across the country. Manager Oxfam's land and economic opportunities program Fatima Naqvi said the launch of the farmer's charter campaign in Pakistan - would bring together farmers, lawyers and Pakistani NGO's, civil

society and media especially. The farmer's charter of demands calls for government to introduce comprehensive land reforms and better protection and support for poor farmers, especially women. It was told that key demands of the twelve point farmer's charter include calls for reform of existing tenancy acts to allow workers to establish unions, demand fair wages and receive land titles supporting their legal rights to the land; while legal mechanisms should be put into place to adjudicate complaints and resolve conflicts. The charter says there needs land reforms - ensuring cultivable state-owned land, as well as land owned by absentee See # 6 Page 11

Bureaucracy told not to follow verbal orders ISLAMABAD: Special Committee of NA Public Accounts Committee (PAC) has directed bureaucracy not to comply with verbal orders of any one including President and Prime Minister. PAC special committee met here Thursday under health minister Riaz Pirzada in Parliament House. Committee also directed bureaucracy to obtain written approval from the competent authority of every work. Riaz Pirzada told official vehicles are misused in his ministry and he has taken stern notice of it. "I have issued orders for withdrawing the vehicles from the officers who are not authorized to use them", he said. Committee disposed of the matter of installation of security apparatus without inviting tenders in Prime Minister House besides issuing directives that no See # 7 Page 11

PCB reject Afridi request of playing for Hampshire KARACHI: The Pakistan Cricket Board (PCB) has rejected a request from former captain Shahid Afridi for permission to play for English county Hampshire. A PCB official said on Thursday Afridi had been asked to appear before a disciplinary committee on June 8 to respond to several charges of violating his central contract clauses. "We have scheduled the hearing as soon as possible. It is now in the hands of the disciplinary committee. If it feels right it can give him clearance to play for Hampshire," PCB media manager Nadeem Sarwarsaid. Afridi, 31, who led Pakistan to the semifinals of the World Cup this year, announced his retirement from international cricket on Monday in protest against his removal as captain for the recent one-day series againstIreland. -Reuters


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Friday, June 3, 2011

Political worker gunned down in city

KARACHI: PNS Shahjahan patrols in the piracy prone areas of Indian Ocean region, 600 - 1000 NMs South West off Karachi as the threats posed to Pakistani economy due to rise in piracy incidents at sea has necessitated a more dynamic role for Pakistan Navy to safegurad maritime interests.-Online

PTA deposits Rs13.56bn in tax KARACHI: Pakistan Te l e c o m m u n i c a t i o n Authority (PTA) has deposited Rs13.56 billion in the FY 2009-10 to the national exchequer while telecom sector contributed Rs109.05 billion in the form of taxes. According to the Quarterly Report 2011 issued by PTA, the contribution of telecom sector to national exchequer through taxes, duties and regulatory charges kept growing. At the end of FY2010, the total contribution was over Rs109 billion of which almost 50 per cent came from GST. In the first half of the FY2011, the total contribution to national exchequer was Rs56.3 billion which was almost Rs49 billion in the first half of FY2010 showing growth of 15 per cent since last year. It is therefore expected that by end of FY2011, the total contribution to national exchequer would be higher than the last year's contribution. According to an estimate, telecom sector contributes more than 90 per cent share in total taxes by the services sector of Pakistan which is now being diverted to provinces under 18th Amendment.-APP

Pak, India start visa relaxation talks ISLAMABAD: The Officials of Interior Ministry of both Pakistan and India on Thursday opened two-day talks in Islamabad to introduce a 'relaxed visa regime' and to promote people-to-people contact, officials said. An Indian delegation led by Joint Interior Secretary G.B. Nawasan is taking part in talks with Pakistani counterparts. Both sides will review proposals to soften the strict visa formalities of 1974, and initiate a new accord as people in both countries complain about long delay and restrictions in getting visas. During the IndiaPakistan home secretarylevel talks in New Delhi in March, both sides agreed to set up a Joint Working Group (JWG) to examine the modalities for streamlining the visa procedure/modalities and giving a final shape to the revision of the Bilateral Visa Agreement, according to a joint statement. Officials from both sides are hopeful to make progress in the Islamabad talks as the dialogue process has now got momentum after over twoyear deadlock over the 2008 Mumbai attacks. Pakistan and India have indicated they are positive in liberalizing the visa regime to facilitate greater people-to-people contacts between the two nations.-NNI

Lyari Development Package, a gift for people: Sharjeel KARACHI: The Lyari Development Package is a great gift for the people of the area from the present democratic government. This was stated by the Sindh Minister for Information, Sharjeel Inam Memon. He was holding a meeting regarding this package

and other development works on Thursday. The Administrator of the Lyari Town, Muhammad Raisi, was also present on the occasion. He also gave a briefing to Sharjeel Inam Memon regarding the Lyari Package. The Minister pointed out that Lyari is a stronghold of

the Bhuttoism. He said that the implementation of this development package would bring a very positive change in Lyari and in the lives of the people of the area. Sharjeel Inam Memon said that this would provide the required facilities in the area.-APP

Govt to continue struggles for rights of laborers: Awan ISLAMABAD: Former Federal Minister and senior PPP leader Babar Awan has said on Thursday that the government would continue struggle for rights of laborers community as they are precious asset of the country. Addressing to condolence reference here on Thursday under the aegis of CDA Labor union in memory of late Hakim Ali Zardari, father of President

Asif Ali Zardari, former Federal Minister and senior leader PPP Babar Awan said that by increasing monthly wages of the laborers the government has proved that it realizes the problems confronted by the laborers and struggles for their rights would continue in future. He further said that sad demise of late Hakim Ali Zardari closed a chapter of politics in Sindh, late

Hakim Ali always followed the politics of principles. He said that first of all late Zulfiqar Ali Bhutto raised voice for 'Roti kapra aur makan' and then late Benazir Bhutto and Asif Ali Zardari move onward with their slogan. On this juncture the other PPP members threw light on 'Hakim Ali Zardari's life and his different aspects of his life about 'laborer friendly' person.-APP

KARACHI: LG Electronics recently inaugurated its brand show room at recently launched country's biggest food street 'Port Grand'. Picture shows I. K. Lee, Chief Consular General Republic of Korea, Babar Khan Ghouri, Federal Minister for Port and Shipping; Nisar Khuhro, Speaker Sindh Assembly; Agha Siraj Khan Durrani, Sindh Minister for Local Government along with S.Y. Ryu, General Manager LG Electronics and Imran Zaki, Head of Corporate Marketing LG Electronics outside the LG brand show room.-Staff Photo

Steps on for uplift of backward areas: Prime Minister ISLAMABD: Prime Minister Syed Yusuf Raza Gilani has said that the Government is paying special attention towards the uplift of underdeveloped areas of the country and in the upcoming budget the same criteria has been made the benchmark of the overall development agenda. The improvement in the living standard of the people of these areas, he mentioned, can be brought through the effective engagement of the Government agencies with people's representatives.

The Prime Minister was talking to Senator Syeda Sughra Imam who called on him at PM's House here on Thursday. The Prime Minister said that as a result of the 7th NFC Award and the 18th Amendment the Provincial Governments have major role in dealing with the public affairs. He added that Federal Government would provide every possible assistance to the Provincial Governments in the completion of development agenda for the coming fiscal year.

Talking about the CCI meeting, the Prime Minister said that the enhanced role of the forum as envisaged by the 18th Amendment would help the Federal and the Federating Units form consensus on various issues of national importance. Syeda Sughra Imam apprised the Prime Minister about various development projects which are under completion in her area. She also presented the details of schemes for the next year.-NNI

KARACHI: A political party worker was gunned down by unidentified gunmen in Orangi Town area here on Thursday, police said. According to the details, some unidentified gunmen opened fire and seriously injured Sadaqat who was riding on his motorbike in Orangi Town 11/5. Sadaqat was taken to the Abbasi Shaheed Hospital where he succumbed to his injuries. The family of the victim created anarchy at the hospital and started vandalizing hospital property. Shortly after the incident, police arrived at the hospital and controlled the situation. Police have registered a case and started investigation. NNI

Sindh police seeks Rs10bn raise in budget Kashif Munir KARACHI: In view of the deteriorating law and situation in the province, the Sindh police has demanded an increase of Rs10 billion in the coming budget. Apart from this, the police department gas also asked for setting up two new forensic laboratories and substantial increase in equipment and manpower to cope up with the deteriorating law and order situation. Further, it is learnt, the department has also demanded incentive in salaries of the police personnel. In 2010-11 budget, Rs29.6 billion were allocated to the Sindh Police and with the demanded increase in budget, it would be a substantial raise, if approved. AIG Finance Sindh Police Dost Ali Baloch has said that the two new forensic labs, if approved, would be set up at Mirpurkhas and Sukkur. Besides, the money would be spent on purchase of walk through gates, reinforcement of bomb disposal squad and CCTV cameras, it is learnt.

‘1029 basic health units working in Sindh’ Staff Reporter KARACHI: Provincial Minister for Information Sharjeel Memon has said that the present democratic government is serious to provide basic health facilities to people. Under peoples primary health programme, 1029 basic health units are functioning all over the province with all necessary facilities. He was talking to a delegation of Pakistan Peoples Paramedical staff here in his office.

UNHCR, UNESCO agreement for support services ISLAMABAD: The United Nations refugee agency UNHCR and the UN Educational, Scientific and Cultural Organization (UNESCO) Thursday signed an agreement for enhanced collaboration to support mainstreaming services for Afghans in Pakistan in joint programs under One UN in Pakistan. The collaboration between the two UN agencies, as set under the new partnership specifies that UNESCO will collaborate for the inclusion of rights and services for Afghans in Pakistan and the internally displaced people (IDPs) in areas of school education, literacy, non-formal education, special (inclusive) education, natural science, culture, communication and information, and other social service sectors in the agency's broad mandates.-NNI

Pak, Iran vow to boost trade and investment Staff Correspondent ISLAMABAD: A highpowered delegation of Iranian Province Khorasan Razvi, led by Governor Dr. Mahmoud Salahi visited Islamabad Chamber of Commerce and Industry (ICCI). Iranian Ambassador to Pakistan, Mashallah Shakari also accompanied the delegation. Muslim Ummah must be united to overcome the challenges of world powers. There were centuriesold civilization, historical and cultural relations between Pakistan and Iran, both countries should enhance further cooperation in trade industries and other sectors, Dr. Mahmoud Salahi, Governor of Iranian

Province Khorasan Razvi has said, addressing the business community at ICCI. Dr Salahi expressed hope that industrial exchange program between Punjab and Khorasan would help to promote trade relations of two provinces. He said that Iran was willing to import rice, meat, fruits and many other items from Pakistan, adding that, Iran and Punjab government were going to set up slaughter houses in Lahore. He said that Iran has made tremendous progress in various sectors and there was a vast scope of cooperation in energy sector, elaborating the point, Dr. Salahi said that Khorasan could also help Pakistan in

producing electricity from water, coal, air and solar options. Speaking on the occasion, Mashallah Shakari, Iranian Ambassador to Pakistan said that Pakistani investors should benefit from the expertise of Iranian companies. He said that Iran and Pakistan have great potential for enhancing economic and cultural cooperation amongst the business communities of both countries. The Ambassador said that exchange of business delegations could pave the way for exploring areas of common interest. Iran would provide technical and all other kinds of assistance to Pakistan to overcome energy crisis, he added.

Turkish govt help for Pak edu lauded Staff Reporter KARACHI: Provincial Senior Minister for Education and Literacy, Pir Mazharul Haq has said that the Turkish Government is playing a significant role in the education field throughout the province; especially flood affected areas where educational institutions are being rehabilitated with support and assistance provided to the Sindh Government for infrastructure. This he observed while talking to a four-member delegation of Pak-Turk International schools, colleges led by Regional director Ali Karan which called on him at his office here Thursday. The other members of the delegation included Mesut Kacmaz, Principal, Dr. Shaukat Ali Vice Principal, Hussain Country Manger

Turkish Airlines, Siraj, Abdul Rehman an student of Pak Turk School Adnan Khan of Swat Khyber Pakhtoonkhwa who obtained first position with Gold Medal in Project Competition of 40 countries in Georgia in May 2011 were also present. Mazharul Haq lauded the towering performance of Pak Turk and Adnan Khan, congratulated them, said that present elected Government is giving special thrust to rural education especially girls education and taken concrete steps to provide quality education in far flung areas. President of Pakistan Asif Ali Zardari is desirous to modernise the education system in Sindh in this regard the Prime Minister of Pakistan Syed Yousuf Raza Gillani gave the education policy to improve

the standard of the education and status of the teachers which help the implement the true policies in the education sector to achievedesired goals, he said. He further said that Turkish Government, and other donor agencies had taken reform steps to build up the education standard for which 115 billion are being provided besides European Union, World Bank, US Aid and others have signed MoU's in the Education sector to provide infrastructure. in Sujawal. Pir Mazharul Haq gave away the shield to Student Adnan Khan for his outstanding performance while visiting Pak-Turk delegation also giving away the Certificate to the Senior Education Minister for promotion of the Education in Sindh and memento of the organization.

BFAME winners receive warm welcome on arrival KARACHI: Pakistan team which won the 16th Bridge Federation of Asia and Middle East (BFAME) competition after 12 years was accorded warm reception on their return from Chennai (India) here Thursday after beating arch-rival India in the final on Wednesday. Pakistan defeated defending champion India 127-105 in 6-nation contest to regain the title and also qualified for the Bermuda Bowl - World Championship being staged in the Netherlands in October. Members of the national team and Non Playing Captain Tariq Rasheed Khan were profusely garlanded when they emerged from the Quaid- e-Azam International Airport Terminal building raising the "Vinodini Goenka Trophy". -APP

'Engro Rupiya Certificates' launches second issuance TFD Report KARACHI: Engro Corporation Limited has announced the launch of the second issue of the Engro Rupiya Certificates savings option, which provides investors with an unprecedented 14.5 per cent rate of return. This issuance follows the successful launch of the certificates in October 2010. According to a press release issued here on Thursday, that issuances comes after the successful launch of the certificates in October 2010, when subscriptions for the Engro Rupiya Certificates reached Rs4 billion, with the target having been met before the announced IPO closing period, with 80% of the amount having come from individual investors. The second release of Engro Rupiya Certificates also offers profit payments twice in a year for a minimum amount of PKR 25,000, invested for a period of 3 years.

NO.SO.III(S&GAD) 3-3/2011 GOVERNMENT OF SINDH SERVICES GENERAL ADMINISTRATION & COORDINATION DEPARTMENT Karachi. Dated the 31st December, 2010 To, I ) Dr. Urusa Baloch, Dermatologist (BS- 1 8), C/o Dr. Yousuf Al-Bedawi Hospital Director, Prince Abdulaziz Bin Musaad Hospital, Arar City, North Zone, Kingdom Of Saudi Arabin. C/O High Commissioner of Pakistan at Kingdom of Saudi Arabia. 2) Dr. Urusa Baloch, Flat No.D-20, Jason luxury Apartment, Clifton, Block-3, Clifton, Karachi. SUBJECT: SHOW CAUSE NOTICE Whereas you are alleged to have committed the following acts of misconduct within the meaning of section 3 of the Removal from Service (Special Powers) Sindh Ordinance 2000:You were granted deputation upto 05.07.2010 to work with the Ministry of Health, Kingdom of Saudi Arabia vide this department's notification dated 15th June, 2010 and that you were due to join Health Department, on 06th July 2010, but you failed to do so, as such you are absent from Government duty since 06th July 2010 todate. 2. Whereas sufficient documentary evidence is available on the record against you and I, CHIEF SECRETARY, SINDH being your appointing authority am satisfied that there is no need of holding an enquiry. 3. Now, therefore, in exercise of the powers conferred on me by sub-Section (4) of section 5 of the Ordinance, I do hereby. dispense with the enquiry and call upon you to Show Cause within 14 days of receipt of this notice as to why action should not be taken against you under the said ordinance, failing which, ex-parte decision will be taken against you. 4. You may also intimate whether you would like to be heard in person.

INF-KRY.1997/11

CHIEF SECRETARY/ COMPETENT AUTHORITY


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Friday, June 3, 2011

Oil slips from earlier gain due to inventory jump US crude inventories jump; analysts had forecast a drop LONDON: Crude oil prices slipped in choppy trading on Thursday, reversing earlier gains, due to an unexpected jump in crude oil inventories in the United States. Remarks from some OPEC oil producers, including Saudi Arabia, that the group might increase the official output ceiling also weighed oil prices. By 1543 GMT, US crude futures fell $1.43 to $98.86 a barrel, slipping below a 100 day moving average. Brent crude fell 41 cents to $114.12 a barrel, having risen more than $1 earlier. US crude oil inventories jumped by 2.9 million barrels in the week to May 27, government data from the Energy Information Administration (EIA) showed. That was mostly in line with figures from the industry group American Petroleum Institute

Sterling extends losses against euro LONDON: Sterling fell to a four-week low against a broadly stronger euro on Thursday, hurt by dovish comments from a UK policymaker which added weight to the view domestic interest rates will stay on hold for some time. The euro rose to 88.53 pence, past the May 6 high of 88.47 pence, as the pound extended falls suffered the previous day after surprisingly weak manufacturing data. The euro was also bolstered by Greece agreeing to new measures to cut its deficit. Euro/sterling was last up 0.8 per cent at 88.40 pence. The next target is 88.78 pence, the 61.8 per cent retracement of the fall from 90.43 pence in early May to the late May low of 86.11 pence. The single currency could further extend its gains if it closes above its 55day moving average at around 87.91 pence. Sterling was flat against a weak dollar at $1.6327, erasing gains made earlier in the session after a purchasing managers' survey showed UK construction activity grew more than expected last month. Stops are cited above $1.6440. Much of sterling's weakness was a hangover from Wednesday's PMI survey revealing the slowest manufacturing growth since September last year. Focus now turns to PMI data from the services' sector which makes up around 70 per cent of the UK economy - to gauge the resilience of economic growth. A string of poor data has added to the market view the BoE will hold rates at 0.5 per cent until at least the end of 2011. This was reinforced by Bank of England policymaker Paul Fisher who said in a newspaper interview he would consider voting for another round of quantitative easing if the economy worsened. -Reuters

(API), which on Tuesday showed a 3.5 million barrel increase for the same week. The increase was in contrast to analysts' forecast of a 1.3 million barrel drop ahead of the release of the data. The EIA figure also showed crude oil stocks in the United States, the world's secondlargest energy consumer, averaged 371.34 million barrels in May, the highest level since at least 2006. "The numbers confirm the bearish API report," said Gene McGillian, analyst with Tradition Energy in Connecticut. But he added a weak dollar could continue to support oil prices. "The market is still stuck between $95 and $105 a barrel. We will soon go back to watching the financials and as long as the dollar is under pressure,

this crude rally will remain in place," he said. The Organisation of Petroleum Exporting Countries (OPEC) will meet next week to review its output policy. Ali al-Naimi, the oil minister of the most influential OPEC producer Saudi Arabia, said OPEC is ready to raise production to meet any increased demand. Earlier on Thursday an OPEC delegate said the group might consider raising output by up to 1.5 million barrels per day. An OPEC target rise of 1 million bpd would result in only a small increase in the amount of oil coming to the market. That is because part of the rise would simply absorb above-target supply that some members of the group in OPEC are already pumping, the OPEC delegate said. -Reuters

Asian currencies

Won, ringgit down as investors cut risk SINGAPORE: The South Korean won and the Malaysian ringgit faltered on Thursday as investors reduced risky positions, pricing in expectations of weaker key US job data and on worries about a sustained soft patch in the world's top economy. Renewed worries about Greece, after Moody's Investors Service cut the debtridden country's credit rating, also prompted investors to cover dollar-short positions against emerging Asian currencies. Investors are watching out for US jobs data for May due on Friday, after other economic numbers released this week point to continued weakness in the world's biggest economy. The won snapped a five-session rise, shedding 0.5 per cent against the dollar as investors covered dollar-short positions and on importers' dollar

demand. But the South Korean currency recovered some losses with some recovers in local stocks and exporters also bought it for settlements. The won weakened to as soft as 1,083.5 per dollar, the 50 per cent Fibonacci level of its weakening trend in May. Exporters regarded the 1,082 as good level to buy the won, while importers purchased dollar when the local currency strengthened past 1,080, dealers said. The ringgit weakened past a 55-day moving average as interbank speculators covered dollar-short positions. The Malaysian currency weakened to as soft as 3.0275 per dollar, breaking through the 55-day moving average of 3.0149. It recovered some losses on the euro's rebound, but it still stays weaker than the moving average. -Reuters

Yuan ends down, cbank lowers mid-point SHANGHAI: The yuan ended down slightly against the dollar on Thursday after the People's Bank of China set a weaker mid-point following five days of record high fixings, reflecting its intention to let the yuan take a breather. But the yuan traded slightly firmer than the mid-point on expectations the central bank may continue to use the exchange rate to fight inflation. But dealers said a momentary retreat in the yuan from record highs does not affect its longer-term outlook as May consumer inflation is likely to hit a peak. Spot yuan closed at 6.4828 versus the dollar and traded in

a narrow range between 6.4824 and 6.4849, weaker than Wednesday's close of 6.4780. It has hit seven record highs since May 24. Before trade began, the PBOC set the yuan's daily mid-point at 6.4886 against the dollar, from Wednesday's 6.4837. The Chinese currency has now appreciated 5.30 per cent since it was depegged from the dollar in June 2010, and 1.62 per cent since the start of this year. Offshore, one-year non-deliverable forwards (NDFs) were bid at 6.3650, little changed from Wednesday's close of 6.3670. Their implied yuan appreciation in a year's time was 1.94 per cent. -Reuters

Copper falls to week low on US jobless data LONDON: Copper fell to its lowest in a week on Thursday after US weekly jobless claims fell less than expected, heightening concerns about the world's biggest economy and outweighing a normally supportive weak dollar. Benchmark copper on the London Metal Exchange finished at $8,920 a tonne, from $9,102 a tonne at the close on Wednesday. Trading volumes were light due to a religious holiday that closed offices in most European countries. The metal used in power and construction hit a session low of $8,905, its lowest in about a week. New US claims for unemployment benefits fell last week, but not enough to assuage fears the labour market recovery has taken a step back. The figures do not bode well

for Friday's US non-farm payrolls data. The small decline in claims fits in with other data ranging from consumer spending to manufacturing, indicating the economy has adopted a decisively weak tone at a time when the Federal Reserve is scheduled to wrap up its $600 billion government bond-buying programme at the end of the month. Data released on Wednesday showed US companies hired far fewer workers than expected in May, and output in the manufacturing sector slowed to its lowest level since 2009. Inventories of copper on the London Metal Exchange rose 2,650 tonnes to 473,500 tonnes, the highest in a year, data showed on Thursday. Inventories have been rising steadily since December,

adding to nagging worries about lower imports into top consumer China, which is digging into its stockpiles. Summer is a seasonally weak period for metals consumption, and a strong rebound in Chinese imports is unlikely in the next two months, but it could pick up at the end of the third quarter and into the fourth quarter, Major said. Aluminium, untraded at the close, was last bid at $2,616 from a last bid at $2,667 on Wednesday. Zinc, used in galvanizing steel, closed at $2,220 from $2,257. Battery material lead was untraded at the close, and was last bid at $2,404 from $2,500 while tin closed at $26,600 from $27,595 at Wednesday's close. Nickel was $22,550 from $23,250. -Reuters

Sugar surges on fund buying, coffee rises LONDON: Sugar futures surged more than 3 per cent on fund buying on Thursday, reversing Wednesday's losses triggered by poor US economic data, while ICE coffee rose in choppy dealings buoyed by tight supplies of high-quality beans. Cocoa eased, pressured by a resumption of supplies from top producer Ivory Coast after the end of a violent power struggle following November's disputed presidential election. In sugar, fund buying was the main impetus for the surge. "The funds who sold yesterday are bidding up the market today," said one veteran London-based sugar futures dealer. Physical white sugar demand before Ramadan in August had helped to drive up white sugar futures prices, which had outperformed raws, dealers said. Liffe August white sugar jumped around 3.5 per cent to a six-week high of $688.10 per tonne before losing a little ground to stand at $687.2 per tonne, up $22.60 or 3.4 per cent, in moderate volume of 3,448 lots at 1452 GMT. ICE July raw sugar futures were up 0.9 cent or 4 per cent at 23.36 cents a lb, just below a session peak of 23.46 cents a lb. ICE coffee futures prices fell after shaving around 8 cents off benchmark July values on Wednesday when US data indicated economic growth may be slowing more than expected. ICE July arabica coffee was up 1.9 cents or 0.7 per cent at $2.5785 per lb at 1454 GMT. Liffe July robustas fell $86 or 3.4 per cent to $2,476 a tonne. Cocoa prices eased, stuck inside their recent range, with the resumption of Ivorian exports weighing. ICE July cocoa was off $32 or 1.1 per cent at $2,921 a tonne in light volume of 4,599 lots. July cocoa on Liffe stood 11 pounds or 0.6 per cent lower at 1,803 pounds a tonne. Reuters

Tokyo rubber at 1-wk low on weak oil BANGKOK: Tokyo rubber futures fell to a one-week low on Thursday due to weaker oil prices and a stronger Japanese yen, but prices were still supported by limited supply in producing countries, dealers said. The benchmark rubber contract on the Tokyo Commodity Exchange fell 6.4 yen to settle at 381.9 yen ($4.720)per kg. It fell as low as 376.4 yen, the lowest since May 25. The most active Shanghai rubber contract for September delivery fell 135 yuan to finish at 32,450 yuan ($5,008.658)per tonne. "There were so many negative factors today that dragged TOCOM prices down, the oil prices and the firmer yen, but I think it's a short-term situation," one dealer said. However, dealers said TOCOM rubber was still supported by low supply from the big producing countries, which helped the benchmark finish above 380 yen, a major support level. -Reuters

Indian sugar falls for 2nd day MUMBAI: India's sugar fell for a second straight day on Thursday due to weak demand from retailers and higher stocks, and analysts expect prices to remain mostly subdued in June. In Kolhapur, a key market in top producer Maharashtra, the most traded S-variety edged down by 0.43 per cent to 2,532 rupees ($56.47) per 100 kg. The most active sugar for June delivery on National Commodity and Derivatives Exchange (NCDEX) was down 0.08 per cent to 2,532 rupees per 100 kg at 2:55 pm. "The demand is very, very weak. At the same time, mills have large stocks. Prices are expected to be lower in June when demand is typically weak," said Ashwini Bansod, a senior analyst at MF Global Commodities India. -Reuters

Dollar drops as economy weighs; euro hits 1-mth high USD struggles on weak US data, payrolls data eyed NEW YORK: The euro hit a one-month high against the dollar on Thursday as Greece agreed to new measures to cut its deficit, mitigating fears over its debt crisis and making investors shift their focus to the US economy. While new US claims for unemployment benefits fell by 6,000 last week to a seasonally adjusted 422,000, the labor market by most accounts remains weak. "Jobless claims were not horrible, but it is still above 400,000, which is certainly a negative," said Camilla Sutton, chief currency strategist at Scotia Capital in Toronto. "There is a lot of hesitancy ahead of tomorrow's nonfarm payrolls report." "Every indication we have had so far points to a slightly softer labor market in the US" Focus is now on the US Labor

Department's nonfarm payrolls report on Friday, a key monthly driver of financial markets given jobs growth is one of the Federal Reserve's two mandates. US nonfarm payrolls likely increased by 150,000 in May, according to a Reuters poll. The euro was last up 1 per cent at $1.4448, having risen as high as $1.4487 on trading platform EBS. Greece has agreed to 6.4 billion euros in new measures to cut its 2011 budget deficit and aims to wrap up bailout talks with international inspectors by Friday, a senior government official told Reuters on Thursday. "The euro is rallying as comfort over a near-term outcome for Greece improves and the market refocuses on problems in the US economy," Scotia's Sutton said. "A key psychological level is $1.45."

