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Trade-with-India argument Page 3 GM food inevitable to overcome hunger Page 2 Pakistan ranks 145 out of 187 countries in Human Development Index Page 8 Pages: 8

profit.com.pk

Wednesday, 30 November, 2011

govt reassures iMF on passco, tcp, usc restructuring ISLAMABAD StAff REpoRt

tcc files for int’l arbitration over

Reko Diq project g

copper reserves at the reko diq are estimated at 5.9b tonnes g tcc planned to initially invest $3.3b in copper project profit losses due to the non conversion of the exploration license into MLA. They said the international arbitration is expected to take years to complete and during that time no mining work could be carried out in the area.

ISLAMABAD

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AMER SIAL

he Tethyan Copper Company (TCC), which owns the exploration lisence for Reko Diq copper gold project in Balochistan has said it has begun international arbitration proceedings to protect its rights after the provincial government rejected its mining lease application.

Feasibility study

legal proceedings A statement issued by TCC on Tuesday said, “Following the summary formal refusal of the mining lease application (MLA) originally submitted in February 2011, TCC has today filed for international arbitration in order to protect its legal rights”. however, it did not provide any details on the arbitration proceedings. earlier this month, Balochistan rejected MLA application that TCC submitted in February this year. The company had filed a notice of dispute on October 19, 2011, after provincial government refused to meet its executives, or extend a deadline for a response to objections raised over the lease. After the provincial government summarily dismissed its application, TCC decided to go for international arbitration. “We are disappointed we have not yet been given the opportunity to resolve this by negotiation. We firmly believe that our feasibility study and MLA submission are in accordance with the Balochistan Mineral Rules 2002, and that there should be no regulatory or legal obstacle to the granting of the MLA. We have to initiate arbitral proceedings in order to protect our legal rights, but we remain open to meeting with the Government of Balochistan and its regulatory body to work

towards an amicable, negotiated resolution to the dispute”, said Tethyan Chief executive Tim Livesey in a brief statement.

about tcc and reko diq TCC a joint venture of the world’s leading miners Antofagasta and Barrick Gold had served a “notice of dispute” to the government of Balochistan over its Reko Diq project giving 120 days for the settlement of the dispute otherwise the company will seek international arbitration. The joint venture partners have spent $200 million to buy the exploration license from Australian BhP Billiton in 2006. The copper reserves at the Reko Diq are estimated 5.9 billion tonnes, with an average copper grade of 0.41 per cent and an average gold grade of 0.22 grams a ton. TCC planned to initially invest $3.3 billion in the project that would have increased during 56 year mining operation period. According to experts, TCC will be claiming all its investment costs and future

In February 2011, the company filed an application for a mining lease over a mining area within the exploration license eL-5 in the Chagai district of Balochistan. The basis of the application was a feasibility study of an initial mine development at the Reko Diq project. The feasibility study was given to the provincial government in August 2010 under an existing agreement between TCC and Balochistan. At the time of the completion of the feasibility study in 2010, under provisions of the agreement, Balochistan was entitled to become a 25 per cent equity partner in the project, enabling them to profit additionally from the mine development and operations over and above the normal royalty and taxation payments. The provincial government on November 24, 2010 decided not to become a participating party in the project. Upon receipt of the mining lease application from the company in February 2011, the provincial regulatory body responded in September 2011 with a number of observations, made in the context of an intended refusal. TCC was given 30 days to respond to the observations. The company sought meeting with the provincial government to better understand their observations and concerns and requested an extension of an additional 60 days in order to engage with the provincial government, however no extension was granted, and its application was dismissed.

Monetary policy announceMent

A lull before the policy storm

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SAkInA HuSAIn

N a regime of changed stances but repeated circumstances, the house is once again divided on whether SBP will tango with the private sector this time around. Although four months may be a small time for the effects of the last announcement to ensue on private credit, the net decline of about Rs9 billion since the beginning of the current fiscal year may say something about the effectiveness of policy and its makers in the economy.

If one were to go by how the previous governor reined in the much-revered SBP, the night would have been considered just nippy enough for another rate hike. And the reasoning would have predictably fallen

in the realm of government borrowing (outstanding stock) from SBP exceeding the prescribed and renegotiated limit of Rs1,150 billion by Rs75 billion in Oct11 and Rs85 billion up till 11th Nov’11. Moreover, with inflation also expected to go up in the remaining part of the fiscal year, the balance of trade and balance of payments in 4moFY12 have turned deeper shades of red to stand at $6.9 billion and $1.4 billion respectively. Additionally, exchange rate yesterday depreciated to its lowest ever to about Rs88/$ and foreign exchange reserves, the economy’s blue eyed pride have declined by $1.3 billion during 4moFY12.

But what does one go by in the current scenario?

Announcements such as a predilection and efforts towards a zero real interest rate really do gift the cat to the

audience. Based on CPI numbers available for Oct-11, the real interest rate stood at 1.04 per cent. Thus the smartest of all would quickly be able to predict a 100bps cut in the discount rate, over the incoming and/or next monetary policy. Moreover, the continued stagnancy of the private sector may once again make a case for too high an interest rate, just ripe to be snipped off.

In the way stirring up the private sector, the government ignores the message that the financial system transmits into the universe; “even though you may not want our money, we would still like to give it to you!” evident in during and post the auctions the government stood out as a net retiree.

Thus risk aversion seems to have become a structural phenomenon. Although SBP is trying to influ-

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OveRNMeNT has reassured International Monetary Fund (IMF) that it will be taking urgent steps to restructure state owned agencies involved in commodity operations and to improve their efficiency and financial controls to plug losses. An official source said Cabinet Committee on Restructuring (CCOR) will be taking decisions on reconstitution of board of directors of Pakistan Agriculture Storage and Services Corporation (PASSCO), Trading Corporation of Pakistan and Utility Stores Corporation (USC) to improve their financial management in next few days.

Restructuring plans of PASSCO, TCP and USC are finalised and submitted to CCOR for consideration. The plans have redefined their objectives and functions keeping in view domestic and international trends in the commodity business. Proposals have been made to enhance their storage capacity on modern lines and for increasing efficiency in operations. IMF, he said, was told that government agencies were involved in commodity operations to ensure price stability of different commodities in the domestic market. Commodity finance is secured against underlying commodity. however, government did not agree with IMF’s demand to limit a ceiling on commodity operations, saying that it was difficult as it depended on shortage in local market and prices internationally. IMF was assured that government would discourage subsidies on procured commodities. however, it was assured that subsidy amount paid would be reflected in annual budgetary operations. Government has recently ended quasi fiscal liabilities related to power sector and commodity operations of Rs391 billion with issuance of Pakistan Investment Bonds (PIBs). Outstanding dues of power sector were Rs313 billion and that of commodity sector of Rs78 billion.

This helped in reducing annual debt servicing cost of these liabilities by Rs10 billion, increasing the credit availability to private sector, and reducing the refinancing cost of commodity operations.

The source said intervention helped reduce outstanding stock of commodity operations from Rs298 billion on 30th August to Rs320 billion on 5th November.

It also helped reduce the gap between outstanding bank finance and market value of underlying commodity from Rs116 billion to Rs36 billion. he said provinces were being pursed to pay off their liabilities to further reduce the gap.

ence private demand for funds, it may have little control over the supply side and moreover, there seems to be an impending deficit on the latter anyway. If there had not been a shortage, then the central bank would have faced no need to inject Rs340 billion through OMOs as it did on November 25th.

To come to the policy maker’s defense, it seems to be unfairly carrying the burden of correcting this economy, when most of its problems have been generated from the political circles and a lack of foresight in the current and past fiscal corridors. Internationally, central banks’ objectives have just been reduced to controlling inflation only. Balancing and generating growth with this objective is the government’s problem. And why shouldn’t it be? Current expenditure eats up almost the entire budget; if the government has to overfeed it self then sometimes it should force its constituents to work, a little, at least. Moreover, a lesson in history, would easily teach that if an economy could be run by fighting and funding wars all the time, then the much held onto Moghul glory would not have been a thing of the past. From the frail private sector’s banner to the SBP: how can some more money at one point in time make up for the losses of lost decades?

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Wednesday, 30 November, 2011

debate

GM food inevitable to overcome hunger FArAkH SHAHzAD

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OOD security situation in Pakistan has exacerbated after the devastating climatic changes and natural disasters.

Pakistan is ranked at the 11th spot in the list of food insecure countries among 148 nations.

The situation in Bangladesh and India is also alarming, but better it is than us as they are at the 20th and 25th spots in the said list.

