Profit Pakistantoday

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Saturday, 26 November, 2011

Steel millS criSiS

Govt agrees on sovereign guarantee for pSm ISLAMABAD

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AMER SIAL

fter being informed that the banks have flatly refused to provide any loan to the loss making Pakistan Steel Mill (PSM), the government decided to provide a sovereign guarantee for rs6 billion loan, to keep the entity operational till its financial restructuring, business plan is approved. An official source said the decision was made at the Cabinet Committee on restructuring, chaired by the finance Minister Abdul Hafeez Shaikh on friday. PSM, the source said, decried during the meeting that no bank was ready to give loan to the state owned en-

tity which was faced with a loss of rs1 billion per month due to under capacity operations. the steel mill is operating on only 20 per cent production, even though a production level of 70 per cent was required to reach break even. It was pointed out that there was shortage of raw material and if imports were not made immediately the mill would close down. the restarting would be more expensive than the financial assistance sought at present. the committee decided to provide guarantee to banks to enable raw material procurement. the committee was informed that an assistance of rs11 billion was required to enhance the production output to 80 per cent that will make the entity profitable. It will also require long term restructuring of debts. When some ministers expressed concerns on the financial plan, the committee was informed that PSM was a profitable entity during 2001-2008 period. It suffered heavy losses during the tenure of the present government. CCOr directed empowering of the board of

Gas discovery made at Zin block

electricity bill payment

50,000 industrialists boycott KESC S

KARACHI

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GHULAM ABBAS

He highly frustrated business community of Karachi has decided not to pay the monthly electricity bills to Karachi electric Supply Company (KeSC) against the 12 hours’ long loadshedding in the industrial sector.

As the prolonged outages have paralysed life in the industrial areas of the city, the over 50,000 industrialists of the country’s financial hub will not pay the utility bill until restoration of the uninterrupted power supply from KeSC, Mian Abrar, President Karachi Chamber of Commerce and Industry told Profit on friday.

IndustrIalIsts not defaultIng: Instead of paying the electricity bill to KeSC, the industrialists of the city’s seven industrial associations would submit the bills to offices of seven Associations trade and Industry which included S.I.t.e. Association, federal B Area Association, Landhi Association, North Karachi Association, Korangi Association, S.I.t.e. Super Highway Association and Bin Qasim Association, in protest against the unjustified power breakdowns which have almost stopped activities in the sector, he said. through pay orders, the businessmen would submit the billed amount at the offices of various associations to show that the industrial consumers were not defaulters of the privately run public utility. But despite the regular payment made to KeSC, the company was delib-

directors of PSM to make them more accountable and rationalising the custom duty on the raw materials. It was decided that the five year business plan will be considered by the economic Coordination Committee of the cabinet for final decision. the approval of the new business plan is required to conclude an investment deal with russia that has assured an investment of $500 million in the upgradation of the steel mill. the mill has production capacity of 1.1 million tonnes which would be increased to 1.5 million tonnes. the company has 17,000 employees and their salary bill is more than rs700 million per month. PSM incurred loss of rs26 billion in fiscal year 2008-09, rs11 billion in 2009-10 and rs11 billion in 2010-11. the government helped the entity by rescheduling its loans of rs7 billion and providing cash assistance of rs3 billion in the fiscal year 2009-10 while it helped in restructuring loans of rs8 billion and injected a cash assistance of rs2 billion in 2010-11.

erately making power shortages in order to get gas and subsidised fuel supply from the government organisations.

CompetItIveness In InternatIonal market: Under the present 12-hours loadshedding in three cycles, is actually the breakdowns of power supply for 24 hours as the industries could not run their machines with frequent and prolonged outages.

Besides KeSC’s policies had pushed cost of production up, leaving the industries non-competitive in the international market. According to Abrar, this was the first time the businessmen of the city were forced to withhold payment of the monthly electricity charges as hours’ long loadshedding in the industrial areas had taken a heavy toll on industries. this, he said would also badly affect exports and the expected revenue generation for the national exchequer.

He further alleged that the management of the company was only focusing on how to steal money from the crisis hit consumers instead of spending money on infrastructure, power generation and distributions. earlier, KCCI members in a meeting attended by chairman of the BMG group and former president of KCCI Siraj Kasim teli, KCCI President Mian Abrar Ahmad, Zubair Motiwala, Irfan Moton, Nisar Sheikhani, Yunus Bashir, Zia Ahmad Khan, Majyd Aziz, Mahtab Chawla and tariq Malik, it was decided that a series of protests would be organised against power break downs started after, what KeSC claims, the curtailment of gas supply from Sui

Southern Gas Company. power CrIsIs CrIpplIng Industry: It was decided that if things did not change and the KeSC did not bring down loadshedding, they would not pay power bills to the KeSC and deposit the same along with pay order with the respective associations from Monday. If the KeSC continued its highly deplorable policy, 17,000 industries of Karachi would be forced to close down and traders and workers would also be involved in the protest because they were also being hit by the power utility’s policy. the concerned businessmen, industrialists, traders of the city had also staged a protest sit-in at the Karachi Press Club (KPC) on Wednesday against power load shedding in the industrial zones of the city.

According to sources the loadsheddings were purely blackmailing tactics started employed by KeSC to get the industrialists support for pressurising SSGC to restore the gas supply to a maximum level. pay your power BIlls or faCe dIsConneCtIon; kesC’s warnIng to kCCI: On the other hand KeSC, in a statement has slammed the announcement made by the KCCI, in which the trade body members seem to have made a decision to refrain from paying the power dues to the utility. KeSC denounces all such acts and considers it as an open violation, given the fact that the situation and the reasons behind the current power crisis, brought about by the massive and forced curtailment of gas supply to the power utility is a fact well known to them.

KeSC has explicitly stated that all those power consumers, especially Industrialists who do not pay their bills on their respective due dates, their power supply will be disconnected without fail because KeSC has a zero tolerance policy against willful defaulters. KeSC cited that the bills which are up for payment pertain to the previous month’s power consumption, of a time when all the industrial consumers were enjoying exemption from load shedding in their industrial zones, which has been a standard policy of KeSC for the past two years.

ISLAMABAD AMER SIAL

tAte owned Oil and Gas Development Company Limited (OGDCL) has made gas discovery at Zin block in Balochistan and estimates of the reserve size, quality and daily supply are being finalised.

An official source said gas pressure was assessed at 1000 pound square inch (psi) which indicates a big reservoir. However, he shared no information on the size of the reservoir, its quality and potential daily gas supplies, and said “the technical team is the process of evaluating all of these things”.

National flag carrier, OGDCL started exploratory drilling in the block located in Dera Bugti district and first well X-1 was spud in May this year. the company had obtained exploration license for Zin block in 1996. But due to law and order issues, it could not be drilled for last 14 years.

In industry circles, Zin block is considered a very prospective block as it is surrounded by major natural gas producing fields of Pirkoh, Loti, Sui and Uch. Work on the site was started in 2010, when government provided required security to the com-

pany. If drilling proves successful the gas from the field will start flowing within next one year, the source said.

A major discovery in the block will make government enhance security for companies interested in oil and gas exploration in the hydrocarbon rich province to overcome severe energy crisis due to estimated 2 bcfd shortfall in gas supply. the country’s first major discovery of Sui gas field located in Dera Bugti was made in 1952. Its neighbouring district of Kohlu is attributed by experts as the most prospective area for finding major conventional hydrocarbon reserves. OGDCL has applied for security clearance for four licenses in the district including Kohlu, Jandran, Jandran West and Kalchas.

OGDCL is the largest upstream company in the country having a portfolio of 77 fields, out of which 45 fields are 100 per cent owned and operated, and 32 are nonoperated fields. As of December 2010, it holds 48 per cent of the country’s recoverable oil reserves, and 37 per cent of the country’s recoverable gas reserves. In terms of production, currently OGDCL delivers 56 per cent of Pakistan’s oil output, and 22 per cent of its gas production.

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Saturday, 26 November, 2011

debate

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KunwAR KHuLDune SHAHID

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ItH the current power predicament, and the relentless bursts of load shedding, there is a dire need to enhance our repertoire to meet the growing energy requirements.

Both industry and indeed the masses are bearing the brunt of the dearth of electricity on a daily basis, and hence, the clamour to ameliorate matters has been growing more vociferous day by day. Amidst such state of affairs, the Iran-Pakistan gas pipeline promises to be a knight in shining armor, as far as the prospect of bolstering our gas shortage is concerned.