"The euro and dollar are in an ugly dog contest and the euro is winning right now." Traders said a major Asian sovereign account was a seller around the highs with further stops highlighted on a break of $1.4500, while option barriers rolling off this month are layered up to $1.4700. The euro was last trading up 0.7 per cent at 1.2146 francs , pulling away from its record low of 1.2053 francs struck earlier on Thursday. The US dollar, however, was under pressure against the safehaven Swiss franc and was last down 0.1 per cent at 0.8408, above a record low of 0.8383 struck on Wednesday. The dollar index was down 0.2 per cent at 74.520, having fallen to a one-month low of 74.29. The dollar slipped 0.2 per cent to 80.78 yen. -Reuters

Indian rupee recovers to end steady

Aussie flat despite upbeat data; NZD lags

MUMBAI: The Indian rupee recouped intraday losses to end nearly steady on Thursday, propelled by the euro's surge in late trade and strong corporate dollar inflows, but dollar demand from oil companies and weak local shares kept it under pressure. The partially convertible rupee ended at 44.83/84 per dollar, little changed from Wednesday's close of 44.84/85. It touched an intraday low of 44.98. "It's going to be difficult for the rupee to break the 44.80 level," said Ashtosh Raina, head of forex trading at HDFC Bank. "Rupee is currently being driven largely by overseas markets. So it is tough call." Traders said the rupee's direction on Friday would largely

be driven by overnight movements in the euro and US equities. The one-month onshore forward premium was at 22.75 points versus 24 last close. The three-month was at 71.75 points versus 74 and the one-year was at 262 points versus 268.5. The one-month offshore nondeliverable forward contracts were quoted at 45.01, weaker than the onshore spot rate. In the currency futures market, the most traded near-month dollar-rupee contracts on the National Stock Exchange, the MCX-SX and the United Stock Exchange were at 45.0150, 45.0175, 45.0200 respectively. Total volume was $8.02 billion. Reuters

NY cotton climbs as Texas drought bites NEW YORK: US cotton futures finished at a fresh fourweek high Wednesday as a severe drought in the key growing state of Texas easily wiped out early losses from poor US economic data, brokers said. Forecaster Telvent DTN said Texas, the biggest cottongrowing area in United States, will remain hot and dry through Sunday. The benchmark December cotton futures on ICE Futures US went up 1.77 cents to finish at $1.3727

per lb, dealing from $1.3194 to $1.3848. It was the highest settlement for the third-position cotton contract since May 4. Spot July cotton climbed 2.30 cents to conclude at $1.6097 per lb. Total volume traded reached almost 26,000 lots, almost 50 per cent above the 30-day norm, Thomson Reuters preliminary data showed. A weekly report by the Texas Agri Life extension service said most of the state continued to suffer from exceptional drought. -Reuters

Palm oil climbs on stronger demand hopes KUALA LUMPUR: Malaysian palm oil futures rose 1.3 per cent on Thursday as traders await signs of Asian and Middle Eastern countries stockpiling ahead of the Muslim holy month of Ramadan in August. Stronger demand could help palm oil eventually claw back a loss of 11 per cent notched so far this year, which has seen production in Malaysia and Indonesia stage a strong rebound after two years of weak yields, traders said. The benchmark August crude palm oil contract on the Bursa Malaysia Derivatives Exchange

rose 43 ringgit to 3,403 ringgit ($1,130) a tonne. On Monday, the contract hit a more than twomonth high. Overall traded volume stood at 25,067 lots of 25 tonnes each. Malaysian palm oil stocks probably rose to 1.7 million-1.8 million tonnes last month as favourable weather aids output, traders said. Technicals were negative. Palm oil would extend its loss to 3,307 ringgit per tonne as indicated by a Fibonacci retracement analysis. US soyoil for July delivery and the most-active January 2012 soyoil contract on Dalian edged higher. -Reuters

WELLINGTON/SYDNEY: The Australian dollar was little changed on Thursday as it failed to hold gains after a sharp rebound in retail sales prompted markets to see an increased chance of a rate hike in the near term, while the New Zealand dollar slipped. The Aussie gained a third of a cent and reached a session high of $1.0665 after a surprisingly sharp rebound in retail sales in April. But it later gave back most of the gains when macro-funds sold into the rally with stops above $1.0660, according to traders. The Aussie was also dragged lower by selling flows in the euro cross rate, they added. The Australian dollar was last hovering around $1.0610, virtually unchanged from its New York close, but off a one-week low of $1.0594 struck overnight after a sell-off in risky assets. Support for the Aussie is now seen from $1.0561 with resistance at $1.0690, ahead of a strong barrier at Wednesday's high of $1.0757. Interbank futures initially dipped before paring losses. The Reserve Bank of Australia is still largely expected to keep rates at 4.75 per cent at its June policy meeting next week with markets implying just a 12 per cent chance of a 25bp hike in June. Other data out on Thursday showed the country's trade surplus shrank slightly to A$1.60 billion, though still at a strong level. The NZ dollar spent the session in the shadow of the more strongly-performing Aussie, as it retreated to around $0.8115 from its late New York level around $0.8144, as investors sought safe havens and ditched risky positions. The kiwi, which hit a 26-year high of $0.8264 on Tuesday, is seen taking its direction from broader global markets. Near term support for the kiwi seen at $0.8070 with $0.8190/00 seen capping the topside. Consequently the Aussie outperformed the kiwi, up 0.2 per cent on the day to settle around NZ$1.3050, off a four-month low of NZ$1.2905 on Tuesday. -Reuters

Gold eases but US data worries support LONDON: Gold eased but held in sight of four-week highs on Thursday, supported by concern about the outlook for US growth and the European debt crisis. Data this week has painted a picture of a US economy that may be running out of steam as companies hired fewer workers than expected, factory activity hit a near-two year low, auto sales slowed and pricier gasoline ate into retailers' sales. The dollar has fallen to its lowest in a month against a basket of currencies and although there has been some respite to the concern over the euro-zone's finances, gold has managed to gain more than 2 per cent in two weeks.

Spot gold eased 0.2 per cent to $1,536.85 an ounce by 1418 GMT, having hit $1,550.14 on Wednesday, its highest since May 3. US gold was down 0.3 per cent at $1,537.70, while euro-priced gold fell by 1.1 per cent on the day to 1,063.82 euros an ounce. "Right now, the flows are perhaps being tempered a little bit by seasonal weakness, but it bodes well that at the start of May, when prices dipped below $1,500 that physical interest out of Asia did materialise, not as aggressively as we'd seen before, but that interest is still present and it's still very healthy," said Suki Cooper, Barclays Capital analyst. "Thus the inflows that we've seen over the last couple of

week's haven't been hefty, but they have been supported on the back of factors like the weaker-than-expected macro data, the resurfacing of the sovereign debt issues and inflation fears are still ticking away in the background." In ETF flows, gold holdings rose for the first time since May 26, up about 70,000 ounces to 64.542 million ounces, bringing the net change in holdings for the year to -0.73 per cent, from -0.66 per cent a week ago. Palladium was last up 1 per cent at $773.72 an ounce, having fallen by nearly 1 per cent on Wednesday, while platinum was flat at $1,814.74, having shed 0.7 per cent in the previous session. -Reuters


4

Friday, June 3, 2011

The Financial Daily International

White House prepares initial Afghan drawdown

Vol 4, Issue 211

Publisher & Editor-in-Chief: Amir A. Ashary Editor: Shakil H. Jafri Executive Editor: Manzar Naqvi Honorary Advisory Board Haseeb Khan, FCA

S. Muneer Hussain Rizvi

Asim Abbas Ashary, CPA

Khurram Shehzad, CFA

Akhtar M. Zaidi, FCA

Prof. Zakaria Sajid (KU)

Dr. A. Hadi Shahid, FCA

Zahid Bukhari SVP HBL (retd)

Muhammad Arif

Ismat Sabir Head office

111-C, Jami Commercial Street 11, Phase VII, DHA Karachi Telephone: 92-21-35311893-6 Fax: 92-21-35388428 URL: www.thefinancialdaily.com Email Address: editor@thefinancialdaily.com

Lahore office 24- Peshawar Block, Fortress Stadium, Lahore Telephone: 92-42-6675595 Fax: 92-42-6664349 Email Address: editor@thefinancialdaily.com

Don’t hope against hope All is set for the new federal budget to be announced today. One of the biggest concerns is that as against an expected revenue of Rs1.9 trillion the consolidated outlay has been projected at Rs3.8 trillion or a short fall equivalent to the size of revenue. One could only wonder how the economic managers plan to bridge this gap. Pakistan faces hostile lenders, in the aftermath of killing of Osama bin Laden in Pakistan, with the pressure that all sorts of aid, grants and even lending should be suspended. The lender of last resort wants Pakistan to accelerate its economic growth rate mainly to improve tax to GDP ratio to 4.5 per cent for the next fiscal year, whereas the deficit is likely to touch 6.5 per cent. This is a mammoth target and all probability achieving this seems almost impossible to begin with. The revenue collection is directly linked with the economic activities in the country. Keeping in view the extensive and intensive load shedding of electricity and gas even if the country succeed in achieving 2.5 per cent GDP growth rate, it would be outstanding performance. While the industries are running at nearly 50 per cent capacity utilization, revenue collection is also likely to remain disappointingly low. The suggestions that new taxes should be imposed and/or rate of existing taxes be increased are not likely to help in mobilising extra revenue. The government aims at revitalising the industrial sector by curtailing energy shortages and high interest rates that are presently discouraging the private sector from investing, which sounds a hoax call. The prevailing energy crisis is not because of any shortfall in supplies but due to gross mismanagement and pilferage. The circular debt is the outcome of failure to contain theft and not because of any failure to recover the full cost. The situation has gone from bad to worse and inching towards total collapse. Any increase in electricity and gas tariffs is of no consequence unless theft is contained and further hike in tariffs would only increase the thefts. Tax to GDP ratio can only be improved when all segments of the society pay tax on their income. As along as the elites of this country refuse to pay tax and wish to penalize the commoners the situation just can't improve. The issue of taxing income from agriculture is still lingering on because federation terms it a provincial subject, where the assemblies are dominated by the feudal lords. Now the capacity of urban population to pay taxes has almost exhausted. As long as we have the begging bowel in our hands we may get something but the cost will be too high. The sovereignty of this country is at stake and so are our nuclear assets.

Disclaimer:

All reports and recommendations have been prepared for your information only. Summary and Analysis are not recommendation to buy or sell. This information should only be used by investors who are aware of the risk inherent in securities trading. The facts, information, data, indicators and charts presented have been obtained from sources believed to be reliable, but their accuracy and completeness cannot be guaranteed. The Financial Daily International and its employees are not responsible for any loss arising from use of these reports and recommendations.

P

resident Barack Obama, with Osama bin Laden dead and a fiscal crisis on his hands at home, looks set to announce an initial US troop withdrawal from the costly Afghan war that could be larger than previously expected. Some current and former officials say Obama could easily announce a pullout of at least 10,000 troops over the next year as the administration seeks to capitalize on gains against the Taliban in the south and the Navy SEAL raid last month that killed the al Qaeda leader in Pakistan. At the start of this year, with violence raging after nearly a decade of war, a minimal pullout of less than 5,000 troops had been anticipated. Obama has made no final decision and, as far as is known, has received no formal recommendations from the Pentagon about how many soldiers should be pulled starting in July from the 100,000-strong US force in Afghanistan. General David Petraeus, the commander of US and NATO troops in Afghanistan, is expected to present his recommendations in the next week or so to Defense Secretary Robert Gates. Obama, who sent 30,000 extra troops to Afghanistan after a reassessment of the US war strategy in late 2009, will confer with his inner circle and inform Americans in mid- to late June of how he plans to begin withdrawing US forces. As the West looks to leave, Afghan forces are slated to slowly take over from foreign forces by the end of 2014. Senior US officials declined to speculate about the size of the drawdown. Petraeus, the politically savvy general who Obama has tapped to be his next CIA boss, is holding his cards close to his chest as he seeks to avoid leaks that could damage his standing with the White House. "The president has said he wants the withdrawal to start in July and to be meaningful," one senior defense official said. "Those are the discussions that have to happen." Anthony Cordesman, a former defense official and

military expert at the Center for Strategic and International Studies, said a drawdown of some 15,000 soldiers over the next year would balance political and military concerns without endangering the overall counter-insurgency campaign. "It shows you're serious about reductions. It's the first step in this transition process to 2014," he said. White House discussions on the Afghan war, a potential drag for Obama as he eyes his 2012 re-election bid, are tilting subtly toward the so-called counter-terrorism model favored by Vice President Joe Biden, which relies on targeted raids rather than a heavy footprint of regular combat troops. The perceived success of special forces raids in Afghanistan over the past year, together with the strike on bin Laden, will strengthen those arguing for a faster drawdown, officials say. The White House may also be more likely to favor a faster withdrawal as Obama grapples with pressure to cut spending and battles Republicans to raise the limit on US borrowing. Hostility is mounting in both parties toward the war, which now costs over $110 billion a year. Last week, the House of Representatives narrowly defeated an amendment that would have required Obama to intensify planning for a withdrawal. PEACE TALKS KEY The Pentagon, which under Petraeus has advocated a more troop-heavy counter-insurgency approach similar to what commanders say turned around the war in Iraq, and some NATO partners will likely warn the White House against any moves that might jeopardize hardwon gains against the Taliban. "I suspect the NATO command in Afghanistan will want to proceed much more cautiously than the White House," said Andrew Exum, a former advisor to US Central Command who is a fellow at the Center for a New American Security, a Washington think tank seen as close to the Obama administration. Some parts of southern Afghanistan are far more

secure than they were before Obama's surge, but militants have spread out across the country and fighting has been heavy along the eastern border with Pakistan. The Afghan state remains weak and corrupt and many Afghans have seen few changes from a decade of foreign assistance. If Obama settles on a faster drawdown, he would likely send home a larger number of combat troops, perhaps including a full brigade combat team of up to 5,000 soldiers and other combat forces in addition to support troops. Ronald Neumann, a former US ambassador to Afghanistan, and others say that more important than the size of the initial American drawdown is the performance of local forces that are left behind. Afghanistan's army and police have grown rapidly but local forces struggle with desertion, paltry equipment, illiteracy and even insurgent infiltration. "You want to thin out in a measured way, where the price of failure for the Afghan forces is a bloody nose and not a broken head," he said. "The real question is, can you hand over some of the hard areas?" Some security experts warn the Taliban could regain the upper hand against an inexperienced local military by simply sitting out the drawdown, even a slow one. "The Taliban are not losing and we are not winning," said Kamran Bokhari, a South Asia expert at global intelligence firm STRATFOR. "The Taliban doesn't have to win battles; they just have to stay there, and they do that by walking away from certain battlefields." The success of the phased US drawdown may ultimately hinge on the West's ability to broker a peace deal between the Afghan government and the insurgent groups it is battling. The State Department is leading US efforts to move the peace initiative forward, but there are few signs that substantive talks with Taliban leaders, most of whom are believed to live in Pakistan, will soon get underway. Even optimists think a deal could be years in the making.-Reuters

Bond market rally may signal dark times to come A

torrent of terrible economic data has electrified the US Treasury market, driving the key 10-year note's yield lower and prompting investors to predict a further plunge. On Wednesday, the yield on the benchmark 10-year Treasury note fell below 3 per cent, the first time since December, on further evidence the economic recovery is losing momentum -and fast. That may be good news to investors who are long the Treasuries market, but for those who have money in stocks, commodities or other higher-risk assets, it could spell big trouble ahead. Neither is it good news for the large number of unemployed people in the United States whose hopes of a jobscreating recovery could be dashed. "It does look like we have a pretty weak rebound, even weaker than we had considered," said Jason Brady, a managing director for Thornburg Investment Management in Santa Fe, New Mexico. The 10-year Treasury bond is one of the most widely watched securities as it sets the benchmark for almost every other interest rate in the US economy, from the cost of financing corporate debt and mortgages to credit card balances. Many investors previously expected yields to rise -- even spike -with the end of the Federal Reserve's

latest bond buying program nearing and the economy experiencing a self-sustaining recovery. But weakening employment and troubled housing markets, unresolved debt problems in Europe and Japan's struggle to recover from the earthquake have money managers reversing course. Dan Fuss, vice chairman of $150 billion Loomis Sayles, said on Wednesday he isn't ruling out a 2.50 per cent yield on the 10-year Treasury note -- 44 basis points lower than the current 2.94 per cent at New York close on Wednesday. "I emphasize that I give it low odds, but it is possible," Fuss said. It was only on Feb. 9 that the 10year's yield peaked at 3.78 per cent. Bret Barker, portfolio manager at $120 billion TCW in Los Angeles, said he too isn't ruling out 2.50 per cent on the 10-year's yield, but sees a 2.75 per cent yield as more plausible. "We hit 2.50 per cent when Lehman Brothers collapsed and just before QE2 began with fears of a double-dip recession and deflation," he said. "We assign a low probability to both deflation and a double dip." The yield on the 10-year Treasury note hit an intraday low of 2.33 per cent on Oct. 8, 2010, ahead of the Fed's second round of bond purchases, also known as Quantitative Easing 2.

But that doesn't compare to levels following Lehman's implosion when the 10-year yield intraday low was 2.04 per cent on Dec. 18, 2008. Sean Simko, senior portfolio manager at SEI Investments in Oaks, Pennsylvania which oversees $179 billion in assets, said last Friday's nonfarm payrolls report could extend the bond market's moves. "If Friday's payroll number disappoints, we could have another leg down in yield. It could press below 2.90 per cent." US nonfarm payrolls likely increased by 150,000 in May, according to a Reuters poll, less than the 180,000 forecast before a report on Wednesday showed a sharp slowdown in private job growth last month. For more details please click on GROSS VERSUS GUNDLACH The bond market's explosive rally has even caught the world's biggest bond manager off guard. Since Bill Gross' $240 billion PIMCO Total Return fund took its initial "short" position in US government-related debt in March, Treasury yields have slid roughly 45 basis points. Gross is not short Treasuries, but swaps, according to a source familiar with the matter. Swaps are an agreement between two parties that receives a fixed rate of interest and pays a floating rate (three-month LIBOR).

When an investor "shorts" a swap, he agrees to pay a fixed rate in exchange for a floating rate, which is just the reverse. To put it simply, it's a bet yields will rise because the price of the swap will go down similar to a Treasury bond. Gross' fund is up 3.38 per cent so far this year, outperforming 52 per cent of his peers, according to Lipper as of May 31 data. Jeffrey Gundlach, chief executive of the $10 billion DoubleLine Capital, predicted in December that the US economy would not be able to handle a 10-year Treasury rate rise above its then current level of 3.50 per cent. "The economy, society and government are fueled by debt," Gundlach said, and cannot run successfully in a rising interest-rate environment. The chances yields could reach 2.5 per cent do seem slim. It took extraordinary circumstances to get them far below 3 per cent last time. But in a marketplace where most asset classes are suggesting some mix of optimism, the bond market's signals suggest more caution is needed. For now, Gundlach's fund is far outperforming Gross's. His DoubleLine Total Return, albeit in a different bond category to Total Return, is up 5.17 per cent so far this year and beating 85 per cent of its peers, according to Lipper as of May 31.-Reuters

Economy shadows Obama 2012 re-election hopes isappointing news on the US economy the issue most important to American voters has cast a cloud over President Barack Obama's hopes of re-election next year. Polls show the Democratic president favored to win the election, with his approval ratings buoyed by foreign policy successes, most notably the killing of Osama bin Laden. Obama has also benefited from the Republicans' failure so far to assemble a field of strong presidential candidates, which has given him a head start on building his campaign apparatus and raising millions of dollars to pay for it. But the economy remains the major downside for Obama's 2012 prospects, with US economic growth at a tepid 1.8 per cent annual rate in the first three months of 2011. Economists do not foresee a sharp decline in the country's financial fortunes before the November 2012 election, but a double-dip in home prices, the impact of high gasoline prices on consumers and a slowdown in regional manufacturing are raising concerns the current soft patch could become protracted. "The economy is always part and parcel of people's general psyche as they walk into the voting booth," said Neera Tanden, who was director of domestic policy for Obama's 2008

D

campaign against Republican challenger John McCain. Even an economic upturn, if it is not strong, might not be enough to boost the Democrats, said Tanden, who is now with the Center for American Progress in Washington. "What's tricky about a recovering economy -- if we're in a time when we don't have particularly high growth rates but we have good trends -- that's more of a jump ball in terms of how people are approaching the option." US private-sector payroll growth slowed sharply in May, falling to the lowest level in eight months. The closely watched monthly jobs report on Friday is likely to show unemployment declined slightly to 8.9 per cent in May from 9.0 per cent in April. "If economic growth slows, stays slow and unemployment is between 8.5 and 9 per cent next fall, I'd hate to be running for re-election under those circumstances," said William Galston of the Brookings Institution in Washington. "Candidates and campaigns make a difference. But the candidates and campaigns are structures erected on top of the fundamentals, and next year you don't require a very clear crystal ball to see that the economic fundamentals will be the most important fundamentals," he said.

Economists say the window of opportunity for Obama to significantly bring down the 9 per cent unemployment rate is narrowing. They say the economy must grow by at least 3 per cent each quarter to lower the jobless rate and the first quarter's tepid growth rate is expected to be followed by a 2.5 per cent to 3.3 per cent rate in the second quarter. WORRIES OVER DEFICIT Voters also are concerned about the US budget deficit, which is expected to hit $1.4 trillion this year and stay in the trillion-dollar range for several years. Experts do not expect an agreement from Washington on a long-term, comprehensive debt-reduction strategy before November 2012. Vice President Joe Biden is leading talks with lawmakers over spending cuts that could be folded into an agreement to raise the debt ceiling, the legal US borrowing limit, before Aug. 2, when Treasury Secretary Tim Geithner has said the government will run out of money to pay its bills. "The overarching theme is going to be the economy and probably linked to that is deficit reduction," Ipsos pollster Cliff Young said. However, the deficit issue could cut both ways. "The Republicans have a strong brand on budget cutting, and voters are

worried that it is going to go too far," said Ryan McConaghy, director of the economic program at the centrist Third Way think tank. "They are concerned the Republicans will slash and burn the budget, but they are not quite sold that Democrats will go far enough." A Democrat won what had been a Republican-held seat in the US House of Representatives in a special election in New York State last week, largely due to voter concerns about a Republican plan to scale back the government's Medicare health insurance for the elderly. Republicans in Congress who swept to power in 2010 on promises that they would steer the economy better than Obama and other Democrats have done since he took office in 2009 could also suffer if the financial picture is weak. "The challenge for Republicans is that people believe that they actually control part of the government now, and they no longer have the luxury of the free ride that they had in the first two years," Tanden said. However, voters typically hold the president more accountable for the health of the economy, which means that Obama will face more pressure to show that his policies can boost employment. And Obama's fortunes will set the tone for his party.-Reuters


5

Friday, June 3, 2011

South East Asian stocks

Mixed, global growth a concern KSE-100 Index Opening Closing Change % Change Turnover (mn)

12,264.06 12,179.81 84.25 0.69 87.31

LSE-25 Index Opening Closing Change % Change Turnover (mn)

3,272.51 3,249.36 23.15 0.71 2.54

ISE-10 Index Opening Closing Change % Change Turnover (mn)

2,797.29 2,765.44 31.85 1.14 0.11

Major Gainers

Symbol

Close

Change

NESTLE 3,370.78 ULEVER 5,035.78 IDYM 325.90 SAPL 150.01 NATF 83.05

40.02 39.92 6.08 4.51 3.95

Major Losers

Symbol

Close

Change

BATA ENGRO PAKT PPL APL

502.70 193.49 101.93 213.40 382.68

-5.83 -4 -3.82 -3.61 -3.53

Top 5 Volume Leaders

Symbol NML JSCL KASBB ATRL LOTPTA

Close Vol (mn) 59.83 7.80 1.68 139.78 14.96

5.53 5.14 4.04 3.85 3.31

Active Issues Plus Minus Unchanged

106 156 92

Sector Updates FERTILISER 000 tonnes

Urea Offtake (Jan to Feb 11) 807 Urea Offtake (Feb 11) 413 Urea Price (Rs/50 kg) 1,195 DAP Offtake (Jan to Feb 11) 128 DAP Offtake (Feb 11) 69 DAP Price (Rs/50 kg) 4,041

AUTOMOBILE ASSEMBLER PAK SUZUKI MOTOR Units Production (July 10 to Feb 11) 53,036 Sales (July 10 to Feb 11) 52,067 Production (Feb 11) 5,883 Sales (Feb 11) 6,954

INDUS MOTOR CO Production (July 10 to Feb 11) 33,832 Sales (July 10 to Feb 11) 32,991 Production (Feb 11) 4,754 Sales (Feb 11) 4,698

HONDA ATLAS CAR Production (July 10 to Feb 11) 10,834 Sales (July 10 to Feb 11) 10,444 Production (Feb 11) Sales (Feb 11)

1,555 1,665

DEWAN FAROOQ MOTORS Production (July 10 to Feb 11) Sales (July 10 to Feb 11) Production (Feb 11) Sales (Feb 11)

186 133 0 20

BANKING SECTOR Scheduled bank (Rs in mn) Deposit (March 25,11) 5,046,487 Advances (March 25,11) 3,118,444 Investments (March 25,11) 2,202,311 Spread (Feburay 11) 7.51%

OIL MARKETING CO (000 tons) MS (Jul 10 to Jan 11) MS (Jan 11) Kerosene (Jul 10 to Jan 11) Kerosene (Jan 11) JP (Jul 10 to Jan 11) JP (Jan 11) HSD (Jul 10 to Jan 11) HSD (Jan 11) LDO (Jul 10 to Jan 11)) LDO (Jan 11) Fuel Oil (Jul 10 to Jan 11) Fuel Oil (Jan 11) Others (Jul 10 to Jan 11) Others (Jan 11)

1,300 183 96 14 795 129 4,044 614 38 5 5,007 680 98 15

PRICES (Ex-Refinery)

Rs

MS (1 Apr 11) MS (1 Mar 11) MS % Chg Kerosene (1 Apr 11) Kerosene (1 Mar 11) Kerosene % Chg JP-1 (1 Apr 11) JP-1 (1 Mar 11) JP-1 % Chg HSD (1 Apr 11) HSD (1 Mar 11) HSD % Chg LDO (1 Apr 11) LDO (1 Mar 11) LDO % Chg Fuel Oil (1 Apr 11) Fuel Oil (1 Mar 11)

59.35 53.88 10.15% 68.95 63.31 8.91% 70.88 63.54 11.55% 75.02 66.53 12.76% 65.27 60.96 7.07% 56,777 53,252

Gulf stocks lower; Egypt slips on capital gain tax

Emerging realities push KSE into red Nawaz Ali KARACHI: Fall in international capital markets and uncertainties regarding the future of Capital Gains Tax (CGT) in the federal budget announcement on June 3 (Today) recalled the bears at the Karachi Stock Exchange (KSE) as it ended below 12,200 levels on Thursday. The benchmark KSE-100 index fell by 84 points to close at 12,179 points, KSE-30 index dropped 105 points to close at 11,784 points and KSE allshare index lost 53 points to close at 8,480 points. "Bearish activity was witnessed in overbought market after global capital and commodity markets plunge on weak US economic data", said Ahsan Mehanti, Director Arif

FTSE falls on US jobs data LONDON: Britain's top shares slid for a second day as worries over weak economic data drove investors from risky assets ahead of Friday's US non-farm payroll numbers. The FTSE 100 closed down 80.69 points, or 1.4 per cent, at 5,847.92, with volume 93 per cent of its 90-day average. The index fell one per cent in the previous session when a weak US ADP Employer services report and the US manufacturing data raised doubts about the pace of economic recovery. US non-farm payrolls will provide more clues about prospects for economic growth. "We are in risk-off mode following on from yesterday's losses. The US ADP report and US manufacturing data is still having an impact on today's market," said Joshua Raymond, market strategist at City Index. "Investors are removing positions just in case US non-farm payrolls are disappointing." See # 17 Page 11

Habib Investments. Limited foreign and institutional interest ahead of federal budget announcement and uncertainty over tax measures on corporate sector and capital markets played a catalyst role in bearish sentiment, he added. International stock markets fell on Thursday after disappointing US data added to suspicions that the global economy may be losing attraction, prompting traders to shun risk assets. Though, some mix activity was witnessed in the early moments of the session but then selling continued in oil and banking stocks on decline international stock markets and commodity prices pushing the index into the red zone. Bearish activities then continued throughout the remaining

part of the session, where apart from declining global markets investors were also worried over the fate of Capital Gains Tax (CGT) and taxation measures for the listed companies in the federal budget announcement. The index breached 12,200 levels and at about 3:08 PST touched its lowest level of the day of 12,168 points (-ve 95) and close the session near those levels. Zohaib Zaheer, analyst at Aba Ali Habib Securities said that looming budget-related uncertainties are the primary reason behind slow down of trading activity and once a clear picture emerges, the capital market is likely to act accordingly. During yesterday's session, profit taking was evident while peer pressure was seen in the See # 14 Page 11

Nikkei falls sharply on soft US data TOKYO: Japanese share prices fell sharply on Thursday, after disappointing US data added to suspicions that the global economy may be losing traction, prompting traders to shun risk assets. Tokyo shares were not helped by simmering political uncertainty after Japanese Prime Minister Naoto Kan survived a no-confidence vote by offering to resign once he has overcome the worst of the country's nuclear crisis. The Nikkei share average fell 1.7 per cent to 9,555.04, giving up a large portion of the gains accumulated over the past two sessions. The broader Topix dropped 1.6 per cent to 825.76. The fall was slightly smaller than the 2.2 per cent decline in the Dow Jones industrial average on Wednesday, which analysts say is natural given that Japanese shares underper-

formed during the rally in the US and in other developed countries' stocks in recent months. Wall Street shares made a dismal start to June, typically a weak month for the market, after both private payroll data and a key manufacturing survey missed estimates. The data, raised suspicions that the confluence of the end of the Federal Reserve's bond buying, tightening in many emerging economies and supply chain problems after Japan's earthquake could lead to a deeper slowdown than many had thought. With a string of data out of the United States undershooting market expectations, traders were reluctant to take risk, worrying that Friday's payroll data could disappoint again and cement such worries. See # 16 Page 11

Financials, energy lead losses

Hong Kong, China shares down HONG KONG: Shares in Hong Kong and China fell on Thursday, with Shanghai's main index slumping to a fourmonth low, on signs that the global economic recovery is losing steam and on fears of more policy tightening in China over the coming long weekend. The Hang Seng ended 1.6 per cent lower at 23,253.8 points, giving up almost all of its gains for the week, as investors moved out of financials and energy plays that carry the biggest weightings in the benchmark index. Turnover fell 15 per cent compared with the previous session, suggesting there was no rush for the exits despite global market weakness. China's Shanghai Composite fell 1.4 per cent to 2,705.2 points, its lowest level since January, but found support near the 2,700 level from which it had bounced earlier this week. Investors have been rattled this week by data showing a worldwide manufacturing slowdown and fresh weakness in the US labour and housing markets, which could spur further selling of riskier assets such as equities and commodities. Traders are also on guard for further policy tightening in China, where officials remain intent on curbing stubbornly

high inflation despite signs of a modest slowdown in economic growth. The People's Bank of China has picked holidays or weekends to surprise the market with tightening steps, such as hikes in interest rate or banks' reserve requirement ratio (RRR), since it launched its latest monetary tightening cycle last October. Hong Kong and mainland China markets are closed on Monday for holidays. "The growth and inflation mix is something of a worry, but only in the short term," said Elke Schoell-Jost, chief investment officer at BEA Union Asset Management in Hong Kong. Oil producers, which have enjoyed a bounce over the past week, slid on worries that demand would wane in a slowing global economy. CNOOC, which had seen a strong run-up over the past week, fell 2.2 per cent, while PetroChina shed 2.1 per cent. Newly listed commodities trading powerhouse Glencore International Plc tumbled 4 percent after the European Investment Bank said it had frozen all loans to the company over corporate governance concerns. SHANGHAI SLIPS Banks led China stocks broadly lower for the second day, partly over uncertainty

about the impact of plans to restructure local government debt reported by Reuters on Wednesday. Under those plans, some banks may be forced to write down some of their loans. Agricultural Bank of China, Hong Kong's top perfoming large-cap bank stock this year, fell 4.1 per cent on 2.6 times its average 30-day traded volume on profit-taking. It is still up 13 per cent this year compared with a one percent gain for the Hang Seng and a 3.6 per cent decline for the Shanghai Composite. The Shanghai financial sector index lost 3 per cent, with China's biggest lender, Industrial & Commercial Bank of China (ICBC) down 0.9 per cent. The other three of the socalled "Big Ffour" banks, Bank of China, China Construction Bank and the Agricultural Bank of China declined 1.2 per cent, 3.4 and 2.5 per cent respectively. "The fall in banks today probably shows investor nervousness about the way the bad debt situation is playing out," said Huatai Securities analyst Chen Huiqin. Losers outnumbered gainers on the benchmark. Analysts said bargain-hunters were picking up stocks that had fallen in recent sessions.-Reuters

US stocks late-morning

Nervous investors eye key levels NEW YORK: The S&P 500 traded at a six-week low, taking out its lowest point for May at 1,311.80, as nervous investors focused on key market levels to manage risk a day after stocks' worst one-day fall in nearly a year. Stocks traded choppily before heading lower after the open as data showing stubbornly high jobless claims and lackluster chain-store sales provided little reason to get back into the market after a string of weak economic data. Traders are honing in on 1,311 on the S&P 500, the index's low point in May, as near-term support. If that level is broken at the close it could open the window to a move back to the April low at 1,294, and the March lows near 12601250, the index's 200-day moving average. "It's a trigger point for managers, as people don't really know what's going on," said Robert Sluymer, managing director for US technical research at RBC Capital Markets in New York. "Support levels become very, very important, particularly heading into the back half of the day. "In the periods where you get a lot of stress in the market, people rely on technicals as a line in the sand where they're going to take risk off," he said. Bank stocks stabilized after falling on news that Goldman Sachs received a subpoena from New York prosecutors seeking information on the investment bank's role leading into the global financial crisis. Goldman's stock fell 1.4 per cent to $134.25. The Dow Jones industrial average dropped 86.20 points, or 0.70 percent, to 12,203.94. The Standard & Poor's 500 Index fell 7.46 points, or 0.57 per cent, to 1,307.09. The Nasdaq Composite Index lost 7.68 points, or 0.28 per cent, to 2,761.51. Initial claims for state unemployment benefits slipped 6,000 to a seasonally adjusted 422,000, while economists polled by Reuters forecast 415,000.-Reuters

Indian shares slip on banks, autos fall BANGALORE: Indian shares snapped a two-day rise on Thursday and fell 0.6 per cent as sluggish US economic data dented investor appetite for risk assets across world markets. Banks and automobiles were among the top losers as domestic concerns resurfaced about high inflation and rising interest rates putting a squeeze on corporate earnings. Analysts said expectations for good rainfall in the JuneSeptember monsoon season, which is vital for boosting farm output and rural incomes in India, helped limit the stocks fall. Consumer goods leader Hindustan Unilever, which depends on large rural markets for sales, bucked the trend and rose 3.3 per cent on a media report its UK-based parent was said to be on the block. "The market is showing resilience despite the fall in international markets," said Gajendra Nagpal, CEO of Unicon Financial.