In this context, crop improvement through conventional breeding is a rational strategy but it would not be sufficient to meet the challenges of increasing food demand due to ever-growing population. Therefore, we have to resort to Genetically-modified (GM) food mechanism through new technologies like Genetic engineering to strengthen our existing crop improvement system. The desperation to go for GM food has increased manifolds due to the consecutive flash flooding in Pakistan in 2010-11 that has jeopardized the national economy. It is to be noted that number of food insecure people in Pakistan is 77 million, malnourished people 45 million and homeless without food are 17 million people.

genetically ModiFied Foods Genetically-modified foods have the potential to solve many of the world’s hunger and malnutrition problems, and to help protect and preserve the environment by increasing yield and reducing reliance upon chemical pesticides and herbicides. Yet there are many challenges ahead for governments, especially in the areas of safety testing, regulation, international policy and food labeling. Many people feel that genetic engineering is the inevitable wave of the future and that we cannot afford to ignore a technology that has such enormous potential benefits. however, we must proceed with caution to avoid causing unintended harm to human health and the environment as a result of our enthusiasm for this powerful technology. There has been a significant opposition to the idea of GM food in America and europe who are reverting back to organic farming but the situation is not applicable for Africa, Asia and developing nations as the inhabitants of third world countries are facing food shortage and are dying from hunger. So it is the need of the hour to promote the GM crops in our region to meet the food demand and eliminate hunger. We have to keep in mind the hard facts that the present world’s population is 6.8 billion while the world’s population by 2050 will be 9.4 billion; this will further shoot up the global demand for food. At the start of 2009, under nourished people were as

many as 963 million while the hungry and insecure people for food in India alone stood at 220 million.

The term GM foods or GMOs (geneticallymodified organisms) is most commonly used to refer to crop plants created for human or animal consumption using latest molecular biology techniques. These plants have been modified in the laboratory to enhance desired traits such as increased resistance to herbicides or improved nutritional content. The enhancement of desired traits has traditionally been undertaken through breeding, but conventional plant breeding methods can be very time consuming and are often not very accurate. On the other hand, can create plants with the exact desired trait very rapidly and with great accuracy. The best known example of this is the use of B.t. genes in corn and other crops. B.t., or Bacillus thuringiensis, is a naturally occurring bacterium that produces crystal proteins that are lethal to insect larvae. B.t. crystal protein genes have been transferred into corn, enabling the corn to produce its own pesticides against insects such as the european corn borer.

The world population has topped 6 billion people and is predicted to double in the next 50 years. ensuring an adequate food supply for this booming population is going to be a major challenge in the years to come. GM foods promise to meet the need of feeding the hungry population in a variety of ways.

Pest resistance: Crop losses resulting from pests attack can be staggering, leading to devastating financial loss for farmers and starvation in developing countries. Farmers typically use many tons of chemical pesticides annually. Consumers do not wish to eat food that has been treated with pesticides because of potential health hazards, and runoff of agricultural wastes from excessive use of pesticides and fertilisers can poison the water supply and cause harm to the environment.

Herbicide tolerance: Crop plants genetically-engineered to be resistant to one very powerful herbicide could help prevent environmental damage by reducing the amount of herbicides needed. For example, Monsanto has created a strain of soybeans genetically modified to be not affected by their herbicide product roundup. A farmer grows these soybeans which then only require one application of weed-killer instead of multiple applications, reducing production cost and limiting the dangers of agricultural waste run-off.

Disease resistance: There are many viruses, fungi and bacteria that cause plant diseases. Plant biologists are working to create plants with genetically-engineered resistance to these diseases.

Cold tolerance: Unexpected frost can destroy sensitive seedlings. An antifreeze gene from cold water fish has been introduced into plants such as

tobacco and potato. With this antifreeze gene, these plants are able to tolerate cold temperatures that normally would kill unmodified seedlings.

Drought tolerance: As the world population grows and more land is utilised for housing instead of food production, farmers will need to grow crops in locations previously unsuited for plant cultivation. Creating plants that can withstand long periods of drought or high salt content in soil and groundwater will help people to grow crops in formerly inhospitable places.

Nutrition Malnutrition: It is common in third world countries where impoverished peoples rely on a single crop such as rice for the main staple of their diet. however, rice does not contain adequate amounts of all necessary nutrients to prevent malnutrition. If rice could be genetically engineered to contain additional vitamins and minerals, nutrient deficiencies could be alleviated. For example, blindness due to vitamin A deficiency is a common problem in third world countries.

Pharmaceuticals: Medicines and vaccines often are costly to produce and sometimes require special storage conditions not readily available in third world countries. Researchers are working to develop edible vaccines in tomatoes and potatoes. These vaccines will be much easier to ship, store and administer than traditional injectable vaccines.

criticisM environmental activists, religious organisations, public interest groups, professional associations and other scientists and government officials have all raised concerns about GM foods, and criticised agribusiness for pursuing profit without concern for potential hazards, and the government for failing to exercise adequate regulatory oversight.

Most concerns about GM foods fall into three categories: environmental hazards, human health risks, and economic concerns.

The environmentalists say that the genetic engineering of plants and animals is looming as one of the greatest and most intractable environmental challenges of the 21st Century. They think that this novel technology has invaded their grocery stores and kitchen pantries by fundamentally altering some of the most important staple food crops. “By being able to take the genetic material from one organism and insert it into the permanent genetic code of another, biotechnologists have engineered numerous novel creations, such as potatoes with bacteria genes, “super” pigs with human growth genes, fish with cattle growth genes, tomatoes with flounder genes, and thou-

sands of other plants, animals and insects. At an alarming rate, these creations are now being patented and released into the environment”, wrote an NGO at its website on food safety.

Currently, up to 85 per cent of US corn is genetically engineered as are 91 per cent of soybeans and 88 per cent of cotton (cotton seed oil is often used in food products). According to industry, up to 95 per cent of sugar beets are now Ge. It has been estimated that upwards of 70 per cent of processed foods on supermarket shelves–from soda to soup, crackers to condiments–contain genetically engineered ingredients.

A number of studies over the past decade have revealed that genetically engineered foods can pose serious risks to humans, domesticated animals, wildlife and the environment. human health effects can include higher risks of toxicity, allergenicity, antibiotic resistance, immune-suppression and cancer. As for environmental impacts, the use of genetic engineering in agriculture will lead to uncontrolled biological pollution, threatening numerous microbial, plant and animal species with extinction, and the potential contamination of all non-genetically engineered life forms with novel and possibly hazardous genetic material.

Food shortage The world economy has run into a brick wall. Despite countless warnings in recent years about the need to address a looming hunger crisis in poor countries and a looming energy crisis worldwide, world leaders failed to think ahead. The result is a global food crisis. Wheat, corn and rice prices have more than doubled in the past two years, and oil prices have more than tripled since the start of 2004. These food-price increases combined with soaring energy costs will slow if not stop economic growth in many parts of the world and will even undermine political stability, as evidenced by the protest riots that have erupted in many places of the world. Practical solutions to these growing woes do exist, but we’ll have to start thinking ahead and acting globally. In this perspective, the need to adopt the GM food has increased manifolds just to save the people dying of hunger. We need to produce more food over the next 50 years than has been produced in the past 10,000 years combined. The best way to reach the depth of the debate is that we need to have an advance system of agriculture research that requires a huge budget. We need to have a minimum of two per cent of our Agri GDP earmarked for the research budget but it is unfortunate that we have only 0.2 per cent that is next to nothing.

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Wednesday, 30 November, 2011

EDITORIAL

Trade-with-India arguStructural weaknesses ment

he bloating current account, the relaxing monetary policy and the rising import bill all combine to pressure the rupee further against the dollar, stoking inflationary fears in an already stagnant economy where investment shows little signs of picking up. We’ve finally come to the point where the government’s excessive borrowing, channeled into non-productive avenues of running day-to-day business, is translating into structural weakness, embodied in this case in movement away from the rupee’s twoyear 86 level against the greenback.

With the Rs90 per dollar expectation by year end, we have also come to the final point where the government can still leverage the weakening local currency for export earning advantage, an exercise that will require considerable change of posture in Islamabad.

Immediately, we should see incentivisation of productive enterprise. The weakening interest rate regime must be complemented by

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reducing the government’s size in the money market, allowing the private sector to exploit relatively cheaper money and inducing foreign investment at the same time. Until and unless the government restores investor confidence, both local and exogenous, the weakening currency will only feed into weakening growth and rising unemployment. exports is but one essential feature in need of a very visible government push in the last half of the ongoing fiscal. The other, of course, is tax collection. So far, advances made by the 18th amendment have actually had a negative yield, at least in terms of revenue generation, the reason simply being a lackluster show of responsibility on part of relevant authorities. With deficits now mounting fast enough to hurt the economy structurally, and half the fiscal year gone with no signs of targets being met, those in charge must pull their socks up or risk being delivered a rude message at the polls.

