Profit 22nd December, 2011

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Urea price increase and impact on industry Page 7 Reviving the dying garments industry Page 2 Asia, the dark horse Page 3 Pages: 7

profit.com.pk

Thursday, 22 December, 2011

Thai govt to open market for Pakistani fruits KARACHI

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Govt to extend railway track to China: Bilour ISLAMABAD

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OnLInE

INISTER for railways Ghulam Ahmad Bilour said railways’ network is being extended to China and Afghanistan. He was speaking during ‘Question Hour’ during National Assembly session in the Parliament House under chairmanship of Deputy Speaker Faisal Karim Kundi on Wednesday. The minister expounded the desire to construct railway tracks between China and Pakistan and that $6 billion would be needed for the project, while negotiations in this context were held with Chinese officials.

“They were ready to lend us the amount needed for construction of the track, however, we urged them to establish the track and Pakistan would provide them assistance and land,” Bilour

added. In response to a question raised by Khalida Mansoor, the minister for railways said estimated cost of losses to Pakistan railways’ infrastructure and assets in 2010 was Rs6395.239 million and in 2011 PR suffered a loss of Rs247.237 million due to floods mainly in Sindh. Meanwhile, replying to a question raised by Dr Naheed Shahid Ali, Parliamentary Secretary Haider Ali Shah said all provinces were instructed to establish 20-bed special unit in district hospitals where drug addicts could be treated. This master plan was launched for next five years, he said. On this Deputy Speaker Faisal Karim Kundi said anti-narcotics forces should be enhanced so that youth could find jobs and play a constructive role in the society.

To a question raised by Barjees Tahir, minister for privatisation Ghaus Bux Mehr said Rs800 million still has to be paid by PTCl in connection to privatisation. The ministry is

already working on a plan to make the process transparent. He informed the house that three corporations including OGDCl are being privatised. To another question, he said the case of steel mills is in the court of law and presently the market is also not favourable for privatisation. In reply to comments by Tahir that asserted that concerned ministers remained absent, hence they did not answer the members’ questions, Federal Minister Khurshid Shah pointed out that four ministers are replying to the questions. Upon this the deputy speaker said that the issue should be brought into notice of the Prime Minister.

It is pertinent to mention that PR relies on handouts of Rs2.5 billion ($2.8 million) a month to pay salaries and pensions. The institution is facing losses forecasted up to Rs35 billion ($390 million) in the fiscal year starting from July 2011 and ending in June 2012.

Govt illegally supplying 678 mmcfd to industries ISLAMABAD

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AMER SIAL

ll Pakistan Compressed Natural Gas Association (APCNGA) on Wednesday said government was illegally supplying 678 million cubic feet of gas per day (mmcfd) to industrial units which was causing innumerable misery for domestic consumers. Addressing a press conference, Chairman APCNGA Ghiyas Abdullah Paracha said government was responsible for violation of gas supply agreement between Sui Northern Gas Pipelines limited (SNGPl) with CNG, fertiliser, industrial, commercial and other sectors. He said government had deliberately reduced gas pressure in big cities just for the benefit of a few people involved in the business of liquefied Petroleum Gas (lPG).

He appealed the government to improve gas supply to domestic and CNG sectors by stopping gas supply to industries, which under agreement were eligible for only nine months gas supply, otherwise the association would be compelled to launch a protest campaign. He said gas was being illegally supplied to industrial sector, which has no gas supply agreement

for three months December, January and February. Giving an example he said ghee mills and sizing textile units were getting un-interrupted gas supply and were not part of gas load shedding scheme. If their supply was cut 50 mmcfd gas would be available. Similarly if gas supply of captive power plants were cut it would yield 250 mmcfd of gas. He said timely supply from Kunnar Pashaki and latif gas fields would provide 200 mmcfd of gas. He said some unknown reasons were delaying linking of gas for the two projects even though petroleum minister had announced a number of times that 200 mmcfd gas would be available from the two fields by end of November this year.

He said government’s callousness was resulting in destroying national economy.

Paracha said gas shortage was being engineered to help some influential businesses to make money from costly gas imports that would have devastating impact on the national economy and sovereignty.

He said lNG imports were being advocated by government without considering that cost of importing lNG at $18 per mmBTU would play havoc with the weak foreign exchange reserves. Cost of local gas supply on average is $ 4.5 per mmBTU. No

local business would remain competitive in case of expensive lNG and would be forced to close down. About import of lPG he said it would be too costly as compared to petrol and CNG. He alleged that a few influential persons were being helped to make huge gains through lPG imports. He said use of lPG in vehicles was more dangerous than CNG. He said local lPG producers were charging international prices, as the sector was unregulated despite the apparent protest of government. He said CNG sector was paying highest tariff to the government. He alleged that few influential were trying to replace CNG with lPG auto gas and they were instrumental in developing the impression that blast of CNG cylinders was the cause of accidents. He said government, Oil and Gas Regulatory Authority, Provincial Transport Authorities and Hydrocarbon Development Institute of Pakistan (HDIP) have failed in performing their due role to monitor CNG cylinders and kits by establishing labs for checking the quality of the equipment. He said CNG stations on their own would not be providing CNG to vehicles which have substandard cylinders of kits. However, he said labs were needed on a countrywide scale to certify CNG kits and cylinders.

STAFF REPORT

large business group of Thailand is coming to Pakistan to invest in the poultry sector.

Thai government will also consider opening of its market for Pakistani fruits. This was stated in a meeting between Mr Pichate Satirachaval, Thailand’s Trade Representative and Consultant to Thai PM, and Makhdoom Amin Fahim, Federal Minister for Commerce here on Wednesday. Satirachaval was accompanied by Thai ambassador in Pakistan, as well as Pakistani ambassador to Thailand. They discussed bilateral trade issues between the two countries.

According to sources at Trade Development Authority of Pakistan, the meeting was informed that a large food business group of Thailand – the CP Group - was coming to Pakistan to explore the viability of investing in the poultry sector here. It was anticipated that the next meeting of Joint Economic Commission will be held in Pakistan that would help attract investment from Thailand, leading to greater bilateral trade between the two countries. Mr Satirachaval offered Thai expertise for up-grading gems and jewelry sector of Pakistan, as Pakistan had substantial mineral deposits which needed to be explored. Besides that Thailand‘s Trade Representative agreed to look into the possibility of opening up of Thai market for export of Pakistani fruit. He informed the commerce minister that formation of a Joint Trade Committee (JTC) was approved by Thai Cabinet and its first meeting was likely to be held early next year, either in Pakistan or Thailand. He also stated that a Joint Feasibility Study on an Early Harvest Programme for an eventual Free Trade Agreement had already been completed. Federal minister for commerce drew the attention of the Thai Trade Representative to the potential of Gwadar port of Pakistan as a platform for exports to Central Asia. In the meeting, it was also agreed that the two countries would cooperate for study of Halal Food Certification between the two countries.