"Shares were looking to correct after the recent rise, but they have not fallen as much as feared." The benchmark 30share BSE index closed down 0.62 per cent or 114.63 points at 18,494.18, with 21 components losing ground. It clawed back from early losses of 1.2 per cent after the weather office said monsoon rains were 12 per cent above normal in the week to June 1. The monsoon had hit the country's southern coast on May 29, three days ahead of its usual date. Leading car maker Maruti Suzuki, top truck and bus maker Tata Motors and utility vehicles maker Mahindra & Mahindra lost 2-3 per cent on concern rising borrowing costs could crimp demand. The central bank is widely expected to raise rates by at least 25 basis points at its review on June 16, after increasing rates by half percentage points in May, to stem inflation pressures. See # 15 Page 11

JCR-VIS Upgrades Short-term Rating of Meezan Bank KARACHI: JCR-VIS Credit Rating Co. Ltd. (JCR-VIS) has maintained the medium to long term entity rating of Meezan Bank Limited (MBL) at 'AA-' (Double A Minus) with Stable Outlook. The short term rating of MBL has been upgraded from 'A-1' (A-One) to 'A-1+' (A-One Plus). According to a communiquĂŠ of the credit rating agency, MBL continues to enjoy the highest market share in the Islamic Banking Industry in terms of total deposits at 34% at end-CY10. Growth in deposits to Rs. 131 billion by end-CY10 coupled with higher proportion of low-cost retail deposits is indicative of strong franchise value. Liquid reserves being maintained are high and when viewed together with depositor mix, translate into sound liquidity profile for the institution. Significant growth has been

witnessed in the bank's investment portfolio in the past six months with channelization of liquidity in GoP Ijarah Sukuks. Net financing portfolio of the bank features concentration as lending strategy of the bank is focused on building relationships with top-tier clients. The bank's selective approach to financing has proved its merit as infection levels have remained low. However, in view of limited universe of toptier clients, significant growth in financing portfolio, while maintaining asset quality indicators may pose a challenge. Profitability of the bank has improved over the years supported by low cost funding and increasing business volumes. Going forward, in view of the target to establish 53 branches in CY11, operational efficiency indicators may come under some pressure.

Dhiyan

AND THE CURTAIN RISES TODAY Zia Shaafi, Senior equity dealer Pearl Securities We expect some good news regarding Capital Gains Tax (CGT) in the budget announcement today (Friday). We also expect some bullish activities moving forward where index is likely to touch 13,000 levels soon. Investors are recommended to invest only in blue chip stocks of oil, fertiliser, and cement sectors while blue chips of the banking sectors can also be considered at dips. Market would witness dull activities today.

Nauman Zaheer, Investment Advisor

Post budget outlook of the market is bullish and index can touch 13,000 levels by the end of this month. It is expected that some relaxation would be given to small investors on paying CGT in the budget today. Investors are advised to invest in cement sector followed by oil and fertiliser sector stocks. Market would be positive today.


6

Friday, June 3, 2011

Market

KSE 100 Index

Symbols

Volume

87,311,920

Value

3,660,753,112

Trades

54,763

Advanced Decline Unchanged Total

Current High Low Change

106 156 92 354

All Share Index

12,179.81 12,295.07 12,168.64 i84.25

Current High Low Change

8,480.49 8,555.01 8,474.37 i53.53

OIL AND GAS

Company

Paid up Cap(mn)

PE

High Low 1,565.50 1,533.77 Total cos Defaulter cos 12 P/BV (x) ROE (%) 3.48 32.54

Open

High

Low

Attock Petroleum 691 6.92 386.21 Attock Refinery 853 4.58 137.60 BYCO Petroleum 3921 - 10.01 Mari Gas Company 735 4.33 107.67 National Refinery 800 5.24 382.82 Oil & Gas Development 43009 10.30 154.01 Pak Petroleum 11950 7.80 217.01 Pak Oilfields 2365 7.44 340.20 Pak Refinery Limited 350 48.76 88.17 P.S.O XD 1715 4.11 290.19 Shell Gas LPG 226 - 23.85 Shell Pakistan 685 8.08 228.33

388.90 141.69 10.10 107.50 387.35 155.60 217.75 341.25 89.25 291.00 23.80 227.51

382.10 137.60 9.65 105.00 376.55 152.00 212.99 337.03 87.08 287.00 23.13 226.00

Close Chg 382.68 139.78 9.74 105.84 379.66 152.20 213.40 337.58 87.28 287.82 23.80 227.42

-3.53 2.18 -0.27 -1.83 -3.16 -1.81 -3.61 -2.62 -0.89 -2.37 -0.05 -0.91

Current High Low Change

KMI 30 Index Current High Low Change

11,784.43 11,917.38 11,776.76 i105.67

20,839.62 21,035.26 20,816.53 i137.71

Last 60 days High Low

Volume 169548 3845907 2066688 26580 832700 1169749 1402665 959937 101676 353227 5387 12393

388.90 141.69 10.10 113.75 387.35 158.80 217.75 341.25 110.50 291.00 28.29 231.00

338.18 115.00 7.93 98.50 277.25 128.21 199.50 307.50 81.23 269.47 22.11 201.00

% Change -1.11 5-Day High 1,554.66 5-Day Low 1,519.93

2010 Div BR (%) (%) 300 31 200 55 90 255 80 120

2011 Div BR (%) (%)

20B115.00 - 23.43 - 30.00 20B 50.00 -100.00 - 80.00 -

-

CHEMICALS

Company

Paid up Cap(mn)

PE

Open 826.20 Turnover 44,299 P/E (x) 5.67 Company

High Low 842.18 817.68 Total cos Defaulter cos 4 2 P/BV (x) ROE (%) 1.45 25.53

Close 834.41 Listed cap 3,242.17 mn Payout (%) 11.08

Change 8.21 Market cap 13,572.81 mn Div Yield (%) 1.95

Paid up Cap(mn)

PE

Open

High

Low

Close Chg

Volume

Last 60 days High Low

1092 1321

8.12 8.18

87.20 28.00

89.20 28.00

86.60 27.11

88.29 1.09 27.88 -0.12

41641 2658

89.21 32.49

Pak Int Cont. Terminal PNSC

66.03 25.18

High

Low

Agritech Limited 3924 - 19.39 Bawany Air 75 3.52 7.50 Clariant Pak 341 5.07 164.28 Dawood Hercules 4813 3.69 64.03 Descon Chemical 1996 2.60 Descon Oxychem Ltd. 1020 11.49 7.94 Dewan Salman 3663 3.00 Dynea Pak 94 3.37 10.50 Engro Corporation Ltd 3933 8.65 197.49 Engro Polymer 6635 - 11.80 Fatima Fertilizer 22000 - 13.46 Fauji Fertilizer XD 8482 8.68 141.67 Fauji Fert.Bin Qasim 9341 6.50 43.49 Ghani Gases Ltd 725 10.54 12.45 ICI Pakistan 1388 8.73 159.13 Ittehad Chemical 360 4.36 30.00 Lotte Pakistan 15142 4.18 15.02 Nimir Ind Chemical 1106 11.61 2.80 Shaffi Chemical 120 28.00 2.24 Sitara Peroxide 551 5.60 18.27 Wah-Noble 90 5.05 35.20

19.90 7.10 166.80 64.39 2.65 8.05 3.09 10.94 198.00 12.00 13.59 142.50 43.75 12.86 160.00 31.45 15.25 2.77 2.02 18.50 35.75

18.41 7.00 164.05 63.51 2.50 7.80 2.86 10.25 193.00 11.57 13.36 140.90 43.26 12.42 156.36 31.00 14.93 2.65 2.02 18.05 35.50

Close Chg 19.87 7.00 166.00 63.59 2.51 7.81 2.90 10.29 193.49 11.62 13.44 140.99 43.42 12.54 157.15 30.00 14.96 2.67 2.24 18.09 35.75

0.48 -0.50 1.72 -0.44 -0.09 -0.13 -0.10 -0.21 -4.00 -0.18 -0.02 -0.68 -0.07 0.09 -1.98 0.00 -0.06 -0.13 0.00 -0.18 0.55

Close 1,858.71 Listed cap 52,251.88 mn Payout (%) 48.81

Last 60 days High Low

Volume 11234 1000 21678 38587 41450 235379 1752696 2000 1601909 127835 2981528 1190532 1180971 199924 222225 101 3311115 198511 300 709928 2900

Change -16.17 Market cap 382,920.10 mn Div Yield (%) 5.54

24.55 9.45 201.40 294.00 3.23 9.60 3.65 11.50 238.50 13.95 13.75 145.21 43.85 14.49 172.00 32.57 17.36 3.40 2.99 19.99 37.99

17.86 6.75 140.00 56.10 2.00 6.95 2.11 9.50 188.55 10.70 11.80 124.50 37.86 10.65 148.02 20.11 14.64 2.26 2.00 14.10 34.19

% Change -0.86 5-Day High 1,874.88 5-Day Low 1,849.27

2010 Div BR (%) (%)

2011 Div BR (%) (%)

5 10R 135 25B 50 300B 15 60 20B - 27.5R 130 25B 45.00 65.5 - 12.50 175 5 5 5 50 -

-

FORESTRY AND PAPER Performance of SR Forestry & Paper Index Open 1,159.69 Turnover 118,530 P/E (x) 5.84 Company

High Low 1,169.76 1,133.73 Total cos Defaulter cos 4 1 P/BV (x) ROE (%) 0.44 7.47

Close 1,139.35 Listed cap 1,186.83 mn Payout (%) 25.28

Paid up Cap(mn)

PE

Open

High

Low

Close Chg

Volume

707 50 411

1.79 7.32

17.70 42.34 42.00

18.00 42.49 42.14

17.20 41.51 41.22

17.32 -0.38 42.03 -0.31 41.33 -0.67

112973 1439 4118

Century Paper Pak Paper Product Security Paper

Change -20.34 Market cap 3,142.87 mn Div Yield (%) 4.32

Last 60 days High Low 18.00 44.49 42.80

13.85 35.50 36.77

% Change -1.75 5-Day High 1,159.69 5-Day Low 1,130.09

2010 Div BR (%) (%) 2533.33B 50 -

2011 Div BR (%) (%) -

-

INDUSTRIAL METALS AND MINING

Company

Paid up Cap(mn)

Crescent SteelSPOT Dost Steels Ltd Huffaz Pipe XD Inter.Steel Ltd. International Ind

PE

565 1.96 675 555 21.68 4350 1199 9.21

Open 28.76 2.50 12.48 14.84 51.74

High 29.15 2.51 12.74 14.95 52.19

High Low 1,060.41 1,040.12 Total cos Defaulter cos 7 1 P/BV (x) ROE (%) 1.06 33.10 Low 28.49 2.31 12.12 14.60 51.30

Close Chg 28.95 2.39 12.14 14.74 51.50

0.19 -0.11 -0.34 -0.10 -0.24

Close 1,047.71 Listed cap 3,596.11 mn Payout (%) 30.91

45530 136551 5853 673060 25340

29.75 2.98 14.74 15.06 54.50

26.20 1.62 11.05 0.00 48.52

Open 1,154.72 Turnover 1,799,949 P/E (x) 3.73 Paid up Cap(mn)

High Low 1,161.92 1,140.84 Total cos Defaulter cos 19 4 P/BV (x) ROE (%) 0.95 25.35

PE

Open

High

Low

Atlas Battery 101 5.71 Atlas Honda 626 9.30 Baluchistan Wheels Ltd. 133 1.52 Dewan Motors 1087 Exide (PAK) 56 4.76 General Tyre 598 4.43 Ghandhara Nissan 450 Ghani Automobile Ind 200 6.30 Honda Atlas Cars 1428 Indus Motors 786 7.64 Pak Suzuki 823 15.09 Sazgar Engineering 150 1.13 Transmission 117 -

212.60 149.47 32.49 2.78 195.08 23.97 3.60 3.17 10.52 222.63 67.75 23.00 1.40

216.40 150.00 34.00 3.05 201.25 24.00 3.80 3.50 10.50 222.50 68.50 23.30 1.54

213.00 148.00 33.30 2.57 194.10 23.25 3.50 3.20 10.25 220.01 66.00 23.00 1.54

Company

Paid up Cap(mn)

Close Chg

Company

Paid up Cap(mn)

Al-Abbas Cement

PE

Open

High

Low

Close Chg

Close 897.56 Listed cap 54,792.74 mn Payout (%) 19.04

2011 Div BR (%) (%)

- 20.00 25B 15.00 20B 15

-

Change -6.62 Market cap 64,360.89 mn Div Yield (%) 2.85

% Change -0.73 5-Day High 904.19 5-Day Low 891.36

2010 Div BR (%) (%) - 100R

2011 Div BR (%) (%)

1828

-

2.95

2.91

2.70

2.75 -0.20

4003

3.23

2.31

-

-

Attock Cement

866

6.75

54.50

54.00

53.30

53.30 -1.20

1210

56.70

49.22

50

-

-

-

Balochistan Glass Ltd

-

-

-

-

858

-

2.10

2.40

1.99

2.02 -0.08

504

2.90

1.51

Berger Paints

182

-

16.00

16.00

15.65

15.76 -0.24

1050

17.40

13.55

- 122R

-

-

Cherat Cement

956 47.14

10.00

9.90

9.90

9.90 -0.10

655

11.90

8.81

-

-

-

-

Dadabhoy Cement

982 15.77

1.96

2.09

2.01

2.05 0.09

16998

2.24

1.50

-

-

-

Dandot Cement

948

-

1.75

1.75

1.15

1.40 -0.35

1000

2.49

1.15

-

-

-

Dewan Cement

3891

-

1.92

2.06

1.90

1.93 0.01

337152

2.67

1.36

-

-

-

-

DG Khan Cement Ltd

3651 31.72

23.85

24.21

23.72

23.79 -0.06

2256569

26.44

21.31

-

20R

-

20R

Fauji Cement

6933

8.00

4.73

4.77

4.61

4.64 -0.09

716241

4.94

3.99

-

-

-

92R

Flying Cement Ltd

1760

-

1.54

1.57

1.52

1.55 0.01

16125

1.84

1.26

-

-

-

-

283

-

1.50

1.74

0.70

0.70 -0.80

10003

2.49

0.70

-

-

-

-

4003

-

6.15

6.70

6.05

6.10 -0.05

2203

13.50

5.00

-

-

-

-

1288

-

6.71

6.65

6.65

6.65 -0.06

1000

7.87

5.70

-

-

-

-

13126 76.00

3.05

3.10

3.00

3.04 -0.01

345953

3.45

2.10

-

-

-

-

Gammon Pak Gharibwal Cement Kohat Cement Lafarge Pakistan Cmt.

-

Lucky Cement

3234

5.85

72.65

73.35

71.72

71.97 -0.68

322288

73.69

62.50

40

-

-

-

Maple Leaf Cement

5261

-

2.26

2.30

2.23

2.28 0.02

71953

2.89

1.97

-

-

-

-

Pioneer Cement

2271

-

5.50

5.74

5.50

5.51 0.01

13592

6.40

4.50

-

-

-

-

Shabbir Tiles

361

-

6.09

6.85

6.24

6.25 0.16

3002

8.50

5.25

-

-

- 100R

Thatta Cement XR

798

-

18.59

19.00

18.00

19.00 0.41

21500

19.19

16.50

-

50R

-

-

GENERAL INDUSTRIALS Performance of SR General Industrials Index Open 992.33 Turnover 212,575 P/E (x) 1.99 Company Cherat Papersack ECOPACK Ltd Ghani Glass

High Low 997.97 985.20 Total cos Defaulter cos 13 2 P/BV (x) ROE (%) 0.88 43.91

Close 990.83 Listed cap 3,043.31 mn Payout (%) 15.55

Change -1.50 Market cap 36,980.01 mn Div Yield (%) 7.80

% Change -0.15 5-Day High 992.33 5-Day Low 978.93

Paid up Cap(mn)

PE

Open

High

Low

Close Chg

Volume

Last 60 days High Low

172

2.52

51.80

53.20

51.00

51.25 -0.55

153054

56.90

46.45

20

25B

-

50R

230 1067

5.75

1.70 56.50

1.80 56.50

1.66 55.51

1.75 0.05 56.50 0.00

46104 2450

2.38 58.00

1.31 49.00

25

10B

-

-

2010 Div BR (%) (%)

2011 Div BR (%) (%)

MACPAC Films Packages Ltd

389 2.56 12.52 844 18.77 112.70

13.50 12.51 12.85 0.33 113.93 112.07 112.61 -0.09

5449 2912

15.21 124.50

6.06 103.01

32.5

-

-

-

Tri-Pack Films

300

178.00 176.51 176.57 -1.49

2600

180.80

126.51

100

-

-

-

6.89 178.06

INDUSTRIAL ENGINEERING

Adam Sugar Ansari Sugar Bawany Sugar Chashma Sugar Crescent Sugar Dewan Sugar Faran Sugar Fecto Sugar Habib Sugar Habib-ADM Ltd Hussein Sugar J D W Sugar Kohinoor Sugar Mehran Sugar Mirpurkhas Sugar Mirza Sugar Mithchells Fruit National Foods Noon Sugar Pangrio Sugar Quice Food S S Oil Sanghar Sugar Shahmurad Sugar Shahtaj Sugar Shakarganj Mills Tandlianwala

58 244 87 287 214 365 217 146 750 200 121 539 109 157 84 141 50 414 165 109 107 57 119 211 120 695 1177

Open

High

Low

1.10 0.74 1.34 4.56 5.06 0.68 1.56 0.70 1.97 2.74 0.27 8.80 14.34 1.48 5.80 0.30 1.70 1.13 1.80 1.18 30.63

18.78 8.00 8.50 10.00 9.48 2.80 18.50 38.00 25.80 12.70 10.94 76.68 3.73 68.00 42.54 2.50 74.00 79.10 16.10 3.50 2.41 4.25 12.00 10.61 65.00 5.99 54.73

18.89 8.95 8.50 10.78 10.48 3.00 18.50 38.00 25.93 12.61 11.94 78.60 3.50 66.40 41.75 2.68 75.00 83.05 16.10 3.52 2.55 4.25 12.00 10.40 63.50 5.85 55.00

18.00 8.94 8.50 10.50 9.89 2.66 18.49 38.00 25.51 12.55 11.00 77.26 3.05 64.70 41.75 2.47 75.00 79.00 16.10 3.50 2.49 4.25 11.97 9.61 62.10 5.85 54.80

High Low 1,660.72 1,629.95 Total cos Defaulter cos 11 1 P/BV (x) ROE (%) 3.05 38.02

Company

Paid up Cap(mn)

PE

Open

High

Low

Ados Pak

66

3.11

8.20

8.50

8.44

AL-Ghazi Tractor

215

4.07 234.44

Bolan Casting

104

4.91

Dewan Auto Engineering 214

Close 1,635.96 Listed cap 1,336.62 mn Payout (%) 131.49

Close 1,148.60 Listed cap 6,768.53 mn Payout (%) 20.42

Volume

Change -6.12 Market cap 42,666.70 mn Div Yield (%) 5.47

Open 734.52 Turnover 366,871 P/E (x) 1.43 Company

Paid up Cap(mn)

Pak Elektron Singer Pak Tariq Glass Ind

PE

1219 375 130.77 693 1.63

Volume

Last 60 days High Low

0.30

738

10.70

7.40

2010 Div BR (%) (%) -

-

-

-

236.00 234.95 235.80

1.36

647

239.00

199.05

400

-

-

-

49.75

48.49

47.50

49.75

0.00

202

52.25

42.70

25

10B

-

-

-

1.22

1.39

1.16

1.23

0.01

46167

2.15

0.71

-

-

-

-

9.08

9.45

8.70

9.00 -0.08

6504

10.84

8.01

-

-

-

-

Hinopak Motor

124

88.50

86.01

139

122.50

85.00

-

-

-

-

Millat Tractors

366

60645

558.00

504.00

650

25B325.00

-

86.44

86.44

0.00

558.00 547.00 548.44 -2.10

Open 7.79 17.00 11.72

High 7.90 16.70 12.61

Open 971.66 Turnover 12,785,035 P/E (x) 6.28 Company

Paid up Cap(mn)

(Colony) Thal Amtex Limited Artistic Denim Ashfaq Textile Azam Textile Azgard Nine Babri Cotton Bata (Pak) Bilal Fibres Blessed Tex Mills Chakwal Spinning Chenab Limited Colony Mills Ltd Crescent Jute D M Textile D S Ind Ltd Dawood Lawrencepur Dewan Farooque Spin. Dewan Khalid Textile Dewan Mushtaq Textile Ellcot Spinning Fazal Cloth Gadoon Textile XD Ghazi Fabrics Gul Ahmed Textile Gulistan Spinning Hira Textile Mills Ltd. Ibrahim Fibres Indus Dyeing Khalid Siraj Kohinoor Ind Kohinoor Mills Kohinoor Textile Leather Up Mian Textile Mukhtar Textile Nagina Cotton Nishat (Chunian) Nishat Mills Pak Synthetic Prosperity Ravi Textile Rupali Poly Sally Textile Samin Textile Service Ind Shahtaj Textile Sunrays Textile Taha Spinning Tata Textile Thal Ltd Treet Corp

Last 60 days High Low 216.40 153.93 37.99 3.46 206.99 26.17 4.50 4.60 10.77 233.75 76.90 25.50 1.71

188.00 132.07 31.06 1.50 175.27 22.01 2.16 2.90 9.00 205.51 60.00 22.00 1.11

2010 Div BR (%) (%) 100 50 25 60 20 150 5 10 -

2011 Div BR (%) (%)

20B 15B 65.00 - 50.00 20B 10.00 -

15B -

Close Chg 18.72 8.95 8.50 10.69 10.36 2.92 18.50 38.00 25.61 12.55 11.56 78.47 3.73 64.85 42.54 2.52 75.00 83.05 16.10 3.51 2.55 4.25 12.00 9.61 62.92 5.85 54.82

-0.06 0.95 0.00 0.69 0.88 0.12 0.00 0.00 -0.19 -0.15 0.62 1.79 0.00 -3.15 0.00 0.02 1.00 3.95 0.00 0.01 0.14 0.00 0.00 -1.00 -2.08 -0.14 0.09

Close 2,065.81 Listed cap 11,335.33 mn Payout (%) 30.57

Volume 3870 4000 491 700 8249 6404 1464 115 50341 1119 1542 1850 301 30896 130 217850 6192 23846 400 999 2000 1000 250 7309 1000 2999 990

Change 18.87 Market cap 288,146.06 mn Div Yield (%) 0.65

Last 60 days High Low 19.00 8.95 9.25 10.90 10.48 3.85 19.90 50.00 25.93 13.00 11.94 83.95 4.69 68.00 49.80 3.90 77.69 83.05 21.80 5.08 3.40 6.45 13.01 10.79 71.50 7.49 55.00

11.50 5.45 5.25 8.00 6.02 2.16 17.50 35.08 21.51 10.80 8.00 71.50 2.45 50.30 39.51 2.47 65.40 52.10 10.90 3.25 2.20 3.80 11.50 7.91 59.72 4.35 39.61

2010 Div BR (%) (%)

% Change 0.92 5-Day High 2,113.82 5-Day Low 2,041.11 2011 Div BR (%) (%)

25 10 25 25 25B 40 -40.49R 7010B 12.5R - 10R 35 20B 15.00 10B 15 20B 10 40 12 10 15 10 -

High Low 743.60 718.90 Total cos Defaulter cos 15 7 P/BV (x) ROE (%) 0.15 10.64 Low 7.50 16.70 11.75

Close Chg 7.54 -0.25 17.00 0.00 12.37 0.65

Close 727.96 Listed cap 3,763.71 mn Payout (%) 6.27

Volume 267371 275 99225

Change -6.55 Market cap 4,637.53 mn Div Yield (%) 4.37

Last 60 days High Low 14.50 21.57 14.47

7.26 14.71 11.20

2010 Div BR (%) (%) 17.5

10B 10B -

% Change -0.89 5-Day High 757.51 5-Day Low 727.96 2011 Div BR (%) (%) - 200R

56 2594 840 70 133 4493 37 76 141 64 400 1150 2442 238 31 600 591 978 57 34 110 188 234 326 635 146 716 3105 181 107 303 509 2455 60 221 145 187 1620 3516 560 185 250 341 88 267 120 97 69 41 173 307 418

High Low 979.30 964.92 Total cos Defaulter cos 211 73 P/BV (x) ROE (%) 0.54 8.64

PE

Open

High

Low

7.65 1.57 0.45 0.29 5.92 0.74 0.64 0.60 2.09 1.84 0.27 0.21 0.59 0.89 0.68 0.61 3.17 0.40 0.77 3.23 3.11 0.44 4.89 7.64 0.61 3.98 5.31 2.47 0.96 3.07 0.31 2.35 2.97 1.47 0.81 0.45 6.82

1.80 2.98 23.01 5.11 2.60 6.69 17.00 508.53 1.09 66.00 1.49 2.24 2.00 0.60 3.50 1.31 35.27 2.79 1.71 4.30 25.25 51.18 70.00 6.00 50.04 7.27 3.86 45.21 319.82 1.49 1.17 1.90 4.33 2.75 0.45 0.50 15.00 25.44 60.08 19.55 14.90 1.00 40.77 7.60 5.00 174.88 26.00 35.00 4.00 31.75 103.52 54.97

2.01 3.05 24.16 5.11 2.50 6.88 17.00 517.00 1.00 67.00 1.44 2.44 2.14 0.69 4.00 1.32 35.90 2.80 1.90 4.40 26.24 53.70 70.10 6.00 50.06 7.50 4.00 45.90 334.00 1.79 1.20 1.75 4.45 2.75 0.50 0.63 15.00 26.45 61.20 20.20 14.89 1.20 40.01 7.97 5.00 175.00 26.25 34.00 3.00 33.33 104.70 55.92

2.01 2.66 23.49 4.11 2.50 6.61 16.50 486.00 0.95 66.00 1.06 2.05 1.91 0.57 3.70 1.20 34.90 2.50 1.80 4.00 25.00 53.70 70.10 6.00 50.06 7.47 3.87 43.50 317.00 1.40 1.16 1.75 4.12 2.75 0.50 0.30 15.00 25.21 59.55 18.57 14.75 0.96 40.00 7.95 4.80 173.55 26.25 34.00 3.00 32.25 103.00 54.02

Close Chg 1.80 2.69 24.16 4.11 2.50 6.66 16.98 502.70 0.95 67.00 1.49 2.26 2.01 0.60 3.88 1.24 35.00 2.79 1.83 4.00 25.05 53.70 70.10 6.00 50.10 7.49 3.88 45.31 325.90 1.59 1.19 1.75 4.25 2.75 0.50 0.31 15.00 25.89 59.83 19.75 14.75 1.03 40.77 7.96 4.82 173.90 26.25 34.00 4.00 33.29 103.61 54.59

0.00 -0.29 1.15 -1.00 -0.10 -0.03 -0.02 -5.83 -0.14 1.00 0.00 0.02 0.01 0.00 0.38 -0.07 -0.27 0.00 0.12 -0.30 -0.20 2.52 0.10 0.00 0.06 0.22 0.02 0.10 6.08 0.10 0.02 -0.15 -0.08 0.00 0.05 -0.19 0.00 0.45 -0.25 0.20 -0.15 0.03 0.00 0.36 -0.18 -0.98 0.25 -1.00 0.00 1.54 0.09 -0.38

Close 969.95 Listed cap 47,070.70 mn Payout (%) 16.68

Volume 300 1842129 19693 501 1451 2373470 3728 952 3000 393872 304 40541 24474 8339 1650 26925 5631 8451 1000 1005 2513 1515 500 1397 5205 510 66586 8552 1000 1851 5865 500 640615 1000 3500 5001 743 1467664 5528249 657 2747 38116 300 500 1401 1699 500 58109 110 4760 160626 15061

Change -1.71 Market cap 126,668.96 mn Div Yield (%) 2.66

Last 60 days High Low 2.84 3.05 24.16 5.98 2.99 9.48 18.41 570.00 1.80 68.09 1.97 3.40 2.85 1.40 4.00 1.73 49.05 5.00 2.26 5.40 28.74 59.70 102.24 8.00 53.65 9.00 5.18 50.74 334.00 1.79 1.78 2.90 5.25 3.50 0.75 0.77 17.95 29.50 66.19 21.21 16.90 1.74 44.40 9.35 6.80 215.44 26.29 38.30 5.40 43.00 112.19 59.20

2010 Div BR (%) (%)

% Change -0.18 5-Day High 972.33 5-Day Low 968.73 2011 Div BR (%) (%)

0.50 1.81 - 30B 18.55 20 4.11 2.03 7.5 4.40 14.00 - 15B 411.00 280 0.71 58.00 50 0.76 5 1.65 1.50 0.25 3.00 0.95 34.01 5 15B 1.81 1.10 3.02 24.25 35 50.00 100SD 66.00 70 4.00 10 40.86 12.5 6.30 10 3.76 10 43.25 20 251.00 50 - 50.00 0.92 0.75 0.67 3.60 1.60 0.31 0.16 14.10 20SD 23.15 15 56.80 25 45R 17.01 13.60 30 0.40 38.05 40 5.50 10 4.10 - 100R 154.00 75 20.90 45 34.00 30 3.00 31.75 25 97.00 80 20B 46.00 50 900B -

-

Performance of SR Pharma and Bio Tech Index Open 965.49 Turnover 10,259 P/E (x) 6.49

2011 Div BR (%) (%)

213 10.71 -

46161 2019 240 1720200 338 9380 9901 3951 3720 1825 1351 628 235

PERSONAL GOODS

% Change -0.31 5-Day High 1,641.05 5-Day Low 1,611.56

Ghandhara Ind

8.33 550.54

2.43 -0.35 0.00 0.02 -0.55 -0.70 0.10 0.17 -0.27 -1.43 -0.77 0.10 0.00

% Change -0.53 5-Day High 1,154.72 5-Day Low 1,142.99

PHARMA AND BIO TECH

Change -5.09 Market cap 33,145.09 mn Div Yield (%) 16.41

8.50

Close Chg

-

Fundamental Highlights As on Jun 30, 2010

Technical Analysis RSI (14-day)

46.57

Total Assets (Rs in mn)

MA (10-day)

4.23

Total Equity (Rs in mn)

MA (100-day)

4.67

Revenue (Rs in mn)

17,057.30

MA (200-day)

5.05

Interest Expense

1st Support

4.05

Profit after Taxation

2nd Support

3.92

EPS 10 (Rs)

1.909

1st Resistance

4.38

Book value / share (Rs)

23.10

2nd Resistance

4.58

PE 11 E (x)

4.90

Pivot

4.25

PBV (x)

0.18

3,361.27 10,693.34 1,072.77 277.86

KTML closed down -0.08 at 4.25. Volume was 1,863 per cent above average (trending) and Bollinger Bands were 25 per cent wider than normal. The company's profit after taxation stood at Rs140.023 million which translates into an Earning Per Share of Rs0.65 for the nine months of fiscal year (9MFY11). KTML is currently 15.8 per cent below its 200-day moving average and is displaying a downward trend. Volatility is low as compared to the average volatility over the last 10 trading sessions. Volume indicators reflect very strong flows of volume out of KTML (bearish). Trend forecasting oscillators are currently bearish on KTML.