Humayun Akhtar Khan

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Philip Morris – comedy of errors 177pc rise in import bill The article is very well written and researched. The content and the writing style actually took me on a nostalgic journey of 90s. Cigarette advertisements are nowhere to be found in Pakistan today and it is pretty evident that they are banned. My reaction towards the recent print advertisement of Marlboro in one of the local Sunday magazines was the same as the writer’s. I still wonder, what made the famous tobacco company make such a big blunder. Not being well researched is not a good excuse because it is not an immature company. To put it in a nut shell, last week was a crisis week for Philip Morris in terms of reputation.

First of all I would like to thank the Profit team for giving the readers such an accurate depiction of stats and numbers. This makes us more aware about the current scenario and how things fluctuate.

Moving on to the actual rise in import bill and the rupee’s fall against dollar, it is a clear case of lack of investment. Risk-averse investors should be given incentives so that various plans could be implemented. This would prove to be a strong method of boosting our economical turmoil. Something must be done or else the import bill would inflate further.

MAzHer AHMeD

TooBA rAFI

LAhoRE

ONSIDeRING Pak-Indian complexity, progress on trade and investment should move in tandem with progress on political and security issues. Yet there is no denying the potential in increased bilateral trade, which is why both governments should move towards enhancing the overall volume.

Interestingly, prior to partition, a good 95 per cent of the subcontinent’s trade comprised activity within its borders, and since the fateful divide, the number has dropped to as low as five per cent, an indicator of how much both countries can gain from opening up.

In case of fair and sincere advances in trade, Pakistan stands to gain more. There is a good reason the world is making a beeline to tap and exploit India’s rapidly growing, vast market. Therefore, Pakistan’s recent trade diplomacy, culminating in granting India the MFN status, is understandable. It’s just how the exercise was undertaken that left a little to be desired. In effect, Islamabad ended up acceding to India’s MFN demand in return for removal of the latter’s objections in the WTO to Pakistan’s special trade concession by the european Union – a one time, time barred window offered to help in the devastation caused by floods.

Of course, MFN or no, we’ve been trading with India for a long time, primarily around the two thousand odd positive list items Pakistan permits. But despite the fact that India granted Pakistan the MFN status in 1996 and Pakistan didn't, the overall trade balance is tilted heavily in New Delhi’s favour. Of the total trade volume of approximately $1.5 billion,

RAwALpIndI

While fine-tuning such arrangements, it is of the utmost importance to safeguard interests of local industry, agriculture and the services sector

Pakistan’s share is a paltry $275 million. Primarily, we’re unable to export to our potential due to excessive Non-Tariff Barriers (NTBs) erected by India.

I would have approached this issue by seeking a comprehensive bilateral trade deal going beyond WTO and Safta. Falling back on our respective comparative advantages, I would have sought trade preferences for products capable of significant market penetration in India, like textiles, value-added textile products, food items, etc. In return, I would have directed the government to offer India preferences on raw material, machinery, IT products, etc. While fine-tuning such arrangements, it is of the utmost importance to safeguard interests of local industry, agriculture and the services sector, hence the stress on gradual opening up. The removal of NTBs has to be central to any such negotiations.

India cannot demand trade liberalisation and enforce restrictive barriers at the same time. It is with regard to these issues – protecting indigenous strength and unwinding NTBs – that the recent initiative has been off the mark.

We came close to establishing fresh trade parameters when I was the government's chief trade negotiator, as Pakistan's commerce minister for five years, but lack of appropriate movement on political and security issues often checked progress. That we are finally on the road to trade is encouraging, however the need to proceed with caution cannot be stressed enough.

I would also caution against aggressive posturing on opening transit routes. It is extremely important to note the incongruity between Saarc access via India and route to Afghanistan and Central Asia through Pakistan. Plus, Afghan transit is one of the biggest, most menacing avenues of smuggling into Pakistan. Granting India access will only exacerbate the problem. Specifics of granting transit rights are outside the ambit of the WTO and should be taken up under relevant multilateral transit conventions, not bartered away for deals like the eU concession.

It also bears noting that so long as the other arm of revenue generation – the tax machinery – is compromised, the export sector must be made that much more proactive to keep the wheels of the economy running. For years, Pakistan and India have let political differences interfere with mutual socio-economic uplift, possible through increased trade. We must ensure more trade while protecting our interests, which requires prudence and care, not fanfare.

The writer is a former Federal Minister

Rage against the machine

Kunwar Khuldune Shahid he airstrikes on Saturday imply that the Pak-US bond is fast approaching its breaking point. The recurring breach of Pakistan’s sovereignty has had temperatures soaring in the country and the military is under escalating pressure to terminate its cooperation with US; especially after ,what has been, an unceremonious year for the relationship. The unprovoked act of innocent killings has brought about unparalleled rage against the

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US/NATO machine.

2011 has been tumultuous year as far as US and Pakistan’s enigmatic bond is concerned. The oft-touted military allies, combating the war against terror have witnessed an exchange of mistrust, skepticism and anger. The Raymond Davis affair set the ball rolling earlier in the year, and rewrote the term ‘diplomacy’ for the Average Joe in our part of the world. Then the US breached every law in inter-dominion codes and ethics and penetrated into Abbottabad, where they found Osama Bin Laden and then disposed him off.

Pakistan-US bond has been like that marriage, where both the concerned parties have grown sick of each other’s antics, their expectations soar and the reciprocation is not up to the mark, have at one time or the other tried to woo other partners and have even cheated on each other. But now owing to recent events with the sword

of divorce hanging over the relationship; is breakup a viable solution for either party? The two countries and their altercations are the political illustration of U2’s chartbuster “with or without you”; they can’t seem to be able to live with each other, but they sure as hell can’t live without each other.

At the end of the day it is the fiscal side of things that govern most global matters and none more so than the issues between Pakistan and USA. With Pakistan reliant on Western aid for its own sustenance, it cannot stretch out the situation beyond repair. If the political ties completely go kaput, it is detrimental to Pakistan’s future in the long run; especially in the present scenario where we are shrouded by the menace of susceptibility. US on the other hand, might be playing the domineering husband to Pakistan’s dependant wife, but with its war going haywire in Pakistan’s western vicinity, Washington is as reliant on Islamabad

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

At the end of the day it is the fiscal side of things that govern most global matters and none more so than the issues between Pakistan and USA

– even if not in the same obviously hypersensitive way.

US needs the NATO supply routes to be kept open for its troops in Afghanistan; and in an apt riposte to NATO’s attack on Saturday, this is exactly what we have targeted.

US also needs Pakistan to keep a check on AlQaeda and Taliban’s expansion. They can point fingers, they can impugn us, but they just cannot do without us. And hence if the US fails to recognise our contributions and continues to breach our sovereignty for its self-seeking purposes we could refuse to play ball. however, there is only so much that we can do, owing to their monetary stranglehold. Granted that when juxtaposed with American disbursements in

Iraq and Afghanistan, its aid to Pakistan is significantly small, the way international dynamics work we cannot afford a complete breakdown in ties. As things stand an average American does not look upon Pakistan as an ally, and the average Pakistani does not look upon US as a friend; but nonetheless the two countries need each other. We’ll show our displeasure for some time but eventually we would be back on the negotiation table. We can expound our anger against the status quo, and our rage against the machine but we can’t do without the US. Not yet anyway.

The writer is Sub-Editor, Profit. He can be reached at khulduneshahid@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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Wednesday, 30 November, 2011

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news

I appreciate UK’s efforts as a leading bilateral development partner of Pakistan and its budgetary support mainly in the areas of education, health, poverty reduction and governance

Federal Minister Finance, dr abdul hafeez shaikh

PAK CAN SAVE $100M ANNUALLY ON JUTE IMPORT LAHore StAff REpoRtER

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ARGe scale sowing of jute in Pakistan can save $100 million annually on import of this fibre crop from Bangladesh.

Pakistan Jute Mills Association (PJMA) has launched an initiative to convince farmers of Punjab for commercial sowing of jute crop in Pakistan with assurance to extend help in shape of free seed, guidance from sowing to retting and buying all the

produce. “Pakistan needs only 150,000 acres to meet the requirement of 12 jute mills situated in Pakistan. Nevertheless, at present due to government’s decision of switching over to polypropylene bags instead of jute has forced closure of five mills during last two years.”