Thai Trade Representative informed that in Thailand about 5,000 firms had already been qualified for halal food trade and nearly 75,000 items were cleared as halal. The meeting was concluded with a determination on both sides to stimulate the bilateral trade between Thailand and Pakistan through extensive exchange of trade delegations.

In the meeting, it was also agreed that the two countries would cooperate for study of Halal Food Certification

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Thursday, 22 December, 2011

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debate

FARAKH SHAHzAD

HE effects of unprecedented energy crisis have started appearing on the export horizons of Pakistan. The readymade garments export industry that was growing at a rapid pace until the recent years, is reported to be continuously nosediving since 2008-2009. The importance of the garment sector in the overall economic perspective is two fold. On the one hand the sector has the potential to be the engine of Pakistan textile export growth, while on the other the sector is the largest source of creating low cost employment in the country at all levels.

DyinG exPorT Due to the obvious reasons, the garments sector has lost export orders worth $800 million so far in the current fiscal year and if the situation continued unabated it is feared that the exports would further decline in months to come.

The last quarter of the year has always been a busy period for Pakistani manufacturers and exporters due to more than usual Christmas and New Year orders coming from EU and America. But this year the garments industry registered a decline of 15-20 per cent in terms of export orders due to uncertainty of shipments which are delayed due to electricity and gas load shedding.

GLobaL facTor Apart from the domestic problems of Pakistan, there is yet another misfortune waiting for Pakistani exports in EU and American markets: the global crisis. It is significant to note that the key global markets are coping with the economic turmoil.

It is due to the compounded reasons that Pakistan Readymade Garments Manufacturers and Exporters Association (PRGMEA) is anticipating a sharp decline in apparel exports nearly to $3 billion this fiscal year by about 30 per cent for the big economic downturn both EU and US undergo at present.

The US, and Germany, UK, France and Spain in the EU bloc are all in the deep economic recessions these days, implicating the Pakistan’s conventional textile exports decline.

Therefore, the country’s garments export is expected to remain $3 billion or just below as compared to $4.1 billion last year.

So far Pakistani exporters have ruled out disintegration of EU economic zone because it has consumed huge efforts of the member states and financial sacrifices by Germany and France at utmost level. They believed the EU economic zone crisis would have never hit Europe, if there had a comprehensive system of fiscal management in place.

In this context, the US economic crisis had also hit Pakistan’s textile exports this fiscal year as much as the EU had impacted them. Shelves at big chain stores in the US are vacant for financial decline, and buyers stopped placing orders with Pakistan’s exporters. Buyers of the EU are also reluctant to place their orders; rather they reduced their buying by half as uncertain economic crisis which at present looms large.

Finding a solution to a global fiscal downturn is more difficult than overcoming our domestic energy crisis. Yet there is a light at the end of the dark economic tunnel

LaTeraL imPacT The garments industry that is a source of daily bread and butter to six million workers is unable to grant a job security to its manpower thus jeopardising the lives of more than one millions families depending on it. Pakistan is fast losing its share in the global garment market because of high cost of production. Garments exports from Pakistan’s traditional competitors in the region Bangladesh, Sri lanka, China and India - have picked up dramatically because the exporters of those countries are getting hidden subsidies from their respective governments. Export of readymade garments from Pakistan decreased form 42 million dozens worth $1.59 billion in 2007-08 to only 30 million dozens worth $1.23 billion in 2008-09, thus showing decline of 23 per cent in term of value.

ineviTabLe oPTion Finding a solution to a global fiscal downturn is more difficult than overcoming our domestic energy crisis. Yet there is a light at the end of the dark economic tunnel. In this whole perspective, there is an only way out left for Pakistan to save its export industry: GSP Plus status. Generalized System of Preferences (GSP)

is a preferential tariff system extended by developed countries (also known as preference giving countries or donor countries) to developing countries (also known as preference receiving countries or beneficiary countries). It involves reduced tariffs or duty free entry of eligible products exported by beneficiary countries to the markets of donor countries.

DeficiTs It is ironical to note that Pakistan is an important economic and political partner of the EU but ranks at 52nd trading partners despite being 6th largest nation of the world. At present 49 countries are getting GSP Plus including several African countries but Pakistan is facing tough competition from Bangladesh and Cambodia. Their objections are based on the assumptions that in the event of granting the similar status to Pakistan, they will lose their market shares. It is to be remembered here that GSP-plus is not an international convention but a bilateral arrangement which could be also said to be a gift of the European Union to poor and needy nations.

raTificaTion The analysts say that the European Union is currently working on a proposal for widening its scope by easing economic criterion, and it may help Pakistan upgrade itself from GSP to GSP-plus, but not before ratifying all the key international conventions. So far, Pakistan has been lagging behind and lot many key international conventions are not ratified or partially ratified. However, once they are ratified by Pakistan, it could qualify for GSPplus by the year 2014.

Pakistan’s trade with EU mainly comprises textiles that are 55 per cent, followed by leather products. EU remains Pakistan’s largest trading partner receiving 18 per cent of Pakistan’s exports and providing nine per cent of its total imports. The overall volume of trade between the EU and Pakistan is worth $8,256 million with a trade surplus of $729 million in Pakistan’s favour.

European Union (EU) head of South Asia David Tirr during his recent visit to Pakistan said that Friends of Democratic Pakistan (FDP) during meeting in Brussels last year came out with a strategy message of fiscal, economic and tax reforms. Similarly, a lot more is needed to be done on the energy sector reforms, he added. The EU

director of South Asia further said that Pakistan does need assistance but the question is how to go about it at a time when EU members are also faced with cash flow problem. As a preliminary homework to get the things in right direction, the dialogues are being held between Pakistan and EU on politics, security, proliferation, human rights, trade and investment and it is assumed that the procedure will be completed by the first half of next year. Pakistan was struck with devastating floods twice during 2010 and again in 2011, causing huge losses to agricultural and industrial sectors. Seeing the severity of the affects, the European Council presented a proposal to unilaterally suspend, for a limited period of time, duties on 75 items of important imports from Pakistan.

UnexPecTeD sTUmbLinG However, the proposed EU trade preferences for Pakistani textile products were opposed by India and it was considered the only stumbling point.