KASB Bank Limited

Fundamental Highlights As on Dec 31, 2009

Technical Analysis RSI (14-day)

72.13

Total Assets (Rs in mn)

59,223.06

MA (10-day)

1.46

Total Equity (Rs in mn)

4,958.87

MA (100-day)

1.54

Revenue (Rs in mn)

MA (200-day)

2.01

Interest Expense

1st Support

1.43

Loss after Taxation

2nd Support

1.25

EPS 09 (Rs)

1st Resistance

1.78

5,061.63 5,490.40 (4,227.75) (4.446)

Book value / share (Rs)

2nd Resistance

1.95

PE 10 E (x)

Pivot

1.60

PBV (x)

5.22 0.32

KASBB closed up 0.24 at 1.68. Volume was 1,153 per cent above average (trending) and Bollinger Bands were 26 per cent narrower than normal. The company's loss after taxation stood at Rs549.366 million which translates into a Loss Per Share of Rs0.58 for the 1st quarter of current calendar year (1QCY11). KASBB is currently 16.3 per cent below its 200-day moving average and is displaying an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 trading sessions. Volume indicators reflect very strong flows of volume into KASBB (bullish). Trend forecasting oscillators are currently bullish on KASBB. Momentum oscillator is currently indicating that KASBB is currently in an overbought condition.

Mybank Limited

Performance of SR Household Goods Index

Performance of SR Industrial Engineering Index Open 1,641.05 Turnover 115,092 P/E (x) 8.01

-

Performance of SR Personal Goods Index

Last 60 days High Low

Volume

215.03 149.12 32.49 2.80 194.53 23.27 3.70 3.34 10.25 221.20 66.98 23.10 1.40

High Low 2,083.32 2,038.89 Total cos Defaulter cos 61 16 P/BV (x) ROE (%) 14.21 30.30

PE

Performance of SR Construction and Materials Index High Low 916.90 894.18 Total cos Defaulter cos 37 6 P/BV (x) ROE (%) 0.47 7.10

2011 Div BR (%) (%)

FOOD PRODUCERS Open 2,046.94 Turnover 376,524 P/E (x) 46.90

CONSTRUCTION AND MATERIALS Open 904.19 Turnover 4,143,054 P/E (x) 6.67

-

Performance of SR Food Producers Index

% Change -0.22 5-Day High 1,049.97 5-Day Low 1,026.64

2010 Div BR (%) (%) 30 40

40 15

HOUSEHOLD GOODS

Change -2.27 Market cap 16,060.32 mn Div Yield (%) 9.63

Last 60 days High Low

Volume

2010 Div BR (%) (%)

Performance of SR Automobile and Parts Index

Performance of SR Industrial Metals and Mining Index Open 1,049.97 Turnover 213,372 P/E (x) 3.21

% Change 0.99 5-Day High 834.41 5-Day Low 787.79

AUTOMOBILE AND PARTS

Company

High Low 1,886.01 1,854.47 Total cos Defaulter cos 36 6 P/BV (x) ROE (%) 3.08 35.00

Open

Kohinoor Textile Mills Limited

Performance of SR Industrial Transportation Index

Close Change 1,537.34 -17.32 Listed cap Market cap 65,194.15 mn 1,138,330.28 mn Payout (%) Div Yield (%) 55.94 5.23

Performance of SR Chemicals Index Open 1,874.88 Turnover 10,808,881 P/E (x) 8.81

Alert ! Unusual Movements

INDUSTRIAL TRANSPORTATION

Performance of SR Oil and Gas Index Open 1,554.66 Turnover 8,879,769 P/E (x) 10.71

KSE 30 Index

Company Abbott (Lab) XD Ferozsons (Lab) GlaxoSmithKline Highnoon (Lab) Sanofi-Aventis Searle Pak

Paid up Cap(mn) 979 250 1963 182 96 306

PE

Open

5.68 92.69 7.63 92.00 10.57 74.54 6.11 26.46 - 145.50 5.76 59.54

High

High Low 971.03 961.05 Total cos Defaulter cos 9 P/BV (x) ROE (%) 1.45 22.31 Low

Close Chg

93.70 92.50 92.69 0.00 92.45 91.60 92.12 0.12 74.97 74.00 74.01 -0.53 26.50 26.10 26.38 -0.08 151.89 149.00 150.01 4.51 59.01 59.00 59.01 -0.53

Close 962.69 Listed cap 3,904.20 mn Payout (%) 44.54

Volume 266 2092 2806 2191 504 2400

Change -2.80 Market cap 31,311.41 mn Div Yield (%) 6.86

Last 60 days High Low 94.00 99.49 90.00 33.50 168.00 66.15

81.00 87.10 70.60 24.51 143.10 58.05

2010 Div BR (%) (%) 50 40 25 100 30

% Change -0.29 5-Day High 969.74 5-Day Low 960.17 2011 Div BR (%) (%)

20B 12.50 15B 10B -

-

Fundamental Highlights As on Dec 31, 2009

Technical Analysis RSI (14-day)

70.20

Total Assets (Rs in mn)

MA (10-day)

2.38

Total Equity (Rs in mn)

MA (100-day)

2.37

Revenue (Rs in mn)

MA (200-day)

2.31

Interest Expense

1st Support

2.66

Loss after Taxation

2nd Support

2.36

EPS 09 (Rs)

1st Resistance

3.10

Book value / share (Rs)

2nd Resistance

3.24

PE 10 E (x)

Pivot

2.80

PBV (x)

35,490.71 5,104.86 3,368.22 2,881.90 (1,639.83) (3.092) 9.63 0.30

MYBL closed up 0.33 at 2.90. Volume was 809 per cent above average (trending) and Bollinger Bands were 64 per cent wider than normal. The company's loss after taxation stood at Rs94.157 million which translates into a Loss Per Share of Rs0.18 for the 1st quarter of current calendar year (1QCY11). MYBL is currently 25.3 per cent above its 200-day moving average and is displaying an upward trend. Volatility is extremely high when compared to the average volatility over the last 10 trading sessions. Volume indicators reflect very strong flows of volume into MYBL (bullish). Trend forecasting oscillators are currently bullish on MYBL. Momentum oscillator is currently indicating that MYBL is currently in an overbought condition.

Nishat (Chunian) Limited

Fundamental Highlights As on Jun 30, 2010

Technical Analysis RSI (14-day)

51.87

Total Assets (Rs in mn)

MA (10-day)

25.30

Total Equity (Rs in mn)

MA (100-day)

26.13

Revenue (Rs in mn)

MA (200-day)

23.00

Interest Expense

14,251.88

1st Support

25.25

Profit after Taxation

2nd Support

24.61

EPS 10 (Rs)

5.875

1st Resistance

26.49

Book value / share (Rs)

27.96

2nd Resistance

27.09

PE 11 E (x)

2.47

Pivot

25.85

PBV (x)

0.93

4,432.51 13,343.54 1,101.05 931.47

NCL closed up 0.45 at 25.89. Volume was 37 per cent below average and Bollinger Bands were 10 per cent narrower than normal. The company's profit after taxation stood at Rs1.283 billion which translates into an Earning Per Share of Rs7.85 for the nine months of fiscal year (9MFY11). NCL is currently 12.5 per cent above its 200-day moving average and is displaying a downward trend. Volatility is low as compared to the average volatility over the last 10 trading sessions. Volume indicators reflect volume flowing into and out of NCL at a relatively equal pace. Trend forecasting oscillators are currently bearish on NCL.

BOOK CLOSURES Company

From

To

Shaheen Insurance # Ittehad Chemicals # (TFC) Engro Fertilizer JS Bank # Jahangir Siddiqui & Company # Crescent Steel (Un-Consolidated) Treet Corporation # (TFC) Saudi Pak Leasing Co Lotte Pakistan PTA # PTCL OGDC Fauji Fertilizer Bin Qasim Hinopak Motors Pakistan Oilfields # National Bank of Pakistan # Atlas Honda Invest Cap. Inv Bank Sui Northern Gas Pipelines # Mehran Sugar Mills

03-Jun 04-Jun 04-Jun 06-Jun 06-Jun 08-Jun 08-Jun 10-Jun 10-Jun 11-Jun 14-Jun 14-Jun 14-Jun 14-Jun 14-Jun 15-Jun 17-Jun 17-Jun 17-Jun

10-Jun 10-Jun 17-Jun 14-Jun 15-Jun 14-Jun 14-Jun 16-Jun 20-Jun 21-Jun 20-Jun 20-Jun 20-Jun 20-Jun 23-Jun 24-Jun 23-Jun 23-Jun

D/B/R

Spot AGM/Date

10(II) 31-May 17.5(I) 03-Jun 15(II) 06-Jun 12.5(I) 06-Jun 65,15(B) 07-Jun 7.5(II),10(B)(I)

10-Jun 10-Jun 15-Jun 15-Jun 14-Jun 16-Jun 20-Jun 20-Jun 20-Jun 23-Jun 24-Jun 23-Jun -

INDICATIONS # Extraordinary General Meeting

OTHER SECTORS Symbols Pakistan Cables TRG Pakistan Ltd. Murree Brewery Co. Grays of Cambridge Pak Tobacco Co. Shifa Int.HospitXD Media Times LtdXR P.I.A.C.(A) AKD Capital Limited Pace (Pak) Ltd. Netsol Technologies Pak Telephone

Open 49.8 2.84 107.01 49.28 105.75 32.05 16.64 2.55 40 2.85 21.72 3.2

High 49 2.92 110.4 51.69 104.95 32.7 17.5 2.6 40.89 2.94 21.98 3.4

Low Close 49 2.77 105.15 46.82 101.05 32 15.64 2.47 39.1 2.8 21.5 3.12

49 2.8 107.24 48.61 101.93 32 16.55 2.5 40 2.82 21.54 3.2

Change -0.8 -0.04 0.23 -0.67 -3.82 -0.05 -0.09 -0.05 0 -0.03 -0.18 0

Vol 500 307038 7482 4682 285 2100 2819 144381 251 397791 267591 1015


7

Friday, June 3, 2011

FIXED LINE TELECOMMUNICATION Performance of SR Fixed Line Telecommunication Index Open 1,023.22 Turnover 915,977 P/E (x) 5.59 Paid up Cap(mn)

Company

Pak Datacom Pakistan Telecomm Co A Telecard WorldCall Tele Wateen Telecom Ltd

PE

78 32.28 37740 14.36 3000 3.03 8606 6175 -

Open

High Low 1,023.55 1,009.07 Total cos Defaulter cos 5 P/BV (x) ROE (%) 0.72 12.84

High

31.98 17.67 1.84 2.27 2.80

Low

33.57 17.60 1.92 2.35 2.92

33.40 17.45 1.74 2.22 2.62

Close Chg 33.57 17.52 1.79 2.22 2.68

1.59 -0.15 -0.05 -0.05 -0.12

Close 1,013.63 Listed cap 50,077.79 mn Payout (%) 62.56

Volume 2060 667872 145100 100945 120626

Change -9.59 Market cap 70,486.00 mn Div Yield (%) 11.20

Last 60 days High Low 50.00 18.10 2.12 2.89 3.20

28.71 16.05 1.40 1.94 2.41

% Change -0.94 5-Day High 1,023.22 5-Day Low 1,005.88

2010 Div BR (%) (%) 80 17.5 1 -

2011 Div BR (%) (%)

- 15.00 -

Atlas Insurance Central Insurance Century Insurance EFU General Insurance IGI Insurance New Jub Insurance Pak Reinsurance Pak Gen Insurance PICIC Ins Ltd Premier Insurance Silver Star Insurance Universal Insurance

443 3.48 391 1.59 457 4.62 1250 14.11 970 5.87 989 10.37 3000 5.95 275 31.32 350 9.30 303 3.71 291 0.94 263 -

27.77 73.51 8.42 38.21 71.00 58.50 17.07 5.95 10.88 8.51 5.25 2.01

Paid up Cap(mn)

Company

PE

Genertech Hub Power Japan Power KESC Kohinoor Power Kot Addu Power

198 11572 1560 7932 126 8803 Nishat Chunian Power Ltd XD 3673 Nishat Power Ltd 3541 S G Power 178 Sitara Energy Ltd 191 Southern Electric 1367 Tri-star Power XD 150

7.58 2.33 5.59 2.79 2.43 5.83 -

Open

High

0.69 37.72 1.23 2.45 3.00 43.69 15.74 16.98 0.89 21.05 1.55 1.00

0.66 38.00 1.32 2.48 3.00 43.90 15.95 17.40 1.73 21.40 1.59 1.19

Low 0.55 37.66 1.24 2.38 2.80 43.51 15.30 16.95 0.90 20.51 1.49 1.00

Close Chg 0.65 37.73 1.24 2.39 3.00 43.56 15.52 17.00 1.10 21.05 1.50 1.00

-0.04 0.01 0.01 -0.06 0.00 -0.13 -0.22 0.02 0.21 0.00 -0.05 0.00

Close 1,361.54 Listed cap 95,369.29 mn Payout (%) 104.13

Volume 10226 1210387 124105 183563 503 68076 1092225 2758228 25257 300 140335 15900

Change -2.99 Market cap 105,795.63 mn Div Yield (%) 7.55

Last 60 days High Low 0.80 40.39 1.70 2.87 4.25 44.19 17.25 17.75 1.73 23.26 1.98 1.37

0.49 36.12 0.97 2.25 2.11 40.26 14.30 15.45 0.40 15.35 1.13 0.31

% Change -0.22 5-Day High 1,364.53 5-Day Low 1,358.69

2010 Div BR (%) (%) 50 50 20 -

Open 899.61 Turnover 7,922 P/E (x) 5.35

-

GAS WATER AND MULTIUTILITIES Performance of SR Gas Water and Multiutilities Index Open 1,320.31 Turnover 558,995 P/E (x) 8.62 Paid up Cap(mn)

Company Sui North Gas Sui South Gas

PE

5491 13.76 8390 5.12

Open

High Low 1,350.31 1,317.93 Total cos Defaulter cos 2 P/BV (x) ROE (%) 0.98 11.41

High

19.37 22.31

19.68 22.95

Low 19.11 22.50

Close Chg 19.27 -0.10 22.66 0.35

Close 1,328.08 Listed cap 12,202.80 mn Payout (%) 66.79

Volume 271374 287621

Change 7.77 Market cap 29,592.27 mn Div Yield (%) 7.75

Last 60 days High Low 21.87 25.97

17.64 20.52

% Change 0.59 5-Day High 1,328.08 5-Day Low 1,299.09

2010 Div BR (%) (%) 20 15

2011 Div BR (%) (%)

25B

-

-

BANKS Performance of SR Banks Index Open 1,151.87 Turnover 11,591,122 P/E (x) 7.34 Paid up Cap(mn)

Company Allied Bank Limited Askari Bank XB Bank Alfalah Bank AL-Habib Bank Of Khyber Bank Of Punjab BankIslami Pak Faysal Bank Habib Bank Ltd

8603 7070 13492 8786 5004 5288 5280 7327 11021 Habib Metropolitan Bank XB 10478 JS Bank Ltd 8150 KASB Bank Ltd 9509 MCB Bank Ltd XD 8362 Meezan Bank XB 8030 Mybank Ltd 5304 National Bank 16818 NIB Bank XR 40437 Samba Bank 14335 Silkbank Ltd 26716 Soneri Bank XR 6023 Stand Chart Bank 38716 Summit Bank Ltd 7251 United Bank Ltd 12242

PE

Open

6.05 61.41 5.41 12.11 5.37 10.35 6.02 28.45 2.12 5.07 6.23 10.14 3.75 7.50 9.96 7.35 118.09 5.26 18.38 56.00 2.84 1.44 8.12 203.53 6.00 17.85 2.57 4.11 52.96 1.76 24.25 1.95 17.38 2.81 3.11 6.19 7.18 8.70 3.40 7.43 63.17

High

High Low Close 1,158.31 1,136.11 1,142.66 Total cos Defaulter cos Listed cap 27 - 257,548.02 mn P/BV (x) ROE (%) Payout (%) 1.02 13.94 40.49 Low

Close Chg

61.56 61.20 61.39 -0.02 12.25 11.85 11.91 -0.20 10.49 10.16 10.21 -0.14 28.48 28.35 28.41 -0.04 5.05 4.71 4.75 -0.32 6.29 6.08 6.12 -0.11 3.84 3.75 3.75 0.00 10.24 9.82 9.90 -0.06 118.26 117.50 117.60 -0.49 18.30 17.90 18.30 -0.08 2.83 2.68 2.80 -0.04 1.77 1.42 1.68 0.24 203.79 200.50 201.07 -2.46 17.90 17.51 17.51 -0.34 2.94 2.50 2.90 0.33 53.09 52.25 52.33 -0.63 1.75 1.69 1.70 -0.06 1.95 1.93 1.94 -0.01 2.88 2.76 2.78 -0.03 6.69 6.20 6.21 0.02 8.95 8.50 8.90 0.20 3.79 3.30 3.68 0.28 63.50 62.60 63.19 0.02

Volume

Change -9.21 Market cap 674,611.24 mn Div Yield (%) 5.52

Last 60 days High Low

7125 64.03 383907 14.28 614863 11.20 60013 30.65 56820 6.25 907644 7.40 17837 4.18 142534 13.90 24182 128.50 26107 24.20 62091 3.05 4043075 1.77 512062 230.80 3704 19.70 791169 2.94 769717 79.90 2192500 2.19 103500 2.20 654652 3.00 31391 6.99 27234 9.75 2320867 3.87 158995 66.00

57.00 10.90 9.01 26.95 3.30 4.51 3.26 9.00 104.16 17.00 2.06 1.16 192.20 16.26 1.60 49.57 1.47 1.62 2.02 5.62 7.90 2.36 56.70

% Change -0.80 5-Day High 1,168.71 5-Day Low 1,142.66

2010 Div BR (%) (%)

40 10B - 10B 20 20B -64.41R - 20B 65 10B - 20B - 33R -105.16R 115 10B 30.00 - 15B 75 25B -154.79R -63.46R - 311R 6 - 20R 50 -

NON LIFE INSURANCE

Paid up Cap(mn)

Company

Adamjee Insurance XD

1237

High Low 773.86 754.70 Total cos Defaulter cos 34 22 P/BV (x) ROE (%) 0.58 5.20

Close 763.65 Listed cap 11,111.34 mn Payout (%) 79.54

Change -3.30 Market cap 46,973.20 mn Div Yield (%) 7.16

PE

Open

High

Low

Close Chg

Volume

Last 60 days High Low

7.22

68.14

68.30

66.80

67.31 -0.83

201332

83.40

62.00

% Change -0.43 5-Day High 768.55 5-Day Low 762.35

2010 Div BR (%) (%) 25

PE

2011 Div BR (%) (%)

-

-

-

Open

EFU Life Assurance

850

9.40

67.85

New Jub Life Insurance

627 13.96

52.00

0.20 -0.34 -0.11 -0.40 -0.04 0.50 0.07 0.00 0.28 -0.20 0.14 0.02

4027 4439 1200 15670 36666 1597 278408 164 2596 844 4106 500

41.00 115.90 10.85 39.50 103.00 74.90 20.80 10.00 13.00 13.27 7.49 3.42

26.00 65.00 8.00 29.01 65.10 51.16 12.43 5.05 7.08 8.00 4.56 1.32

40 25 10 12.5 30 20 30 25 -

20B 50B 55B 10.00 25B 10B 15B -

-

Low

Close Chg

Close 891.65 Listed cap 2,290.72 mn Payout (%) 355.53

Change -7.95 Market cap 9,889.97 mn Div Yield (%) 4.12

Last 60 days High Low

Volume

2010 Div BR (%) (%)

Company

Paid up Cap(mn)

PE

Open

High

Low

10.83 6.50 4.30 2.22 0.56 1.51 3.47 7.60 6.75 5.85 2.55 9.50 1.25 5.45 0.76 5.48 10.16 7.55 13.30 6.18 0.88 0.99 9.90 1.30 6.73

10.82 6.50 4.75 2.30 0.56 1.75 3.50 8.00 6.84 5.85 3.55 10.19 1.29 6.00 1.10 6.25 10.99 7.40 13.43 6.30 0.93 1.20 9.73 1.26 6.89

10.77 6.50 4.70 2.15 0.50 1.55 3.45 7.51 6.66 5.56 2.55 10.19 1.15 5.99 0.85 5.90 10.99 7.35 13.06 6.06 0.90 0.89 9.72 0.93 6.70

Volume 2132 1011 142435 2568728 5663 48568 5000 1001 500 14010 564 183039 45996 534 5135703 403777 10298 18363 1394918 419 215292 13308 1649

0.80 24.97 22.80 26.14 15.97 1.99 3.00 6.00 4.00 2.25 9.29 1.20 3.67 2.00 9.70 3.83 27.00 6.43 4.90 6.40 2.23 1.30 2.00

30 11.5 10 50 -

0.34 21.00 12.01 20.53 10.97 1.15 1.56 3.10 2.17 1.61 5.15 0.22 2.45 1.26 4.82 2.31 16.42 4.53 3.10 5.00 1.45 0.55 0.83

55.79

52.60

55.24

0.00

56

2.80

2.92

2.29

2.80

0.00

55 55

ILTM

Close 1,559.11 Listed cap 29,771.58 mn Payout (%) 104.74

Change 18.99 Market cap 19,646.02 mn Div Yield (%) 7.90

Volume

Last 60 days High Low

2010 Div BR (%) (%)

10.82 6.50 4.75 2.26 0.54 1.55 3.46 7.98 6.80 5.62 3.46 9.95 1.15 5.45 0.76 6.25 10.99 7.40 13.25 6.24 0.92 1.04 9.72 1.26 6.73

5505 155000 20160 4319 132231 21012 105424 150407 3114 2501 7511 600 3893 400 205 2000 1000 16200 28100 71839 48410 13430 2000 1002 2100

11.20 6.94 5.00 2.91 0.84 2.50 3.95 8.44 7.45 6.68 3.94 10.19 1.84 6.25 1.25 9.75 10.99 7.80 13.74 6.59 1.10 1.99 10.50 1.88 7.25

18.5 2.2 0 1.2 17 21 12.5 10 2.8 15.5 10 3 1.04 18 10 20 10 3 1 17 12.5

9.80 5.51 3.65 1.29 0.36 1.22 3.08 7.00 5.41 4.91 1.50 8.46 1.00 4.50 0.45 4.75 8.05 6.92 12.00 5.10 0.80 0.50 9.50 0.71 5.67

WAZIR

230.91

242.45

235.01

230.91

0.00

3330.76

3385.00

3299.00

3370.78

40.02

51

38.80

38.00

38.00

38.80

0.00

50

7.63

7.50

7.50

7.63

0.00

50

3.00

3.50

0.00

18

54.40

0.00

16

REWM

11.50

12.00

12.00

11.50

0.00

10

SRSM

3.31

3.97

3.97

3.31

0.00

10

% Change -0.34 5-Day High 308.84 5-Day Low 295.21 2011 Div BR (%) (%)

20B 20B 10B -

Close Chg -0.01 0.00 0.45 0.04 -0.02 0.04 -0.01 0.38 0.05 -0.23 0.91 0.45 -0.10 0.00 0.00 0.77 0.83 -0.15 -0.05 0.06 0.04 0.05 -0.18 -0.04 0.00

55.24

CSUML

54.00

-

1375 4.64 525 1.73 75 1.85 780 2.35 200 3.86 524 8.16 760 2.29 1008 4.13 3180 2.34 1186 0.59 283 2.23 1200 2.86 184 16.43 250 4.10 125 1000 59 6.01 1000 2.18 2835 2.72 2841 2.47 872 1.67 340 454 5.37 50 0.84 264 2.30

GATI

3.40

-

-

Performance of SR Equity Investment Instruments Index

AL-Meezan Mutual F. Atlas Fund of Funds B F Modaraba B R R Guardian Mod. Crescent St Modaraba Equity Modaraba Golden Arrow Habib Modaraba JS Growth Fund XD JS Value Fund XD KASB Modaraba Meezan Balanced Fund Mod Al-Mali Nat Bank Modaraba Pak Modaraba Pak Oman Advantage Paramount Modaraba PICIC Energy Fund PICIC Growth Fund PICIC Inv Fund Prud Modaraba 1st Punjab Modaraba Stand Chart Modaraba Tri-Star Mutual U D L Modaraba

70

54.00

EQUITY INVESTMENT INSTRUMENTS

Company

0.00

3.50

-

High Low 1,576.96 1,537.91 Total cos Defaulter cos 52 11 P/BV (x) ROE (%) 0.46 2.21

20.00

54.40

-

Open 1,540.12 Turnover 798,375 P/E (x) 20.60

19.50

GLPL

15

0.03 -0.97 0.62 -0.05 0.61 0.13 -0.44 -0.01 0.00 0.02 -0.20 -0.04 -0.12 0.07 0.01 0.00 -0.50 -0.07 0.14 0.00 0.04 0.10 0.00

19.50

DSML

44.00

0.53 21.93 18.33 23.63 15.58 1.63 1.56 4.99 3.00 1.77 7.70 0.50 2.87 1.54 7.80 3.05 21.03 5.64 3.96 5.70 1.88 0.80 1.29

20.00

2011 Div BR (%) (%)

54.00

0.50 21.85 18.05 23.33 15.00 1.50 1.56 4.31 3.00 1.76 7.63 0.45 2.80 1.44 7.71 3.00 20.80 5.62 3.70 5.85 1.81 0.80 1.29

81

GUTM

30

4001

0.64 22.70 18.65 24.18 15.97 1.69 1.56 4.99 3.00 1.89 8.45 0.60 3.24 1.54 7.99 3.19 21.48 5.84 4.79 5.90 1.92 0.80 1.29

0.00

41

51.93 -0.07

0.50 22.90 17.71 23.68 14.97 1.50 2.00 5.00 3.00 1.75 7.90 0.54 2.99 1.47 7.79 3.05 21.53 5.71 3.82 5.70 1.84 0.70 1.29