This was the crux of speeches delivered at a seminar on ‘sowing of jute in Pakistan’ arranged by Pakistan Jute Mills Association (PJMA) in collaboration with Ayub Agriculture Research Institute (AARI)

Faisalabad and Punjab Agriculture Department.

Agronomy Research Institute, a sister wing of AARI, Director Dr Abdus Sattar speaking on the occasion stressed the need for ensuring profitability to growers to convince them for switching over from their traditional sowing practices to this crop. he also urged the growers to go for sowing of jute to save precious foreign exchange of the country and supporting industry which was providing direct employment to over

FBR issues belated TEC to KSE for one month kArACHI

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ISMAIL dILAwAR

N an oft-referred show of ad-hocism Federal Board of Revenue (FBR) issued, what market participants said, is the most-debated certificate to exempt Karachi Stock exchange (KSe) from the payment of six per cent withholding tax (WhT) just for a month period.

The move, according to Ahmed A Mitha, KSe’s chief financial officer, would have a favourable impact on volumes-starved bourse. CFO said market participants would now see their tax burden easing by six per cent on account of KSe services including listing and trading fees.

“The impact would be favourable in terms of six per cent (at source deduction of) withholding tax on account of KSe’s services,” Mitha said.

FBR notified the exemption to KSe through issuing a Tax exemption Certificate (TeC), numbering CIR/ZIII/LTU/KhI/2011/672.

“It is hereby directed that no deduction of tax shall be made under sub-section (1) of Section 153 of the

Income Tax Ordinance, 2001 in the case of M/S Karachi Stock exchange, from payments representing to services rendered by it,” reads the FBR certificate.

The board, however, clarified that the tax already collected would not be refunded to taxpayers and, instead, be deposited into government treasury. Tuesday saw management of KSe notifying the new development to stock members, listed companies and issuers of listed securities saying not to deduct tax on payments made to the exchange.

“Not to deduct tax on payments made to KSe against acquiring services subject to tax deductions at source under sub-section (1) of Section 153 of the income tax ordinance, 2001 up to December 31, 2011,” KSe notices to the members and other stakeholders said.

Interestingly, tax exemption would remain valid only for 31 days of December and exchange would again be running after tax collectors to renew the certificate. “The exemption certificate is valid up to 31.12.2011,” FBR certificate says.

Officials at KSe also appeared

critical of the month-long tax exemption after prolonged discussions with tax collectors in FBR. “We would again go for a renewal after December 31,” said Nadeem Naqvi, managing director of KSe. Ahmed A Mitha, chief financial officer of KSe, explained that tax exemption was being granted on quarterly basis. “It used to be granted on yearly basis until August (last),” he said.

Taking the matter this way would mean that FBR has already wasted at least two months of current fiscal quarter that ranges from October to December.

About financial impact of tax exemption, KSe official said it would range from Rs12 to Rs15 million of the total Rs200 million collected annually by the exchange under heads of various services.

FBR has long been under fire for its failure to devise a practicable mechanism for quantification and collection of controversial taxes like Capital Gains Tax (CGT) and has, therefore, raised a friction of what is applicable on capital gainers at country’s stock exchanges.

4000 people and indirectly supporting over 100,000 families.

Pakistan Jute Mills Association (PJMA) vice Chairman Mian Meraj Din during his brief speech assured that the association would not only buy whole crop planted by the growers but would also ensure that they would get more price than cotton. he said the association would extend full support from plantation to marketing of their crop and all the technical assistance growers needed to adopt this new technology.

energy sub body to overcome electricity load shedding LAHore StAff REpoRt

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he sub-committee on energy of federal cabinet decided to provide frequent electricity to tube wells during night and uninterrupted power supply to agriculture connections.

Federal Finance Minister hafeez Sheikh presided over the meeting, which was held at the governor house. Federal ministers, Dr Asim hussain, Manzoor Wattoo, Khursheed Shah, Naveed Qamar and other senior bureaucrats participated in the meeting. It was informed at the meeting that if domestic and agricultural connections are separated; uninterrupted power supply to tube wells could be made.

Manzoor Wattoo said agriculture is the backbone of an economy and if electricity is not provided in rural areas, then the economy could face serious set backs. however, later it was decided that from March 2012, tube wells would be provided continuous electricity from 10pm to 8am and there would be no unscheduled load shedding during the day.

KSE gains 13 points on White House’s reconciliatory statement kArACHI StAff REpoRt

T

he Karachi stocks market Tuesday recovered from Monday’s setback and gained 13 points on the back of what the analysts said a confidence-building statement from the White house saying Washington would “carry forward” its complicated relationship with Islamabad.

Monday saw the benchmark 100share index nose-diving by 154 points reflecting a cautious reaction from investors at the country’s largest bourse towards Saturday’s deadly Nato attacks on Pakistan Army’s check posts.

On Tuesday, however, the index set in the green zone and recovered by 12.80 points or 0.11 per cent to close at 11,506.95 points against 11,494.15 of the previous day. “Stocks closed higher at KSe after the White house’s statement to carry forward Pak-US relationship with separate investigation of attacks on Pakistan border positions,” said Ahsan Mehanti of Arif habib Investments. The intraday high and low was, respectively, recorded at 11,617.40 and 11,426.50 points.

Despite an upward trend in the index the trading volumes remained

lower and were recorded at the readycounter at 37.386 million shares compared to Monday’s 46.243 million shares. The trading value also appreciated to Rs2.1 billion from the previous Rs2.0 billion. Of the total 293 traded scrips, 109 advanced, 105 declined and 79 remained unchanged. The market capitalisation remained almost static at Rs2.99 trillion.

The KSe 30 index also gained 19.38 points and closed at 10,764.72 points as compared to 10,745.34 points on Monday. The index hit the intraday high and low of 10,866.15 and 10,665.67.

“Global markets recovery and hopes on favourable SBP policy announcements on November 30 played a catalyst role in recovery of oversold

market,” said Mehanti adding this was despite the investors’ concerns for falling rupee-dollar parity and uncertainty over Pak-US relations.

The analyst cited factors like the resumption of SNGPL fed gas supplies to fertiliser plants, expectations for rise in local POL prices this week and higher banking sector spreads of 7.67 per cent for October 2011 as a driving force behind a positive close at the KSe. Fatima Fertiliser Company was volume leader of the day having counted its traded shares at 5.459 million. The company’s share price set in the green zone and closed at Rs22.95 after opening at Rs22.19. Other best performers included Fauji Fertiliser Bin Qasim, Fauji FertiliserXD, Attock

Refinery, Arif habib Company SD, Azgard Nine, engro Corporation POT, DG Khan Cement, National Bank of Pakistan and Lotte PakPTA. The scrips counted their traded shares, respectively, at 4.3 million, 2.1 million, 1.7 million, 1.6 million, 1.6 million, 1.4 million, 1.4 million, 1.2 million and 1.0 million shares.

The futures market was also bullish having seen its trading turnover increased to 5.019 million shares against 4.9 million of the previous day. The scrips that gained numbered 60, those categorised as minus were 48 with no unchanged scrip. FFBL-DeC continued to lead the companies with 1.404 million of its shares traded on the day.

international conference on competition to start tomorrow ISLAMABAD: A two day international conference on competition, enforcement challenges and consumer welfare in developing countries, being organised by the Competition Commission of Pakistan in collaboration with the Competitiveness Support Fund - USAID will start tomorrow, December 1st. The conference will be addressed by internationally acclaimed experts on competition law from America, europe, Africa, Far east and South Asia. The conference will cover five themes of challenge for competition agencies to deal with cartels, deceptive marketing and consumer protection, sharing of country experiences in advocacy and enforcement, state aid and distortion in competition, and collusive bidding in public procurement. StAff REpoRt

urea prices ease as govt producers agree on improved gas supplies KARACHI: engro Fertiliser, having a market share of 20 per cent, has reduced its urea price by Rs100, inclusive of sales tax, per 50 kilogram bag to Rs1,480 (dealer transfer price). Retail price for the farmer would now be close to Rs1,500 a bag effectively.