Afterwards, the objection was withdrawn by India at the recent meeting of the Commerce Ministers of both countries. But unexpectedly, an objection from Bangladesh has effectively halted progress yet again. These trade benefits need to be cleared from the World Trade Organisation (WTO), where Bangladesh has raised objection, fearing Pakistan may capture its market. The fact of the matter is that hat Pakistan could never be a threat to the Bangladesh textile industry in the EU market. Bangladesh exports to the EU have reached $16 billion in the textile sector today from merely $2billion a few years back whereas Pakistan has a mere $1.5 billion in a market of $80 billion in total. Over the years, Bangladesh has developed strong inroads to the EU due to its least Developed Country (lDC) status and therefore enjoys a favourable environment and market access.

boTTom Line Bangladesh and Pakistan have close history. We are SAARC and OIC members, and both countries are involved in various bilateral treaties and have supported each other on various occasions. Prime Minister and Foreign Minister of Pakistan have already taken up this matter at SAARC Conference in Maldives in their sideline meetings. It is hoped that Bangladesh will eventually withdraw their objection at WTO and the duty free exports of 75 items to EU would benefit Pakistan exports in the next 2-3 years.

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Thursday, 22 December, 2011

EDITORIAL

Asia, the dark hor Testing trade diplomacy ND so the Iran-sanctions effect begins presenting itself. UN restrictions barring Pakistani goods from the neighbouring market, compromising $30 million in selected fruit-export losses, are just the trigger for a very undesirable domino-effect. Trade cuts in times of high deficits are bad enough, but the alternate such compulsions invariably give rise to is a much bigger blow to the exchequer. Already there are reports of part of the 3,000 tonnes of stranded kinnow now being smuggled into Iran. Pakistan is no stranger to this menace. More often than not, it refuses to self-correct even after temporary restrictions are lifted.

In addition to compromising immediate revenue, such ad-hoc practices distort export, growing and transportation markets in the producing country. It takes a long time to mitigate subsequent losses. When these decisions are enforced due to geo-political complications in far-off parts of the world, which have no direct bearing on local or regional demandsupply dynamics, the problem is often compounded beyond correction. And since the

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timing of the ban (if it is temporary in the first place) is determined by forces far beyond our control, there is little likelihood of reverting to the old arrangement even in better times. The importing market adjusts, to other exporters with price arrangements that, for obvious reasons, would make little sense renegotiating should Pakistan be suddenly freed from UN shackles. This way, not only do we lose money, but also deliberately place ourselves behind the curve in regional trade mechanics.

Sooner or later, Tehran-specific pressure will come crashing down on Islamabad’s refusal (so far) to back down from the Iran-Pakistan gas pipeline project. As we have recently explored, the tone from Washington has stiffened considerably of late. And though it hasn’t reached the or-else level yet, the time is not far when it will demand a definitive posture of Pakistan. Whichever way it bends, the government must ensure the Pakistani market does not suffer. Already, earning is the government’s soft spot. Its own economic mismanagement has forced it into a fiscal straightjacket. Our trade diplomacy is about to be put to its severest test yet.

Condition of railways

Javed Gilani T is indeed ironic, and no one might have predicted this, that in times of need, the developing world will come to the rescue of the ailing developed economies. The eurozone, rather grudgingly have accepted this new role with the west now gradually being reshaped, and in some aspects humiliatingly by Asian wealth. In order to feel the pervasive air, all you need to do is wakeup, open the international pages of your daily newspaper, and while sipping at your freshly brewed coffee that your wife has left on your breakfast table, read about European leaders, frolicking around at their best behaviour around Chinese officials, hoping for a bailout.

That’s almost as desperate as borrowing cake from your next door neighbour on your child’s birthday.

Pretty embarrassing for the kid, and let’s not delve into the awkward position you put yourself into.

What is most intriguing is, that after decades of being mocked, mimicked, and ridiculed for whatever reasons, the Asians and their investment decisions are now supporting and in fact in other instances even rescuing European and North American businesses. let us consider the various news reports that have recently made the rounds. First we have the example of Saab that finally this week filed for bankruptcy following a rather turbulent journey after the takeover by a Dutch carmaker that failed to meet sales targets. The result was, that production more or less came to a halt.

In contrast we have Volvo. Round about the same time, when General Motors sold Saab to the Dutch carmaker, Spyker Cars, Volvo was taken over by Geely that is considered as the second largest carmaker in China. In

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Despite all the cynicism, when hard facts are analysed it will be learnt that more than 1/3rd of all the world’s savings Politicians eye top positions originate from Asia This is with regards to the news report

This is with regards to the news report titled “Gilani directs railways to improve efficiency” published yesterday. The poor condition of railways has been expressed by everyone all over the media and in the newspapers, but no one seems to be doing anything about it. There was a time when I actually enjoyed my travels via train. It used to be a comfortable experience and one that didn’t cost much.

Now the comfort level is on a decline and the ticket prices are increasing in an extremely bizarre situation. I hope the government manages to turn around the state of railways.

titled “Politicians eyeing top positions in trade bodies” published yesterday.

This trend can be seen in just about every sector of our nation, that most of the topmost seats are being reserved for politicians and there is absolutely no merit system. The true representation of traders, as pointed out in the report, is obviously undermined as a result and hence those that deserve to be at the helm of matters are rarely seen there. Be it trade bodies, or other institutions we need to ensure that only those that deserve to be at the top manage to be there.

WAjeeHA IFtIKHAR

SAuD SHABBIR

comparison to the European counterparts, Volvo has prospered under the Chinese carmaker, and as far as one can understand the company has a stable and bright future. Geely, will also soon have the distinction of becoming the first Chinese car manufacturer to launch their vehicle in the British markets, with their car put on sale towards the end of sometime next year.

The moral of the story is, and to put it rather crudely, Asian motor companies have been able to transform European and Western companies that were flagging, in a way that has boosted their overall performances, a point that can strongly be reinforced by the brilliant performance of Tata with Jaguar, land Rover. Which then reinforces the argument, that the Asian’s are not as stupid as the West has made them out to be for a long time now. Secondly, the reverses in the West ring alarm bells of opportunity for the East.