1.85

0.00

49.60

225 1.10 360 5.59 450 19.29 3750 3.16 40 119.85 250 441 First Credit & Invest Bank Ltd 650 Grays Leasing 215 IGI Investment Bank 2121 9.32 Invest and Fin Sec 600 20.81 Invest Bank 2849 Ist Cap Securities 3166 Ist Dawood Bank 626 0.69 Jah Siddiq Co 7633 JOV and CO 508 JS Global Cap 500 6.04 JS Investment 1000 47.00 KASB Securities 1000 Orix Leasing 821 3.45 Pervez Ahmed Sec 775 6.71 Saudi Pak Leasing 452 Trust Inv Bank 586 0.32

AMZ Ventures Arif Habib Investments Arif Habib Limited Arif Habib Corp Arpak Int Dawood Equities Escorts Bank

1.70

0.00

51.95

Close Chg

1.70

39.94

-

Low

1.85

41.66

-

High

98 85

EWLA

39.75

-

Open

100

0.00 0.00

41.66

50

PE

Vol

0.00

8.96

40.50

50.70

2010 Div BR (%) (%)

Change

11.43 17.00

41.66

67.99

Last 60 days High Low

Close

9.00 17.65

39.94

Performance of SR Financial Services Index

Paid up Cap(mn)

11.19

9.00 17.97

41.66

3840

Change -1.03 Market cap 15,014.54 mn Div Yield (%) 4.42

Low

11.31

8.96 17.00

SNAI

66.95 -0.90

Close 306.46 Listed cap 30,336.44 mn Payout (%) 99.56

High

11.43

KOHE

POML

66.85

High Low 318.17 301.79 Total cos Defaulter cos 41 6 P/BV (x) ROE (%) 0.20 0.91

Open

STPL

% Change -0.88 5-Day High 899.61 5-Day Low 850.70

67.00

Open 307.49 Turnover 7,643,185 P/E (x) 11.58

Symbols HICL

NESTLE

High Low 891.50 878.51 Total cos Defaulter cos 4 P/BV (x) ROE (%) 3.32 3.85

High

UPTO 100 VOLUME

KSBP

FINANCIAL SERVICES

2011 Div BR (%) (%)

Performance of SR Non Life Insurance Index Open 766.94 Turnover 551,655 P/E (x) 11.11

Paid up Cap(mn)

Company

2011 Div BR (%) (%)

- 25.00 7.8R - 30.00 - 10.00 -

27.97 73.17 8.31 37.81 70.96 59.00 17.14 5.95 11.16 8.31 5.39 2.03

Performance of SR Life Insurance Index

-

Performance of SR Electricity Index High Low 1,377.52 1,359.40 Total cos Defaulter cos 15 1 P/BV (x) ROE (%) 1.29 9.35

27.54 73.00 8.31 37.34 70.50 58.00 16.80 5.99 9.91 8.30 5.03 2.01

LIFE INSURANCE

ELECTRICITY Open 1,364.53 Turnover 5,629,190 P/E (x) 13.80

28.00 73.84 8.59 38.50 71.00 59.00 17.45 6.50 11.48 8.99 5.70 2.10

% Change 1.23 5-Day High 1,559.11 5-Day Low 1,521.02 2011 Div BR (%) (%)

- 5.00 10B - 5.00 - 10.00 - 12.50 - 7.50 - 7.50

-

ULEVER

4995.86

5098.00

4999.00

5035.78

39.92

30

ALNRS

46.95

48.98

48.98

46.95

0.00

25

BWCL

13.12

14.00

14.00

13.12

0.00

25

BUXL

7.73

7.12

7.12

7.73

0.00

MFTM

0.73

JDMT

14.50

COLG

710.00

MERIT

0.70

0.70

0.73

20

0.00

19

15.50

13.65

14.50

0.00

8

725.00

700.00

710.00

0.00

7

27.77

28.24

27.50

27.77

0.00

6

AGIC

9.60

10.50

10.50

9.60

0.00

5

FCONM

1.50

1.80

1.80

1.50

0.00

5

FFLM

1.44

1.74

1.74

1.44

0.00

5

SMCPL

4.71

5.44

5.44

4.71

0.00

5

2.80

0.00

4

314.00

0.00

4

FRCL FZTM IDRT

2.80

3.45

314.00

2.01

328.00

299.00

4.89

4.99

4.46

4.89

0.00

RMPL

2665.09

2700.00

2601.00

2665.09

0.00

4

HAJT

0.63

0.64

0.50

0.63

0.00

3

MEHT

64.94

67.10

67.10

64.94

0.00

3

FDMF

2.24

2.32

2.32

2.24

0.00

2

0.00

2

FECTC FNEL

6.33

6.88

2.66

6.30

2.77

1.70

6.33 2.66

4

0.00

2

HADC

0.50

0.50

0.41

0.50

0.00

2

NOPK

21.01

21.87

21.87

21.01

0.00

2

SAIF

7.97

8.40

8.00

7.97

0.00

2

SIBL

1.85

2.25

1.31

1.85

0.00

2

ZTL

3.25

2.90

2.90

3.25

0.00

2

AATM

0.86

1.00

1.00

0.86

0.00

DCM

1.50

1.82

1.82

1.50

0.00

DWTM

5.99

6.99

6.99

5.99

0.00

1

OLTM

0.69

0.69

0.69

0.69

0.00

1

PASM

13.00

13.00

13.00

13.00

0.00

1

PMPK

221.06

222.00

222.00

221.06

0.00

1

SCLL

2.52

2.87

2.87

2.52

0.00

1

UNIC

5.03

5.25

5.25

5.03

0.00

1 1

YOUW ZIL

1.32

1.49

1.49

1.32

0.00

61.62

62.56

62.56

61.62

0.00

1 1

1

FUTURE CONTRACTS Symbols

Open

High

Low

Close

DGKC-JUN

23.94

24.29

23.85

23.90

ATRL-JUN

138.13

140.95

137.52

Change -0.04

Vol 783000

139.66

1.53

739000

NML-JUN

60.53

61.50

60.01

60.17

-0.36

479500

POL-JUN

342.02

342.60

339.01

339.31

-2.71

338000

ENGRO-JUN 198.94

199.25

194.25

194.83

-4.11

269000

PPL-JUN

219.00

214.43

214.78

-3.88

190500

218.66

NBP-JUN

53.37

53.39

52.67

52.71

-0.66

139000

MCB-JUN

205.02

205.00

202.00

202.51

-2.51

117000 93000

FFBL-JUN

42.68

42.80

42.45

42.51

-0.17

FFC-JUN

142.87

143.01

141.56

141.72

-1.15

PTC-JUN

16.01

16.10

15.90

15.90

-0.11

LUCK-JUN

72.86

73.00

72.02

72.15

-0.71

25500

UBL-JUN

63.52

63.80

63.30

63.60

0.08

14000

34000 30000

MTS LEVERAGE POSITION Symbol AHCL AICL AKBL ANL ATRL BAFL DGKC ENGRO FFBL FFC HUBC KAPCO LOTPTA LUCK MCB NBP NCL NETSOL NML OGDC PAKRI POL PPL PSO PTC UBL TOTAL

Total Volume 899,755 30,725 85,897 213,200 107,000 1,285,937 362,120 58,287 95,000 15,700 28,000 113,750 3,824,230 1,000 39,500 731,129 374,181 19,000 369,698 64,100 316,600 36,700 87,380 57,500 24,050 28,000 9,268,439

Total Value 15,039,711 1,550,531 759,541 958,084 11,082,671 10,003,940 6,364,102 8,502,316 3,082,528 1,674,314 792,949 3,737,377 42,947,194 53,910 6,028,273 28,473,606 6,835,218 305,656 16,508,305 7,333,465 3,951,145 9,340,264 13,918,195 12,333,833 304,931 1,333,087 213,215,145

MTS Rate 19.94 16.50 19.50 16.67 19.50 15.75 16.00 15.00 16.00 16.00 15.00 16.20 16.88 20.00 20.00 16.52 16.19 15.07 16.20 16.00 16.95

BOARD MEETINGS

Nishat Mills Ltd

KSE 100 INDEX

Engro Corporation

Dera Ghazi Khan Cement Co Ltd

Company

Date

Time

First Cap Security Ltd Amtex Ltd

06-Jun 07-Jun

11:30 11:30

TECHNICAL LEVELS Company Al-Abbas Cement

Technical Outlook Technical Analysis RSI (14-day)

Brokerage House

Leverage Position

58.34

Support 1

12,133.95

MA (5-day)

12,197.63

Support 2

12,088.10

MA (10-day)

12,148.90

Resistance 1

12,260.40

MA (100-day)

11,990.29

Resistance 2

12,340.95

AKD Securities Ltd TFD Research

Target Price

Recommendations

74.65 78.6

Brokerage House

Target Price

Arif Habib Ltd

254.9 246.65

Recommendations

Brokerage House

Arif Habib Ltd

Buy

AKD Securities Ltd

36.45

Positive

TFD Research

Leverage Position

Technical Outlook Technical Analysis 58.04 23.00 25.20 26.24 Free Float Shares (mn) 200.80

Target price for Dec-11 & **Net Open Interest in future market

age and Bollinger Bands were 28 per cent narrower than normal.

Recommendations

50

Buy

68.00

33.90

32.75

25.95

26.65

Adamjee Insurance

41.11

68.45

67.60

70.60

71.90

Askari Bank

50.38

14.60

14.35

15.10

15.40

14.90

Azgard Nine

55.87

10.50

10.30

10.95

11.20

10.75

Attock Petroleum

63.99

321.20

318.60

25.50 69.75

327.20 330.60 324.60

Attock Refinery

49.67

80.60

79.75

82.85

84.20

81.95

Neutral

Bank Al-Falah

46.69

8.15

8.00

8.45

8.60

8.30

Positive

BankIslami Pak

47.62

2.90

2.85

3.10

3.20

Bank.Of.Punjab

57.56

8.55

8.30

9.10

9.35

Dewan Cement

46.08

1.45

1.40

1.65

1.75

1.55

D.G.K.Cement

48.09

24.75

24.30

26.10

26.95

25.65

Dewan Salman

42.88

1.45

1.40

1.55

1.60

Dost Steels Ltd

49.06

2.05

1.90

2.45

2.65

Technical Analysis

Leverage Position

RSI (14-day) MA (10-day) MA (100-day) MA (200-day)

45.21 MTS Shares `000 58.287 194.11 MTS Rs `000 8,502.32 206.09 MTS Rate 16.00 193.58 ** NOI Rs (mn) 168.90 Free Float Shares (mn) 176.98 Free Float Rs (mn) 34,243.45 Target price for Dec-11 & **Net Open Interest in future market

age and Bollinger Bands were 64 per cent narrower than normal.

3.05 8.85

1.50 2.25

EFU General Insurance 27.65

37.00

36.35

38.30

38.95

37.65

EFU Life Assurance

36.94

57.95

56.95

59.70

60.45

58.70

Engro Chemical

50.71

173.60

171.60

Faysal Bank

57.43

Fauji Cement

59.12

14.05 5.20

13.85 5.10

179.00 182.40 177.00 14.35

14.50

14.20

5.45

5.60

5.35

28.20

28.75

27.90

27.10

displaying an upward trend. Volatility is extremely low when compared to displaying an upward trend. Volatility is relatively normal as compared to

Habib Bank Ltd

50.84

the average volatility over the last 10 trading sessions. Volume indicators the average volatility over the last 10 trading sessions. Volume indicators

Hub Power

37.66

33.60

reflect moderate flows of volume into DGKC (mildly bullish). Trend fore- reflect volume flowing into and out of ENGRO at a relatively equal pace.

ICI Pakistan

55.63

120.50

118.90

123.20 124.30 121.60

casting oscillators are currently bullish on DGKC.

Indus Motors

44.47

225.95

223.05

230.80 232.75 227.90

J.O.V.and CO

34.50

3.30

3.20

Japan Power

52.59

JS Bank Ltd

41.22

2.05

1.90

2.25

2.35

2.15

Jah Siddiq Co

44.21

10.35

10.05

11.10

11.60

10.80

Brokerage House AKD Securities Ltd

Trend forecasting oscillators are currently bullish on ENGRO.

Fauji Fertiliser Bin Qasim Ltd

Brokerage House

Target Price

Recommendations

Target Price

Recommendations

144

Hold

Arif Habib Ltd

120.7

Reduce

AKD Securities Ltd

45.52

Accumulate

129.4

Neutral

TFD Research

44.25

Neutral

Arif Habib Ltd

Technical Outlook

Leverage Position

RSI (14-day) MA (10-day) MA (100-day) MA (200-day)

52.40 MTS Shares `000 15.70 140.50 MTS Rs `000 1,674.31 139.07 MTS Rate 125.15 ** NOI Rs (mn) 28.64 Free Float Shares (mn) 466.49 Free Float Rs (mn) 65,770.05 Target price for Dec-11 & **Net Open Interest in future market

Hold

Technical Outlook

Technical Outlook Technical Analysis

42.2

Technical Analysis

Leverage Position

RSI (14-day) MA (10-day) MA (100-day) MA (200-day)

67.17 MTS Shares `000 95.00 42.75 MTS Rs `000 3,082.53 41.32 MTS Rate 15.00 36.39 ** NOI Rs (mn) 25.35 Free Float Shares (mn) 326.94 Free Float Rs (mn) 14,195.67 Target price for Dec-11 & **Net Open Interest in future market

and Bollinger Bands were 79 per cent narrower than normal.

(consolidating) and Bollinger Bands were 31 per cent narrower than normal.

PPL is currently 4.7 per cent above its 200-day moving average and is dis- HUBC is currently 3.0 per cent above its 200-day moving average and is FFC is currently 12.6 per cent above its 200-day moving average and is FFBL is currently 19.3 per cent above its 200-day moving average and is playing an upward trend. Volatility is relatively normal as compared to the displaying an upward trend. Volatility is extremely low when compared to displaying a downward trend. Volatility is relatively normal as compared to displaying an upward trend. Volatility is extremely low when compared to average volatility over the last 10 trading sessions. Volume indicators the average volatility over the last 10 trading sessions. Volume indicators the average volatility over the last 10 trading sessions. Volume indicators the average volatility over the last 10 trading sessions. Volume indicators reflect volume flowing into and out of PPL at a relatively equal pace. Trend reflect volume flowing into and out of HUBC at a relatively equal pace. reflect moderate flows of volume into FFC (mildly bullish). Trend forecast- reflect very strong flows of volume into FFBL (bullish). Trend forecasting Trend forecasting oscillators are currently bullish on HUBC.

69.95

33.25

24.35

245.4

PPL closed down -3.61 at 213.40. Volume was 98 per cent above average HUBC closed up 0.01 at 37.73. Volume was 1 per cent below average and FFC closed down -0.68 at 140.99. Volume was 39 per cent below average FFBL closed down -0.07 at 43.42. Volume was 67 per cent below average

forecasting oscillators are currently bullish on PPL.

69.00

31.60

24.80

104.15

TFD Research

Bollinger Bands were 38 per cent narrower than normal.

66.00

32.10

47.55

27.40

Positive

and Bollinger Bands were 7 per cent wider than normal.

67.00

49.98

Arif Habib Securities

105.10

50.3

55.25 MTS Shares `000 28.00 37.75 MTS Rs `000 792.95 37.98 MTS Rate 36.65 ** NOI Rs (mn) 0.47 Free Float Shares (mn) 810.01 Free Float Rs (mn) 30,561.60 Target price for Dec-11 & **Net Open Interest in future market

52.10

54.03

Arif Habib Limited

49.98

TFD Research

RSI (14-day) MA (10-day) MA (100-day) MA (200-day)

53.25

Attock Cement

44.16

Accumulate

57.45 MTS Shares `000 87.38 212.53 MTS Rs `000 13,918.20 209.54 MTS Rate 16.20 203.88 ** NOI Rs (mn) 90.56 Free Float Shares (mn) 247.73 Free Float Rs (mn) 52,865.85 Target price for Dec-11 & **Net Open Interest in future market

52.60

Fauji Fertilizer

42.1

RSI (14-day) MA (10-day) MA (100-day) MA (200-day)

50.95

Fauji Fert Bin

Arif Habib Ltd

Leverage Position

Buy

51.45

DGKC is currently 9.3 per cent below its 200-day moving average and is ENGRO is currently 0.1 per cent below its 200-day moving average and is

AKD Securities Ltd

Technical Analysis

362.12 6,364.10 15.75 101.29 4,777.14

Fauji Fertiliser Co

Target Price

Recommendations

224

1st 2nd Pivot Resistance 3.80 4.00 3.70

46.93

195.41

DGKC closed down -0.06 at 23.79. Volume was 30 per cent above aver- ENGRO closed down -4.00 at 193.49. Volume was 17 per cent below aver-

Positive

Leverage Position

MTS Shares `000 MTS Rs `000 MTS Rate ** NOI Rs (mn) Free Float Rs (mn)

Target Price

Technical Outlook

Leverage Position

RSI (14-day) MA (10-day) MA (100-day) MA (200-day)

Buy

Technical Outlook Technical Analysis

Brokerage House

Buy

28.72

TFD Research

Hub Power Co Ltd

Pakistan Petroleum Ltd

Recommendations

30.1

AKD Securities Ltd

Technical Outlook Technical Analysis

Target Price

Arif Habib Ltd

Positive

RSI (14-day) 48.44 MTS Shares `000 369.698 MA (200-day) 11,349.90 Pivot 12,214.50 MA (10-day) 59.63 MTS Rs `000 16,508.31 63.30 MTS Rate 16.52 KSE 100 INDEX closed down -84.25 points at 12,179.81. Volume MA (100-day) MA (200-day) 58.13 ** NOI Rs (mn) 55.13 was 18 per cent below average and Bollinger Bands were 31 per Free Float Shares (mn) 175.80 Free Float Rs (mn) 10,518.11 cent narrower than normal. As far as resistance level is concern, the Target price for Dec-11 & **Net Open Interest in future market market will see major 1st resistance level at 12,260.40 and 2nd NML closed down -0.25 at 59.83. Volume was 185 per cent above resistance level at 12,340.95, while Index will continue to find its 1st average (trending) and Bollinger Bands were 36 per cent narrower support level at 12,133.95 and 2nd support level at 12,088.10. KSE 100 INDEX is currently 7.3 per cent above its 200-day moving than normal. average and is displaying an upward trend. Volatility is extremely low NML is currently 2.9 per cent above its 200-day moving average and when compared to the average volatility over the last 10 trading ses- is displaying an upward trend. Volatility is extremely low when comsions. Volume indicators reflect moderate flows of volume into pared to the average volatility over the last 10 trading sessions. INDEX (mildly bullish). Trend forecasting oscillators are currently Volume indicators reflect very strong flows of volume into NML (bullbullish on INDEX. ish). Trend forecasting oscillators are currently bullish on NML.

TFD Research

Brokerage House

Buy

RSI 1st 2nd (14-day) Support 49.23 3.45 3.35

Allied Bank Limited

ing oscillators are currently bearish on FFC.

oscillators are currently bullish on FFBL.

97.00

1.50

42.10

95.75 33.35

1.35

100.50 102.75 34.25

3.50 1.80

3.60 1.95

33.95

3.40 1.65

58.82 48.24

Lucky Cement

62.69

70.80

69.75

MCB Bank Ltd

52.59

191.20

189.40

Maple Leaf Cement

49.46

3.05

2.95

3.35

3.50

3.25

National Bank

57.99

65.75

64.70

68.15

69.45

67.10

Nishat (Chunian)

50.50

16.05

15.65

17.05

17.60

16.65

2.20

2.10

74.90

72.35

39.90

NIB Bank

49.62

Nimir Ind.Chemical

41.25

1.35

1.30

1.45

1.50

1.40

Nishat Mills

55.95

46.05

45.50

47.65

48.70

47.10

Oil & Gas Dev. XD

58.47

145.30

144.25

PACE (Pakistan) Ltd.

48.67

2.70

2.65

44.53

2.60

1.55

18.80

42.55

2.15 73.35

196.30 199.55 194.45

Netsol Technologies

Pervez Ahmed Sec

19.00

43.35

99.25

K.E.S.C

2.00

42.90

34.60

Kot Addu Power

2.05

41.70

106.70 107.35 105.75

2.50

1.40

19.50 2.85

19.80 3.00

19.30 2.75

148.20 150.05 147.15 2.80 1.85

2.85 2.05

2.75 1.70

P.I.A.C.(A)

42.83

2.10

2.05

2.20

2.25

2.15

Pioneer Cement

59.65

7.90

7.80

8.30

8.50

8.15

Pak Oilfields

67.25

233.50

231.80

237.40 239.60 235.70

Pak Petroleum

63.14

210.00

208.80

212.70 214.20 211.50

Pak Suzuki

46.15

77.00

76.55

P.S.O. XD

57.51

261.25

258.40

P.T.C.L.A

55.11

18.80

18.65

Shell Pakistan

32.99

192.00

190.50

Sui North Gas

61.53

28.45

28.20

Sitara Peroxide

45.96

8.60

8.50

8.90

9.05

8.75

Sui South Gas

67.80

21.25

20.95

21.85

22.25

21.60

78.00

78.45

77.50

267.75 271.35 264.90 19.20

19.45

19.05

196.00 198.50 194.50 29.00

29.25

28.70

Telecard

46.00

2.15

2.00

2.40

2.50

TRG Pakistan

56.46

3.60

3.45

3.90

4.10

3.80

United Bank Ltd

49.15

54.35

53.80

55.70

56.50

55.15

WorldCall Tele

46.25

2.50

2.45

2.60

2.70

2.55

2.25


8

Special Report

Friday, June 3, 2011

Economic Survey of Pakistan 2010-11 Overview of the Economy I. Introduction The economy of Pakistan has been undergoing a stabilization phase since the last three years. The restoration of macroeconomic stability is important and necessary to provide the platform for generating growth, jobs, and improving the quality of life of the people. This period has been marked by the continuing -- and intensified --security challenges the country has confronted since 2001. In addition, the country faced multiple adverse shocks of commodity and oil prices and the fallout of the global financial crisis. The year under review saw the unprecedented calamity of the great floods. These floods wiped out about 2 percentage points from the growth as well as inflicted a massive damage of $10 billion on country's economic structure. Some 20 million people were displaced as more than 50,000 Sq. Km area was submerged in water. During the year oil prices also shot up from $70/barrel to $125/barrel creating a new threat to the macro framework. Viewed in this background the growth rate of 2.4 percent registered during the year 2010-11 seems reasonable. Although much below its potential, the performance signifies the enormous resilience in the economy as it was tested several times by one crisis after another beginning with the earthquake of 2005. With some reprieve and continuing effort, there is reason to believe that the country will revert to its potential growth trajectory. The destruction of major crops, particularly rice and cotton, led to a negative growth of 4% in this sector. The manufacturing sector growth was adversely affected --and was negligible --due to reduced output in the textiles and petroleum products (affected by submersion of refineries under flood waters and the circular debt problem). Inevitably, the overall quantum of economic activities, captured by services sector was also affected, with a growth of 4.1 percent, originally targeted at 5.4%. The challenges posed by exogenous shocks affected the pace of the reforms process as the government was forced to make difficult tradeoffs and cater to unexpected demands for flood rehabilitation and the impacts of increasing oil prices. The government, while pursuing a regime of deregulation of pricing of key products was nevertheless forced to intervene in the energy and commodity markets to keep prices from getting completely out of the reach of the public. This burden of subsidies, though significantly reduced from previous years, exerted continuing pressure on the fiscal system and the adjustment path was affected. In the second half of the year, due to a combination of austerity, resource mobilization measures and bold decisions on pricing the macro-framework was stabilized and the anticipated damage to the overall fiscal position was avoided. However, more work will be required to rebuild the reforms programs, and to remain engaged with the development partners. The most significant development during the year was the historic performance of the external sector, which is heading to register a surplus in the current account. First, exports registered a growth of 28 percent in the first 10 months of the year compared to same period last year. Crossing the $20 billion mark for the first time, exports are set to exceed $24 billion. Second, the remittances have also recorded a strong performance by crossing the double digit mark and are set to reach the historic level of more than $11.2 billion. Third --and this is partly attributable to moderated demand for imports --the current account shows a Economic Survey 2010-11 ii surplus of nearly $748 million. Finally, the combined effect of these positive developments was reflected in the growth of external reserves which also touched a historic high of $17.1 billion at the end of April, 2011. Pakistan has enjoyed sustained period of exchange rate stability since December 2008. The Real Effective Exchange Rate (REER) depicted unprecedented appreciation of 10 percent in 2009-10 and marginally appreciated in the first ten months of the current fiscal year. The SBP is not intervening in the foreign exchange markets and exchange rate is market determined. The situation regarding inflation remained a key concern for the economy. For most of last fiscal year, inflation was coming down, but the shocks of floods and oil price have reversed the declining trends. It should be noted that with rising commodity and oil prices, inflation has affected all countries both regionally and globally. However, in the second half of the year, the rising inflationary trend has been stemmed and inflation is now hovering around 14 percent. With fiscal consolidation and abetment of some pressures from international prices, the inflation outlook looks better than in the earlier part of the year. Inflationary pressures inevitably brought pressure on the interest rate, and with much of the credit flowing in

the government sector, private credit, despite some growth over the previous year remained weak. With development resources preempted by unanticipated expenditures on flood relief and power and petroleum subsidies, fiscal discipline required the government to reduce its public investment to a low level in many years. Accordingly, the overall investment in the year was also below its level in the recent past. The overall monetary survey indicated modest growth in monetary aggregates. The reserves money grew by 17.1 percent in the period July-May 21, 2010-11as against 13.6 percent growth in the comparable period of last year on the back of strong growth of 73.1 percent in the NFA of the SBP. The NDA component grew steadily at 11.6 percent in the period. Broad money expansion by11.7 percent in the period July-May 21, 2010-11 is mainly drive by phenomenal growth 57.3 percent in the Net Foreign Assets (NFA) which is reflective of the positive developments in the external sector. The NDA of the banking system has expanded by 9.4 percent in the period. The tight monetary policy stance adopted by SBP is reflected in the rise in the policy rate which registered an increase of 150 bases points since July 2010 in the increments of 50 bases points. The year was the first in the implementation of the NFC Award. The award represented a radical break from the past as it transferred a larger share of divisible poor revenues to the provinces. An estimated additional amount of Rs.325 billion will be transferred to the provinces compared to the last year. Since many of the primary public services are provided by the provinces, greater availability of resources will facilitate both the improvement in quality as well as scale of such services. The passage of 18th Constitutional Amendment has led to the devolution of additional subjects to the provinces, especially those in the social sectors. It is hoped that undivided responsibility of provinces in social sectors and availability of enhanced resources will lead to much improvement the quality of social sector indicators that have been lagging behind for some time. Despite many challenges, the overall performance of the economy has been moderately satisfactory. The recent measures announced for fiscal correction should contribute to a faster recovery and resumption of growth. It was felt by some observers, that the budget deficit --the key indicator of economic stability--will reach unprecedented levels due to the difficult circumstances. However, due to sound economic management and fiscal discipline, the deficit has been contained and is estimated at 5.3% of GDP. To settle the circular debt and get more production out of the existing energy plants, the government has decided to pay additional Rs. 120 billion subsidies from for previous years. This will add an additional 0.6 percent to the deficit, bringing it to 5.9%. However, the outlook for the next year looks bright on this account as the year has fully accounted for the subsidies falling due during the year and substantial correction in such burdens is likely to be made in the years ahead. Overview of the Economy iii A brief review of the economic situation during first three quarters and prospects for next quarter is given below: II. Real GDP Sectoral Growth: The Real GDP growth is estimated to remain at around 2.4 percent compared to the target of 4.5 percent. The set back was due to the agriculture sector which was badly affected by floods. However, the strong performance of services sector which grew at 4.1 percent has kept the overall growth in a reasonable range. The sector-wise estimates are discussed in subsequent paragraphs: Agriculture sector recorded modest growth of 1.2 percent in 2010-11 against the target of 3.8 percent but provided much needed support to boost exports, revival of manufacturing sector and responsible for upbeat in the consumption. Given the enormous price inducement, the agriculture sector is likely to spearhead economic growth in the next fiscal year as well. The lower growth owing to recent floods necessitated downward adjustments in the estimates of some of major crops like rice, and cotton. The rice crop production unexpectedly went down to 4.8 million tons which will be lowest ever production since 1994-95. The wheat production stood at 24.2 million tons as against last year's actual production of 23.8 million tons. The important thing is better yield as area under cultivation fell by around 3 percent. Sugarcane is estimated at 55 million tons which will be highest in the last three years. Minor crops are estimated at 4.1 percent mainly because of enormous price incentive available and its shock resistant nature. The estimate for growth in the livestock sector is 3.7 percent as against 4.2 percent last year. Lower growth is because of the adverse impact of devastating flood destroying some of the livestock. However, recent surge in prices of livestock products and incentives provided for livestock may help

in improving the value addition in the sector in the medium-term. With changing patterns of consumption, the consumption of livestock products has increased significantly. There are indications that price incentive might work for more livestock growth. The fertilizer off-take declined by 11.3 percent, thereby representing less usage by the farmers. One reason might be higher prices as urea prices soared by 25.8 percent and DAP is expensive by 46.5 percent in the first nine months of the current fiscal year. Domestic production is up by 2.7 percent but import of fertilizer is down by 50.4 percent. Disbursement of credit for agriculture sector has increased marginally by 1.4 percent in July-March 2010-11. This fall in disbursements is largely due to substantial decline of 23.7 percent seen in one specialized bank (ZTBL) which more than offset the 9.5 percent rise in disbursements made by commercial banks. The sluggish credit performance is partially contributed by risk-averse behavior of commercial banks and weaker activity in the aftermath of floods. Large-scale manufacturing remained victim of power outages and lower domestic demand. Slowdown in largescale manufacturing from earlier projected 4.9 percent to 1.7 percent (JulyMarch 2010-11) reflects the impact of the severity of energy shortages and electricity tariff -hike leading to cost escalation. The positive terms of trade shock has helped improve competitiveness for textile sector in particular and other conventional exports based small and medium manufacturing sectors. We expect it to pick-up in months to come and improve growth performance further mainly because of capacity enhancement in some industries like fertilizer, and steel, and likely improvement in the sugar production to 4.1 million tons this year. The impact of these positive developments will feed into the growth during the period January-June 2011. Notably, the base effect will work adversely up to March 2011, and thereafter it may support growth momentum. III. Inflation: As noted earlier Inflation has reared its head in the first half of the year and posed a challenge for economic management. Two price indices like CPI and SPIN witnessed a clear downtrend in recent months; however, WI remained on upward trajectory. The inflation rate as measured by the changes in Consumer Price Index (CPI) after reaching peak at 25.3 percent in August 2008, showing easing since November 2008 with slight variations. However, following massive supply disruptions in the aftermath of devastating floods, food inflation became sole Economic Survey 201011 iv driver of overall CPI. WI inflation is primarily driven by inordinate spike in cotton prices because of its huge weight in the index. CPI inflation has moderated since January, 2011. The CPI inflation has escalated by 0.23 on month-on month (M-o-M) basis and 13.2 percent on year on-year (Y-o-Y) basis in May 2011. The cumulative increase in July-May 2010-11 is 14.0 percent as against 11.6 percent in the comparative period of last year. The recent slow-down in inflation has been due to better availability of food items, increased sugar production and a very good looking wheat crop that is exerting downward pressure on wheat and other products. The recent decline in cotton prices, continuing decline in sensitive price index and fiscal consolidation, particularly leading to a major reduction in SBP borrowings, give hope that in the months to come prices will continue to moderate though challenges will remain so long as international prices remain volatile. The fact that inflation has so far been food and energy driven is reflected in persistent decline in core inflation throughout the period until March. Since March there is a small surge, but given the construction of the index, in the months ahead core inflation may show some upsurge. However, with abetment of increase in energy prices and a likely upside of floods which experts say will be reflected in better agriculture productivity due to improvement in the quality of soil, as is already showing in the Kharif crops, it is not apprehended that the resurgence in core inflation will neutralize the slow- down in food prices. The Wholesale Price Index (WI) during first eleven months of 2010-11 has increased by 23.2 percent, as against 12.2 percent in the comparable period of last year. It has declined from as high as 35.7 percent in August 2008 to almost zero percent (0.3%) in August 2009, reflecting impact of massive decline in commodity prices in the international market. The recent spike is mainly driven by surge in the textile and energy prices. WI has moved up from 17.6 percent in June 2010 to 25.4 percent in March 2011, however, in April and May 2011, the WI has shown moderation. The recent decline in cotton prices will dampen the WI further in months to come. The Sensitive Price Indicator (SPIN) has recorded an increase of