“This is in the backdrop of a possible increase in gas supplies to SNGPL-fed fertiliser plants in December 2011 as per the consensus between urea manufacturers and government,” viewed Farhan Mahmood of Topline Securities. The analyst said other fertiliser producers were also expected to reduce the price in next few days in line with past practices. StAff REpoRt

lcci urges bangladesh to withdraw objections LAHORE: Lahore Chamber of Commerce and Industry urged Bangladesh to withdraw objections and support Pakistan in getting european Union’s GSP Plus status. This was demanded by LCCI Acting President Kashif Younis Meher while talking to Bangladesh high Commissioner in Pakistan Suhrab hossain here at Lahore Chamber of Commerce and Industry. LCCI vice President Saeeda Nazar and vice President of SAARC Chamber of Commerce and Industry Iftikhar Ali Malik also spoke on the occasion. LCCI Acting President said that objections raised by our brotherly country Bangladesh on GSP Plus Status to Pakistan by eU are unexpected as Pakistan has always supported Bangladesh on all occasions. Kashif Younis Meher said that market research should be conducted regarding their range of products and priority should be given to each other for import of goods rather than buying from distant countries. StAff REpoRt

chairman Fbr assures kp delegation of implementation of finance package PESHAWAR: Chairman FBR, Salman Saddique has assured a delegation of Khyber Pakhtunkhwa Chamber of Commerce and Industry that their genuine reservations about implementation of Prime Minister’s finance package will be removed to ensure that stalled business and trade activities in the militancy hit area of Khyber Pakhtunkhwa are revived.

Talking to a delegation headed by President, KPCCI Afan Aziz and consisting of notable Industrialists and Trade Leaders including Senator Ilyas Ahmed Bilour, Mr Ziaul haq Sarhadi, Mr Muhammad Muhsin Wadud, haji Muhammad Asaf, Mr Usman Bashir Bilour, Mr Zahid Ullah Shinwari and Mr Zulfiqar Ali Khan, who met with him in his office at Islamabad on 28th November, 2011, he assured them that he will be visiting KPCCI by mid December to get himself briefed on problems of taxpayers. StAff REpoRt

no date extension for filing income tax, sales tax returns: Fbr ISLAMABAD: The Tax Reform Core Group, in its two-day meeting with Federal Board of Revenue (FBR) officials expressed its extreme reservation over frequent extensions being granted by the board in filing of income tax and sales tax returns. A firm policy decision was taken in the meeting, presided over by Chairman FBR, Salman Siddique, the statutory dates of filing the income tax and sales tax returns shall not be extended in future, particularly for the returns required to be filed by the companies on 31st December, 2011. The taxpayers are advised to file their returns on the stipulated dates as no extension in date shall be contemplated, as decided by the Tax Reform Core Group in its meeting. StAff REpoRt

Profit for e-paper_Layout 1 11/30/2011 12:10 AM Page 5

Wednesday, 30 November, 2011

If Europe is contracting, or if Europe is having difficulties, then it's much more difficult for us to create good jobs here at home

news

us president, barack obama

THE EURO ZONE MELT DOWN LonDon/BoSTon REutERS

W

heN Novo Nordisk's chief financial officer met marketing colleagues last Friday the conversation moved far beyond the usual discussion of sales and performance.

Jesper Brandgaard asked a simple, farreaching question: how would the firm set prices for two pivotal new insulin products if the euro collapsed?

The Danish firm, the world's biggest maker of insulin for the treatment of diabetes, sits outside the euro zone but sells into it. It's a question that is being echoed - in various forms - in the boardrooms of banks, brokerages, trading houses, law firms and the world's leading manufacturers.

"It's hard to make detailed plans but we need to think through how our pricing strategy would fare if there were suddenly a dismantling of the euro," Brandgaard told Reuters. "how do we avoid falling into a trap? This is the first time I've asked such a question. It's a topic

that is increasingly on the radar."

In the case of the products in question - Degludec and DegludecPlus, two ultra-long-acting insulins - Novo Nordisk has time on its side. The new drugs are still working their way through the regulatory approval process and probably will not reach the market until late 2012.

Planning for a breakdown of europe's 17-nation single currency is not easy. Like many business leaders, Brandgaard views a breakup of the euro as possible though not yet probable -- but the odds are increasing. In a Nov 23 Reuters poll 14 out of 20 economists said the single currency would not survive in its current form - and companies are starting to plan for a worst case scenario.

Their trepidation is best summed up by Martin Sorrell, the head of the world's biggest advertising agency WPP. "The complexity fills everybody with such appalling fear and is so complicated that the last thing in the world you want to happen is that," Sorrell told Reuters on Monday. "But the honest answer is that, like everybody

else, you try and contingency plan for any break-up of the euro zone."

Drawing on interviews with company officials, bankers and lawyers in europe, the United States and Asia and companies' regulatory filings, Reuters has pieced together a picture of patchy preparedness for the possible demise of the 12-year-old euro currency, an event that would be unparalleled in recent history.

"These days, it's a part of almost every risk management conversation that comes up," said a senior player in London's insurance market, speaking like many in this story on condition of anonymity because of the sensitivity to their business.

Some of the most active contingency planning is happening in european countries outside the euro zone that have strong trading links with the currency bloc - Denmark and Britain being leading examples. Of the 33 companies with the biggest exposures to the euro zone in sales terms, five are British, according to Thomson Reuters data. health care, energy and consumer goods are among

the most exposed industries.

A number of British firms, including the world's biggest caterer Compass Group, have said they have discussed or put in place contingency plans to deal with a euro collapse but most are reluctant to give details.

"Most business people have given up waiting for the political Godots. You just can't run your business on the basis that something will turn up, so you have to plan on the basis that it doesn't turn up. So you think about what legally and contractually it is going to mean. You also say 'I'm going to run my balance sheet as conservatively as possible'," WPP's Sorrell said.

TESTING THE SYSTEM Banks, brokers and exchanges are in the front line. ICAP, the world's top broker for foreign exchange and government bonds, said on Monday it has tested its trading system to handle the collapse of the euro zone and re-emergence of national currencies.

It is not alone in carrying out 'war games'. A senior banker at a large investment bank said he had a team of 20 people globally running all kinds of scenarios all the time. That team was now spending a lot of its time on the possible break-up of the euro. They had simulated a weekend crisis by running through the different stages of Friday night, Saturday and Sunday in one full working day. In addition, they had looked whether they would have enough people (and the right ones) available and made sure they knew where to reach them.

"It's my job to assume the worst. You can test all kinds of benign scenarios, but if something really bad - let's say a sudden overnight default of Italy - were to happen and we hadn't tested that, I wouldn't be doing my job properly.

If that latter scenario were to occur, things would look very ugly indeed.

There simply wouldn't be enough time to sort out all the various trading positions and look at all the paperwork," the banker said.

In his estimation, a return to the drachma in euro zone minnow Greece was the least of his concerns. he likened Greece to bankrupt U.S. broker-dealer MF Global - annoying but not a real issue and Italy to Lehman, whose collapse marked the start of the 2008 financial crisis.

Britain's regulator, the Financial Services Authority, has told Britain's banks to draw up contingency plans in case there is a disorderly break-up of the euro zone or exit of some countries. "We cannot be, and are not, complacent on this front," Andrew Bailey, deputy head of the FSA's Prudential Business Unit, said on November 24.

U.S. firms are testing their systems too. A.M. Best Co, the main ratings agency for the insurance industry, said on November 22 it is doing additional stress testing on insurers given deteriorating conditions in europe. The agency, which just conducted a similar review two months ago, said it is looking at underwriters' exposures on a case-bycase basis to see if any have additional risk from the weakening euro zone.

SAFEGUARDING THE CASH For non-financial firms, a key

05

focus of efforts for firms worried about a euro collapse is in trying to safeguard their cash. Corporate balance sheets currently are very strong with upwards of $1 trillion net sitting on them, a reflection of companies' reluctance to invest in adding capacity or in buying other firms.

The chief executive of a european company with annual revenues of more than $10 billion a year told Reuters during a recent visit to London that his board had discussed how to handle a euro zone collapse but that it had proved a very short meeting. Other than ensuring their cash deposits were in the safest possible banks and relying on the broad international nature of their business, executives quickly concluded there was little more they could do.

Siemens finance chief Joe Kaeser said in a November 10 media call on the group's quarterly results that a considerable proportion but less than half of its 12 billion euros in liquidity had been parked with the eCB. About a year ago, Siemens -- a maker of fast trains and gas turbines -- acquired a banking license to be able to deal directly with the eCB. BMW said on Monday its approach to handling excess liquidity had not changed and that it continued to use a number of international commercial banks as well as the eCB's deposit facility. Daimler said it used surplus cash mainly internally. volkswagen did not immediately respond to calls seeking comment. Similar caution emanated from companies in other industry sectors.