Initially, India was very much a part of the project, but our eastern neighbours have absconded; citing security related concerns. the pipeline has been a massive undertaking, and with its initiation a long way down the memory lane, the project has come a long way. And after various brands of antagonisms, it seems to be on the brink of completion.

OriGin Pakistani civil engineer, Malik Aftab Ahmed Khan, conjured up the idea to reinforce Pakistan’s gas reserves and gave a design proposal of the potential project. In his article titled “Persian Pipeline” published in mid 1950s by the Military College of risalpur, Aftab Ahmed highlighted the blueprint of the entire proposal and also outlined the means for its protection. the need for it to be protected arose because the drafted out pathway overlapped with many antagonistic regions, that were hell bent upon ensuring that the project was not initiated. Aftab Ahmed suggested small battalion-size cantonments should be set up along the pipeline’s proposed route through Baluchistan and Sind, which would keep the hostility in check.

(around 42 per cent) extends within the domain of Iran. from Asalouyeh the route is traced towards Iranshahr; the distance covered in this segment is 902 kilometers. from Iranshahr to the Iran-Pakistan border, the pipeline runs for a further 270 kilometers before it enters Pakistan. After entering Pakistan, the pipeline’s proposed path is via Baluchistan into Sindh and Punjab. from Khuzdar, there would be a tributary en route to Karachi and the main pipeline would progress till Multan. from Multan, the pipeline can be extended to Dehli. Nonetheless, if China were to show interest in the project, the route could be modified accordingly to accommodate the South-east Asian giant. Owing to concerns regarding Baluchi insurgents, an alternative pathway from Iran to the maritime boundary between India and Pakistan off Kutch has also been proposed. If this idea is to be pursued, one branch would then run into Pakistan, while another one would branch off to Kutch.

prOSpectS the Iran-Pakistan pipeline project promises to bear enough fruits to drag Pakistan out of the current energy quagmire. the initial capacity of the project was touted as 22 billion cubic meters of natural gas per annum, which was going to gradually evolve towards 55 billion cubic meters per year. Nevertheless, after the project has been restricted to the stature of a bilateral matter between Pakistan and Iran, the numbers being prognosticated are 8.7 billion cubic meters of annual gas supply as the contracted numbers, and up to 40 billion cubic meters of maximum gas supply has been promised. the radius of the pipeline is 28 inches, making its diameter 56 inches and circumference approximately, 176 inches. the cost surrounding the project is said to be $7.5 billion. And while it is clear that the pipeline alone cannot act as our saviour and we would have to explore our reserves as well, it is unambiguous that it would go a long way in aiding our cause.

cOnceptualiSatiOn While Malik Aftab Ahmed Khan’s idea was constructively intriguing, it did have its creases that needed to be ironed out. Hence after being intermittently shelved, the groundbreaking idea was conceptualised in 1989 by rajendra K Pachauri along with Ali Shams Ardekani, former Deputy foreign Minister of Iran. the concept of an Iran-Pakistan pipeline was further extended to include India, and this mammoth project was being touted as the ‘Iran-Pakistan-India Pipeline’ – IPI pipeline or the Peace pipeline. Dr Pachauri expounded the design to both the Iranian and the Indian governments and received a positive riposte from the Iranian hierarchy. During the annual conference of IAee (International Association of energy economics) in 1990 Dr Ardekani also backed the idea.

1990s Deliberations over the pipeline project between Iran and Pakistan began in 1994, which was followed by the preliminary agreement in 1995. It was decided that the pipeline was going to trace its starting point in the South Pars gas field and would run all the way to Karachi. As further plans unravelled under the political hangover, Iran further proposed to extend the pipeline to India and hence in february 1999, the initial agreement was signed between Iran and India. With Iran, Pakistan and India being an enigmatic triangle of prospect, cooperation, scepticism and tension, the pipeline has been a ropy affair going to and fro and fluctuating in synchrony with the political turmoil that epitomises the region.

Such a trend was at its apogee as the world moved into the new millennium.

rOute the South Pars field is the origin of this historical pipeline project and the proposed length of the pipeline is 2,775 kilometers. Starting off from Asalouyeh in Bushehr province in Iran, 1,172 kilometers of the aforementioned 2,775 kilometers of the pipeline

2000s Post 9/11, when American influence was reigning supreme in the region, the project was duly affected. United States being fiercely antagonistic to-

wards Iran, and the Indo-Pak relationships oscillating with the tide; the aforementioned triangle then became an inscrutable quadrilateral.

It was all quiet on the pipeline’s front in the first half of the previous decade, after developments began to resurface from 2007 onwards. In february 2007, Pakistan and India agreed to pay Iran $4.93 per million British thermal units ($4.67/GJ); however, some of the clauses of the agreement were still up for negotiation. In August 2008, Iran iterated its desire to see China enter the project that would make it a gargantuan South Asian project that could rewrite all history books.

2009 saw India abandon the project, owing to the proclaimed security concerns; the fact that India had signed a civilian nuclear deal with US in 2008 also triggered the decision. even so in 2010, India reiterated its desire to be a part of the project and invited Pakistan and Iran for trilateral talks. However, like in most global matters, the most daunting influence was that of the United States of America. In January 2010, US called on Pakistan to completely abandon the project, with Iranian hostility towards the US rising and Pakistan being flaunted as a pivotal ally in America’s War on terror. US vowed to provide assistance for a liquefied natural gas terminal and also promised to aid the import of electricity from tajkistan through Afghanistan’s Wakhan Corridor, if Pakistan were to leave the project. Nevertheless, on 16th March 2010, Iran and Pakistan signed an agreement on the pipeline which has been followed by Iranian announcement in July 2011 that it had completed the construction of its section.

recent menace target killings in Hazara are escalating and ostensibly as a warning to the Pakistani hierarchy, who plan on undertaking the construction work now that Iran has nearly completed its side of the project. Jundallah is said to be involved in attacks in Sistan-Baluchistan and Lashkar-eJhangvi is the principal antagonist in Baluchistan that is threatening to upset the applecart of not only the Iran-Pakistan pipeline, but the recently signed tAPI deal as well. these attempts are under the hangover of the US-Pakistan energy dialogue and Pakistan-Iran Joint economic Commission (JeC) and are intended to ward off potential investors in the projects.

baluchiStan’S cOOperatiOn Balochi hostility regarding the project – while indubitably veritable – has quite often been over exaggerated as well. the province is now making all the right noises as far as a positive outlook and approach towards the project are concerned.

Chief Minister Baluchistan, Nawab Mohammad Aslam raisani has been buoyant about the project and recently announced that the government of Baluchistan has agreed to give land for the project. the land to be allocated is in the districts of Gwadar and Lasbella, which is an integral route, as far as the pipeline’s passage through Baluchistan is concerned. the chief minister

iran-pakistan gas pipeline has weathered storms, countered antagonisms and has stood the test of time

however, expressed his desire to see the contract of the proposed work on the pipeline through Baluchistan be given to local contractors, which would in turn bolster the economy of a province that has unfortunately lagged behind the rest as far as economic prosperity is concerned.

neGOtiatinG price fOrmula Pakistan has recently articulated its desire to negotiate over the gas price formula with Iran, in accordance with the price mechanism that has been settled under tAPI (turkmenistan Afghanistan Pakistan India) gas pipeline project with turkmen government. According to the initial agreement between tehran and Islamabad, Pakistan was to pay 78 per cent of crude oil parity price to Iran after a mutual consensus was reached from both sides. However, after the tAPI project has been signed, Pakistan wants to revisit the numbers with Iran. According to reports, the new numbers could save up to $100 million from the $1.25 billion that were going to cost in the construction of the Iran-Pakistan gas pipeline.

apprOachinG cOmpletiOn Petroleum minister Dr Asim Hussain, recently proclaimed that the pipeline project would be culminated by the end of 2013, asserting that “first gas flow is targeted by the end of 2014”. this comes after the Iranian hierarchy is on the verge of completing their side of the deal by constructing the pipeline up till the Iran-Pakistan border.