Despite, all the cynicism, when hard facts are analysed it will be learnt that more than 1/3rd of all the worlds savings originate from Asia. For us, a crisis merely marks an opportunity to buy the remnants of a glorious empire that fell folly to its own hubris, to the fallacy of its own policy making. Thanks to all the chaos, we get the opportunity to bottom fish the prizes once again. And it is not only the Chinese money that is now snapping up bargains from the Western powers, the trend is picking up in the oil rich countries of the Middle East as well. For reference, you need only look up the recent purchase of $300m stake in Twitter by Prince Alwaleed bin Talal. Despite the loss of control, for countries like Britain and much of Europe this change in dynamics does not point towards complete hopelessness but an opportunity to invest in Asian markets. After all, the wise would remember that Britain, amongst other western countries earn more from investments made abroad, than it pays out in dividends and other remittances. The mindset of the Asian investor, can be summed up in what the head of Fosun, liang Xinjun, China’s largest private sector conglomerate, said, “EU-US consumer spending has deteriorated in the last three to four years and will continue to fall in the next four to five years. Growth of their enterprises will be limited or even fall. So we can buy about 10 to 30 per cent shares of their companies, become their top or second shareholder, and then bring them into the Chinese market to grow."

And so, ladies and gentlemen, let me welcome you to the new Asian century.

The writer is chief manager SME bank and has over 30 years of experience in the banking industry

WAh CAnTT

averaGe Joe invesTor

Foreign pullout eases for Theamarket willbit regain

Agha Akbar HE pattern in the last few sessions at Pakistan’s bourses, mainly at Karachi’s KSE-100 index, has been rather predictable. Up a few notches and then slightly down, or down quite sizably, but regaining as much a few days down the road. But amidst low volumes, the index has roughly lost by 700 points from its recent high of 12,000 – and it is not regaining it in a jiffy.

May be in another seven to eight weeks, it might get there again, but not

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unless there is a major development that provides the push and the momentum.

The good news meanwhile is that foreign funds’ pulling out investment seems to have eased off a bit – at least for the moment. Since that was one factor keeping the market depressed, even the temporary ceasing of this hemorrhage definitely is some relief.

The biggest recent recovery, after a sizable fall last week, came on two successive days after the weekend, on Monday and Tuesday – in the wake of President Asif Ali Zardari’s return back home from Dubai. The speculation on that count stopped, and the market perked up. The gain on Tuesday alone was a whopping 255 points, making the KSE page on the web under the title ‘Market Summary’ green almost all the way as one scrolled down.

But Wednesday again saw the market take a little tumble – by around 70 points.

The motive of the investors so obviously

was making a quick buck.

And this is a pattern that is likely to sustain, at least in the short term until mid-February 2012 and onwards – when the December-closing entities disburse dividend and bonus shares. In times like these, when the economy is stagnating at best, mid-February seems too far away for investors to come in droves and commence buying big time. So, with pocket books staying close till then, there would be little surges and minor dips, but the market would generally retain its present lacklustre mood.

For an Average Joe, what to buy and sell, for opportunities are always there? Mr Ali Malik, CEO of the First National Equities, is not just intuitive but very well informed too. He had some time ago marked Engro Corporation down as ‘Sell Now’ and predicted that it would fall steeply, to end up at two-digits. That when Engro’s star seemed to be shining bright and

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previous highs, but not unless there is a major development that provides the push and the momentum

rising, being traded at Rs200-plus apiece. Despite a slight upward movement, and an upper lock the other day, it is being traded now at around Rs94.

If you go by Mr Malik, this is not the worst that you’ve heard of Engro. He forecasts that it could go down to even half its current price – which is already well below half of its peak.

Now that is some fall. I have never owned a bunch of Engro, so that is not going to hurt one. But going by that advice, and given that Mr Malik has mostly been spot on with his predictions, an Average Joe would do well to cut his losses here and now, before it becomes really expensive.

Mr Malik is not without a sense of humour either. And he believes that most Engro shareholders, especially of the Av-

erage Joe variety, are a sentimental lot. And even if they sold it, they’d buy back the moment there is the slightest hint of upward mobility. Apparently, he must have seen enough such Engro patrons to have formed such an opinion. But if I had a soft spot for Engro, I would take this comment as a word of caution and would never touch it unless I was absolutely sure that there was solid evidence that its management had overcome the snags and the figures supported such a judgment.

There are a few mouth-watering buys in cheap and middle range that one has discovered, but the word count is up, so until next Thursday.

The writer is Sports and Magazine Editor, Pakistan Today

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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Thursday, 22 December, 2011

Mobilink is the largest telecommunication operator in Pakistan. We have moved into the rural areas of Pakistan, extending our reach to the farthest corners of the country

news

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mobilink Pakistan President and ceo, rashid Khan

One month delay in signing FTA with Indonesia Pakistan lost iranian market under Un, Us sanctions g Pakistan to lose another lucrative market for Kinnow this season g

KARACHI

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GhULAM ABBAS

one month delay in signing Free Trade Agreement (FTA) with Indonesia could exacerbate the export of Pakistani Kinnow, as the fruit would not be able to profit from relaxation of duty under the already approved FTA until 2013. If Pak-Indonesia FTA, already signed at secretary level this year, is not signed by the ministers of commerce from both countries before January 2012, Pakistani Kinnow which has a bumper

crop in the country, would suffer for almost two seasons.

In a letter sent to Commerce Minister Makhdoom Amin Fahim On December 15, Pakistan Fruit and Vegetable Exporters, Importers and Merchant Association (PFVA) requested the minister to sign the FTA before next month to avail duty relaxation facility under the agreement by January 2012. The Indonesian market’s importance is second only to Iran, where trade is already disallowed under sanctions imposed by United Nation and United State of America this year, causing huge

NCPL stock price declines

surplus/stock of fruit in the country. To practically implement the already approved FTA, the signature of the minister was needed, however, the association said, Pakistani ambassador in Jakarta could also be authorised by the minister to do the same in case of his unavailability. PTA was signed at secretary level on October 16 in Jakarta and the zero rated duty regimes could be established after the signing procedure.

“If the PTA is signed in December 2011, the implementation of import duty will be applicable from January 2012. However, if this is signed after December this

year, the implementation will be effective from January 2013 or in simple words, the implementation will be delayed by another one year,” PFVA claimed. Implementation of FTA was also needed in view of the decision of State Bank of Pakistan (SBP) for not issuing the Export Form to exporters for exporting fruits to Iran.

Commenting on the issue, Waheed Ahmed, Co-Chairman PFVA said the only way to minimise losses to the country’s fruit exports this year would be via duty free market access to Indonesia. As SBP’s fresh move against trade deals with Iran has halted the country’s exports to Tehran causing a surplus of over 3000 containers worth Kinnow, a drastic decline in the exports of fruits was expected this year.