Simon henry, chief financial officer of oil company Royal Dutch Shell, said as a consequence of europe's debt crisis it was taking extra care in investing its $20 billion cash pile. "It's with secure counterparties and its short term," henry said.

Drugs firm AstraZeneca told Reuters it was carefully monitoring its exposure to the banking sector in light of the debt crisis and had increased its holdings of U.S. government Treasury bills.

The chairman of another company in Britain's FTSe 100 index of leading firms said the shortage of AAA rated banks was complicating life. British firms don't have access to the eCB because Britain is outside the euro zone.

CORPORATE CORNER unido participates in exhibition at convention centre islamabad ISLAMABAD: The United Nations International Development Organisation (UNIDO) in collaboration with Pakistan Stone Development Company (PASDeC) participated in the exhibition at the Convention Centre Islamabad on 26th and 27th November by setting up an enclosure displaying products made by the women entrepreneurs trained in the Marble Mosaic. The marble products at display attracted a large number of visitors and buyers who appreciated the quality of the products. The products were made by the women entrepreneurs trained in the marble mosaic training conducted by the UNIDO in Karachi, Islamabad and other parts of the country under its Women entrepreneurship Development Programme (WeD). pRESS RELEASE

honoured with many national and international prestigious awards in the past. These hotels continue to strive and maintain commanding presence in the hospitality sector. pRESS RELEASE

ufone launches blackberry curve 9360 ISLAMABAD: Ufone proudly introduced BlackBerry Curve 9360, another industry first BlackBerry launch in Pakistan. BlackBerry Curve 9360 is equipped with the new BlackBerry OS 7.0 and features a powerful 800Mhz processor with built in 3G, GPS, NFC, Wi-Fi, Bluetooth and BBM. The devices will be sold from corporate sales and regional sales and service centers for Rs29,999. Speaking at the launch, Akbar Khan, Ufone Chief Marketing Officer said that this BlackBerry handset is one of the most technologically advanced BlackBerrys to date and shall facilitate the empowerment of the fast paced Pakistani corporations and businesses. pRESS RELEASE

hashoo group offers free round the clock wi-Fi internet service

ptcl launches easy load service

ISLAMABAD: hashoo Group hospitality Division, having its fold of all the Marriott and Pearl Continental hotels in Pakistan, has now offered its distinguished guests round the clock free access to Wi-Fi internet service in addition to the existing endless amenities. hashoo Group hotels are known for their expertly designed hospitality and unsurpassed luxury and have been

ISLAMABAD: Pakistan Telecommunication Company Ltd (PTCL) has launched easy Load service for maximum facilitation of its valued customers. Now PTCL vfone and evO customers can instantly recharge their accounts with whatever amount they want through a large network of approximately, 150,000 Uload retailers situated all over the country for a minimum recharge of Rs20. Both the customer and retailer will get an SMS alert in case of successful

transaction. In case of failed transaction, a failure message will be received at retailer’s end and he will reimburse the money to the customer. pRESS RELEASE

nbp online branches cross figure of 800 KARACHI: National Bank of Pakistan has converted its 800 branches online out of its deep rooted network of 1265 branches which cover the remotest areas of the country. Through online facility, NBP customers holding an account at any online branch can deposit and withdraw cash from any of the 800 online branches through inter branch transaction (IBT); debit / ATM card can be issued to all customers of online branches; centralised account opening, Know Your Customer (KYC) and better control / compliance. pRESS RELEASE

ISLAMABAd: Argentina Ambassador, h.E Rodolfo J Martin Saravia, presenting Club Charter Certificate to Mr Ali Zaheer. PRESS RELEASE

LAhoRE: Chairman Evacuee trust, Syed Asif hashmi, with Chief Executive, Aftab Akbar MIdAS pvt Ltd at the wahgah Border, upon his return from India. PRESS RELEASE

ISLAMABAd: Emaar pakistan, marketing team is present at Lifestyle Exhibition 2011, held at Jinnah Covention Centre, Islamabad. PRESS RELEASE

Profit for e-paper_Layout 1 11/30/2011 12:11 AM Page 6

Wednesday, 30 November, 2011

06 Markets

top 10 sectors

24% 09% 35% 10% 08%

Chemicals

01% 07% 02% 03% 01%

General Industrials

Construction & Materials Electricity Banks

Fixed Line Telecommunication

Oil & Gas

Financial Services

Personal Goods

Equity Investment Instruments

STOCK MARKET HIGHLIGHTS Index 11506.94 2949.26 2607.27

KSE-100 LSE-25 ISE-10

Change -153.99 +20.94 +27.55

Volume 32,476,669 959,644 13,000

Market Value 1,995,504,143 31,932,529 1,271,025

top 5 perForMers sector wise

Major Gainers Company UniLever Pak Ltd. Indus Dyeing XD Attock Petroleum Colgate Palmolive Engro CorpSPOT

Open 5493.22 365.13 402.21 575.00 123.09

High 5748.99 375.00 409.80 598.00 128.15

Low 5465.00 374.10 402.00 580.00 121.60

Close 5518.60 374.62 407.34 580.00 127.24

Change 25.38 9.49 5.13 5.00 4.15

Turnover 8 100 94,034 11 1,434,481

2857.33 790.10 749.31 285.17 78.54

2960.00 750.61 749.31 288.80 79.95

2730.00 750.60 711.85 270.92 74.62

2751.90 750.60 715.76 270.92 74.65

-105.43 -39.50 -33.55 -14.25 -3.89

103 259 1,108 508,407 809

Volume Leaders Fatima Fert.Co. Fauji Fert Fauji FertilizerXD Attock Refinery Arif Habib Co SD