Dr Asim Hussain also exclaimed that the government was pursuing a new petroleum exploration and production policy that would bolster the prospects of investment within the realms of oil and gas exploration in the country. Such incentives when coupled with the IP and tAPI projects bode well for the revolution in the energy sector in our part of the world.

epilOGue As things stand in Pakistan, we are in dire need to an inkling of inspiration to improve our multi-pronged crises. We need to tap into our own reserves and further pursue projects along the lines of the Iran-Pakistan pipeline, and the tAPI project is another major step in the right direction. the Iran-Pakistan pipeline project has stood the test of time and has proven itself to be a steadfast quest towards the enhancement of bilateral ties and trade between two forthcoming nations and towards the amelioration of power shortages. Despite a plethora of opposition and animosity, the project continues to surge towards its desired goal. the project has weathered all storms and hopefully, we shall soon see it being proved as one of the most lucrative deals in the history of the region.

The writer is sub-editor Profit. He can be reached at khulduneshahid@gmail.com

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Saturday, 26 November, 2011

EDITORIAL

Diminishing exports He October slowdown in textile exports is not really alarming once you explore its underlying reasons – chronic energy shortage to industry and inability to expand owing to an unaccommodative monetary environment. the surprise at the slowdown is quite alarming, though, especially when it registers with government functionaries. Immediately following the budget announcement, we repeatedly pressed for increased patronage to both manufacturing and industry, and the underlying need to incorporate value addition into the export mix. Yet little changed despite the finance ministry’s ambitious budgetary projections, and nearcriminal power shortage continued to compromise production savagely.

If things weren’t bad enough, the tight monetary stance ruled out whatever little hope of stimulating investment and expansion remained. And even with the phased central bank rate cuts, the government is overwhelmingly present in

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the borrowing market, still crowding out the private sector. With the government’s other main revenue generation arm, tax collection, still shy of crucial reforms, Islamabad’s fiscal condition is about to change from bad to much worse.

It’s not just that fiscal authorities have hit a road-block half way through the fiscal. there were signs right from the beginning that the time-buying bandwagon the government had decided to step on was running on borrowed time. So once again important targets will be missed, and no matter what authorities say, there will again be painful cuts in the development budget. And since the gloomy picture owes to the government’s inability to even protect its small export basket, one thing Islamabad cannot claim presently is a prudent, medium-to-long-term outlook. Six months of continuous reminders have had little affect on the government. It is hoped that the export shock will at least push it into a more proactive posture. failing that, nothing short of the ballot box will bring some sense where it is needed.

Cross roads of high finance

Zayn Usmani NterNAtIONAL financial hubs assume a singular importance in times of turmoil, especially recession as deep as the one unleashed by the epic collapse of Lehman Brothers in 2008. the intense amalgamation of different and differing persuasions these places play host to gives rise to just the kind of chatter that investors need to know. So I remain extra alert whenever I’m in Hong Kong, Singapore, or Dubai, carefully listening to workers and executives from different parts of the world to judge how much my own interpretation of events is in keeping with others’.

Strange as it seemed at the outset of the downturn, these are days of overwhelming consensus. While the immediate panic of the recession featured all sorts of analyses, and the integrated money-printing international response drew as many challengers as it did supporters, now there is little denying that europe holds the key to present crisis, at least in the immediate term. And as investors and financial authorities across the world, and of course especially in europe, scramble to save the euro, they are not pricing in the negative spill over this drama will have on Asia, seemingly decoupled from the crisis far away.

In fact, I hear less people trumpet the rising star of Asia’s emerging economies that only recently were hailed as leading the international bottoming out of the recession. As much as europeans and Americans fret about the disaster in europe’s periphery, Asians complain of the possibility of collapsing exports as prime target markets across the Atlantic falter. for, no sooner than the euro’s collapse will American banks start falling, compro-

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Pakistan should position itself at the centre of international financial flows Planning and economic growth Sugarcane export Mr tarin has outlined an extremely pressing issue. Over the years, disparities between the rich and the poor have sharply increased, with the rich getting phenomenally richer and so on. If we trace back the history, we see that recession has affected the rich as well, but they rebounded very strongly from all the downturns. We can say that capitalism to some extent does have the capacity to restore economic balance, if used in the right manner. the economic problem and the uneven distribution of wealth in Pakistan can only be minimised if the middle and lower income groups also participate fully in the economic process instead of relying on the political and strategic institutions.

I personally believe that we have been extremely negligent on the sugar cane front. It is one of the most lucrative crops that we can find in our part of the world but in my humble opinion its utility has not been proper. And it’s not just about the sugarcanes we have been ignoring the agriculture sector for a long time. Agriculture has been our backbone throughout history and unfortunately we have been criminally negligent regarding our backbone.

We are hell bent upon implementing the MfN status but as is customary, we are also being insensitive towards the farmers’ concerns. things need to change, and quick.

MAHAM OMeR

MARyAM AjMAL

The writer is a freelance financial journalist

LAHoRE

ISLAMABAd

The water bomb

Ali Rizvi Or those of us who feel that the piling up of nuclear arsenal in itself threatens the future of South Asia, are blatantly mistaken. the policy makers, the intermediaries and the stakeholders are all convinced that peace will be sustainable only when the Kashmir issue between Pakistan and India is addressed, however the problem has now escalated beyond merely the Kashmir dispute. According to a World Bank report, water scarcity in South Asia, is expected to reach unprecedented levels in the coming years. It explained that as demand rises,

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mising the two biggest towers of the international financial system. And once eU and US economies record another few quarters of negative growth, Asia’s export engines will start grinding to a halt one by one. As a rule, when an entire bloc’s exports to other blocs are squeezed, their growth slows, and subsequently intra-regional trade also diminishes. therefore, whenever the federal reserve releases minutes of its meetings, whenever Merkel and Sarkozy call another conference, and whenever the oil market fluctuates on whether or not the economic north is on the verge of a double-dip recession, Asia’s decision-makers watch with marked concern. Alas, in an age when sentiment can and does influence market forces, sometimes even more than actual events, Asia has been strikingly behind the curve in talking up european and American markets, its little efforts drowning in the loud market cry fearing imminent doom.

Asia has also suffered from not positioning itself proactively in the crossroads of international finance. Give or take a few (like Hong Kong and Singapore), few leveraged the unprecedented integration of the international financial system over the last decade and a half. even China’s mammoth growth machine, save its exports and currency dramas, has been more of an introvert, focusing on its own internal dynamics. Only India, that too to an extent, ventured into the furious cross-currents that defined high finance till recently.

Pakistan is perhaps the most mysterious case. After suddenly exploding into the international stage in the aftermath of 9/11 and the recession early in the last decade, it disappeared just as quickly after the elections of feb ’08.

Ironically, democracy was not accompanied by financial and economic prudence, and relationships forged over a decade were not exploited properly. Now caught in persistent stagflation and sub optimal growth, its finance managers must immediately make arrangements for forging new trade deals, and alter production accordingly. Very soon, most of its limited markets, for its limited exports, will dry. If it had stayed in the mainstream of international finance, it would have seen this coming. If it fails to do so even now, there can only be further retardation, and alienation.

with the 1.5 billion strong population growing almost by 1.7 per cent each year, it is almost like dropping the entire population of North Korea on the region every year.

Add this to the long list of woes of Pakistan that is combating terrorism, radicalisation, political uncertainty, economic crisis, power shortage, fiscal mismanagement, and any other predicament humanly imaginable. As the economies of South Asia, grow every year the growth comes at the cost of feeding the rising demand of food.

Industries, require water, agriculture requires water, food requires water, and power generation requires water.

Pakistan’s storage capacity of water presently stands at approximately 9 per cent of average annual flows, compared with the average world capacity of 40 per cent. Add this to the fact that by 2030, Pakistan will be the 5th largest populous country of the world and you find yourself in dire straits. to top it off, India’s construction of Baglihar dam that Pakistan alleges is being built with gated spillways in vio-

lation of the provisions of the Indus Water treaty, will give the neighbouring regional rival greater control over Pakistani waters. former water expert of the World Bank, John Briscoe who advises Pakistan on water issues said, “the Baglihar decision allowed a reservoir on a river coming into Pakistan, and now a precedent is set.” the water bomb in Pakistan is ticking with every passing second, as the water reserves are fast depleting. According to estimates, water availability is expected to decrease to 800 cubic meters by 2020, from 5000 cubic meters in 1947.

Intriguingly the per MW cost of electricity produced from the Baglihar project is much higher than the average per MW cost elsewhere in India. Moreover, studies estimate that for the Baglihar dam to produce 900 MW of electricity, it would require 860 cumecs of water, however flows of Chenab reduce considerably in winters, so much so that flow in winters reduces to up to 50 cumecs. reports indicate that India has built 14 hydropower plants on Chenab and is in

Shahab Jafry Business Editor

Kunwar Khuldune Shahid Sub-Editor

babur SaGhir Creative Head

ali riZvi News Editor

maheen Syed Sub-Editor

hammad raZa Layout Designer

Our water availability is expected to decrease to 800 cumecs by 2020, from 5000 cumecs in 1947

the process of building more projects that will eventually enable it to completely block water of the Chenab river for almost a month.