17.9 percent during the period (JulMay 2010-11) as against 12.9 percent in the same period of last year. The upward trend is again reflecting the impact of massive supply disruptions in the aftermath of floods. The SPIN is on downward trajectory from its peak of 21.5 percent in December 2010 to 15.4 percent in May 2011. Going forward, the prices of edibles like meat, milk, and ghee/ cooking oil will be crucial in determining the fate of the SPIN. In recent times, the weakly trend is consistently declining, which will have a positive effect on CPI provided there is no more shock that would adversely affect the WI. IV. MONETARY DEVELOPMENTS: The SBP has kept its tight monetary policy stance for some time. The SBP has raised the policy rate by 150 basis points (bps), staggered in three stages of 50 bps each, since July 2010. SBP raised the policy rate by 50 bps to 13 percent on 2nd August 2010. Soon after this the economy experienced an exogenous shock in the form of massive Floods which engulfed almost one-fifth of the country. The inflation became a challenge in the aftermath of the floods which compelled the SBP to raise the policy rate further by cumulative 100 bps points to 14 percent up to 30th November 2010. Since then the need for further adjustment in policy rate was not felt simply because the inflation had started moderating and fiscal discipline was restored, with government borrowing from SBP significantly brought down. The efficacy of monetary policy to shave-off aggregate demand from the economy was affected due to unanticipated fiscal pressures emanating from revenue-expenditure mismatch. During July 01, 2010-May 21, 2011, money supply(M2) expanded by 11.7 percent against last year's expansion of 8.9 percent in the comparable period of last year. The reserve money expanded at much faster pace of 17.1 percent against the expansion of 13.6 percent in the comparable period of last year. Net domestic assets (NDA) have increased by Rs.492.6 billion as compared to increase of Rs.487.6 billion in last year, thereby showing an Overview of the Economy v increase of 9.4 percent in this period whereas, last year the growth in the comparable period was 10.5 percent. Net foreign assets (NFA) have recorded an expansion of Rs.184.6 billion against the contraction of Rs.31.8 billion in the comparable of last year. The NFA of the SBP accounted for big chunk of the improvement as it expanded by Rs.135.2 billion as against contraction of just Rs.5.9 billion in the comparable period of last year. Government borrowing for budgetary support has recorded an increase of Rs.614.2 billion as compared to Rs.397.6 billion in the comparable period of the last year. The SBP financing has shown a net increase of Rs.146.8 billion and financing from scheduled banks witnessed a net increase of Rs.467.4 billion during July 01, 2010-May 21, 2011. Credit to private sector witnessed a net increase of Rs.112.9 billion during July 01, 2010-May 21, 2011 as compared to Rs.115.5 billion in the comparable period of last year. SBP kept its monetary tightening stance during the fiscal year, further increasing the policy rate by 150 bps in three rounds. These policy measures were in response to carryover of macroeconomic stresses for some time and increase in real aggregate demand. Weighted average lending rate increased from 13.3 percent in April 2010 to 14.4 percent in April 2011. Weighted average deposit rate on the other hand has fractionally decreased from 7.37 percent in April 2010 to 7.35 percent in April 2011 which implies increase in the spread amidst intensive deposit mobilization efforts on the part of the banks. The weighted average yields on 6 months T-bill has increased by almost 141 bases points to 13.46 percent in April 2011 as against 12.05 percent in April 2010. V. FISCAL DEVELOPMENTS: Fiscal performance - both revenues and expenditures - have been affected by the floods and the policy adjustments in the face of global rise in prices of energy. The original estimates had to be revised in the light of these unprecedented happenings. Preliminary data suggests that the fiscal deficit is likely to remain between 4-4.5 percent of GDP in the first nine months of the current fiscal year. Part of the increase in the fiscal deficit is explainable on account of higher security related expenditures and the floods, however significant contribution to this increase came from higher subsidies, delay in adoption of tax measures, nonrealization of auction of 3-G license and several petroleum related incomes which were affected due to non-resolution of circular debt problem in full. The emerging fiscal situation has reinforced the urgent need to broaden the tax base, rationalize expenditure and to better insulate the economy from shocks. Although, initially a relatively higher reliance had to be placed on bank borrowings, particularly from SBP, over

time this imbalance has been corrected and the share of non-bank borrowings has been significantly increased. Beginning with the Jan-March quarter, the constraint of zero SBP borrowing on a quarterly basis has been fully adhered to. At the End of March, SBP borrowings were recorded at minus Rs.16 billion compared to the level outstanding at end June, 2010. A number of steps were adopted to improve debt management which essentially focused on reducing reliance on bank borrowings. Government now aims to restrict banks' investment in government securities only to the extent required for meeting statutory requirements. For this purpose extensive marketing efforts are taken to encourage selldown by banks of government securities to nonbank institutions and individuals while the system of national savings schemes is strengthened for mobilization of non-bank resources from the individuals. The delayed taxation measures led to the revision of FBR target from Rs.1667 billion to Rs.1588 billion. However, with slowed economic activities, including a decline in the real growth rate, the growth in revenues in the first nine months was below expectation. Accordingly, a need for mid-course adjustment was felt. Accordingly, as part of fiscal consolidation a major effort was launched in March whereby three tax measures with a revenue potential of Rs.53 in a quarter were adopted. These included the imposition of a one-time flood-surcharge on income tax, an additional excise duty of 1% on Economic Survey 2010-11 vi some selected luxury items and removal of exemptions on many goods subject to sales tax. With these measures part of the revenue lost in the first three quarters due to delay in tax measures will be recouped and the impact of reduced revenues on fiscal deficit. The revised FBR target of Rs.1588 billion, though formidable, remains on track. VI- External Sector: One bright feature of the first ten months (July-April) is the strength of the external sector. Phenomenal increase in remittances and robust growth in exports owing to sharp increase in the prices of cotton overshadowed the strong growth in imports, thereby generating the current account surplus of US$ 748 million or 0.3 percent of GDP. Overall external account has also shown improvement even when capital and current account receipts have continued to fall in this period. Exports started recovery since January 2010 and grew marginally by 2.7 percent in 2009-10 - rising from $ 19.1 billion of last year to $ 19.6 billion. However, exports rose by 14.5 percent in the second half (January-June 2010) and by 27.5 percent in the first nine months of the current fiscal year (July-March 2010-11) which is really reflecting enormous pick-up in exports. Textile sector accounted for 62 percent of buoyancy in export growth and that too is coming from the value added sector. Food group accounted for almost 17 percent increase in exports on the back of vegetables, wheat and tobacco. After living in the oblivion, leather products took advantage of escalation of commodity prices and non-traditional exports contributed 11.5 percent of exports growth. The upbeat in the export market is mostly price effect and the contribution of quantum impact is minimal. Pakistan has to strengthen its supply side to sustain current momentum in the exports because we have lost sizeable amount owing to supply constraints in terms of foregone exports. Imports registered a negative growth of 2.3 percent in 2009-10. The imports stood at $32.3 billion as against $28.1 billion last year. Notwithstanding this negative growth, the import growth in January-June 2010 (second half of FY 10) is recorded at 18.5 percent and for the first ten months of CFY (July-April 2010-11) imports recorded a hefty growth of 14.7 percent. This implies substantial pick-up in the pace of imports during the last five quarters. This incorporates impact of higher oil and commodity prices for some time. The food group accounted for 35.4 percent of import growth and, sugar and edible oil are responsible for one-fourth of imports growth. Escalation in POL prices in the international market has not impacted POL import bill significantly, mainly because of compensation coming from lower quantum terms imports of POL products. Upbeat in textile exports also reflected in imports composition as raw cotton and textile machinery is responsible for almost one-fourth of imports growth. The positive aspect of imports growth is some pick-up in raw material imports during last three months or so. Trade Balance The merchandise trade deficit has improved and declined from $12.3 billion to $12.1 billion in JulyApril 2010-11. Substantial increase of 27.8 percent in exports outstripped otherwise buoyant growth of 14.7 percent in imports, which caused the trade deficit to improve by 2.2 percent. The improvement in the trade deficit

is substantial in the January-April 2011 when trade deficit averaged $636 million per month as against $957 million in the period Jul-December 2010. In the month of April 2011, the trade deficit narrowed to just $236 million which implies substantial improvement in the trade deficit is yet to come. This reflects the impact of positive terms of trade shock as Pakistan's exports prices grew at much faster rate than import prices. Unit value of exports has increased by 37.1 percent as against increase of 23.4 percent in unit value of imports, thereby causing improvement in terms of trade indices by 59.3 percent. The improvement in unit value of exports is more pronounced in manufacturing category where it increased by 37.1 percent because of huge price boost to textile export prices. Workers' remittances reached record $ 9.1 billion mark in the first ten months (July-April) of 2010- 11as against $ 7.3 billion in the comparable period of last year, depicting an increase of 23.8 percent. Overview of the Economy vii The remittances from Saudi Arabia recorded massive growth of 36.7 percent, followed by EU (38.3 percent), UK (34.9 percent) and UAE (25.7 percent). The remittances for the first time in the history crossed the one billion dollar mark in March and April 2011. This has raised the hope that workers' remittances will cross the $ 11 billion this year. Current Account Balance Pakistan's current account balance shrank by 121.6 percent in the first ten months of 2010-11. The current account balance turned to surplus $748 million from deficit of $3456 million in the comparable period of last year. The improvement is broad based and improvements witnessed across the board in trade balance of goods and services, and income account while buoyancy in current transfers helped current account to turn into surplus. Current account absorbed extraordinary commodity and oil price shocks without impacting exchange rate or reserve accretion. This is mainly because of higher inflow of worker's remittances and sharp reduction in trade of goods and services deficit. The services credit also improved by 24.6 percent in comparison to just 6.6 percent increase on debit side. Foreign Exchange Reserves amounted to $ 17.1 billion by the end of April 2011. Of this amount, reserves held by State Bank of Pakistan stood at $ 13.7 billion and by banks stood at $ 3.4 billion. The reserve coverage for import of goods and services has improved to 4.6 months. The improvement in reserves can also be attributed to account valuation impact and benefited from lower current account financing requirement. Exchange rate remained more or less stable as rupee depreciated by just 2.2 percent in July-April 2010-11, however, Real Effective Exchange Rate (REER) appreciated by 0.8 percent in the period. Pakistan economy has witnessed unprecedented sustained exchange rate stability since January 2009. This is evident from the fact that REER had appreciated by 10.2 percent in 2009-10. Exchange rate stability could provide impetus to economic growth in normal circumstances. Foreign direct investment (private) stood at $ 1,232 million during JulyApril 2010-11 as against $1,725 million in last year, thereby showing a decline of 29 percent. This is mainly due to volatile security condition in the country. Power, oil and gas and financial businesses remained the main attraction for foreign investors. External Debt and Liabilities (EDL) stood at $ 59.5 billion by end-March 2011 up from end-June level of $55.9 billion. The major chunk originates from translation impact of weaker dollar against major currencies such as euro and yen. IMF outstanding stock stood at $8.9 billion as against $8.1 billion at endJune 2010. Similarly, Paris Club debt went up to $15.1 billion as against $14 billion, only on account of translation effect rather than fresh net disbursements. The net impact of cross-currency valuation cost net addition of $2.7 billion to the external debt stock while total addition to EDL was just $ 4 billion. This implies almost three fourth of addition to debt stock was coming from transnational impact. Notwithstanding this adverse impact, EDL grew by just 6.4 percent which is the lowest ever increase in EDL stock in the last five years. Resultantly, the EDL stock in relative terms has decreased by 3.4 percentage points from 31.6 percent of GDP by end-June 2010 to 28.2 percent by endMarch 2011. The debt burden as measured by EDL as percentage of foreign exchange earnings decreased from 146.6 percent by end-June 2010 to 127.2 percent by end-March 2011. Conclusion The present government started off its term with a inherited backlog of problems - deficits, electricity shortages, security expenditures, resettlement of IDPs, low growth and entrenched inflation. The year under review brought new and totally unexpected challenges such as the


Special Report

Friday, June 3, 2011

9

Economic Survey of Pakistan 2010-11 increase in the price of oil and the devastating floods that created huge losses to crop and livestock sector, physical infrastructure and the GDP. Despite all these challenges the performance of economy has been positive as elaborated in the early part of the chapter. The government has shown continuing resolve to take difficult decisions and pursue the path of reforms. The economic stabilization program of the government includes measures like: (i) Economic Survey 2010-11 viii broadening of tax base through reformed GST and other tax measures; (ii) elimination of subsidies especially the power sector subsidies and (iii) amendment in SBP Act to place limit on government borrowing from SBP; and (iv) direct cash grants to poorest of the poor through Benazir Income Support Program (BISP) and Watan Card Scheme for flood affected people. In addition to above; the reform agenda in the economic and financial sector also include: ` l Restructuring of Public Sector Enterprises l Power Sector Reforms l Debt management strategy l Fiscal austerity to reduce fiscal deficit l Tight monetary policy to check inflation l Building foreign exchange reserves to stabilize the exchange rate l Promoting exports l Incentivizing home remittance l Strengthening social safety nets to mitigate impact of stabilization measures through Benazir Income Support Program (BISP) l Promoting growth, and raising domestic revenues l Rationalizing subsidy regime to reduce pressure on the budget l Tax administration and policy reform to mobilize domestic resources. The above reforms agenda is comprehensive as it takes into account the major challenges that remain on horizon. In the years ahead government is determined to sustain macroeconomic stability, spur growth through the new growth framework that relies more on building peoples, markets and institutions of governance and other softer sides of intervention as opposed to single-minded focused on brick and mortar infrastructure. Inclusive growth will only be possible when people are empowered and their productivities are enhanced to a level where they can compete confidently at the global level. EXECUTIVE SUMMARY Growth and Investment The Real GDP is estimated to grow at 2.4 percent on the back of strong performance of services sector which is lower than target for the year at 4.5 percent as envisaged in the Annual Plan 2010- 11. This deviation from the target is attributed to slower growth in the manufacturing and agriculture sector. The growth in the agriculture is estimated at 1.2 percent on the back of 3.7 percent growth in the livestock sector. The slower growth is mainly because of recent flood driven downward adjustments in estimates of some of major crops like rice, and cotton. Minor crops are estimated at 4.1 percent mainly because of enormous price incentive available and its shock resistant nature. Large-scale manufacturing remained victim of power outages and lower domestic demand as it grew by 0.98 percent (July-February 2010-11 incorporated in the national accounts but the growth is now 1.7 percent in JulyMarch 2010-11) as against 4.9 percent of last year. Deceleration in growth inhabits the impact of severity of energy shortages and electricity tariff hike leading to cost escalation. The positive terms of trade shock has helped improved competitiveness for textile sector in particular and other conventional exports based small and medium manufacturing sector. The underlying improvement is not reflected in large-scale manufacturing because they are mainly concentrated in the informal sector. Services sector grew by 4.1 percent as against 2.9 percent last year. The main contributors to this growth are public admn and defence (13.2 percent), and social services sector (7.1 percent). The former because of 50 percent pay rise for government servants and higher defence spending, the later because of logistics support and flood generated social activities. The contribution to economic growth is spearheaded by the services sector with 90 percent stake while only 10.0 percent contribution came from the Commodity Producing Sector (CPS). One of the important components of CPS, manufacturing alone contributed 23 percent to real GDP growth; however, this is more than neutralized by 25.4 percent negative contribution Overview of the Economy ix of relatively smaller sector, electricity and gas distribution. Thanks to 10.7 percent positive contribution from the agriculture, the overall negative contribution of the industrial sector could not prevent commodity producing sector to contribute positive 10.7 percent to the GDP growth. From demand side, it was totally consumption driven growth with negative contributions from net exports and investment. Pakistan's per capita real income has risen by 0.7 percent in 2010-11 as

against 2.9 percent last year. Per capita income in dollar term rose from $ 1073 last year to $ 1254 in 2010-11, thereby showing tremendous increase of 16.9 percent. This is mainly because of stable exchange rate as well as higher growth in nominal GNP. Real private consumption rose by 7.0 percent as against 4.0 percent attained last year. However, gross fixed capital formation lost its strong growth momentum and real fixed investment growth contracted by 0.4 percent as against the contraction of 6.1 percent in last fiscal year. The total investment has declined from 22.5 percent of GDP in 2006-07 to 13.4 percent of GDP in 2010-11. The national savings rate has decreased to 13.8 percent of GDP in 2010-11 as against 15.4 percent of GDP last year. Domestic savings has also declined substantially from 16.3 percent of GDP in 2005-06 to 9.5 percent of GDP in 2010-11. Agriculture Agriculture still provides employment to 45 percent population and provides essential input for agro-based industry. Agriculture income has created demand for industrial products. Agriculture provided main impetus to economic growth by creating additional demand of goods and services as a result of higher prices of agricultural produce. As a result of inordinate spike in prices of major crops, an additional amount of Rs. 342 billion was transferred to the rural areas in 201011 alone. Contrary to this only Rs.329 billion were transferred to the rural areas on account of higher prices of major crops during the eight years (2001-2008). The highest ever wheat crop provided strength to the attainment of the objective of food security this year. Agriculture sector recorded modest growth of 1.2 percent in 2010-11 but provided much needed support to boost exports, revival of manufacturing sector and responsible for upbeat in the consumption. Given the enormous price inducement, the agriculture sector is likely to spearhead economic growth in the next fiscal year as well. The agriculture has lost significant growth momentum as its growth slowed down to 2.7 percent in the decade of 2000s as against 4.4 percent in 1990s and 5.4 percent in the 1980s. The structural problems and lack of mechanization remained main impediment to growth. Major crops remained the victim of natural calamities during the last few years and three out of last four years witnessed negative growth in the major crop sector. The unprecedented floods in July 2010 destroyed two major crops, i.e. rice and cotton. As reported by SUPARCO, an area of 2.364 million hectares under Kharif Crops 2010 was damaged. During the outgoing year 2010-11, the overall performance of agriculture sector exhibited a weaker growth mainly due to negative growth of major crops and forestry. Against the growth target of 3.8 percent, and previous year's performance of 0.6 percent, agriculture is estimated to grow by 1.2 percent. Major crops, accounting for 31.1 percent of agricultural value added, registered a negative growth of 4.0 percent for second year in a row mainly because of decrease in production of rice and cotton by 29.9 and 11.3 percent, respectively. Minor crops accounting for 10.9 percent of overall agriculture value addition, grew by 4.8 percent as against negative growth of last two years. The Livestock sector having 55.1 percent stake in the agriculture sector was also impacted by the massive floods and witnessed marked slowdown recorded growth at 3.7 percent in 2010-11 as against 4.3 percent last year. The sector is immune from weather related problems and thus offers prospects for consistent growth. Fishery sector grew by 1.9 percent as against last year's growth of 1.4 percent. Forestry has experienced negative growth of 0.4 percent this year as compared to last year's positive growth of 2.2 percent. Economic Survey 2010-11 x Pakistan's agricultural performance is dependent upon availability of irrigation water. As against the normal surface water availability at canal heads of 103.5 Million Acre Feet (MAF), the overall (both for Kharif as well as Rabi) water availability has been less in the range of 2.5 percent (2005-06) to 20.6 percent (2004-05). Relatively speaking, Kharif season 2010 faced more shortage of water than any other Kharif season since 2003-04. During the current fiscal year (2010-11), the availability of water as a basic input for Kharif 2010 (for the crops such as rice, sugarcane and cotton) has been 20 percent less than the normal supplies and 21 percent less than last year's Kharif season. The water availability during Rabi season (for major crop such as wheat), is, however, estimated at 34.6 MAF, which is 5.0 percent less than the normal availability, and 38 percent more than last year's Rabi crop. The domestic production of fertilizers during the first nine months (JulyMarch) of the current fiscal year was up by 2.7 percent over the same period last year. The import of fertilizer decreased by 50 percent; hence, the total availability of fertilizer also decreased by 15 percent over the same period last year. Total off-take of fertilizer has also reduced by 11.3 percent.

Keeping in view the increasing demand of credit due to recent unprecedented floods and torrential rains in the country, the Agricultural Credit Advisor Committee (ACAC) has allocated agriculture credit disbursement target of Rs.270 billion for 2010-11 as compared to Rs.260 billion fixed for last year. Out of the total target, Rs. 181.3 billion were allocated to commercial banks, Rs. 81.8 billion to ZTBL and Rs. 6.9 billion to Punjab Provincial Cooperative Bank Limited(PPCBL). During the period (July-March ,2010-11), all the banks have disbursed Rs. 168.7 billion or 62.5 % of the target compared with disbursement of Rs. 166.3 billion during corresponding period last year. Manufacturing The performance of the Large Scale Manufacturing (LSM) sector during July-March remains victim of operational constraint on account of energy/gas shortages and devastating effects of flood 2010. It is evident from the fact that the momentum in growth was upset in the initial months of current fiscal year. The construction, petroleum refining, cotton textile and agro-based industries were strongly affected. Textile sector suffered heavily from the loss of cotton crop and other industries heavily dependent on gas i.e. fertilizer industry adversely affected by shortage in gas supply. However, LSM posted positive growth in December 2010 onwards. The major sectors contributed to positive trends in LSM are improvement in sugar production, automobile and strong external demand supported the growth in chemicals and leather. Moreover, significant rise in worker remittances as well as public and private transfers to the flood affected population and huge transfers to rural areas producing cotton and sugarcane has strongly impacted on the consumer demand for durable goods. Quantum Index of Large Scale Manufacturing (QIM) managed to register positive growth of 1.71 percent during the period July-March 2010- 11. Main contributors to this modest growth include leather products (30 percent), automobile (14.6 percent), food, beverages & tobacco (9.3 percent), paper & board (2.9 percent), chemical (1.4 percent), fertilizer (0.8 percent), pharmaceutical (0.5 percent) and textile (0.2 percent). However, some groups dragged index down with negative growth include; engineering product (15.4 percent), steel product (13.1 percent), electronic (12.9 percent), non-metallic minerals (9.6 percent) and petroleum products (4.2 percent). Textile industry contributes about 60 percent to the total export earnings of the country, accounts for 46 percent of the total manufacturing and provides employment to 38 percent of the manufacturing labour force. Textile sector performance has shown slight improvement owing to spike in global prices and its production slightly increased. The mining and quarrying sector is estimated to grow by 0.4 percent in 2010-11 as against 2.2 percent growth registered during last year. Natural gas, crude oil and dolomite posted positive growth Overview of the Economy xi of 1.9 percent, 1.1 percent and 5.9 percent, respectively during the current financial year. However, most of minerals witnessed negative growth rate during the period under review, the growth of coal declined by 4.0 percent, followed by chromite 39.3 percent, Magnesite 60.9 percent and barites 32.6 percent, respectively. Fiscal Development Intensification of war on terror put additional burden on public finances at a time when weaker domestic economic activity is taking its toll on revenue mobilization efforts. Fiscal balance deteriorated in 2009-10, and some adjustment is expected in fiscal deficit. A low and declining tax-toGDP ratio and increasing public debt stock has imposed a constraint on the size of fiscal stimulus to support revival of growth momentum needed for the economy. It was therefore, a number of economic and financial reforms were undertaken, that includes l Rationalization of Expenditure l Optimization of Available Resources l Process Re-engineering and l Efficiency of Operation l Restructuring of Public Sector Enterprises l Power Sector reforms The government has also announced various temporary tax policy measures through Presidential Ordinance to generate additional revenues of Rs 53 billion during the last quarter of 2010-11. These are as follows:Withdrawal of sales tax exemption on agriculture inputs like tractors, pesticides, and fertilizer both at domestic and import stages. Now these are subjected to 17 percent GST A onetime surcharge of 15 percent has been imposed on withholding and advance taxes payable during financial year 2011; and Special excise duty rate has been increased from 1 percent to 2.5 percent on non-essential items for the remaining period of tax year 2010-11. Total expenditures witnessed an overall decline since 2007-08. The decline in total expenditure (1.7 percentage point of GDP) is shared by current expendi-

ture (1.2 percentage points) and development expenditure (0.9 percentage points) during the past 3 years. However in 2010-11, the total expenditure is expected to reach at Rs. 3257 billion or 18.0 percent of GDP. On the other hand, total revenues are expected to rise by Rs 2,574 billion or 14.6 percent of GDP. Fiscal deficit as a percentage of GDP has declined from 7.6 percent in 2007-08 to 5.3 percent in 2008-09 on account of a drastic cut in development expenditures. Nonetheless, the fiscal consolidation witnessed in 2008-09 evaporated with an increase in fiscal deficit by 6.3 percent in 2009-10, which was 1.5 percent more than the budget estimate for 2009-10 due to large additional subsidies for the electricity sector and higher security related expenditure. Meanwhile, the catastrophic floods, which hit Pakistan in the summer of 2010, reduced growth and posed a further challenge to public finances by depressing budget revenues and necessitating additional spending to meet the humanitarian and reconstruction needs, thereby necessitating upward adjustment in the fiscal deficit target from 4 percent of GDP at the time of budget announcement to 5.3 percent of GDP. According to the consolidated revenue & expenditure of the government, total revenues grew by 6.2 percent during July-March 2010-11 and reached to Rs1,489 billion as compared to Rs1,402 billion in the same period last year. The increase is mostly coming from higher tax revenues partially contributed by direct taxes on the back of advance income tax payments and growth in taxes on goods and services and international trade due to increase in rupee imports. On the other hand, growth in non-tax revenues decreased by 5.7 percent mainly because of a decline in transfer of SBP profits. Economic Survey 2010-11 xii Within overall revenues, FBR taxes witnessed a growth of 12.6 percent during July-April 2010-11, and reached at Rs 1,156 billion against Rs 1,026.5 billion in the same period last year. However, other tax revenues neutralized this growth. Negative growth in non-tax revenues neutralized further total revenue growth to just 6.2 percent. Total expenditure increased at much faster rate of 11.5 percent during JulyMarch 2010-11 and thus widened the revenue-expenditure gap. Unsustainability of the fiscal balance emanates from the persistent growth in expenditure caused by flood relief activities, security related expenditure and delay in the implementation of tax reforms. External resources for financing of budget deficit amounted to Rs 61 billion, and insufficiency of the external financing shifted more reliance on domestic resources to finance the fiscal deficit during JulyMarch 2010-11. Fiscal deficit as a percentage of GDP stood at 4.3 percent during the first nine months of 201011 against the revised target of 5.3 percent for the whole fiscal year. Money and Credit Inflationary pressures were quite severe in the beginning of fiscal year 2010-11 and become worse by the devastating floods. Moreover, the dried up external financing flows due to difficulties in IMF program and insufficient funds from non-bank sources raised the pressures on SBP borrowing to finance the fiscal deficit through most of first half of fiscal year 2010-11. To target the inflation and to contain the aggregate demand induced risks to macroeconomic stability, SBP raised the policy rate by 150 basis points (bps), staggered in three stages of 50 bps each, since July 2010. SBP raised the policy rate by 50 bps to 13 percent on 2 nd August 2010. Soon after which country experienced an exogenous shock in the form of Floods. Consequently, the rate was further increased by cumulative 100 bps points to 14 percent up to 30 th November 2010. While keeping in view the risks to inflation and economic growth, SBP has decided to keep the policy rate unchanged at 14 percent on 29 th January 2011. The YoY growth in broad money (M2) increased sharply to 9.6 percent during July-April, 2011 against 8.1 percent in the corresponding period last year. Net Domestic Assets (NDA) during July-April 2011 reached at Rs 402.5 billion against Rs 446.1 billion during the same period last year. The expansion in NDA mainly attributed by a rise in demand for private sector credit and government borrowings.On the other hand the NFA of the banking system during the period under review had increased by Rs 153.2 billion after registering a significant decline of Rs 31.3 billion during the same period of last year. The increase is due to record inflow of worker remittances worth $9 billion which are expected to cross historical $11 billion mark by the end of current fiscal year. The government borrowing from the banking system for budgetary support and commodity operations stood at Rs342.2 billion during July-April, 2011 on account of weak fiscal position. Government has borrowed Rs 196.3 billion from the State Bank of Pakistan (SBP) , while Rs 275.9 billion has been borrowed from the scheduled banks during JulyApril, 2011. Less than expected nonbank and external financing for bud-

getray support have compelled the government to borrow from the SBP and scheduled banks since October 2010. Nevertheless, the government was heavily dependent on SBP borrowing till November 2010, that has witnessed some respite in the later half of December 2010 when the government retired a large part of its debt to SBP. The credit to private sector during July-April, 2011 was Rs 156.7 billion compared to Rs 144.2 billion in the corresponding period last year. A strong growth has been witnessed since January 2010 that was mainly due to an increase in seasonal demand for working capital. More than half of private sector credit went to the textile sector showing higher input prices, especially that of cotton. Sector wise breakup of private sector credit also shows that sugar and textile industries were the major drivers to this increase, which respectively availed credit of Rs 105.6 billion and Rs 62 billion during Jul-March 2011. Liquidity conditions in the money market remained fairly comfortable during July-March 2010-11 underpinned by the reduced government Overview of the Economy xiii borrowings from the SBP and growth in bank deposits. SBP drained this excess liquidity not only through auctions, but also mopped up a significant amount through open market operations (OMOs). The SBP mopped up Rs 540.2 billion during July-March 2010-11 against the injections of Rs 1032.3 billion whereas in the comparable period of last year absorption of Rs 242.1 billion against the injection of Rs 3352.5 billion has taken place. The SBP accepted Rs 2527.5 billion from the primary market of T-bills during JulyMarch 2010-11 as compared to Rs 999 billion in the same period last year. Market offered a total amount of Rs 4018.5 billion during the first nine months of 2010-11. Capital Markets During the period from July-March 2010-11 the capital markets demonstrated wavering rising trend and posted modest gains. Pakistan's stock markets have remained buoyant during the first two quarters of the 2010-11 in terms of market index and market capitalization, which was remained steady till January 2011. In the current fiscal year, the Karachi Stock Exchange (KSE) retained its prominent position in Pakistan's capital markets, offering efficient, fair and transparent way of trading securities. This can be compared with any market in the region and enjoying full confidence of the investors. During the period July-March 2010-11, the benchmark KSE-100 index showed a steady growth subsiding the economic uncertainties like implementation of Reformed General Sale Tax (R-GST) and concerns over losses incurred by the massive floods across the country. The most concerning factor to highlight since the start of the fiscal year has been gradual deterioration of the market activity/volume. The KSE-100 index recorded a bullish trend during first half of the current fiscal year (CFY) as the market was trading around 12,000 at the end of December 2010. The KSE- 100 index however, remained steady during the third quarter of 2010-11 and after touching at 12,682 on January 17, 2011 traded at 11810 points at the end of March. The main reason of better performance in mid May 2011 in the stock market and gearing up the momentum in the KSE100 is considerable foreign investment. Investment in capital market during the period July-March 2010- 11 by the foreign investors depicted a net inflow of US$ 301.5 million, but noteworthy contribution was made during the first two quarter of 2010-11. The leading stock markets of the world observed high growth during the fiscal year 2010-11 ranging from 8.1 percent in Japan to the highest market return up to 66.8 percent as peace dividend in Sri Lanka. Pakistan Investment Bonds (PIBs together with the National Saving Scheme 9NSS) instruments primarily hold a larger portion of local fixed income market. They provide the government with long-term maturity debt. State Bank Pakistan (SBP) held seven auctions in 2010-11 and government amassed Rs. 83.4 billion in 201011. To cope with the liquidity requirements of Shariah compliant banking institutions, the target for the auction of fourth GoP Ijara Sukuk is set at Rs 40 billion during Fiscal Year 2010-11 while it was 20.4 billion in revised budget in FY 2010. Three auctions were held in JulyMarch 2010-11. Total amount offered for the said bids was Rs.179.3 billion against target of Rs.125 billion while Rs.136.5 billion were accepted. As of March 31, 2011 there were 3.8 million investors with different National Saving Schemes (NSS). During the fiscal year July-March 2010-11, net deposits with National Saving Schemes increased to Rs 1,822.4 billion. Significant progress has been made on capital market reforms, including formulation of a comprehensive policy for dealing with companies in default of securities market laws to protect the investor, enhance transparency and improve member listing. In order to cater to the financing needs of the market and to bring in liquidity, the securities (Leveraged Markets and