22.19 55.07 167.68 115.99 28.05

23.21 55.70 170.30 119.90 29.00

22.19 53.30 164.10 115.40 28.15

22.95 54.43 165.47 119.18 28.87

0.76 -0.64 -2.21 3.19 0.82

5,459,350 4,365,766 2,193,437 1,798,600 1,689,569

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

Per Tola (PKR) 56,707.00 51,608.00 1,059.00 1025.00

Per 10 Gm (PKR) 48,668.00 44,245.00 909.00 880.00

Per Ounce US$ 1,715.00 – 35.05 –

high

low current

change

voluMe

409.80 119.90 22.06 7.00 92.00

402.00 115.40 21.15 6.87 90.05

407.34 119.18 22.06 6.95 90.91

5.13 3.19 0.00 0.06 0.55

94,034 1,798,600 289 278,943 26,862

29.00 69.39 153.64 37.50 1.50

28.15 66.50 152.50 35.85 1.50

28.87 69.39 153.00 36.45 1.50

0.82 0.00 -0.64 0.56 0.01

1,689,569 10 1,804 101,880 2,982

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

402.21 115.99 22.06 6.89 90.36

Arif Habib Co SD Biafo Ind. Clariant Pakistan Dawood Hercules Descon Chemical

28.05 69.39 153.64 35.89 1.49

20.00 1.40 8.61 30.05 10.24

20.79 1.46 8.79 31.00 10.10

20.00 1.35 8.63 29.60 10.00

20.00 1.35 8.66 30.05 10.00

0.00 -0.05 0.05 0.00 -0.24

1.80 52.69 14.27 7.61 19.94

25.82 3.60 40.34 7.70 20.50

Ados Pakistan AL-Ghazi Tractors Ghandhara Ind. Hinopak Motor K.S.B.Pumps

88.2202 137.6324 1.1331 117.9240

5.25 161.88 7.49 78.54 26.95

1.97 53.00 14.30 7.98 20.53

1.83 51.02 13.27 7.70 19.90

1.83 53.00 14.13 7.87 20.44

0.03 0.31 -0.14 0.26 0.50

3,101 64,581 2,536 903 1,419,943

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

$99.04

Sell 88.50 118.55 138.32 1.1325 87.19 11.40 24.09 23.58 90.09

Brent Crude Oil

$109.00

Atlas Battery Ltd. Bal.Wheels Dewan Motors Exide (PAK) General Tyre

170.00 23.60 2.20 177.10 16.00

27.10 4.10 40.50 8.59 20.50

25.15 3.26 40.01 7.70 19.48

25.90 3.90 40.50 8.43 20.50

0.08 0.30 0.16 0.73 0.00

8,219 151,477 2,251 3,414 125

Dewan Sugar Engro Foods Ltd. Habib Sugar Mills Habib-ADM Ltd. Ismail Industr

2.25 23.95 27.23 13.30 65.00

2.49 24.25 27.48 13.69 64.99

5.99 161.99 7.95 79.95 26.95

4.60 158.50 6.66 74.62 25.61

172.89 23.70 2.20 178.50 16.83

169.00 23.70 2.05 173.00 15.71

110.49 111.43 150.02 150.00

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

(Colony) Thal Ali Asghar Textile Amtex Limited Artistic Denim Mills Azam Textile

1.40 0.56 1.29 20.10 1.35

1.40 0.55 1.33 21.07 1.39

28.90 3.50 121.61 20.25 126.68

AHCL-DEC ANL-DEC ATRL-DEC DGKC-DEC ENGRO-DEC

28.60 3.47 119.49 20.25 123.99

5.25 158.63 6.66 74.65 26.95

171.50 23.70 2.20 177.10 16.80

109.00 111.18 145.05 145.58

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

100.37 76.20 67.51 28.20 12.74

101.60 76.90 68.00 29.25 12.50

0.00 -3.25 -0.83 -3.89 0.00

30 730 2,005 809 45

1.50 0.10 0.00 0.00 0.80

2,700 500 213 38 1,313

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

2.25 23.98 27.40 13.19 64.97

0.00 0.03 0.17 -0.11 -0.03

3,000 19,195 179,447 1,775 1,504

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

1.40 0.55 1.26 20.15 1.16

1.40 0.55 1.30 20.98 1.35

0.00 -0.01 0.01 0.88 0.00

511 500 1,802 13,064 52

28.00 3.36 116.55 19.76 121.00

28.21 3.46 117.30 20.09 122.70

-0.69 -0.04 -4.31 -0.16 -3.98

220,500 629,500 165,000 55,000 454,500

100.00 76.31 68.00 29.25 12.30

-0.37 0.11 0.49 1.05 -0.44

2,094 1,113 10,200 7,001 14,060

100.00 75.99 67.99 28.00 12.00

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

0.28 36.50 0.61 1.63 41.70

0.37 36.55 0.67 1.68 41.90

0.37 36.02 0.60 1.62 41.26

0.37 36.08 0.64 1.65 41.30

0.09 -0.42 0.03 0.02 -0.40

9,500 851,435 98,815 25,551 54,238

60.24 10.31 5.57 11.87 29.53

59.20 10.45 5.75 11.98 29.90

59.00 10.20 5.46 11.66 29.46

59.00 10.28 5.55 11.80 29.50

-1.24 -0.03 -0.02 -0.07 -0.03

6,927 25,619 422,339 805,934 182,086

Electricity Genertech Hub Power Co. Japan Power K.E.S.C. Kot Addu Power

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

syMbol

open

high

low current

change

voluMe

Non Life Insurance 2.20 23.63 27.25 13.15 62.01

Fixed Line Telecommunication

Beverages Murree Brewery Co. Shezan Int’l

voluMe

Pharma and Bio Tech

Automobile and Parts Buy 88.00 117.18 136.82 1.1238 84.89 11.14 23.90 23.42 87.49

change

Future Contracts

General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass Ltd MACPAC Films Merit Pack

low current

Personal Goods 1 6,507 1,100 414 9,012

Construction and Materials Al-Abbas Cement Attock Cement Berger Paints Cherat Cement D.G.K.Cement

high

Household Goods

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

open

syMbol

Food Producers

Industrial Engineering

Interbank Rates US Dollar UK Pound Japanese Yen Euro

open

Chemicals

Major Losers Nestle PakistanXD Siemens Pak Bata (Pak) Ltd. National Ref.XD Hinopak Motor

syMbol

Adamjee Ins Ask.Gen.Insurance Atlas Insurance Cres.Star Insurance EFU General Ins

43.20 8.00 36.50 2.00 35.80

43.78 8.50 36.75 2.20 36.00

42.12 8.00 35.99 2.00 34.46

42.76 8.42 36.51 2.00 35.96

-0.44 0.42 0.01 0.00 0.16

13,373 1,218 1,993 1,065 747

13.50 1.40 65.53

14.50 1.40 65.53

0.00 0.00 0.00

2 1 157

0.32 16.30 15.17 1.00 0.80

0.02 0.00 -0.02 -0.25 -0.01

12,419 101 36,007 5,008 90,802

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

0.30 16.30 15.19 1.25 0.81

0.33 16.79 15.59 1.00 0.96

0.27 16.30 15.00 0.80 0.70

Equity Investment Instruments 1st.Fid.Leasing Mod Allied Rental Mod Atlas Fund of Fund B.R.R.Guardian Cres. Stand.Mod

1.63 21.64 5.78 2.24 0.42

1.60 21.64 5.90 2.32 0.44

1.60 20.90 5.78 1.92 0.37

1.60 21.64 5.85 2.24 0.44

-0.03 0.00 0.07 0.00 0.02

6,000 125 250,001 101 503

12.41 30.76 35.70 14.00 68.21 1.35 65.56 3.80 8.30 58.00 140.00 29.35 15.75 2.00 10.25 0.80 1.86 1.00 16.95 19.11 69.50 25.22 1.45 9.70 3.10

13.02 31.25 36.00 14.00 70.17 1.38 67.66 3.99 8.48 59.69 140.00 29.35 16.44 2.00 10.47 0.81 1.90 1.01 17.02 19.21 69.59 25.65 1.53 9.77 3.10

0.02 0.00 -0.49 -0.75 0.00 -0.06 1.27 0.32 0.13 0.00 0.00 -1.51 0.19 -0.02 -0.02 0.00 0.00 0.01 0.01 -0.06 2.34 -0.79 0.03 0.05 0.10

4,133 7 3,303 14,621 3 81,508 3,183 3,365 5,094 220 5 2,501 22,594 42,203 460,412 26,221 296,897 117,460 13,539 8,438 1,645 549 106,351 29,109 5,000

Miscellaneous Century Paper Pak Paper Prod.

Security Paper P.N.S.C. Pak.Int.Con. SD TRG Pakistan Ltd. Murree Brewery Pak Elektron Ltd. Tariq GlassXD Pak Tobacco Co. Philip Morris Pak. Shifa Int.Hospitals Hum Network 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 AKD Capital Ltd. Pace (Pak) Ltd. Netsol Technologies Pak Telephone

13.00 31.25 36.49 14.75 70.17 1.44 66.39 3.67 8.35 59.69 140.00 30.86 16.25 2.02 10.49 0.81 1.90 1.00 17.01 19.27 67.25 26.44 1.50 9.72 3.00

13.25 31.95 36.20 14.75 70.17 1.51 69.00 4.18 8.78 59.69 140.00 29.98 16.49 2.12 10.60 0.85 2.06 1.06 17.84 19.40 70.00 26.00 1.67 9.99 3.10

Mutual Funds Fund

offer

repurchase

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

501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800

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

Profit for e-paper_Layout 1 11/30/2011 12:11 AM Page 7

Wednesday, 30 November, 2011

the funds allocated for all development schemes should be spent on power generation schemes

news

07

Minister for water and power, syed naveed qamar

Pakistan ranks 145 out of 187 countries in HDI

ISLAMABAD

A

JALALuddIn RuMI

ccording to a report launched by United Nations Development Programme (UNDP), Pakistan ranks 145 out of 187 countries and territories this year while India is at 134 and Bangladesh at 146 in human Development Index (hDI) . Pakistan’s hDI value for 2011 is 0.504, in the low human development category, positioning the country.

Between 1980 and 2011, Pakistan’s hDI value increased from 0.359 to 0.504, an increase of 41.0 per cent or average annual increase of about 1.1 per cent. In 2010’s hDR, Pakistan was ranked 125 out of 169 countries. however, it is misleading to compare values and rankings with those of previously published reports, because underlying data and methods have changed, as well as number of countries included in hDI. Gender Inequality Index (GII) reflects gender-based inequalities in three dimensions reproductive health, empowerment, and economic activity. Pakistan has a GII value of 0.573, ranking it 115 out of 146 countries in the 2011 index. In Pakistan, 21.0 per cent of parliamentary seats are held by women, and 23.5 per cent of adult women have reached a secondary or higher level of education compared to 46.8 per cent of their male counterparts. For every 100,000 live births, 260 women die from pregnancy related causes; and adolescent fertility rate is 31.6 births per 1000 live births. Female participation in labour market is 21.7 per cent compared to 84.9 for men. In comparison, India and Bangladesh are ranked at 129 and 112 re-

spectively on this index. In Pakistan, women’s parliamentarian representation has improved with 21 per cent of parliamentary seats held by women. GII reflects gender-based inequalities in three dimensions – reproductive health, empowerment, and economic activity. Pakistan has a GII value of 0.573, ranking it 115 out of 146 countries in 2011 index.