According to a report published by the US Senate in february this year, the cumulative effect of the 33 plus projects of India, at various stages of completion on the rivers that affect this region, ‘could give India the ability to store enough water to limit the supply to Pakistan at crucial moments in the growing season.’ the latest row between the two countries is over the Kishanganga hydropower project, where the complicated design entails India diverting waters of Neelum, some 22 km down a mountain tunnel to turbines, clearly in violation of the IWt. there are almost 5000 dams in India, whereas Pakistan boasts of a figure that barely exceeds 20 dams. As far as India is concerned, in the case of controversial dams, it seems that the arch rival will get away happy in

the end, as the international arbitration that took place in Hague permitted Indian design, despite ordering suspension of its construction for certain assessments. regardless, India will most probably finish the dam before Pakistan constructs the Neelum project downstream.

While many drone about the need for cultural exchange to promote harmony between the neighbouring countries, such harmony cannot be fostered in the presence of an existential threat to the survival of the people of the region.

Pakistan’s concerns over water are habitually dismissed in the International media, claiming that these are merely excuses to pick a fight with India, but the water bomb of region has the potential to set the spark for a localised conflict with far reaching repercussions.

The writer is News Editor, Profit. He can be reached at ali.rizvi7957@gmail.com

For comments, queries and contributions, write to: muneeb eJaZ Layout Designer

email: profit@pakistantoday.com.pk ph: 042-36298305-10 fax: 042-36298302 website: www.pakistantoday.com.pk

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Some misconceptions associated with MFN have made the whole issue disputable which should be clarified to allay the fears of business community

news

founder president iwcci, Samina fazil

Iraqi envoy invites Pakistani investment LAHORe

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STAFF REPoRT

MBASSADOr of Iraq Dr rushdi Al-Ani has invited Pakistani businessmen to initiate joint ventures with their Iraqi counterparts as abundant investment and business opportunities are available there. He was speaking at Lahore Chamber of Commerce and Industry (LCCI).

Ambassador said Iraq also is in dire need of manpower from Pakistan to complete its projects in construction, manufacturing sector and agriculture. Dr rushdi said Iraq also needs Pakistan’s help in education, health and engineering sectors therefore Pakistani educationists, doctors and engineers should avail opportunities in this oil rich country. He informed participants that Prime Minister of Pakistan would soon visit Iraq where he would be signing a number of economy related agreements also. Ambassador urged LCCI President to arrange a sector-specific delegation to Iraq so that the businessmen could have firsthand knowledge of business facilities being offered by Iraqi government.

Speaking on the occasion, LCCI

President Irfan Qaiser Sheikh said despite the fact that Pakistan and Iraq are members of Organisation of Islamic Cooperation (OIC) and also have close, friendly, and cooperative relations since 1947 but these prolonged ties do not reflect in bilateral economic relations.

He said Lahore Chamber of Commerce and Industry was ready to play an effective role to promote trade and economic cooperation between the two countries. LCCI President said Pakistan was capable of exporting textile products, auto parts, marble, medicines, surgical items, footwear, edibles, wheat and rice.

He said Pakistani construction companies which, if provided proper information, can evaluate Iraq as a potential market. Likewise Iraq can benefit from cheap and abundant labour available in Pakistan for this purpose. Pakistani engineers, doctors, technicians have earned a good name the world over and they would be welcomed by Iraq.

Irfan Qaiser Sheikh said chambers of commerce, like LCCI, can play a very constructive role in bridging the gap of information and interaction between businessmen of the two countries. He said in the domain of educational aids and stationery, Iraq will find Pakistan to be

a dependable supply source. Publishing houses in Pakistan are competent enough to cater to specific needs of Iraqi educational system.

Our publishing setup is making optimum use of enhancements in Arabic script software and you would find their workmanship to be of the required standard.

LCCI President also offered help to the visiting diplomat in Information technology tools in development of tele-communication linkages in Iraq. “Pakistan has the required-trained human resource to develop information portals, websites according to the needs of the Iraqi government.”

Pakistan major items of export to Iraq over the years have included salt, stone, lime & cement, cereals, machinery, plastic products, articles of iron and steel etc; whereas, plastics, fruits, milling products, starches, wheat gluten, aircraft parts, machinery and etc are imported from Iraq.

LCCI executive committee members Ghulam Murtaza Shoukat, Ilyas Majid Sheikh, Husnain raza Mirza, and former executive committee Member Amjad Ali Java were also present in the meeting and highlighted a number of issues coming in the way of two-way trade.

india-pakistan reach broad pact on easy business visas new DeLHI MoNIToRING dESK

A

senior Indian ministry official informed that India has reached an agreement with Pakistan to liberalise visa regime for their business persons. In this regard, a cabinet note is expected to be ready in 7-8 days. "On our side, it has to go to the Cabinet through the ministry of external affairs," Joint Secretary in the Commerce Ministry Arvind Mehta said at a fICCI. India and Pakistan at both sides should grant multiple entry visas, as per the clauses of the proposal. He said the 'police reporting' would also be done away with under the proposal. "the note by MeA will be ready in 7-8 days for consideration of the Cabinet," Mehta said addressing the meeting attended by a business delegation from Pakistan. A broad agreement on the issue has been reached between India's home ministry and interior ministry of Pakistan, he said. Mehta also sought to allay concerns among Pakistan's businessmen that normalisation of bilateral trade would result in swarming of Pakistani market with Indian goods. "Do not be fearful of the future because things are changing," he said, adding there are several safeguards under South Asian free trade Agreement for domestic industry.

Present on the occasion, Pakistan High Commissioner Shahid Malik said that nontariff barriers (NtBs) exist in India on Pakistani goods.

industrialists concerned over alarming rise in banks’ npls karaCHI: the trade and industry has shown its utter dismay over the alarming rise in the banks’ nonperforming loans (NPLs). In a joint statement, Patron in-Chief Korangi Association of trade and Industry, S M Muneer, Chairman ehteshamuddin, Vice Chairmen, Hasham A razzak and tariq Mailk and former Chairman, Mian Zahid Hussain, expressed concern over the recent SBP report that shows an abnormal surge by 24 per cent from rs494 billion to rs629 billion only in one year.

Muneer said he had already shown his apprehension that this would prove a death knell for the local as well as export-oriented industry. STAFF REPoRT

industrialists criticise energy tariff increase laHore: Pakistan Industrial and traders Association front (PIAf) and leaders of business community while strongly criticising the proposed 11 to 14 per cent increase in gas and 31 per cent increase in the hydel-electricity tariff, urged Prime Minister Syed Yousaf raza Gaillani to reject OGrA and NePrA anti-industry summaries in larger interest of the country. PIAf Chairman Sohail Lashari, Lahore township Industries Association Chairman Haroon Shafiq Chaudhry and Auto Parts Manufacturers and exporters Association Chairman tahir Javed Malik said that massive increase in one-go in electricity tariff and gas prices is not only anti-industry but anti-masses. STAFF REPoRT

argentina seeks joint ventures in pakistan IslamaBad: tremendous amount of economic, commercial and political activities between Argentina and Pakistan would have to take place for enhancing bilateral trade relation between the business communities of both countries. Ambassador of Argentina, rodolfo J Martin Saravia, made these remarks while talking to President, Islamabad Chamber of Commerce and Industry, Yassar Sakhi Butt during his visit to ICCI. STAFF REPoRT

KSE sheds 81 points on institutional profit-taking ahead of SBP policy

KARACHI STAFF REPoRT

t

He Karachi stocks market after thursday’s recovery once again turned bearish and lost 81.27 points on friday on what the analysts said institutional profit-taking ahead of the central bank’s policy announcement new week.

Last trading day of the week saw the benchmark 100-share index plunging by 0.6 per cent to 11,648.14 points from the previous 11,729.41 points.