Pledging) Rules were finalized in coordination with the relevant stakeholders and promulgated on February 18, 2011. Rules provided the broader regulatory cover to the products of Margin Financing, Margin Trading and Securities Lending and Borrowing. Subsequently, the regulatory framework of the stock exchanges, the National Clearing Company of Pakistan limited (NCCPL) and the Central Depository Company of Pakistan Limited (CDC) was also amended to Economic Survey 2010-11 xiv provide for the operational aspects of the said mechanisms. Inflation Inflation as measured by the changes in Consumer Price Index (CPI) has escalated by 1.62 on month-on-month (M-o-M) basis and 13.0 percent on year-on-year (Y-o-Y) basis in April 2011. The cumulative increase in JulyApril 2010- 11 is 14.1 percent as against 11.5 percent in the comparative period of last year. During the last 10 months food has remained the major driver of the inflation on the back of major supply disruptions owing to devastating floods as well as spike in imported food stuff prices. Food inflation recorded at 18.4 percent while non-food component increased by 10.4 percent in this period. The Wholesale Price Index (WPI) during first ten months of 2010-11 has increased by 23.3 percent, as against 11.3 percent in the comparable period of last year. The recent spike is mainly driven by upsurge in textile and energy prices. WPI has moved up from 17.6 percent in June 2010 to 25.9 percent in April 2011. The Sensitive Price Indicator (SPI) has recorded an increase of 18.5 percent during this period (Jul-April 2010-11) as against 11.3 percent in the same period of last year. The upward trend is again reflecting the impact of massive supply disruptions in the aftermath of floods. The SPI is on downward trajectory from its peak of 21.5 percent in December 2010 to 16.1 percent in April 2011. The underlying factors for this spike are; rising international oil prices, spike in textile products prices and shortages of key consumer items in the market. However, inflation is largely driven by food prices enforcing the overall inflation to move up. The supply shocks adversely impacted food inflation and was more visible in prices of heavy weights like pulses, rice, meat, milk sugar and vegetables. Trade and Payments Pakistan economy witnessed current account surplus of $ 748 million during July-April 2010- 11. This was possible by phenomenal increase in remittances, robust growth in exports primarily because of positive terms of trade shock that overshadowed the strong growth in imports, and stable exchange rate. Overall external account has also exhibited improvement even when capital and financial account receipts have continued to decrease during this period. Merchandise exports rose to $20.2 billion in July-April 2010-11 as against $ 15.8 billion in the comparable period of last year, thereby showing inordinate growth of 27.8 percent. The growth in exports remained broad based as almost all the groups (textile and non-textile) witnessed a high positive growth. However, the lion's share of this year's exports came from textile sector and food group contributing 61.8 percent and 18.1 percent, respectively to overall exports growth during the period under review. Merchandise imports during increased to $ 32.3 billion in JulyApril 2010-11 as against $ 28.1 billion in the comparable period of last year, thereby showing an increase of 14.7 percent. The overall import bill is higher by $ 4.1 billion, reflecting the impact of higher global crude oil and commodity prices. The higher import bill is contributed by food group ($ 1,528 million), petroleum group ($ 678.3 million), consumer durables ($ 247 million), raw material group ($ 1,039 million), telecom ($ 245 million) and on other items group ($ 951 million). The price and quantity effects worked in the same direction; however price effect remained stronger than quantity effect. During July-April 2010-11, the current account deficit turned to surplus of $748 million from deficit of $3,456 million in the comparable period of last year. This year's improvement in current account is broad based as improvement witnessed across the board in all subcomponents including balance of goods, services and income account while buoyancy in current transfers helped current account to turn it into surplus in the form of higher export growth, strong and sustained inflows of workers' remittances, logistic support related receipts and grants received for flood relief. In the backdrop of improvement in all sub groups, the current account absorbed commodity and oil price shock of high intensity without impacting exchange rate or foreign exchange reserves. Within the current account, deficit in Overview of the Economy xv trade account contracted by 10.8 percent during July-April 2010-11 over the last year which remained at $8,285 million Decline in services account deficit by 28.2 percent during JulyApril 2010-11 was the result of 24.7


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Economic Survey of Pakistan 2010-11 percent growth in services exports that outpaced 6.6 percent growth in services imports. Robust growth in services exports came from logistic support receipts ($743 million), transportation ($1,188 million), travel ($289 million) and other business services ($573 million). Net inflows in the financial account declined to $412 million in July-April 2010-11as against $3,533 million during the same period last year. The massive decline in inflows is unevenly contributed by debt creating and non-debt creating inflows. The massive fall in disbursement of loans is witnessed. The inflow of disbursements of long term loans stood at $1964 million in July-April 2010-11 as compared to $3020 million in the comparable period of last year. Amortization payments witnessed some upsurge and resultantly net inflow of loans stood at $333 million as against $1472 million in the comparable period of last year. On the other hand non-debt creating inflows registered negative growth of 7.1 percent by declining to $1491 million from $1605 million. Portfolio investment provided a cushion against worsening of financial account and recorded inflow of $298 million as against outflow of $48 million. FDI component registered much of the decline in nondebt creating inflows as Foreign direct investment (FDI) declined by 28.7 percent during July-April 201011 as a result of fall in equity capital and reinvested earnings. The decline in FDI in Pakistan mainly led by the domestic factors such as deteriorated law & order situation, energy crises, circular debt issues and weak economic activity. Remittances for the first time in the history of Pakistan crossed the one billion dollar mark in a single month during March 2011 and remained over the one billion for second consecutive month in April 2011 which has boosted optimism about workers' remittances to cross the $11 billion this year. Pakistan Remittance Initiative (PRI) has removed many irritants and incentivizes routing of remittances through former channel. Workers' remittances totaled $9.1 billion in July-April 2010-11 as against $7.3 billion in the comparable period last year depicting an increase of 23.8 percent. This implies that worker remittances have increased by $ 1.8 billion in JulyApril 2010-11 which contributed by that amount in improvement of the current account balance. The recent upsurge in remittances can be attributed to the government's efforts for transformation of remittances from informal to formal channels. In addition to that increased support to flood affected relatives also contributed this improvement in remittances. The rising trend in Pakistan's foreign exchange reserves continued unabated since 2008-09 and reached to $17.1 billion by endApril 2011. Out of $17.1 billion, reserves held by SBP stood at $13.7 billion and by banks stood at $3.4 billion. The continued build up in foreign exchange reserves, a surplus in the current account balance and a sufficient inflow of remittances through official banking channels have strengthened Pak rupee vis-Ă vis the US dollar both in the interbank and open market. During JulyApril 2010- 11, the Pakistan's rupee against US dollar depreciated by 2.2 percent against the 6.6 percent depreciation in same period last year. This comparative stability in rupee mainly owes to improvement in country's overall external account surplus position during the period. External and Domestic Debt Public Debt increased by Rs 1162 billion in the first nine months of 2010-11, reaching a total outstanding amount of Rs. 1,002,0 billion; an increase of 13.1 percent in nominal terms. The primary source of increase in public debt during JulyMarch, 2011 has been a sharp rise in local currency component that accounted for 69.7 percent of the total increase in total public debt. This was primarily due to the slower disbursement from multilateral and bilateral donors and higher than budgeted fiscal deficit. The external debt component grew by Rs 275 billion or 6.4 percent partially due to increased foreign public debt inflows and partly because of crosscurrency translation effect. Public debt as percent of GDP has decreased to 55.5 percent by endMarch 2011 Economic Survey 201011 xvi after hovering around to 60 percent of GDP for two years. External debt and liabilities (EDL) During the first nine months of the current fiscal year 2010- 11, Pakistan's total external debt increased from $55.9 billion at endJune 2010 to $ 59.5 billion by endMarch 2011 - an increase of US $ 3.6 billion or 6.4 percent which is lowest growth in EDL in the last five years. The EDL experienced an expan-

sion of 14.1 percent and 13.4 percent in fiscal year 2008 and 2009, respectively mainly because of huge inflow of IMF SBA amount. A falling current account deficit, low foreign currency debt creating flows and depreciation of USD against other foreign currencies were the main factors associated with muted growth witnessed in EDL. In relative terms, EDL as percentage of GDP decreased from 31.6 percent at end-June 2010 to 28.2 percent by end-March 2011- a decrease of 3.4 percentage points. Domestic Debt is positioned at Rs 5462.2 billion at end-March 2011 which implies net addition of Rs.803.9 billion in the nine months of the current fiscal year. In relation to GDP the domestic debt stood at 30.2 percent of GDP which is lower than end-June 2010 level at 31.4 percent. The domestic debt grew by 17.3 percent which is lower than last years' growth of 20.7 percent. The focus on deficit financing through internal sources owing to non-availability of external receipts has been the major cause. The composition of major components shaping the domestic debt portfolio has undergone a complete transformation from a high dominance of unfunded debt to an increasing dependence on floating component of domestic debt. Since 2004, the unfunded category comprising about 45 percent of the aggregate debt stock has declined to 29.3 percent of the total during July-March, 2011. The share of permanent debt has also decreased over the same period and it stood at 18.5 percent by endMarch 2011. Contrary to this, the share of floating debt (short term domestic debt) increased from 27 percent in the period 2004 to 52.2 percent at endMarch 2011. Since 2006-07, domestic debt witnessed a sharp rise with consequent build-up in the interest payments. Interest payments as percent of GDP has peaked to 4.4 percent of GDP in 2008-09 but since then declined persistently to 2.5 percent of GDP in 2010-11. This also incorporates impact of higher nominal GDP growth. Higher fiscal deficit and enormous slippages in the revenue and expenditure targets remained key problems. Supplementing to the intensity of the situation was a policy overhang and the monetization of the deficit through central bank borrowings. Education Educated human capital has been found to have strong and consistent positive effects on economic growth and productivity of a country. It reflects substantial impact on the degree of social cohesion in a country. An extremely high portion of the education budget is spent on recurrent heads, mainly comprising of salaries in contrast to the meager amount spent on quality improvements, such as teacher's training, curriculum development, supervision, monitoring etc; therefore, additional funds must be allocated for the purpose. According to the latest Pakistan Labour Force Survey 2009-10, the overall literacy rate (age 10 years and above) is 57.7 percent (69.5 percent for male and 45.2 percent for female) compared to 57.4 percent (69.3 percent for male and 44.7 percent for female) for 2008-09. The comparative shares of literate depict marginal improvement in the profile of educational attainment. Nevertheless, all categories remain at the same level except a sort of increase in below matric (37.5 percent). Generally, males are more educated compared to females. Under President's Fanni Maharat Programme individuals, across the country are provided opportunities to gain skills from vocational training institutes/ centres. Prime Minister's Hunar Mand Pakistan Programme is also a similar kind of step to launch different skill development programme, in four priority sectors including: Construction, Agriculture, IT and Telecommunication and skills for women. Higher Education Commission is an autonomous body to provide inter-universities cooperation and Overview of the Economy xvii coordination. The institute has produced many Ph.Ds during last few years. Health and Nutrition A good quality of life and access to good health is recognized as a basic human need and a fundamental human right. Several programs are underway with major thrust to improve health care and training. By the year 2010, there are 144,901 physicians, 10508 dentists, 73,244 nurses, and 27.153 midwives. Besides, there are 972 hospitals in the country with total of 104,137 hospital beds, 4,842 dispensaries and 5,344 basic health units (BHUs) mostly in rural areas. Special attention has been given to the training of nurses, and several training centers

are in operation. Major initiative taken to overcome nutrient problem/ issue in public and private sector include expanded Benazir Income Support Program, Pakistan Baitul Mal Food Security Program, Vitamin A supplementation to children under five year of age and micro-nutrient deficiency control program etc. An allocation of Rs.16.9 billion during the year 2010-11 has been made in the PSDP for 82 projects. Population, Labour Force and Employment The population of Pakistan is estimated at 177.10 million by end-June 2011 and growing at the rate of 2.05 percent per annum. Being the 6 th largest populous country Pakistan shares the 2.55 percent of the total population of the world and if the existing trend remains unchanged it will reach 210.1 million in 2020 (NIPS) and will become the 3 rd most populous country in 2050. The density of population per person is 222. According to the NIPS and P&D Division Punjab has 96.55 million population of the Pakistan. Sindh has 42.18, KPK 23.77 and Balochistan is with 9.07 million people. Capital Territory of Islamabad constitutes 1.33 million while Federally Administered Tribal Area has 4.20 million of population. Population trends are best explained by CBR (Crude birth rate), and CDR (Crude Death Rate). These show the growth and decline of a population per thousand births while IMR (Infant Mortality Rate) is the number of newborns who dies before celebrating their first birth day. If we see the pattern from the last decade we find that in nineties CBR, CDR and IMR were 36.4, 9.4 persons and 94 infants respectively and in 2011 these are 27.50, 7.30 persons and 7.50 infants respectively. If we analyze the trends of these indicators we stumble on a gradual improvement because of revolutionary progress in medical science. Presently, Pakistan is going to become young as 60 percent of its population will be in the range of 15-65 years of age and it will continue to increase resulting in low dependency ratio and increasing working age population /labour force. This gradual shift to a youthful age structure in Pakistan is due to the declines in birth and death rates that occur at the beginning of the demographic transition. According to the Labour Force Survey 2009-10, with a population of 173.51 million, Pakistan has a labour force of 54.92 million people which is 1.20 million more than the previous year. The proportion of both, male and female, is increased by 0.53 and 0.67 million, respectively. Unemployment rate is fractionally higher than the previous i.e. 5.6 in 2009-10 and 5.5 in 2008-09. Crude Participation Rate (33.0 percent) suggests fractional improvement as compared to that of LFS 2008-09 (32.8 percent). In case of Refined Participation Rate, though with wider rural-urban and male-female disparity it also shows a little gain as compared to previous survey i.e. 45.9 percent from 45.7 percent. Agriculture dominates the distribution of the employed persons among all the major sectors leading at 45.0 percent in 2009-10, wholesale and retail exhibited 16.3 percent and manufacturing has the share of 13.2 percent. Poverty The floods of 2010 have caused a significant loss to poverty reduction efforts. The areas affected by floods were consistently lagging behind in terms of socio-economic and educational indicators as compared to the areas unaffected by floods. The loss to infrastructure and livelihood sources will push them behind further. Economic Survey 2010-11 xviii ADB's recently issued study on "Global Food Price Inflation and Developing Asia", maintains that a 10 percent rise in domestic food prices in Pakistan for one year could push an additional 3.47 million people below the $1.25-a-day poverty line or worsen poverty situation by 2.2 percentage points. Global food prices rose by more than 30 percent year-on-year between March 2010 and March 2011 with serious consequences for the poor as they are very sensitive to these items. Food inflation in Pakistan has averaged 18 percent for the last four years which implies significant deterioration of purchasing power of the poor. The precise impact of this build-up in prices could not be determined until availability of results of the Household Income Expenditure Survey (HIES) component of PSLM Survey 2010- 11 the work on which has already started. Change in poverty headcount is strongly correlated with change in per capita GDP growth.

An analysis of 3 year moving average of changes in per capita income and commensurate impact on reduction in poverty headcounts suggests that large reductions in poverty headcount are associated with substantial growth in per capita GDP during 2002-2006. Pakistan's commitment to reduce poverty in the medium term was first reflected in. The overall vision of Poverty Reduction Strategy Paper PRSPII is to steer Pakistan`s economic growth back to the range of 57 percent a year by stimulating growth in the production sector; creating adequate employment opportunities; improving income distribution; and harnessing the country`s economic competitiveness through economic liberalization, deregulation and transparent privatization. The strategy recognizes that to steer Pakistan back on path of broad-based growth, create jobs, and reduce poverty, a prolonged period of macroeconomic stability, financial discipline and sound policies is required. The Government prioritized the 17 pro-poor sectors through the Medium Term Expenditure Framework (MTEF) from 2008-09 to 2010-11 in the PRSP-II. The MTEF provides a link between policy priorities and budget realities. Fiscal Responsibility and Debt Limitation Act, 2005 stipulates that expenditures on social and poverty related spending would not be less than 4.5 percent of GDP in any given year. An amount of Rs.482.6 has been spent on these areas during July-December 2010 which is 15.8 percent higher than in the comparable period of last year. The social safety nets are major initiatives to reinforce the government's efforts to reduce the adverse effects of poverty on the poor. The social safety nets program include Benazir Income Support Programme (BISP) envisages cash grants of Rs 1,000 every month to the females of each qualifying household having a monthly income of less than Rs 6,000 through banks/post offices with the aim to ameliorate the conditions of the poorest of the poor by directly accessing them and supplementing their sources of income. Additionally to enhance selfemployment, some registered beneficiaries of BISP under the current targeting mechanism are selected through a monthly draw under Waseela-e- Haq and each of them are provided with an interest-free loan worth Rs. 0.3 million, repayable in installments over a period of 15 years. The government is also working on various microfinance initiatives in collaboration with the SBP and multilateral institutions to generate employment and combat poverty. 14. Transport and Communication The devastating flood of 2010 caused a severe blow to the road infrastructure. Many sections of the roads in Punjab, Sindh, Balochistan and Khyber Pakhtoonkhwa (KPK) were wiped out by unprecedented flood. According to report "Pakistan Flood, 2011: "Preliminary Damage and Need Assessment", about 10 percent of the roadnetwork (approximately 25,000 Km) sustained the highest damage within the transport and communication sector causing a loss of about 1.2 billion US dollars. The reconstruction requirement of the road-sector has been estimated at 2.07 billion US dollars. During the Calendar year 2010, PIA earned the revenue of around Rs. 107 billion as compared to last year Rs. 94.6 billion showing an increase of 13 percent. Despite the aforementioned performance overall financial position of the organization is grim and management is in Overview of the Economy xix process of taking remedial steps to address the same. The Karachi Port Trust (KPT) handled cargo over 20.8 million tons during July-December 2010-11. The consolidated revenues of Pakistan National Shipping Corporation (PNSC) group for the quarter ended March 31, 2011 were Rs 2,552 million (including Rs. 1,043million from PNSC), making a total of Rs. 6,772 million (including Rs.1,805 million from PNSC) for the nine months under review as against Rs. 5,583 million for the nine moths ended march 31, 2010. The Gwadar Port started its commercial operations in March 2008 by handling the 1 st biggest ship ever berthed at any port of Pakistan namely 76000 DWT Panamax Bulker POS Glory which discharged a total of 63000 M.Tons of wheat. Since then a total of approx. 120 ships have been handled up to 31 st January 2011 at Gwadar Port carrying total cargo of 2,286,781 M.Tons. In Port Qasim, a total of 13.1 million tones of cargo were handled during Jul-Dec. 2010. In terms of statistics, industry has shown positive growth of 3.5 percent during the current fis-

cal year. Total Teledensity reached 65.2 percent (Dec - 10), Cellular mobile sector took lead in the increase of teledensity, offsetting the dwindling figure of fixed/wired line teledensity. Emergence of effective competition between telecom operators continued in telecom sector benefiting the consumer in terms of lowering tariffs and unraveling costly investment possibilities. Cellular mobile companies are now moving towards lowest possible tariffs and offering wide range of data services as well. Cellular industry has a 94.6 percent share in total telecom teledensity followed by FLL 2.9 percent and WLL 2.5 percent, therefore, performance of cellular industry is of utmost importance to the overall sector growth. Energy Economic growth and energy demand are correlated with economic growth. The government is making efforts to cover up the demand supply gap. Import of LNG, rental power stations, increase in oil and gas exploration in the country, development of Thar Coal field, increasing the share of electricity by expanding nuclear facilities, hauling of existing power generation plants to enhance their generation capacity and exploiting the alternate energy sources are all steps taken by the government to meet the energy needs. The energy sector of Pakistan comprises of Oil, Gas, Electricity and Coal. The overall energy supply stood at 48.01 MTOE during JulyMarch 2010-11, showing an increase of 1.93 percent. The supply of electricity and coal increased by 8.32 and 11.32 percent respectively thus, contributing positively in overall increase in energy supply. The gas sector supply slightly increased by 0.1 percent. Whereas, supply of crude oil decreased by 3.2 million barrels and thus posting a negative growth of 8.2 percent. Production of crude oil has increased to 65,996.50 barrels per day during July-March 2010-11, as against 65,245.69 barrels per day in the corresponding period last year. The overall production has increased to 18.08 million barrels during July-March 2010-11 from 17.88 million barrels during the corresponding period last year showing an increase of 1.15 percent. The transport sector consumed 47.82 percent of petroleum products, followed by power sector (42.84 percent), industry (6.66 percent), other government (1.93 percent), household (0.49 percent) and agriculture (0.26 percent). The average production of natural gas per day stood at 4050.84 million cubic feet during JulyMarch 201011, as compared to 4,048.76 million cubic feet over the same period last year. The overall production of gas has increased to 1,109,930.16 million cubic feet during July-March 2010-11 as compared to 1,109,360.24 million cubic feet in the same period last year, showing an increase of 0.05 percent. The power sector consumed 23.81 percent of gas followed by industrial (20.15 percent), household (16.75 percent), fertilizer (15.04 percent), commercial (2.45 percent) and cement sector (0.05 percent) during the period under review. By March 2011, about 2.5 million vehicles have been converted to CNG making Pakistan the largest CNG consuming country. Presently, there are 3329 CNG stations operating throughout the country. Economic Survey 201011 xx The total installed capacity of PEPCO system is 20,681 MW as of March 2010, compared to 20,190 MW in first nine months of the last fiscal year. Out of 20,681 MW, the hydro production is 6555 MW and the thermal production is 14,126 MW. The hydropower capacity accounts for 31.7 percent and thermal 68.3 percent. During July to March 201011, the total installed capacity of WAPDA stood at 11,439 MW. Out of 14,126 MW of thermal power, 4829 MW is owned by exWAPDA GENCOs, 323 MW by rentals, 665 MW by PAEC and rest by IPPs. During the first nine month of current fiscal year, WAPDA generated 66,928 GWh of electricity as against 64,935 GWh in the same period last year showing an increase of 3.07 percent. The household sector consumed 42.92 percent of the total electricity generated followed by Industrial (25.10 percent), agriculture (12.28 percent), KESC (7.53 percent) and commercial (6.53 percent). By March 2011, 160,110 villages have been electrified. During July-March 2010-11, 5.85 million tons of coal has been supplied to different sectors of the economy compared to 5.304 million tons during the same period last fiscal year thus posted an increase of 10.29 percent. Brick kilns and cement industry consumed 56.6 percent and

42.7 percent respectively of the supplied coal. The government is also developing Thar Coalfield in order to increase the share of coal in energy mix and to reduce dependency on expensive imported fuel. Environment The environmental concerns of Pakistan are associated primarily with the adverse impact of un-sustainable social and economic development. High population growth rate, lack of public awareness of environmental related education, mismanagement of natural resources, widely unplanned urban and industrial expansions are the core hard issues. These are further compounded with the rapid urbanization. Average population density of 222 persons per sq km in Pakistan, higher than many other developing countries, whose 37 percent people live in urban areas and 63 percent in rural has a high rate of migration to urban centers which has made the cities dysfunctional, overcrowded and very congested. Rapid urbanization is putting the available insufficient infrastructure under enormous pressure and causing environmental debacles of great magnitude. Serious risks of irreversible damages are present due to air and water pollution, mismanagement of solid waste and destruction of fragile ecosystems. Pakistan is the highly urbanized country in South Asia with 37 percent concentration causing environmental problems such as pollution, waste management, congestion and the destruction of fragile ecosystems. Urban air pollution remains one of the most significant environmental problems, facing the cities. Motorcycles and rickshaws, due to their two stroke (2 strokes) engines, are the most inefficient in burning fuel and contribute most to emissions. 2-stroke vehicles are responsible for emission of very fine inhalable particles that settled in lungs and cause respiratory diseases. The 2stroke vehicles industry is performing fast in Pakistan and has increased by 142.6 percent in 201011 when compared with the year 2000-01. Rickshaws have grown by more than 24 percent while motorcycles and scooters have more than doubled since 2000- 01. CNG is promoted as an alternate motor fuel for Pakistan's market to reduce pressure on petroleum imports and to curb air pollution. Presently, 3329 CNG stations are operating in the country and 2.50 million vehicles are using CNG as fuel. Use of CNG as fuel in transport sector has observed a quantum leap, replacing traditional fuels. National Environment Quality Standard (NEQS) for Motor Vehicle Exhaust & Noise (Amended), 2010 have been approved to control the vehicular emissions. It has been decided that: (i) all petrol driven vehicles imported or manufactured locally will comply with Euro-II emission standards with effect from July 2009. Existing models if not complying with Euro-II emission standards will have to switch over to Euro-II models by no later than three years, If not immediately: (ii) all diesel driven vehicles imported or manufactured locally will comply with Euro-II emission standards with effect from July, 2012. The National Standards for Drinking Water Quality (NSDWQ) were approved to improve the Overview of the Economy xxi water quality and to provide the public with the safe drinking water. Pakistan is committed to achieve the MDG target of halving by 2015 the proportion of people without sustainable access to safe and improved sanitation. Strategic direction, capacity development, and monitoring and evaluation, as well as investments, are primarily the responsibility of the provincial governments through the provincial line departments. Climate change is one of the most complex challenges of the new century; Pakistan like other developing countries remained extremely vulnerable to the impacts of climate change. The most serious concerns are the threat to water and food security of the country and the vulnerability of its costal areas. Other climate change related concerns include increased risks and extreme events (floods, droughts and cyclones) and adverse impact of forests, biodiversity human health etc. Implementation of the climate change programme under Tenth Five Years Plan will be carried out through coordinated efforts of the relevant ministries to secure ample resources and their effective utilization The following areas will be targeted through mitigation and adaptation measures as well as studies to enhance our understanding for Pakistan specific needs.