Polish envoy upbeat about trade prospects

KARACHI

LAHORe

STAFF REPORT

Staff Report

HE stock price of Nishat Chunian Power limited (NCPl) has declined by 17.84 per cent since 1st January 2011, despite of the fact that company paid a dividend of Rs2.0/share in FY11. We expect company’s earnings will stand at Rs2.2bn (EPS: 6.05/share) in FY12 and it will pay a dividend of Rs2.5/share translating into a dividend yield of 18.9 per cent, said Usman Saeed at AHl. In 1QFY12, NCPl posted a profit after tax of Rs580mn (EPS: Rs1.58) as compared to Rs418mn (EPS: Rs1.14) in 1QFY11, depicting an increase of 39 per cent YoY. This jump in earnings was mainly due to the high fuel savings, lower maintenance cost and high penal interest income, earned during the quarter. Due to non availability of Furnace Oil (FO), on the back of cash constraints, the load factor of the plant remained lower in 1QFY12. The plant was operated at a load factor of 78.65 per cent and generated 340Gwh of electricity. In 1QFY12, fuel savings contributed to the tune of Rs0.23/share, at an assumed thermal efficiency of 46.3 per cent. At the given thermal efficiency level, we believe the company will have fuel saving of Rs491mn (Rs1.34/share) in FY12, he added. In 1QFY12, NCPl’s receivables from National Transmission and Distribution Company (NTDC) reached to Rs9.1bn, on which overdue receivables stood at Rs6.2bn whereas, short term borrowing also increased by 56 per cent to Rs5.62bn. Higher receivables resulted in penal income of Rs190mn while, positive spread on circular debt resulted in net impact of Rs0.30/share. He said going forward we expect with the increase in FO prices, the company will witness fuel savings and higher penal interest income which will also support the bottom line in FY12. In 2QFY12, we expect the company to post earnings of Rs547.56mn (EPS: Rs1.49/share) on the back of growing indexation (USD/PKR parity) factors, coupled with efficiency gains and penal interest income, he added.

MBASSADOR of Poland in Pakistan, Dr Andrzej Ananicz, has said trade between Pakistan and Poland would get a new boost in coming months as a number of sectors specific agreements between the two countries are in the pipeline. The ambassador was speaking at lahore Chamber of Commerce and Industry on Wednesday. lCCI Vice President Saeeda Nazar, Executive Committee Members Mehmood Ghaznavi, Tahir M Sheikh, Zeeshan Khalil and Honrary Consul General of Poland in lahore Shahbaz A Khan also spoke on the occasion. The ambassador said that Poland government was interested in further expanding economic relations with Pakistan in all fields including power generation through coal of which the country has huge reserves. The ambassador said Pakistan and Poland need to work together in order to identify possible fields of cooperation and to provide proper information to business communities of both sides. He, however, urged Pakistani businessmen to invest in new technologies to more efficiently exploit country’s resource potential and to enhance bilateral trade with Poland. He said volume of two way trade between Pakistan and Poland is improving every year and would hopefully touch new peak by the end of the year. He also said it was the private sector that should convince government and take a lead in evolving a well tailored methodology to improve the soft image of the country as the reluctance among the foreign buyers, particularly the businessmen from European Union, is a result of a number of law and order related incidents in Pakistan in yester years. Ambassador also promised that Polish Embassy would do its best to meet such challenges and support any proposals and ideas, which will help achieve common goals. Speaking on the occasion, lCCI Vice President Saeeda Nazar said current level of trade between Pakistan and Poland needs more concrete steps on both sides and foremost amongst them is the exchange of information.

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Traders demand form D withdrawal in income Tax return LAHORE: All Pakistan Anjuman-e-Tajiran Pakistan has announced to launch a campaign to press the government for withdrawing the decision of induction of Form D in Income Tax return form. It also rejected the black mailing under the cover of form D and demanded the renewal of old Income Tax form. The demand was raised through a resolution passed in the convention of All Pakistan Anjuman-e-Tajiran here Wednesday. President Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Senator Haji Ghulam Ali was the chief guest. The convention was addressed by central trader leaders, Malik Mehar Elahi, Haji Haroon, Khawja Muhammad Shafique, Mian Abdul Manan, Atiqque Meer, Amir Asghar Dar, Naeem Meer and Babir Mahmood. They also demanded that government should take back the imposition of twenty five per cent tax on income after changes in AOP; along with the establishment of chamber for small and medium traders and cottage industry. ‘The government should also direct all the schedule banks to strictly follow the Secrecy Act because traders have serious reservations regarding secrecy of their accounts and if the Act is not implemented in letter and spirit, then this will affect the business of banks,’ they said. The traders also showed reservations on deteriorating law and order situation of the country and increase in prices of gas and electricity. They also condemned target killings in Balochistan and insisted that government should provide educational and health facilities to the people of Balochistan. President FPCCI Senator Haji Ghulam Ali said efforts should be made for the enhancement of trade with not only India, but with other neighboring countries. He also said efforts should be made to enhance trade between SAARC and ASEAN countries; stressing on the importance of the need of a single currency for SAARC and ASEAN countries like, European Union. He said next century is the century of Asia and Asian countries and they should try to enhance their trade without sacrificing the sovereignty of each other.

While answering the question about the establishment of small chamber of commerce and cottage industry Ghulam Ali said, bill is in the standing committee of commerce of the parliament. STAFF REPORT

chairman aPTma concerned over alarming decline in textile exports LAHORE: Chairman, All Pakistan Textile Mills Association (APTMA), has expressed deep concerns over alarming decline in textile exports during November 2011 due to energy shortage and high interest rate. He said five major sectors of textile industry, including cotton yarn, cotton cloth, knitwear, bed wear and towel have registered steep fall in quantity terms during November 2011. Chairman APTMA said textile exports of cotton yarn have declined by 11 per cent in November 2011 against corresponding period, followed by 22 per cent drop in cotton cloth, 38 per cent in knitwear, 40 per cent bed wear and 20 per cent in towel in quantity terms. He said the decline is being aggravated with every passing month since the start of new fiscal year, which means there is less production for exports in the country due to obvious reasons. According to him, APTMA has been crying over the situation since day one and the latest report of the SBP annual report has corroborated the APTMA concerns. SBP’s annual report has pointed out that the manufacturing sector has suffered a serious setback. The industrial growth was negative 0.1 per cent in financial 2011 due to prolonged power outages and reduction in gas supplies. However, he said, the SBP report must also mention that high interest rate has also played havoc with the industrial growth besides the energy shortage. STAFF REPORT

Government to generate rs 50b from 3G launch

Pressure on rupee, foreign outflows knock 69pts off KSE KARACHI STAFF REPORT

P

ESSIMISTIC outlook over external accounts and foreign investor’s continuous exodus kept investors edgy as KSE100 shed a further 69 points. Even positive news flows including Rs100 per bag urea price hike initiated by Engro, and yet another discovery in TAl at Manazali-9, were overlooked by unnerved investors.