“Bearish activity witnessed in stocks across the board on institutional profit-taking ahead of SBP policy announcement next week,” said Arif Habib Investments’ Ahsan Mehanti. the intraday high and low was, respectively, recorded at 11,755.23 and 11,612.17 points, showed the KSe website. the trading volumes once again nosedived to the record low level of 28 million and was recorded at the ready-counter at 28.176 million shares compared to 50.796 million shares traded on thursday. the trading value also depreciated to rs1.4 billion compared to rs2.5 billion of the previous day. Of the total 310 scrips traded, 78 advanced, 123 declined and 109 remained unchanged. the KSe 30 index also remained negative by 126.59 points and closed at

10932.00 having climbed to the intraday high of 11080.58. the lowest dip the index saw during friday’s session was 10907.75. the trading volume and value, respectively, amounted to rs15.040 million and rs1.339 billion. “Major fall in global stocks and commodities on concerns for the US economic growth and europe debt crises affected the investor sentiment,” Mehanti said. the analyst said the day marked the foreign investors continuation to engage in limited offloading in the blue-chip stocks at the Karachi bourse. “trade remained thin despite OGrA announcements for raise in local gas tariff, easing concerns for rising circular debt in the country,” added Mehanti, who is a director at the Arif Habib Securities. fauji fertiliser Bin Qasim was volume leader of the day having counted its traded shares at 3.5 million. the fertiliser giant’s share price set in the red zone with a loss of rs1.94 to close at rs56.55.

Other best performers included Bank Al-falah, Oil and Gas, Azgard Nine, National Bank of Pakistan, engro Corporation, fauji fertilizer XD, Arif Habib Company SD, Jahangir Siddiqui Company and Lotte PakPtA who counted their traded shares at 3.1 million, 1.3 million, 1.3 million, 1.2 million, 1.1 million, 1.1 million, 1.1 million, 1.0 million and 0.788 million.

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Saturday, 26 November, 2011

We all stated our confidence in the ECB and its leaders and stated that in respect of the independence of this essential institution we must refrain from making positive or negative demands of it

news

french president nicolas Sarkozy

Kyoto pollution curbs may lapse on UN deadlock

P

OLLUtION limits in the only treaty curbing greenhouse gases may lapse at the end of next year because of a rift between richer countries and developing ones over how to combat global warming. China, India, Brazil and their allies are pushing for an extension of the Kyoto Protocol, which requires industrialized nations to cut emissions through 2012.

Japan, Canada and russia refuse to sign that plan, and the U.S. never ratified it. the impasse risks undermining the $142 billion a year market designed to cap carbon-dioxide linked to burning fossil fuels, which are blamed for damaging the climate, and stunting investments in renewable energy that jumped 32 per cent to a record $211 billion last year. Negotiators from 190 countries will gather for two weeks of United Nations climate talks starting Nov. 28 in Durban, South Africa.

“We need an international agreement to have any formal new targets, and it’s equally clear that those new targets are a long way from being agreed,” Henry Derwent, president of the International emissions trading Association and a former U.K. climate envoy said on Nov. 21.

“We are just going have to live without targets for a reasonable period of time.”

CARBON PERMITS SINK european Union carbon permits dropped as much as 11.5 per cent today, losing almost one-fourth of their value this week, as slower economic growth and europe’s debt crisis held back factory production. United Nations emissions credits plummeted to a record low of 4.6 euros in a move that reflected concerns about the outcome of the climate summit, said Per Lekander, a Parisbased analyst at UBS AG. “In the middle of the most serious financial crises since World War II and with

05

climate measures through the U.S. Congress after the Senate rejected carbon cap- and-trade legislation.

KYOTO ‘LESSONS’

several world leaders facing elections, climate mitigation is on the back-burner and neither Asia nor U.S., and possibly also not europe, will sign up to anything which is costly,” Lekander said. “It would be a big surprise to me if Durban didn’t become another Copenhagen,” he said, referring to the 2009 summit that disappointed investors. the talks under the UN framework Convention on Climate Change aim to outline a future for the market-based mechanisms including carbon trading sketched out in the 1997 Kyoto treaty. they’re also talking about how to implement a fund that would channel part of the $100 billion a year industrial nations have pledged in climate aid to developing nations.

‘VERY LOW CHANCE’ Last year’s talks in Cancun, Mexico, left open the most difficult issue of whether to extend emissions limits in Kyoto or start afresh with a new treaty.

Developing nations such as China and India didn’t have requirements for cutting back carbon under Kyoto and since have become two of the three biggest polluters.

“With current positions that countries are starting with in Durban, I’d give Kyoto extension a very low chance,” said Niklas Hoehne, director for energy and climate policy at ecofys, a Dutch consultant that has the eU among its clients. “this is the last moment to save” the Kyoto treaty, and “if it’s lost, we’re in a bottom-up mode when everybody proposes what they want to do -- a different and weaker system.” failure to extend Kyoto would cast a shadow over longterm prospects for limiting global warming. Should countries give up on agreeing to targets after the current limits expire in December 2012, the treaty’s relevance would diminish. President Barack Obama isn’t scheduled to attend the talks in Durban and has stepped back from pushing

“One of their lessons from the Kyoto experience was they won’t get ahead of the U.S. Congress,” said Dirk forrister, head of President Bill Clinton’s 1997 task force on climate. “We have a divided Congress.

Some want action on climate change. Others don’t want to mention the words.” the eU is asking the talks to agree on a timeline for adopting a new treaty that would replace Kyoto. the 27-nation bloc, which has adopted a law to cut greenhouse gases by 20 per cent in 2020 compared with 1990 levels, is ready to sign up for a new commitment period under Kyoto if other countries agree on when they’ll adopt a legally binding global deal. eU Climate Commissioner Connie Hedegaard has ruled out moving without promises for emissions cuts from other nations. “Let’s be frank: At best we could only get the eU, Norway and maybe two or three more countries to sign up for a second Kyoto period,” Hedegaard said this week in Oslo. “that will not make any difference whatsoever for the overall trend in global emissions.

It would also take away pressure from other countries, both developed and developing, to engage in more ambitious climate action.”

‘NOT SPOILING PARTY’ China says goals for developing countries should be voluntary, and India urges industrialized nations to take account of their historical responsibility to clean up the emissions they created in past decades.

“We in developing countries are not spoiling the party,” Indian environment Minister Jayanthi Natarajan said in New Delhi.

“We’re not refusing to cooperate. You all know how far we’ve walked, how far we’ve gone to cooperate, how much action developing countries are taking voluntarily to reduce their carbon footprint.” South Africa, which is hosting the climate talks, wants to avoid having the effort to constrain global warming fizzle on its soil. “We cannot from conference to conference repeat the same rhetoric without getting to a practical implementation,” Cedric frolick, house chair in the South African Parliament, said in an Oct. 31 interview. “We simply cannot afford for Durban to become the graveyard of the Kyoto Protocol. BLooMBERG

CORPORATE CORNER etihad airways earns ‘airline of the year’ title by arabian business magazine

stakeholders including practitioners, advocates, investors, UN agencies, donors, domestic government agencies, and many more. At the conference, Ms Zafar presented her paper entitled “from Micro-to Small and Medium enterprise: How do you grow with your clients, especially women, and allow them to graduate to institutions that can meet their expanding needs” which gave an overview of the challenges faced by NPOs in serving low-income female clients under the paradigmatic shift towards a more commercialised model. PRESS RELEASE

md Kashf foundation participates in the Global microcredit Summit 2011 laHore: Ms roshaneh Zafar, Managing Director of Kashf foundation, participated in the Global Microcredit Summit in Valladolid Spain from the 14th–17th November, 2011. the Microcredit Summit Campaigns are the largest microfinance gatherings in the world, which assemble a full range of

cOmSatS organises an international workshop

IslamaBad: Pakistan telecommunication Company limited (PtCL) eVO Wi-fi cloud has introduced new exciting packages for its valued customers. eVO Wi-fi Cloud is Pakistan’s first intelligent mobile Wi-fi device that puts the world of content, services and connectivity in the palm of the user’s hand. the new revised packages have been introduced to accommodate the recently implemented GSt on the product. With the massive savings bundle offer, customers can enjoy unlimited internet access for 3months at the price of two months. PRESS RELEASE

IslamaBad: Department of Meteorology at COMSAtS Institute of Information technology, Islamabad organised an international workshop on ‘Climate Change and Sustainable Management of Water resources in Asia-Pacific region’, in collaboration with United Nations educational, Scientific and Cultural Organization (UNeSCO), Higher education Commission of Pakistan (HeC), COMSAtS-HQ and DAAD, Germany. resource persons from Asia and the Pacific region enlightened the participants of the workshop on various climate and water related topics. the workshop aimed at providing networking opportunities to national and international researchers, educationists, and others working on mitigation of adverse affects of climatic change. PRESS RELEASE

tetra pak launches ‘tetra pak media awards’