In GII, South Asian women are shown to lag significantly behind men in education and labour force participation. Multidimensional Poverty Index (MPI) identifies multiple deprivations in the same households in education, health and standard of living. In Pakistan 49.4 per cent of the population suffer multiple deprivations while an additional 11.0 per cent are vulnerable to multiple deprivations.

The breadth of deprivation (intensity) in Pakistan, which is the average percentage of deprivation experienced by people in multidimensional poverty, is 53.4 per cent.

MPI, which is the share of population that

is multi-dimensionally poor, adjusted by intensity of deprivations, is 0.264. India and Bangladesh have MPIs of 0.283 and 0.292 respectively. Norway, Australia and the Netherlands rank the highest in hDI while Democratic Republic of the Congo, Niger and Burundi are at the bottom.

Deputy Chairman Planning Commission of Pakistan Dr Nadeem-ul-haq said the country needs to improve governance at every level.” We need to change the entire software of the country starting from policy decisions to management of cities to improve human development index, youth needed to be involved in development”. he said that we need to develop our cities as per international standards.

UNDP country Director Toshihiro Tanaka said Pakistan is among those countries which are being affected by climate change and we can say recent floods and rains and even earthquake of 2005 is a result of climatic change. hence government also needs to focus on improving environmental

conditions he added. Dr Adel Najam vice Chancellor, Lahore University of Management Sciences said recent disasters, like floods, earthquake, law and order is said to be main reason for below human index Pakistan, that is affecting from the conflict in the region. Bushra Gohar, Member National Assembly said development progress in world’s poorest countries could be halted or even reversed by mid-century unless bold steps are taken to slow climate change, prevent further environmental damage, and reduce deep inequalities within and among nations.

2011’s report argues that environmental sustainability can be most fairly and effectively achieved by addressing health, education, income, and gender disparities together with global action on energy production and ecosystem protection. It further warns that South Asia must overcome acute poverty and internal inequalities to maintain current rates of progress. According to Report, South Asia has the world’s highest levels of urban air pollution in its ranks, with cities in Bangladesh and Pakistan suffering from acute air contamination. The report also warns that deteriorating environmental conditions and increasingly extreme weather conditions — such as severe floods that have hit Pakistan for two years in a row—could undermine economic progress in many countries in the region. In addition to providing deeper understanding of how environmental sustainability is inextricably linked to inequality, the annual report also provides human Development Index (hDI) which measures national achievement in health, education and income. It was Pakistan’s late economist Mahbub ul haq, who devised hDI in the first human Development Report in 1990 together with the Nobel laureate, Amartya Sen.

kse brokers mull kcci-like protest kArACHI JAVEd MAhMood

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majority of the members of the Karachi Stock exchange (KSe) are planning to organise a strong protest against the SeCP and FBR as the stock market is recording the lowest turnover because of stringent requirements of both the regulatory organisations, sources told Profit on Tuesday. The brokers have proposed a KCCI-like protest by announcing a country-wide strike at the stock market, said sources, adding the proposal was discussed in the meeting of the board of directors of the KSe on Tuesday. The KSe board, however, deferred the strike proposal and decided to write a letter to the Finance Ministry, Securities and exchange Commission of Pakistan (SeCP) and the Federal Board of Revenue (FBR) with the purpose to warn them of announcing a strike in case the SeCP and FBR continued to enforce the tough tax and legal measures, said sources.

Sources said that the strong reaction of the Karachi Chamber of Commerce and Industry (KCCI) against the electricity loadshedding had impressed the KSe members and now they were putting pressure on the KSe board and management to adopt the same strategy to get the stock market out of deepening crisis.

These days out of 200 members of the KSe, about 120 are functional and a majority of the functional brokers are facing problems in running their offices because of a very low turnover of trading which is the main source of their income. The stock market is recording an average of 20 to 40 million shares turnover, as a majority of the investors and jobbers have disappeared from the market. The SeCP and FBR are trying to find out details about the source of income of brokers, investors, payment of tax, assets, expenditures, etc. Recently, the SeCP and the FBR have written separate letters to the stock markets managements, asking them to get details from their members about their assets, sources of income, payment of tax, etc., Sources said that the SeCP and the FBR are frequently demanding different information from the KSe and brokers, a tendency that had irritated the stock market’s stakeholders and badly hurt the investment sentiment.

For example, in 2008, the KSe used to record about 400 to 450 million shares daily, but now this trading volume had dropped below 40 million shares. In 2008, the value of the KSe’s membership was around 145 million rupees, but now nobody is willing to buy the membership even on half the price, fearing penetration of the SeCP and the FBR while the market was seeing the lowest turnover.

Japanese, korean companies express interest in thar coal g

chinese firms enter thar with over $9 billion investment: sec’y sindh coal and energy dpt g ueg to bring another investment of around $1.2-2.5 billion kArACHI

A

GhuLAM ABBAS

FTeR entrance of Chinese Companies in Thar Coal project with investment of over $9 billion through the recently signed Memorandum of Understandings (MoUs) with government of Sindh, Japanese and Korean firms have also shown interest in this important project.

This, while talking to Profit, was said by Mohammad Younus Dagha, Secretary Sindh Coal and energy department.

In recent negotiations with Japanese Ambassador, he claimed, government of Japan has also committed to invest in the project through Japan International Cooperation Agency (JICA), under its economic assistance programme. This was another success for inviting foreign investment in the project after two largest companies of China had entered the project this month.

A Korean company was also negotiating

with Sindh Board of Investment to enter into the coal mining project. The foreign firm was expected to take part in scheduled bidding of four blocks of Thar Coal project next month. In the scheduled bidding, three companies from China, two from Korea, and a consortium of Germany and Czech were also expected to take part, he claimed. Under fresh bidding, the secretary said, foreign investment was likely to be made for almost 2000-megawatts power and mining projects in Thar.

More international giants in coal and coal mining sectors were expected to come to Pakistan. Younus Dagha, who is also Managing Director of Thar Coal and enery Board, said international giants had started taking interest after a successful investment conference held last month in which foreign companies were briefed about the project. earlier, according to the secretary, Coal and energy department of government of Sindh had successfully attracted

attention of two of the largest Chinese energy companies M/s China Three Gorges and M/s Orient Group which had signed separate MOUs with provincial government in Beijing this month.

Mr Wang Shaofeng vice Chairman of CTG (China Three Gorges Corporation) and Mr Mohammad Younus Dagha, Secretary Coal and energy had signed MOU on 15th November, whereby CTG has shown its willingness to participate in International Competitive Bidding for Thar Coalfield’s blocks vIII, IX and X as well as for Sonda Coalfield. The proposed project will be for coal mining and power generation of 4000 MW with an investment of around $8 billion.

M/s China Three Gorges is one of the largest Chinese companies and has, to its account, several energy projects in China and abroad including the world’s largest Three Gorges Dam. Apart from participating in future projects in Thar Coalfield, CTG has already purchased the ready

project in Sindh’s Sonda Coalfield in Thatta, earlier developed by M/s CMC of China for a 400 MW coal mining and power generation project.

M/s CTG also signed two other MOUs with the provincial government for wind power generation project of 1000 MW and Wind Turbine manufacturing facility near Nooriabad. Another MOU was signed between Mr hongwei Zhang, Chairman of Orient Group and United energy Group (UeG) and Secretary Coal and energy who also hold charge of Secretary Investment.

MOU covers both coal power project and wind energy project, in Sindh. The group, again one of the largest in China, has shown interest in developing coal based power plants in Thar and Badin Coalfields. It has also acquired letter of intent for a 150 MW project in wind in first two years which the company intends to scale up to 500 MW in four years. M/s UeG has already invested in Oil fields of Badin by acquiring British Petroleum’s concessions in the district with

investment of several hundred dollars. New endeavours of UeG will bring another investment of around $1.2-2.5 billion. In the five blocks of Thar Coal project, two UK based companies including Cougar energy and Oracle Coalfield-PLC, Global Mining Company of Japan and local firms like Sindh engro Coal Mining Company were working on various stages.

Presently, Younus Dagha said, work on infrastructure development in on the horizon. This includes improvement of road networks, effluent treatment system, water supply project from Makhi Farash, Alternate supply-waste water from LBOD, Transmission Line from Matiari to Thar CF and Thar airport, with the investment of Rs9.6 billion, Rs4.0 billion, Rs27 billion, Rs9.0 billion, Rs21 billion and Rs800 million respectively. Besides project including Thar Lodges in Islamkot-30 bedded, Reverse Osmosis Plants for potable water and rescue station have already been completed.