KSE 100 index closed at 11268.55 levels with the loss of 69.49 points, while KSE 30 index lost 101.16 points to close at 10308.09 levels. All Share index

closed at 7797.21 levels after losing 44.12 points. Total 92 scrips advanced 113 declined and 101 remain unchanged out of total 306 scrips traded. Heightened system-

atic risks including unabated fall of local currency have eclipsed the attractive fundamentals as fearful investors opt out of the local market. The grim situation is likely to

remain so or even exacerbate in the near term. We reiterate caution and recommend exposure in only select stocks with a solid outlook, said analysts.

IsLAmAbAd: Government is all set to generate Rs50 billion during current fiscal year 2011-12 after launching auction of 3G license process in February next year. According to official sources, the Ministry of Information Technology has completed all formalities and procedures of the license auction. Sources further told that the auction may take a few months after it would be announced formally by the government and bidding is expected to be completed by the second week of March 2012. There will be three licenses auctioned to the operators that would participate in the bidding process, sources added. It is also informed that participating operators may be new contestants besides those already operating in the country. The 3G auction has been focused by the economic policymakers for the last couple of years and it is believed that telecom sector through advancement of technology will bring handsome foreign direct investment (FDI). This will not only boost economy activities in the country but it will be helpful to support the deteriorating economy of the country. OnLInE

PDF Profit_Layout 1 12/22/2011 1:24 AM Page 5

Thursday, 22 December, 2011

I believe quality of service and customer care are the two important areas where we can get competitive edge

news

warid Telecom ceo, muneer farooqui

United States stocks fall amid Europe concerns

U

S stocks fell, following yesterday’s rally, as Oracle Corp. tumbled on disappointing earnings and optimism faded about the European Central Bank’s plan to lend euro-area banks a record amount for three years.

Oracle, the second-largest software maker, dropped 13 per cent, the most since 2002. Walgreen Co., the largest US drugstore chain, slumped 5.3 per cent as profit trailed estimates after customers switched to rival drugstore chains.

Research In Motion ltd. surged 6.7 per cent on reports that Microsoft Corp. and Nokia Oyj considered a joint bid and Amazon.com Inc. had made separate overtures to buy the BlackBerry maker.

The Standard & Poor’s 500 Index decreased 0.4 per cent to 1,236.70 at 10:27 a.m. New York time. The benchmark gauge yesterday rallied 3 per cent. The Dow Jones Industrial Average lost 28.53 points, or 0.2 per cent, to 12,075.05 today.

“Is reality starting to catch up?” Kevin Shacknofsky, who helps manage about $5 billion for Alpine Mutual Funds in New York, said in a telephone interview. “The key thing about the weakness in Oracle is that people were delaying making decisions investing in technology. The question is -- are negative headlines on the European situation starting to affect decision making and will that jeopardize the recovery? There’s a

lot of work to do to solve the European debt crisis. With sentiment as weak as it is, it’s a big problem.”

Benchmark gauges rose yesterday as better-than-estimated housing starts added to expectations the world’s largest economy will weather Europe’s debt crisis. Yesterday’s gain trimmed this year’s decline in the S&P 500 to 1.3 per cent. The measure was still down 9 per cent from this year’s high in April amid concern that Europe’s crisis may slow down the global economy.

MOST EVER Stocks fell as the ECB awarded 489 billion euros ($645 billion) in 1,134-day loans, the most ever in a single operation and more than economists’ median estimate of 293 billion euros in a Bloomberg News survey. “What the ECB is doing is just trying to prevent a disorderly deleveraging of European bank assets,” Barry Knapp, the New Yorkbased head of US equity strategy at Barclays Plc, said in a telephone interview. “By no means it solves the financing problem for Italy or Spain or for the banks.”

The head of the world’s biggest bond fund said he sees a more than one in three chance that the euro zone will break apart and trigger a financial crisis akin to the one that devastated the global economy in 2008. “It would be the equivalent of a sudden stop” in which financial

markets seized up, Mohamed ElErian, chief executive officer of Pacific Investment Management Co. in Newport Beach, California, said. “It would be really, really messy.”

EXISTING HOMES In the US, the number of existing homes sold was revised lower by an average 14 per cent since 2007, the National Association of Realtors reported today, magnifying the depth of the slump that contributed to the last recession.

Oracle tumbled 13 per cent to $25.31. Business-software companies are taking longer to close deals as companies gird for slow economic growth in the US and the possibility of a recession in Europe next year, said Rick Sherlund, an analyst at Nomura Holdings Inc. Walgreen slumped 5.3 per cent to $31.73. A dispute between the company and Express Scripts Inc., an employee-benefits manager, led to a loss of customers, hurting pharmacy demand.CVS Caremark Corp. and Rite Aid Corp. are trying to grab customers amid whether Walgreen and Express Scripts will resolve their contract, which expires Dec. 31.

RIM SURGES RIM surged 6.7 per cent to $13.36. It “turned down takeover overtures” from Amazon because it wanted to fix its shortcomings

CHINA HACkERS BREACHED US CHAmBER OF COmmERCE: REpORT

independently, Reuters reported yesterday. That was followed by a Wall Street Journal article that said Microsoft and Nokia “flirted with the idea of making a joint bid” in recent months.

Both cited unidentified people familiar with the matter.

Anyone expecting the so-called January effect to turn shares of smaller US companies into market leaders may end up waiting in vain, according to Steven G DeSanctis, a strategist at Bank of America Merrill lynch. “We do not think we will see a January effect occur in the remainder of this month or next month,” DeSanctis wrote yesterday in a report.

Smaller companies have only kept pace with larger ones since the end of October. In past years, they rallied during the period in anticipation of further gains in January.

Price swings linked to concern that the US and European economies are faltering explain why the effect is unlikely to surface, according to DeSanctis, a small-cap stock specialist based in New York.