Jinnah-rafi foundation observes 63rd death anniversary of late m rafi butt

laHore: tetra Pak, the world’s leading food processing and packaging solutions company, has launched the “tetra Pak Media Awards” to support and further encourage the media to increasingly report on key environmental and food safety issues

laHore: 63rd death anniversary of M rafi Butt, a close associate of Quaid-e-Azam Muhammad Ali Jinnah, will be observed on Sunday, November 27, 2011, under the auspices of Jinnah-rafi foundation. PRESS RELEASE

ptcl evO wi-fi cloud introduces revised packages karaCHI: etihad Airways, the national carrier of United Arab emirates, has been named ‘Airline of the Year’ by Arabian business magazine. Judges said the award was made in recognition of etihad Airways’ financial performance and service offering, as well as the remarkable speed of its expansion. etihad Airways Chief executive Officer, James Hogan said, “We are delighted to be named as ‘Airline of the Year’

by Arabian business magazine. 2011 has been an exciting year for etihad Airways. PRESS RELEASE

in Pakistan. the awards will be given in four distinct categories – print, electronic, online and photograph – and will be given to works of journalism covering environmental or food safety related issues. PRESS RELEASE

KARACHI: Mr Muhammad Akram of Karachi receiving his Mega Lucky draw Prize, a Suzuki Cultus, in a ceremony marking the end of ‘Haier Pakistan Washing Machine Promotion campaign’. PRESS RELEASE

ISLAMABAd: Makhdoom Muhammad Amin Fahim receiving an award shield during 2nd Bosporus Regional Cooperation Summit at Istanbul. PRESS RELEASE

KARACHI: Suhail Bin Matar Al-Ketbi, Consul General of UAE to Pakistan, is with the sponsors and organisers, after the interaction with the media regarding the holding of the largest single country exhibition of UAE in Pakistan, “MAGNIFICENT 7”. PRESS RELEASE

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Saturday, 26 November, 2011

06 Markets top 10 sectors

49% 09% 10% 04% 04%

Chemicals

01% 03% 01% 03% 17%

Real Estate Investments

Construction & Materials Electricity Banks

Fixed Line Telecommunication

Oil & Gas

Financial Services

Personal Goods

Equity Investment Instruments

STOCK MARKET HIGHLIGHTS Index 11648.14 2993.02 2615.22

KSE-100 LSE-25 ISE-10

Change -81.27 -64.99 -20.05

Volume 22,531,291 1,126,368 19,339

Market Value 2,533,096,420 40,707,460 419,623

top 5 perForMers sector wise

Major Gainers Company Nestle PakistanXD Bata (Pak) Ltd. Service Industries AL-Ghazi Tractors Clover Pakistan

Open 2759.94 770.00 193.81 165.01 51.49

High 2897.93 799.00 201.87 167.77 54.06

Low 2800.01 740.00 193.00 166.65 54.06

Close 2876.54 788.74 201.87 167.66 54.06

Change 116.60 18.74 8.06 2.65 2.57

Turnover 52 131 607 226 200

860.00 590.05 306.47 131.27 104.64

818.00 575.00 309.65 131.40 103.00

817.00 575.00 299.00 125.00 100.02

817.00 575.00 300.17 126.40 100.11

-43.00 -15.05 -6.30 -4.87 -4.53

502 100 50,048 1,137,908 2,010

Volume Leaders Fauji Fert Bank Al-Falah Oil & Gas Azgard Nine National Bank

58.49 11.99 154.55 3.45 3.58 43.17

58.69 12.25 156.00 3.32 43.65

56.25 11.81 152.05 3.43 41.99

56.55 12.01 153.21 -0.02 42.10

-1.94 0.02 -1.34 1,362, -1.07

3,532,635 3,179,744 1,363,773 639 1,233,402

Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)

Per Tola (PKR) 55,062.00 51,608.00 1,023.00 1025.00

Per 10 Gm (PKR) 47,257.00 44,245.00 878.00 880.00

Per Ounce US$ 1,680.00 – 35.05 –

hiGh

lOw current

412.75 127.68 23.89 7.38 97.00

406.10 125.01 23.22 7.19 93.15

chanGe

vOlume

Oil and Gas Attock Petroleum Attock Refinery Burshane LPG XD Byco Petroleum Mari Gas Co.XB

411.14 126.72 23.22 7.20 96.00

Agritech Ltd. Arif Habib CoXDXB SD Bawany Air Products Clariant Pakistan Dawood Hercules

15.00 29.85 5.00 156.34 39.08

-4.15 -1.35 0.00 0.05 -2.26

18,325 226,908 1 1,147,404 47,325

1.51 9.20 33.86 10.80 6.97

15.48 29.90 5.25 156.74 39.35

15.00 29.45 5.00 155.00 38.50

15.00 29.51 5.25 155.18 38.62

0.00 -0.34 0.25 -1.16 -0.46

1,002 252,944 1,000 2,897 15,788

1.91 52.50 1.95 14.18 6.00

1.59 9.48 33.00 11.00 7.25

1.46 9.06 32.18 10.77 6.97

1.48 9.06 32.53 11.00 6.97

-0.03 -0.14 -1.33 0.20 0.00

71,503 2,002 16,754 5,352 205

28.15 3.10 39.88 9.00 89.50

AL-Ghazi Tractors Bolan CastingXD Ghandhara Ind. Hinopak Motor K.S.B.Pumps

87.7640 135.5251 1.1335 116.4277

169.86 28.00 6.94 96.11 26.95

2.19 52.52 1.98 13.70 6.50

1.90 52.40 1.95 13.70 6.00

1.90 52.49 1.95 13.70 6.00

-0.01 -0.01 0.00 -0.48 0.00

3,005 1,288 100 500 1

US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar

International Oil Price WTI Crude Oil

Sell 88.20 116.97 136.78 1.1336 85.07 11.37 24.02 23.51 86.81

Brent Crude Oil

Agriautos Industries Atlas Battery Ltd. Atlas Honda Ltd. Bal.Wheels XD Dewan Motors

60.27 172.01 125.27 26.00 2.15

28.60 3.15 40.50 9.38 92.00

27.80 2.85 39.00 8.53 85.03

27.86 3.11 39.34 9.38 88.55

-0.29 0.01 -0.54 0.38 -0.95

14,445 110,806 1,261 502 17,243

172.00 28.55 7.40 95.76 27.13

168.00 28.00 7.34 91.31 25.61

60.99 172.01 126.00 25.99 2.60

60.27 172.00 125.00 24.70 2.11

110.49 111.43 150.02 150.00

169.86 28.00 7.38 95.76 26.95

$107.75

60.27 172.01 125.00 24.84 2.13

109.00 111.18 145.05 145.58

55.09 11.10 51.41 1.90 12.00

55.09 12.00 53.00 1.90 13.00

AL-Abid Silk Mills Diamond Ind. Hussain Industries Pak Elektron Ltd. Tariq GlassXD

23.34 8.20 3.90 4.20 8.65

23.60 9.03 3.90 4.40 8.89

Amtex Limited Artistic Denim XD Ashfaq Textile Azam Textile Azgard Nine

1.31 19.50 7.10 1.35 3.71

1.44 19.45 8.10 1.40 3.85

29.94 29.94 3.74 3.74 127.13

AHCL-DEC AHCL-NOV ANL-DEC ANL-NOV ATRL-DEC

29.94 29.76 3.80 3.80 127.50

Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. Highnoon (Lab) IBL HealthCare XD

102.51 76.66 69.25 29.29 12.78

103.20 78.00 69.90 29.50 13.29

0.00 0.00 0.44 -0.35 0.00

68 4,001 500 11 418

0.00 0.00 -0.27 -1.16 -0.02

50 100 500 537 79,586

0.69 -4.44

1,170 203

P.T.C.L.A Pak Datacom LtdXD Telecard Limited Wateen Telecom Ltd WorldCall Telecom