Pakistan coach bears no grudge against: Afridi KARACHI: Pakistan cricket coach Waqar Younis does not harbour a grudge against Shahid Afridi and said he was sad to hear the former captain had decided to retire. Afridi announced his retirement from international cricket this week after the Pakistan Cricket Board (PCB) removed him as captain for the one-day series against Ireland. The PCB were unhappy about Afridi's comments concerning perceived interference in his role during the tour of

West Indies, where a dispute with Waqar came to a head. "I am sad that he decided to retire," Waqar told reporters at Lahore airport after returning with the national team from Ireland. "I don't know why he took such a decision. But I have no personal grudge with him. "I have only seen all this stuff in the media. I will be meeting with the board chairman to discuss the tour reports. "But whatever has happened

is not good for Pakistan cricket, which is progressing well despite us getting no international cricket at home." Pakistan won the ODI series against West Indies with Afridi at the helm and drew the test series under senior batsman Misbah-ul-Haq. They also beat Ireland in two ODIs with Misbah as captain. Afridi faces disciplinary action for violating the PCB's code of conduct and they have terminated his contract. -Reuters

Hampshire want urgent PCB rethink LONDON: Hampshire have urged the Pakistan Cricket Board to reverse their ban on former captain Shahid Afridi playing abroad as they prepared to begin the defence of their Friends Life T20 title. Afridi had his central contract suspended by the PCB on Tuesday, with the board responding to the former ODI skipper's announcement of his retirement from international cricket. That move came after the 31-year-old was stripped of the Pakistan one-day captaincy last month following a spat with coach Waqar Younis. The PCB has also revoked all no-objection certificates (NOCs) for the player mean-

ing that a dejected Afridi widely praised for his role in leading Pakistan to the semifinals of the recent World Cup in the subcontinent - will not be officially permitted to play overseas. "It is with regret that Hampshire Cricket announces that Shahid Afridi -the Royals' overseas signing for the Friends Life t20 competition - will not be available to play in tonight's match against the Somerset Sabres at The Rose Bowl," said a Hampshire statement on Wednesday. "It follows the decision by the Pakistan Cricket Board to revoke their No Objection Certificate, thus withdrawing

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their consent for Shahid to take part in the competition. "The club would like to make it clear that although we respect this decision we have been, and continue to, urge the PCB to rethink this matter, and we are keen to have Shahid playing for the Royals at some point in the season. "Hampshire Cricket will be making no further comment on this issue at this time." Afridi, a hugely popular big-hitting all-rounder, whose leg-spin has become arguably even more important than his batting, had also been due to play in the inaugural Sri Lanka Premier League in July. -Online

SBP names 18 players for girls hockey C’ship LAHORE: Sports Board Punjab (SBP) named its 18 players as Punjab Team to appear in the Inter Province Youth U-16 Girls Hockey Championship to be held at National Hockey Stadium,Lahore. The members named in the team are Iram Hussain (Multan) Hirah Naseer (Multan) Aqiba Rasheed (Multan) Aqeedat Fatima (Multan) Iqra Javed (Faisalalabad) Saher (Faisalalabad) Afshan Noreen (Faisalalabad) Riffat Shaheen (Bahawalpur) Maira Sabir (Bahawalpur) Kalsoom Shahzadi (Bahawalpur) Sana Irshad (Bahawalpur) Mahwish Nazeer (Bahawalpur) Nafeesa Bibi (Gujrat) Shafaq (Lahore) Huma Noor (Lahore) Maida (Lahore) Samina (Lahore) Kalsoom (Lahore) All the provinces including Fata, Azad Jammu and Kashmir,Sindh, Khyber Pakhtunkhwa, Balochistan and Punjab are participating in the Championship starting from June 6 to 10. -NNI

Pak cricket team returns victories from Ireland series

Not quitting captaincy: Misbah KARACHI: Pakistan cricket captain Misbah ul Haq has denied rumours that he has resigned from his post. "I can categorically state that I have not resigned from either the one day or the test captaincy. This is the first that I am hearing of this and can confirm that it is false" the PakPassion.net quoted Misbah, as saying. He also clarified that he has not handed his resignation and not spoken to anyone regarding his captaincy. The Pakistan Cricket Board

had appointed Misbah as captain for the twomatch series against Ireland, replacing Shahid Afridi, who subsequently announced his retirement. -Online

Spot-fixing penalty termed ‘too lenient’ SYDNEY: Bans handed to three Pakistani cricketers for spot-fixing offences were too lenient, according to a survey of international players released. More than three-quarters of respondents to the Federation of International Cricketers' Associations survey said the five-year bans meted out to

Salman Butt, Mohammad Asif and Mohammad Aamer were inadequate. The trio, accused by Britain's News of the World of conspiring to deliberately bowl no-balls as part of a spot-fixing betting scam last year, were banned by the International Cricket Council, according to The West Australia.

All deny wrongdoing and are appealing against the verdicts at the Swiss-based Court of Arbitration for Sport. "The vast number of players wants significant penalties to be invoked against those who are found guilty of serious corruption offences," FICA chief executive Tim May said.-Online

a provisional $748 million, compared with a $3.456 billion deficit in the same period last year. In May 2010, Pakistan received $1.13 billion in the fifth tranche of an $11 billion International Monetary Fund (IMF) bailout programme. Pakistan and the IMF ended talks last month in Dubai to discuss budget targets for 2011/12 fiscal LAHORE: The Pakistani year. They are due to meet again in July to discuss the possible release of the sixth tranche. cricket team returned victorious after the series against Continued from page 1 No #11 Ireland and West Indies. year. Talking to the media at the Shaikh said the government is taking solid steps to resolve issue of circular debt, bringing down Allama Iqbal Airport in its volume to Rs 103.939 billion. Lahore, Coach Waqar Younas Economic Survey of Pakistan further showed that Country's per capita income rose to $1254 in said that he was satisfied with 2010-11 from $1073 during last year, showing tremendous increase of 16.9 percent. The enhancement in per capita income is mainly because of stable exchange rate as well as highthe captaincy of Misbah Ulhaq. He said that all the er growth in nominal Gross National Product (GNP). However, gross fixed capital formation lost its strong growth momentum and real fixed investment young players put in great pergrowth contracted by 0.4 percent as against the contraction of 6.1 percent last year. formances. The total investment has declined from 22.5 percent of GDP in 2006-07 to 13.4 percent of GDP in 2010-11. The National Savings rate has decreased to 13.8 percent of GDP in 2010-11 as against 15.4 per cent of GDP last year. Survey revealed that the Large Scale Manufacturing (LSM) managed to register positive growth of 1.71 per cent during the period July-March 2010-11. The performance of the Large Scale Manufacturing (LSM) sector during July-March remains vicThe National Economic Council (NEC) has already approved a development budget of Rs730 billion for the Public Sector tim of operational constraints on account of energy and gas shortages and devastating effects of Development Programme (PSDP) 2011-12 as the peoples govern- flood 2010. It is evident from the fact that the momentum in growth was upset in the initial months ment wants the uplift of its masses and improve their living con- of current fiscal year. ditions across the country. -Agencies The construction, petroleum refining, cotton textile and agro-based industries were strongly affected. Textile sector suffered heavily from the loss of cotton crop and other industries heavily dependContinued from page 1 No #6 ent on gas such as fertilizer industry adversely affected by shortage in gas supply. landlords be redistributed to landless farmers including women, Continued from page 12 No #12 who currently cultivate the land, as Oxfam sources has learnt after for Petroleum and Natural Resources Dr. Asim Hussain, who called on him at Prime Minister House the flood 2010 that women in Pakistan owned only three per cent on Thursday afternoon. -Agencies land, that is too meager count. Member of the Dharti Campaign Shahina Ramzan said rising Continued from page 12 No #13 food prices, land grabs, exploitation of farmers, lack of effective Muhammad Aslam Kambo signed the project Agreement of Additional Financing for Punjab Education land rights policies and lack of farming support plans creating a system that will directly affect the people's food security and their abil- Sector Project on behalf of the Punjab government.-APP ity to earn livelihood.-Online Continued from page 5

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mega watt of electricity. These will commence production in 2015", he noted. Prime Minister Gilani said that Energy Update was doing a good job by projecting all aspects of energy sector as well as highlighting its true potential in the country. The independent media not only promotes the democratic culture of debate, but also plays a vital role in advancement of ideas which can bring a positive change in the society. Our sincerity and effort to ensure free and independent media is evident in 18th Amendments. -Agencies

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Adm. Mike Mullen, held a day of intensive meetings with top Pakistani military and civilian officials. After that outreach, Pakistan allowed the CIA to re-examine the bin Laden compound last Friday. Pakistan also returned the tail section of a U.S. stealth Black Hawk helicopter that broke off when the SEALs blew up the aircraft to destroy its secret noiseand radar-deadening technology. The CIA has also shared some information gleaned from the raid, and Pakistan has reciprocated, U.S. and Pakistani officials said Wednesday. The investigative team will be made up mainly of intelligence officers from both nations, according to two U.S. officials and one Pakistani official. It would draw in part on any intelligence emerging from the CIA's analysis of computer and written files gathered by the Navy SEALs who raided bin Laden's hideout in Abbottabad, as well as Pakistani intelligence gleaned from interrogations of those who frequented or lived near the bin Laden compound, the officials said. The formation of the team marks a return to the counterterrorism cooperation that has led to major takedowns of al-Qaida militants, like the joint arrest of Khalid Sheikh Mohammed in 2003.

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artificial experts and they are handing out assets mendaciously. He added that several people of the commission are eyeing at the fourteen hundred acres of NARC land. He added that our ministry comprises thirty-nine departments, fourteen of which must stay with federal capital to establish equilibrium. He said that the respective ministry is working in accordance with federal legislative list, India has five such ministries, if Ministry for Food and Agriculture be dissolved then it would disassociate us from World Health Organization. The commission would meet again today (Friday) in order to review the proposals of officials about devolution of both ministries. -Agencies

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sign of the Enterohaemorrhagic E. coli (EHEC), which can result in full-blown haemolytic uraemic syndrome (HUS) -- a disease that causes bloody diarrhoea and serious liver damage. Of the seven cases in Britain, three had HUS and the other four suffered bloody diarrhoea, the Health Protection Agency said. Officials in the northern German port city of Hamburg, the epicentre of the outbreak, had last week cited imported Spanish cucumbers as the source of the contamination. But tests on two Spanish cucumbers there this week showed that while they carried dangerous EHEC bacteria, it was not the strain responsible for the current massive contamination, whose toll in Germany rose to 17 after the death of an elderly woman in Hamburg overnight.

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work be executed against the rules. Committee also took serious notice of irregularities of million of rupees found in the accounts of Allama Iqbal Open University and directed that no institution should take any decision about fiscal matters without the approval of finance ministry. Committee also disposed of the audit objection on awarding 10 percent additional shares of Kepco to National Power Company by former Prime Minister Benazir Bhutto. Secretary privatization Shahid Hussain Raja told no loss was caused to national exchequer due to sale of additional shares. -Online

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would be a much better way of helping Pakistan," Haqqani stated, explaining that job creation through greater economic activity would foil extremists' designs to exploit the unemployed youth. US assistance should be seen part of a broader partnership, he argued, addressing a gathering of experts at the launch of a report "Beyond Bullets and Bombs: Fixing the US Approach to Development in Pakistan" which was released by Center for Global Development on Wednesday. He said change in Pakistan will come from within. The Pakistani diplomat noted that an aid-centered approach creates political problems. "The role of aid should be that of catalyst for us to accomplish that change on our own --- aid it is not going to be the main basis on which Pakistan will find prosperity --- our prosperity will come from Pakistanis unleashing their potential in trade, opening up of Pakistan to investment and making it possible for our neighboring countries to trade with us," he remarked. -APP

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Supreme Court in suo moto case of 2007, for its examination and consideration as to whether they were allowed without validity and justification, or because of political reasons or considerations other than law or bona fide business considerations. 2. All the banks/DFIs are hereby directed to: ((a) Ensure compliance of the above instructions. (b) Provide any and all assistance and cooperation in the work of the Commission; and (c) Comply with any general or special instructions of the Commission." Syed Iqbal Haider, SBP counsel, assured the Bench that they would issue a Circular in this regard. The Bench adjourned further hearing till Friday. Earlier, during the course of hearing, the chief justice rejected the draft of the new law prepared by the State Bank of Pakistan, saying most of its points were unacceptable to the court and should be revised. -Agencies

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Pakistanis increased by 23.81 percent to over $9 billion in the performance in services sector. The government is keen to provide relief to the people in the first 10 months of the 2010/11 fiscal year, with $1.03 billion combudget and has taken comprehensive measures to achieve this ing in April alone, according to the State Bank of Pakistan. Pakistan's current account surplus for the July-April period was objective.

banking sector on account of news that the federal government is likely to increase tax rate on banks income from existing 35 to 40 per cent in the budget, he added. Investor participation too remained on the lower side as 87.3 million shares exchanged hands during the day which was 31 million shares less as compared to a turnover of 118.3 million shares on Wednesday. Nishat Mills was the top traded stock with 5.53 million shares followed by Jahangir Sidd. Co, with 5.14 million shares and KASB Bank with 4.04 million shares. Out of total 354 active issues; 156 declined and 106 advanced while 92 issues remained unchanged.

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ICICI Bank, the country's second-largest lender, shed 3.3 per cent and HDFC Bank lost 1.6 per cent, while the sector index dropped 1.8 per cent. Bigger rival State Bank of India bucked the trend to end 0.2 per cent higher. Bajaj Auto, the second-largest motorcycle producer that also makes three-wheeled motorised rickshaws, rose 2.5 per cent after reporting a 20 per cent rise in sales for May. Non-ferrous metals firm Hindalco Industries fell 1.7 per cent as copper extended losses on the London Metal Exchange after US jobs and manufacturing data came in below expectations and raised worries about the health of the global economy. Sterlite Industries shed 2.2 per cent. The BSE index is down nearly 10 per cent this year, with foreign fund outflows at $1.16 billion in May on worries about slowing growth. Data on Tuesday showed the economy grew at its slowest annual pace in five quarters in January to March as rising interest rates crimped consumption and investment, suggesting the central bank may temper the pace of tightening. Leading software exporters fell on concerns about the recovery in the United States, their biggest market. Tata Consultancy Services, Infosys Technologies and Wipro lost 0.3 to 1.2 per cent. The 50-share NSE index closed down 0.7 per cent at 5,550.35 points. In the broader market on the NSE, 964 losers led 437 gainers on volume of 547 million shares.-Reuters

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In the Nikkei, support is seen around 9,400, a low hit in late April and May. Many market players say there are few reasons to sell sharply below that level as Japanese shares are already trading at around book value. But participants also said buying by foreign investors -- a major driving force behind the Nikkei's rebound from a two-year trough right after the earthquake and nuclear accident in March -- appears to be waning. Data from Japan's Ministry of Finance showed on Thursday that foreign investors sold a net 83.2 billion yen of Japanese shares last week, their first net selling in nine weeks in the data series. -Reuters

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Risk-sensitive mining and energy stocks fell, adding to their decline from the previous session, and took most points off the index. "The data over the last few days has been shockingly bad. A lot of people are now wondering whether there is any sort of recovery going on, which has put the mockers on equities," said David Morrison, market strategist at GFT Global. Banks also dragged on the index after a warning from Moody's Investors Service it may downgrade debt ratings on Bank of America Corp, Citigroup Inc and Wells Fargo & Co. Retail stocks also featured on the downside. Kingfisher, Europe's biggest home improvements retailer which hit a six-year high on Tuesday, fell one per cent after it said the second quarter would probably be more challenging. Analysts suggested investors should take profits. TECHNICALS POSITIVE Technical analysts painted a more positive picture. Phil Roberts, chief European technical strategist at Barclays Capital, said he was not concerned about the FTSE 100 unless it fell below its 200day moving average of 5,804 points. He said yields on the FTSE 100 should help support the market and keep it within the 250-point trading range it has occupied since mid-April. -Reuters


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ISLAMABAD: PML-N delegation led by Nawaz Sharif offering fateha with President Asif Ali Zardari for late Hakim Ali Zardari at the Aiwan e Sadr. -APP

Forces claim to kill 40 terrorists

35 security men killed in clashes UPPER DIR: The number of security men killed in PakAfghan cross border attack has reached to 35, while 40 militants were killed in the counter attack by Pakistan Army. The death toll from Wednesday's militant attack on a joint police and Levies check post in Shiltalao area of Upper Dir has risen to 35, according to DCO Ghulam Muhammad. The dead include three civilians. One woman and two policemen have been injured during the skirmishes and have been shifted to the Barawal hospital. Security forces said over 40 militants were also killed in the clashes. Skirmishes had been going on for 24 hours in a village in Dir region, Ghulam Mohammad Khan, a top local government official, said by telephone. "We are preparing to evacuate 25 bodies from the village," he said, referring to police and paramilitary forces killed in the fighting that spread to a forest. Khan said he had no figures on militant casualties. Dir police official Dawar Ali

said army troops had arrived in the area to support security forces. He said more details on the battles were hard to come by because communications had broken down in the area. The militants had arrived in a pre-dawn operation on Wednesday dressed in military uniforms and killed one policeman. Taliban and other al Qaedalinked militants have carved out strongholds on both sides of the porous AfghanistanPakistan border, a region that the United States has called one of the most dangerous places on Earth. The Pakistani military sent reinforcements and helicopter gunships in a bid to quell the attack in an area accessible on the ground only by foot. "Fighting is still going on in some parts near the check-post, which was attacked by around 500 Pakistani and Afghan Taliban," regional police chief Qazi Jamil ur-Rehman told media. An Afghan police official in Kunar told that he was aware that the Taliban or other militiamen had launched attacks "on

the other side of the border" and said they had no connection to Afghan government security forces. Upper Dir is part of Pakistan's northwestern Khyber Pakhtunkhwa province and borders the region where the military waged a major offensive to put down a local Taliban insurgency in Lower Dir, Buner and Swat in 2009. Thousands of Pakistanis have died in bomb attacks over the last four years and thousands more soldiers have been killed fighting homegrown militants. On Wednesday, the commander in Khyber Pakhtunkhwa played down "media hype" over the prospect of an imminent military offensive in North Waziristan, considered the premier militant fortress on the Afghan border. The remote, mountainous region has attracted major interest in the United States as a fiefdom of the Haqqani network, one of its most potent enemies across the border in Afghanistan and thought to have a core of 4,000 fighters. Agencies

US, Pakistan form anti-terrorism team WASHINGTON: Bruised from their latest diplomatic clash, the US and Pakistan are trying to bandage their relationship by forging a new joint intelligence team to go after top terrorism suspects, officials say. The move comes after Secretary of State Hillary Rodham Clinton presented the Pakistanis with the U.S. list of most-wanted terrorism targets, U.S. and Pakistani officials said Wednesday. The list includes some groups the Pakistanis have been reluctant to attack, U.S. officials said. It's one of a host of confidence-building measures meant to restore trust blown on both sides after U.S. forces tracked down and killed al-Qaida mastermind Osama bin Laden dur-

ing a secret raid in Pakistan last month. But it also amounts to a new test of loyalty for both sides. The Pakistanis say the U.S. has failed to share its best intelligence, instead running numerous unilateral spying operations on its soil. U.S. officials say they need to see the Pakistanis target militants they've long sheltered, including the Haqqani network, which operates with impunity in the Pakistani tribal areas while attacking U.S. troops in Afghanistan. All those interviewed spoke on condition of anonymity to discuss matters of intelligence. The U.S. and Pakistan have engaged in a diplomatic staredown since the May 2 raid, with the Pakistanis outraged

over the unilateral action as an affront to its sovereignty and the Americans angry to find that bin Laden had been hiding for more than five years in a military town just 35 miles from the capital, Islamabad. The U.S. deliberately hid the operation from Pakistan, recipient of billions in counterterrorism aid, for fear that the operation would leak to militants. A series of high-level U.S. visits has aimed to take the edge off. Marc Grossman, the special representative for Afghanistan and Pakistan, and CIA Deputy Director Mike Morell met with intelligence chief Lt. Gen. Ahmed Shuja Pasha last month. Last week, the secretary of state and the chairman of the Joint Chiefs, See # 2 Page 11

Europe trades barbs over origin of killer bacteria BERLIN: Russia banned European vegetable imports on Thursday as Britain reported an outbreak of the mysterious lethal bacteria that has killed 18, mainly in Germany, and Spain demanded a payback for its farmers. German authorities have failed to pinpoint the origin of the outbreak, which has infected more than 2,000 people in the last month and dealt a blow to the European farm sector amid official warnings to avoid raw vegetables. As confusion reigned over the killer strain of E. coli bacteria, Russia said it had blacklisted imports of fresh vegetables

from European Union countries with immediate effect and slammed food safety standards in the bloc. Meanwhile Britain said seven people there had been infected with the bacteria, including three British nationals who had recently travelled to Germany and four German nationals. Russia's Rospotrebnadzor watchdog said its ban would remain in force until the EU explained what caused the 18 deaths -- all but one of them in Germany. "This shows that Europe's lauded health legislation -- one which Russia is being urged to adopt -- does not work," con-

sumer watchdog's chief Gennady Onishchenko was quoted as saying by the Interfax news agency. The European Commission slammed the move as "disproportionate" and demanded an explanation from Russia, whose vegetable exports from Europe amount to around 600 million euros ($868 million) each year. At the same time the United Arab Emirates has banned the import of cucumbers from Germany, Spain, Denmark and the Netherlands over the scare. But Spain said its own tests on its cucumbers showed no See # 4 Page 11

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Friday, June 3, 2011

ISLAMABAD: President Asif Ali Zardari has said that the government was exploring "out of box" solutions to resolve energy crisis on the one hand, and attempting to tap renewable energy potentials, on the other, to generate more power. In his message of the 5th anniversary of monthly Energy Update magazine, he said the proactive approach on Thar coal project has enabled the government to attract a couple of coal power generation projects, one of them under publicprivate partnership. "The democratic government pays utmost importance to energy sector and, therefore, gives top priority to address the current energy crisis which is one of the problems inherited by the present leadership. We are committed to expand power generation in the country and attract investment in this sector to meet the growing demand for electricity, oil and gas", he added. The President felicitated the management of Energy Update on the 5th anniversary of its publication. "It is reassuring that Energy Update has focused approach towards all aspects of the energy sector and highlighting its true potentials, for both the local and overseas investors as well as. Prime Minister Yousuf Raza Gilani, in his message, pointed out that the government was striving hard to overcome the energy shortage which is basically an outfall of the previous regime's wrong policies. Like previous year, I have once again invited all the four chief ministers, representatives of industries, business and other stakeholders to workout a detailed roadmap; short-term, medium term and long-term basis to address this issue", he remarked. He asserted that the government was working to bridge the gap in supply and demand of electricity on war footing, a number of power units have been commissioned in the last three years. "We have also expedited work on Thar Coal Power Generation projects for 5,000 megawatt of electricity. These will commence production in 2015", he noted. Prime Minister Gilani said that Energy Update was doing a good job by projecting all aspects of energy sector as well as highlighting its true potential in the country. He asserted that the government was working to bridge the gap in supply and demand of electricity on war footing, a number of power units have been commissioned in the last three years. "We have also expedited work on Thar Coal Power Generation projects for 5000 See # 1 Page 11

Abbottabad commission challenged LAHORE: The Abbottabad inquiry commission was challenged on Thursday in the Lahore High Court (LHC). The petitioner, Advocate Rana Ilmuddin Ghazi, said that the opposition had not been consulted in the formation of the commission. He pleaded that commission should be formed under the chair of the Chief Justice of Pakistan. He also pleaded that the incumbent and retired judges of the superior judiciary should be inducted into the commission. The application indicates that Prime Minister Syed Yousuf Raza Gilani called Abbottabad raid a success while, the applicant highlighted, the operation was against country's sovereignty. The government on Tuesday set up the much awaited commission to probe US raid on May 2 in Abbottabad to kill al Qaeda leader Osama bin Laden. -NNI

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NWA Operation

Pak to call shot in nat'l interest ISLAMABAD: Commenting reports about operation in North Waziristan Agency, Foreign Office spokesperson Tehmina Janjua has said that Pakistan is fighting against terrorism for its own national interests and any decision for any operation will be taken as per Pakistan's own interests and priorities. Foreign Office spokesperson Tehmina Janjua said at the weekly news briefing here on Thursday that President Asif Ali Zardari is to attend the summit of the Shanghai Cooperation Organization to be held at Astana in Kazakhstan on 15th of this month. She said that the summit will celebrate the 10th anniversary of the founding of the organisation. Issues of regional and global peace and security will be high on the agenda of the summit. The spokesperson said the President's participation signals the importance Pakistan attaches to the SCO and its keen interest in working the regional development agenda including building commerce and trade facilities, financial and banking cooperation, energy transaction and corporate sector interactions. She said Pakistan will also attend the Asia-Europe Meeting in Budapest on 6th and 7th of this month. Pakistan

fully subscribes to the concept of inter-regional cooperation in Asia. The spokesperson said at the invitation of Foreign Secretary, his counterpart Afghan Deputy Foreign Minister Jaweed Lodin will pay a three day visit to Pakistan from Sunday next. Both sides will be working to complete the preparations for a visit by the Afghan President in the near future. Tehmina Janjua said Pakistan and Afghanistan have finalized, subject to final approval by both governments, the implementation details of new Afghanistan-Pakistan Transit Trade Agreement. To a question she said Pakistan and Afghanistan have agreed on a two tiered joint Commission for peace and reconciliation in Afghanistan. She said that Pakistan has announced membership of the commission and the Afghan Government has yet to do that. She said at the instance of Islamabad, Pakistan, Afghanistan and the United States have formed a core group to promote the process of peace and reconciliation in Afghanistan. The spokesperson said the dialogue process with India is going according to schedule and the two sides are in the process of finalizing dates for the Foreign Secretary level talks on peace and security,

Jammu and Kashmir, and friendly exchanges. Replying to a question she said Pakistan is going into the dialogue process with India with an open and constructive mind and with the objective of having result oriented talks. About Kishanganga, she said Pakistan is in the process of going into the court of arbitration as per Indus Basin Treaty. To another question she said Pakistan has presented a nonpaper on Siachen during recently concluded Defence Secretary level talks which clearly outlines the country's position on the issue. The spokesperson told a questioner that Pakistan and India are having talks on the visa regime. She said that Pakistan's effort is to facilitate as much as possible people who wish to visit families in Pakistan and the business community. Responding to a question she said preparations are underway for holding of next round of Pakistan-US strategic dialogue. She said during visits of Secretary of State Hilary Clinton and Senator John Kerry, Pakistan and United States agreed on joint operations but added that it doesn't necessarily mean presence of foreign troops on Pakistani soil. It could be sharing of intelligence, she said.- Agencies

Geithner, Republicans to meet on debt limit WASHINGTON: Treasury Secretary Timothy Geithner meets an influential group of freshman Republican lawmakers on Thursday to try to improve chances that Congress will increase his borrowing authority and prevent a government default. The session with the 85 or so Republicans elected in November on a pledge to deeply cut government spending comes in the midst of slow-going White House-led negotiations with Congress over a deficit-reduction deal. Warnings from President Barack Obama's aides about the need to raise the debt limit have fallen on deaf ears among many Republicans, who are skeptical of the talk of a potential catastrophe if that step is not taken by August 2. Geithner is likely to hear some blunt talk from the freshman Republican members of the House of Representatives, many of them conservative Tea Party activists, who could hold up a vote to raise the $14.3 trillion statutory limit. "Many of them campaigned and were elected by telling their constituents what they want to hear and what many of the freshmen believe: that by simply cutting up the nation's credit card, we can

immediately start living within our means," said William Galston, a scholar at the Brookings Institution. A face-to-face meeting is a chance for Geithner to make the case that the debt-limit vote is needed to address spending that has already been incurred and that with financial markets already shaky, a failure to lift the ceiling could further unsettle investors and risk grave harm to the economy. Geithner is at ground zero in Washington's fight over how to clean up the fiscal mess characterized by the $14.3 trillion debt and a $1.4 trillion deficit just this year. "After the meeting I believe Secretary Geithner will see how serious we are as a freshman class about getting our debt and deficit under control so we can get our economy going again," said Representative Kristi Noem. Noem, one of the tough "mama grizzlies" touted by ex-Alaska Governor Sarah Palin, told Reuters she hopes Geithner comes armed with some "significant spending cuts and reforms." The first-term congresswoman from South Dakota might be disappointed as those kinds of details are still to be worked out by Vice President Joe Biden and a

bipartisan group of six lawmakers who are in the early stages of spending-cut talks. 'AN HONEST DISCUSSION' Republicans, and some Democrats, are demanding an outline for trillions of dollars in spending cuts before allowing any increase in the Treasury Department's borrowing authority. The handful of freshmen House Democrats also are invited to Thursday's meeting with Geithner. If Geithner cannot arrive at that meeting with details on the full list of potential spending cuts, he still could make headway with this feisty group of House Republican newcomers. "Having the Treasury secretary personally (attend), take their questions seriously and explain the consequences (of not raising the debt limit) ... could change some minds," said Andy Laperriere, a policy analyst for International Strategy and Investment who follows Washington for investors. "It's showing a measure of respect for this group that will pay dividends," he said. It also will be an opportunity for the freshmen to explain to Geithner "vividly why it is so difficult to vote for this (debt limit increase) back home," Laperriere added. -Reuters

Minfa stands against ministry devolution ISLAMABAD: Ministry for Food and Agriculture Thursday has opposed the dissolution of ministry during the meeting of Parliamentary Commission on the implementation of 18th Amendment. The meeting of Parliamentary Commission was chaired by Senator Raza Rabbani in the Parliament House, in which devolution of Food and Agriculture Ministry and Ministry for Minority Affairs to provinces was reviewed. During the meeting secre-

taries and officials extensively briefed the commission about the sub-offices and assets of these ministries. Talking to the media after the meeting, Chairman of Commission Senator Raza Rabbani expressed that commission is working with a good pace and we are trying our level best to completely transfer the ministries to provinces in thirty days deadline. If we fail to devolve the ministries in the allocated time then the ministries would automati-

cally become part of provinces but this would create panic. He further added that ten ministries along with six departments have already been devolved to the provinces and if any power wants to obstruct their transfer then they must present 20th amendment to fulfill their desire. Talking to the media at this moment, Minister for Food and Agriculture Israrullah Zehri said that matter of devolution of ministries is given to the See # 3 Page 11

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