In January, small caps beat large caps 73 per cent of the time since 1926, according to his analysis of figures from the University of Chicago’s Center for Research in Security Prices. The per centage is the highest for any month of the year. Small caps also had their best monthly performance in January, with an average gain of 4 per cent, DeSanctis wrote. BLOOMBERG

WAsHIngtOn: Hackers in China broke through the computer defenses of the U.S. Chamber of Commerce last year and were able to access information about its operations and its 3 million members, the Wall Street Journal reported on Wednesday. In Beijing, China dismissed the report. The Journal, citing unidentified people familiar with the matter, reported the operation against the top American business lobbying group involved at least 300 internet addresses and was discovered and shut down in May 2010. The newspaper reported it was not known how much information was seen by the hackers, or who may have had access to the network for more than a year before being discovered. The group behind the breach is suspected by the United States of having ties to the Chinese government, one of the sources told the newspaper. The FBI informed the Chamber of Commerce that servers in China were pilfering its information, the source said. Chinese Foreign Ministry spokesman liu Weimin dismissed the report. "There's nothing to be said about the baseless whipping up of socalled hacking and it won't come to anything," he told a daily news briefing in Beijing.

"Chinese law bans hacking." The Chamber of Commerce employs 450 people and represents business interests in Congress, including most of the largest U.S. corporations. The newspaper reported that the emails revealed the names of companies and key people in contact with the Chamber, as well as tradepolicy documents, meeting notes, trip reports and schedules. "What was unusual about it was that this was clearly somebody very sophisticated, who knew exactly who we are and who targeted specific people and used sophisticated tools to try to gather intelligence," the group's chief operating officer, David Chavern, told the Journal. China is often cited as a suspect in various hacking attacks on U.S. targets. In August, the Pentagon warned in a report to Congress that hacking from China could one day be used for overt military means. REUTERS

05

CORPORATE CORNER Usman ishaq to lead marketing department at ZonG LAHORE: ZONG has moved Usman Ishaq from its sales and distribution division to the marketing department, as it prepares to mark a brand new era of cutting edge technology and pioneering services. He was already a member of ZONG family and was diligently fulfilling his responsibilities as director of sales and distribution, has now been appointed as Director Marketing at ZONG - China Mobile Pakistan. During his tenure as director sales and distribution, Usman and his team took the telecom company to new heights of success by enhancing sales, and managed to grab the largest share in subscribers’ number among all telecom operators during the last one year. PRESS RELEASE

samsung upgrades wave smartphones to bada 2.0 LAHORE: Samsung Electronics Co ltd has now upgraded its various Wave smartphone models to feature bada 2.0. The operating systems of Samsung Wave, Wave II, Wave 575, Wave 578, Wave 723, have all been upgraded to bada 2.0. Samsung Pakistan’s Managing Director, Mr Hee Chang Yee said, “The additional facilities have been added to our portfolio, in response to the popularity and success of Samsung Wave smartphones and the innovative bada platform. This upgrade will help the users unleash their creative strengths and technology insight.” PRESS RELEASE

UsaiD awards scholarships to 83 students from balochistan QUEttA: US Agency for International Development (USAID) has awarded Rs20,000 scholarships to 83 talented students enrolled in the recently approved Associate Degree in Education (AED) and Bachelor of Education (B.Ed) (Hons.) programmes in Balochistan. USAID will sponsor 1,500 scholarships for students of the two new education programmes throughout the country. “This scholarship programme is yet another expression of the US government’s long- term commitment to help build a stronger, more prosperous Pakistan,” said Mr Muhammad Tariq Khan, Education Advisor USAID, addressing the students and guests at the award ceremony. PRESS RELEASE

naDra providing dignified work environment for working women IsLAmAbAd: National Database and Registration Authority (NADRA) has adopted a fair and equal employment policy to empower the womenfolk and over 1,750 female employees played a pivotal role in registering the womenfolk of the country. Anti-Harassment Policy at Workplace, 2010-NADRA has helped authority to encourage females work with NADRA, Deputy Chairman NADRA Tariq Malik said on the occasion of the National Day for the Rights of Working Women. PRESS RELEASE

ifc launches alternative Dispute resolution Project LAHORE: IFC, private sector arm of the World Bank Group, has launched an Alternative Dispute Resolution (ADR) Project in lahore. IFC had previously supported the setting up of Karachi Centre for Dispute Resolution (KCDR), which is Pakistan’s first mediation centre, in 2006/07. ADR Project in lahore will introduce commercial mediation to litigants and disputants will serve as a pilot for Punjab province. PRESS RELEASE

KARAChI: PML-n Chief Mian Muhammad nawaz Sharif with Mr Rolf Bauer, Director Operations hashoo Group of hotels and Mr Rehan Pirzada, Executive Assistant Manager, Pearl-Continental Karachi upon his recent visit to Karachi. PRESS RELEASE

PDF Profit_Layout 1 12/22/2011 1:25 AM Page 6

Thursday, 22 December, 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 11338.04 2803.8 2627.18

kSE-100 LSE-25 ISE-10

Change -69.49 -24.75 -3.33

Volume 39,117,221 896,571 7,500

market Value 2,093,278,680 26,461,220 444,684

top 5 perForMers sector wise

Major Gainers Company Nestle pakistanXD Siemens pak Wyeth pak Limited Atlas Honda Ltd. AL-Ghazi TractSpOT

Open 2445.75 780.00 717.59 121.50 189.77

High 2568.03 819.00 753.46 126.00 196.68

Low 2505.00 745.01 700.00 125.51 191.26

Close 2568.03 811.37 747.92 125.98 192.47

Change 122.28 31.37 30.33 4.48 2.70

Turnover 218 38 389 300 3,220

152.00 423.94 378.21 166.15 159.41

153.00 427.49 379.50 164.10 159.65

145.10 418.00 373.01 160.00 156.01

146.77 419.23 373.78 161.78 156.60

-5.23 -4.71 -4.43 -4.37 -2.81

19,380 17,758 5,431 2,981 505,640

Volume Leaders Fatima Fert.Co. Engro Corp Hub power Co. Fauji FertilizerXD Fauji Fert BinXD

22.49 96.56 35.52 154.86 48.03

23.21 96.90 35.50 155.90 48.40

22.35 91.81 34.01 150.01 46.52

22.82 94.21 34.50 152.43 47.11

0.33 -2.35 -1.02 -2.43 -0.92

8,869,458 4,663,605 3,884,023 2,600,268 2,414,346

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

per Tola (pkR) 54,740.00 51,608.00 1,002.00 1025.00

per 10 Gm (pkR) 46,981.00 44,245.00 860.00 880.00

per Ounce US$ 1,625.00 – 35.05 –

hiGh

Low cUrrenT

427.49 111.89 21.96 6.60 86.50

418.00 109.30 21.96 6.49 84.40

chanGe

voLUme

Oil and Gas Attock petroleum Attock Refinery Burshane LpG Byco petroleum mari Gas Co.