10.80 34.50 0.96 1.85 1.11

55.09 11.10 51.41 1.63 12.99

0.00 0.00 0.00 -0.27 0.99

35 1 100 14,431 771

23.34 8.20 3.80 4.20 8.65

23.34 8.20 3.90 4.25 8.65

0.00 0.00 0.00 0.05 0.00

2 2 6 8,650 10

1.30 19.00 8.10 1.34 3.62

1.38 19.01 8.10 1.35 3.66

0.07 -0.49 1.00 0.00 -0.05

26,864 74,958 5,000 5,200 672,596

29.80 29.55 3.71 3.65 127.00

29.89 29.61 3.75 3.65 127.23

-0.05 -0.33 0.01 -0.09 0.10

9,000 34,500 1,286,500 1,354,000 12,000

102.74 76.66 69.00 29.38 13.18

0.23 0.00 -0.25 0.09 0.40

6,920 100 3,312 3,502 9,773

102.50 76.66 69.00 28.70 12.80

10.95 34.50 1.00 2.00 1.17

10.70 34.00 0.89 1.82 1.05

10.74 34.50 0.90 1.88 1.06

-0.06 0.00 -0.06 0.03 -0.05

873,286 50 179,056 2,098,153 74,429

0.36 37.11 0.68 1.63 17.01

0.42 37.15 0.68 1.71 17.00

0.32 37.00 0.64 1.63 16.61

0.32 37.01 0.65 1.70 17.00

-0.04 -0.10 -0.03 0.07 -0.01

3,307 416,249 164,679 232,001 300,022

62.23 10.95 5.69 12.07 29.87

62.80 11.00 5.80 12.31 30.00

62.10 10.80 5.62 12.00 29.75

62.23 10.86 5.65 12.04 30.00

0.00 -0.09 -0.04 -0.03 0.13

216 77,973 350,983 5,499,424 71,128

Banks Allied Bank Ltd Askari Bank B.O.Punjab Bank Al-Falah Bank AL-Habib

Open

hiGh

lOw current

chanGe

vOlume

Non Life Insurance 52.35 11.10 51.41 1.63 12.99

Electricity Genertech Hub Power Co.XD Japan Power K.E.S.C. Kohinoor Energy

SymbOl

Adamjee Ins Atlas Insurance Century Insurance Cres.Star Insurance EFU General Ins

47.94 36.49 7.23 2.40 36.61

47.59 36.49 6.80 2.99 36.51

46.80 35.27 6.36 2.00 36.50

47.07 36.49 6.51 2.01 36.51

-0.87 0.00 -0.72 -0.39 -0.10

15,293 2 10,100 1,123 1,713

13.50 1.40 65.53

14.50 1.40 65.53

0.00 0.00 0.00

2 1 157

0.25 16.40 15.97 1.25 0.86

-0.10 0.00 -0.06 0.00 -0.23

36,032 101 2,207 4 631

Life Insurance American Life East West Life Assur EFU Life Assur

14.50 1.40 65.53

14.50 2.34 68.80

Financial Services AMZ Ventures A Arif Habib Investmen Arif Habib Ltd. Dawood Cap.Man XB Dawood Equities

0.35 16.40 16.03 1.25 1.09

0.33 16.40 16.29 1.29 1.07

0.25 15.56 15.96 0.75 0.83

Equity Investment Instruments 1st.Fid.Leasing Mod 1.52 Allied RentalModXDXB 21.64 Atlas Fund of Fund 5.86 B.R.R.GuardianXD 2.00 Cres. Stand.ModXD 0.49

1.53 22.45 5.85 2.00 0.44

1.53 21.64 5.85 1.72 0.34

1.53 21.64 5.85 2.00 0.42

0.01 0.00 -0.01 0.00 -0.07

2,500 1 29,600 493 69,931

12.76 31.25 36.00 14.87 69.00 1.44 67.01 112.13 13.15 4.00 8.18 59.95 30.00 15.50 8.00 2.00 10.65 0.80 1.92 1.03 17.25 19.66 69.40 1.51 9.85

13.00 31.25 36.48 14.94 70.17 1.50 69.00 115.96 13.05 4.01 8.50 59.69 30.86 15.46 7.96 2.01 10.70 0.81 2.00 1.05 17.25 19.70 68.86 1.55 10.08

-0.02 0.25 0.48 0.80 1.17 0.01 0.00 0.00 0.00 0.00 0.00 0.00 1.16 0.00 0.00 -0.02 -0.11 -0.01 -0.01 -0.03 -0.19 0.01 0.00 -0.02 0.05

3,002 1,055 2,501 2,947 5,493 271,654 113 3 2 2,252 4,402 50 1,100 2 14 17,99 459,847 56,284 190,716 27,048 9,562 5,882 50 165,663 351,004

Miscellaneous Century Paper Pak Paper Prod.

Security Paper P.N.S.C.XD Pak.Int.Con. SD TRG Pakistan Ltd. Murree BreweryXDXB Shezan Inter.XD Feroze 1888 Mills Pak Elektron Ltd. Tariq GlassXD Pak Tobacco Co. Shifa Int.Hospitals Hum Network XD Media Times Ltd P.I.A.C.(A) P.T.C.L.A Telecard Limited Wateen Telecom Ltd WorldCall Telecom Sui North GasXDXB Sui South GasXDXB EFU Life Assur Pace (Pak) Ltd. Netsol Technologies

13.02 31.00 36.00 14.14 69.00 1.49 69.00 115.96 13.05 4.01 8.50 59.69 29.70 15.46 7.96 2.03 10.81 0.82 2.01 1.08 17.44 19.69 68.86 1.57 10.03

13.19 31.35 36.75 15.00 70.25 1.52 69.99 121.75 14.05 4.40 8.81 60.00 30.95 16.45 8.90 2.05 10.87 0.85 2.06 1.10 17.59 19.99 69.40 1.73 10.15

Mutual Funds fund

$95.53

AL-Noor Suger Mills Bawany Sugar Clover Pakistan Colony Sugar Mills Crescent Sugar

Fixed Line Telecommunication

Beverages Murree Brewery Co. Shezan Int’l

vOlume

Pharma and Bio Tech

Automobile and Parts Buy 87.50 115.58 135.28 1.1247 82.79 11.11 23.83 23.34 84.22

chanGe

Future Contracts

General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass LtdXD MACPAC Films Packages Limited

lOw current

Personal Goods

Construction and Materials Al-Abbas Cement Attock Cement Bal.Glass Berger Paints Buxly Paints

hiGh

Household Goods

Industrial metals and Mining Dost Steels Ltd. Huffaz Seamless Pipe Int. Ind.Ltd. Inter.Steel Ltd. Siddiqsons TinXD

Open

SymbOl

Food Producers 406.99 125.37 23.22 7.25 93.74

Industrial Engineering

Interbank Rates US Dollar UK Pound Japanese Yen Euro

Open

Chemicals

Major Losers Siemens Pak Colgate Palmolive National Ref.XD Engro Corporation Linde Pakistan Ltd.

SymbOl

Alfalah GHP Cash Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Income Fund Atlas Islamic Income Fund Atlas Money Market Fund Atlas Stock Market Fund Crosby Dragon Fund

Offer 501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800

repurchase 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500

nav 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500

fund

Offer

repurchase

HBL Money Market Fund HBL Multi Asset Fund HBL Stock Fund IGI Income Fund IGI Stock Fund JS Principal Secure Fund I JS Principal Secure Fund II KASB Cash Fund

100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000

100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000

nav 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087

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Saturday, 26 November, 2011

public sector enterprises including, pakistan railways, pia and some other organisations are being rehabilitated as most of them are sick for the last 40 years

news

07

minister textile industry, makhdoom Shahabuddin

Supply of fuel in danger as Rs179bn circular debt cripples PSO

punjab to follow federal govt with wheat support price federal govt announced wheat support price of rs1,050 per maund g black-marketing has increased urea production cost from rs5,000 to rs6,000 per acre

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hubco, wapda and Kapco pay rs10billion less than agreed g pia to clear rs4.3 billion of outstanding dues g fuel import would have to be deferred

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KARACHI

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STAFF REPoRT

ONGStANDING circular debts, which have piled up to the “high point of” rs179 billion, have made financial situation of Pakistan State Oil (PSO) “untenable”. “Now with total receivables standing at the high point of rs179 billion, PSO’s financial situation has become untenable,” said state-owned oil supplier in a statement.

It said huge problem caused by non-payments from power sector and airline had crippled PSO’s liquidity position and may lead to an inevitable breakdown in supply chain resulting in fuel shortages in the country.

Despite repeated non-payments from power sector, PSO has struggled to supply fuel worth an average of rs32 billion to power entities on a monthly basis. Despite this, the power sector namely HUBCO, WAPDA and KAPCO have continuously defaulted on their payment obligations to PSO. An average shortfall

of rs10 billion per month has been recorded in payments from the power sector for the past 6 months, with rs5.2 billion being disbursed to PSO in the month of November.

“A similar situation is occurring with the continuous default by PIA,” the company said adding that national carrier had been violating its agreement with PSO by failing to make regular payments for the fuel it receives.

Keeping in view national interest, PSO had supported PIA in every possible way including borrowing from banks and accommodating Airline’s requests for deferred payments to ensure uninterrupted fuel supply to the airline.

As of today, PIA owes PSO rs4.3 billion. And while their payments had become irregular, the carrier had increased its daily average fuel uplift from rs60 million to rs70 million worth of product. National carrier had promised to pay back rs1.0 billion of its outstanding dues by end of October. However; they not only violated this commitment, they recently stopped their daily fuel payments to

PSO as well. “the situation has now reached a critical level; continuous non-payment by these entities has left PSO cash-strapped and unable to meet its payment obligations to both local and international suppliers,” PSO said.

In case immediate payments are not received by defaulting entities, be it power sector or the national carrier, import of future fuel cargoes would have to be deferred as the company had exhausted its financing resources.

With domestic production of fuel oil already in doldrums, any reduction in import would result in fuel shortages, increased load shedding and disruption of flight schedules nation wide, PSO warned. If faced with this situation PSO would be left with no choice but to discontinue supplies to any defaulting customer until its outstanding receivables are recovered. PSO said given the critical level of circular debt and mounting receivables, living up to the credo of “PSO never stops” was a challenge on its own.

engro undergoes nib’s founder Khawaja executive level changes iqbal resigns KARACHI STAFF REPoRT

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NGrO Corporation has made some executive level changes on the helm of its subsidiaries, engro Powergen Qadirpur Limited, engro fertiliser Limited and engro Polymer and Chemicals Limited (ePCL), the shareholders at Karachi Stock exchange were informed.

According to the corporation, Khalid Mansoor, the current chief executive officer of engro Powergen, would replace

Khalid Siraj Subhani, the chief executive of engro’s 100-per cent-owned subsidiary, engro fertiliser. the latter, whereas, would take over ePCL in the same capacity after the early retirement of ePCL’s chief executive, Asif Qadir. “the new changes would take effect from January 1 (2012),” the company said in a notice to KSe. the notice has also been dispatched to the management and shareholders of the concerned firms at the stock exchanges in Lahore and Islamabad.

KARACHI STAFF REPoRT

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HAWAJA Iqbal Hassan, President, chief executive and founder of NIB Bank Limited (NIB), has resigned from his post for reasons unknown.

“We write to inform you that Mr Khawaja Iqbal Hassan has submitted his resignation,” the bank informed its shareholders at the country’s three stock exchanges in Karachi, Lahore and Islamabad.

NIB’s Board of Directors

accepted the resignation of Mr Hassan noting the “significant contributions” made by the founder of the bank to develop NIB into a respected brand name in the country. the Board, the bank said, has designated Aamir Zahidi, an existing director of the bank, as the interim president and chief executive of the bank. the President-designate would, however, formally be taking charge of the bank after the central bank approves his appointment and resignation of Mr Hassan, NIB said.

LAHORe

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IMRAN AdNAN

OLItICAL rivalry among federal and provincial governments have jeopardised the availability of affordable food for masses. federal government has announced wheat support price of rs1,050 per maund for the next wheat crop and Punjab government is likely to follow suit to save its vote bank for the forthcoming election. economic managers in the country have ignored the fact that Pakistan has been getting bumper wheat crops since three seasons. the country has some 10 million tonnes of wheat stocks available against the national requirement of 4.5 million tonnes. food departments’ godowns still hold 2009’s wheat crop grains on which the government has paid millions of rupees on account of bank markup and incidental charges.

Simple arithmetic shows that even after fulfilling national requirement, the country will have some 5.5 million tonnes of surplus wheat. the estimated value – at the rate of rs950 per maund – of available wheat stock is rs237.50 billion, which was borrowed from commercial banks by federal and provincial governments.

Conservative estimates suggest that government has paid around rs700 million on account of incidental charges at the rate of rs100 per maund. In addition, government has paid over rs100 billion to various banks on account of mark-up against borrowed money. economic experts point out that the country is constantly paying the price of contradictory and flawed economic policies. they point out that in 2008 federal government gave jump of over 52 per cent to wheat support price by increasing its price from rs625 to rs950 per maund, which resulted in that bread (roti) prices were reportedly

increased from rs2 to rs6. Meanwhile, provincial government introduced politically motivated ‘Sasti roti’ scheme to arrest bread price that attracted huge criticism from opposition and media.

Historic price figures show that 52 per cent increase in wheat support price inflated flour price by 23 per cent, which gave tough time to Punjab government. It had to take over the control of nearly 72 mills in the province, as flour millers were reluctant to reduce wheat flour price. the whole provincial machinery was witnessed in controlling the price of wheat flour and sasti roti. economic pundits have once again predicted that by increasing wheat support price, government has once again let the genie out of the bottle. they believed that though wheat support price increase would help political leadership in gaining popularity in rural areas, but it would bring skyrocket inflation in rural and urban areas alike. they underscore that latest increase in wheat support price has increased its price even from international markets, which will not only stop wheat products exports but also encourage smuggling. Industry experts indicate that flour consumption has already shrunk by 20 per cent as bakery and confectionary products consumption has dropped remarkably, during recent years. flour millers estimate that a 20-kilogram wheat flour bag will touch rs700 when new crop will hit markets. economic pundits suggest that instead of increasing commodity prices, government should focus on controlling prices of agriculture inputs.. Despite having surplus wheat stock in the country, they underline, neither Pakistan could export wheat or wheat products, nor could it provide affordable food to masses. And this is only because of flawed economic policies that may backfire for ruling parties in the forthcoming general elections, they concluded.

carec approves over 100 projects worth $17 billion ISLAMABAD JALALUddIN RUMI

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entral Asia regional economic Cooperation (CAreC) has approved over 100 CAreCrelated projects worth $17 billion. the projects include six land transport corridors that cover 3,600 kilometers of roads and 2,000 kilometers of railways. they traverse the CAreC region north-south and east-west; linking europe, east Asia, South Asia, Middle east, and beyond; connecting all member countries.

Secretary economic Affairs Division Abdul Wajid rana and officials from ministry of commerce and finance

represented Pakistan at the 10th ministerial conference at Baku, Azerbaijan.

Asian Development Bank (ADB) has allocated $4.7 billion over the next three years to support Central Asia regional economic Cooperation (CAreC), 2020’s goals of trade expansion and improved competitiveness.

ADB President Haruhiko Kuroda, while announcing the allocation for CAreC 2020 goals at ministerial conference said we stand ready to assist in accelerating the development of physical infrastructure connectivity, the development of economic corridors, and the improvement of the knowledge

base needed to support CAreC’s priorities. established in 2001, CAreC brings together Afghanistan, Azerbaijan, China, Kazakhstan, Kyrgyz republic, Mongolia, Pakistan, tajikistan, turkmenistan, and Uzbekistan. It promotes the implementation of regional projects in energy, transport, and trade facilitation from northern China to Caucasus and europe, and from Kazakhstan to the warm water ports of Karachi, Gwadar and beyond.

About 4,000 km of road and 2,250 km of railway lines have been built or upgraded, opening up corridors of trade and opportunity. Streamlined custom procedures are moving people

and their businesses across borders, faster and at a less cost. the electricity transmission lines and upgraded power plants are beginning to boost the vital energy trade in the region that will bring prosperity and security. the ministers and senior representatives of development agencies have discussed support for the new 10-year strategy for Central Asia regional economic Cooperation (CAreC) programme. the six multilateral institutions support the work of CAreC that includes ADB, european Bank for reconstruction and Development, International Monetary fund (IMf), Islamic Development Bank (IDB),

United Nations Development Programme (UNDP), and World Bank.

ADB has served as the CAreC secretariat since 2001. the multilateral institutions at the forum echoed their support for the work of CAreC and some also offered substantial financial assistance over the next decade. Senior representatives of bilateral agencies from france, Germany, Japan, United Kingdom, and United States also attended the forum and supported CAreC 2020. the three-day conference wrapped up with a ministerial retreat where participants discussed how CAreC countries could individually and collectively contribute to a prosperous Asia by mid-century.