423.94 111.52 20.92 6.54 86.02

Arif Habib Co SD Clariant pakistan Dawood Hercules Descon Chemical Descon Oxychem

27.81 152.00 31.18 1.45 3.89

-4.71 -1.74 1.04 0.02 -1.50

17,758 676,554 1,025 150,330 26,943

19.01 1.19 8.84 28.56 9.99

28.27 153.00 32.73 1.60 4.12

27.56 145.10 31.19 1.40 3.68

27.73 146.77 32.73 1.45 3.99

-0.08 -5.23 1.55 0.00 0.10

826,402 19,380 95,093 302 218,737

2.25 51.97 6.97 19.00 1.41

18.69 1.20 8.90 29.90 9.99

18.69 1.10 8.40 28.00 9.85

18.69 1.20 8.84 29.79 9.87

-0.32 0.01 0.00 1.23 -0.12

1,765 13,148 2 46,509 26,518

27.83 4.04 40.00 19.35 79.00

Ados pakistan AL-Ghazi TractSpOT Hinopak motor k.S.B.pumps millat Tractors Ltd.

90.0094 141.6748 1.1569 118.3174

4.56 189.77 70.05 25.25 378.21

2.29 52.69 7.15 19.24 1.89

2.25 51.50 6.72 18.40 1.41

2.25 52.01 6.80 18.78 1.41

0.00 0.04 -0.17 -0.22 0.00

25,600 42,526 1,017 1,405,226 2

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

$97.22

Sell 90.80 118.98 142.34 1.1570 89.41 11.64 24.61 24.08 93.18

Brent Crude Oil

$106.73

Atlas Battery Ltd. Atlas Engineering Atlas Honda Ltd. Dewan motors Exide (pAk)

166.15 58.00 121.50 1.91 159.96

27.83 3.89 41.49 19.35 80.90

27.00 3.82 40.00 18.35 79.00

27.00 3.86 40.05 19.35 79.00

-0.83 -0.18 0.05 0.00 0.00

8,000 13,500 835 35 257

voLUme

Abdullah Shah Adam Sugar AL-Noor Suger mills Bawany Sugar Colony Sugar mills

5.60 16.70 55.20 11.10 1.75

5.00 16.95 57.95 11.10 1.70

5.00 196.00 70.05 23.99 379.50

4.56 189.77 67.00 23.99 373.01

164.10 58.00 126.00 2.25 159.90

160.00 58.00 125.51 1.89 158.00

110.49 111.43 150.02 150.00

Diamond Ind. Hala Enterprise pak Elektron Ltd. Singer pakistan Tariq Glass Ind.

8.20 6.01 4.06 14.07 8.30

9.18 6.90 4.38 15.06 8.50

(Colony) Thal AL-Qadir Textile Amtex Limited Artistic Denim mills Azam Textile

1.40 12.50 1.18 21.50 1.11

1.10 13.00 1.25 21.50 1.60

AHCL-DEC ANL-DEC ATRL-DEC DGkC-DEC ENGRO-DEC

27.96 3.40 111.88 19.09 97.03

28.25 3.46 112.00 19.25 96.40

4.56 192.47 70.05 23.99 373.78

161.78 58.00 125.98 1.89 158.03

109.00 111.18 145.05 145.58

Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithkline pak.

Highnoon (Lab) IBL HealthCare

99.00 74.62 65.27 29.23 13.61

100.00 75.00 65.99 30.00 13.50

0.00 2.70 0.00 -1.26 -4.43

103 3,220 67 24,995 5,431

-4.37 0.00 4.48 -0.02 -1.93

2,981 5,017 300 1,008 1,130

0.69 -4.44

1,170 203

p.T.C.L.A pak Datacom Ltd Telecard Limited Wateen Telecom Ltd WorldCall Telecom

10.28 34.38 0.75 1.84 0.81

5.00 16.77 55.99 11.10 1.70

-0.60 0.07 0.79 0.00 -0.05

500 2,642 2,014 50 9,042

9.18 6.90 3.94 13.07 8.31

9.18 6.90 3.94 15.06 8.39

0.98 0.89 -0.12 0.99 0.09

1 50 389,302 501 11,224

1.00 13.00 1.17 21.50 1.11

1.00 13.00 1.20 21.50 1.11

-0.40 0.50 0.02 0.00 0.00

2,000 500 11,407 40 1

27.75 3.26 109.61 18.50 92.21

27.83 3.32 110.19 18.81 94.54

-0.13 -0.08 -1.69 -0.28 -2.49

97,000 140,500 298,000 208,000 1,558,000

99.54 74.62 65.20 29.74 13.44

0.54 0.00 -0.07 0.51 -0.17

426 10 4,216 3,276 1,962

98.50 74.62 64.10 28.51 13.15

10.32 34.50 0.83 1.88 0.94

10.13 34.45 0.75 1.75 0.83

10.17 34.50 0.79 1.75 0.90

-0.11 0.12 0.04 -0.09 0.09

325,684 900 7,497 27,179 1,537,164

0.35 35.52 0.63 1.51 1.60

0.35 35.50 0.65 1.55 1.70

0.34 34.01 0.60 1.50 1.65

0.34 34.50 0.65 1.51 1.65

-0.01 -1.02 0.02 0.00 0.05

10,002 3,884,023 55,204 299,633 501

56.83 10.29 4.81 11.51 28.30

57.99 10.29 4.89 11.55 28.52

56.00 10.00 4.72 11.00 28.18

56.46 10.01 4.78 11.35 28.27

-0.37 -0.28 -0.03 -0.16 -0.03

8,086 156,080 419,199 1,772,293 87,101

Electricity Genertech Hub power Co. Japan power k.E.S.C. kohinoor 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 5.00 16.31 52.44 10.30 1.60

Fixed Line Telecommunication

Beverages murree Brewery Co. Shezan Int’l

chanGe

Pharma and Bio Tech

Automobile and Parts Buy 89.80 117.51 140.71 1.1470 87.05 11.39 24.40 23.91 90.50

Low cUrrenT

Future Contracts

General Industrials Cherat packaging ECOpACk Ltd Ghani Glass Ltd merit pack packages Limited

hiGh

Personal Goods

Construction and Materials Al-Abbas Cement Attock Cement Cherat Cement D.G.k.Cement Dadabhoy Cement

oPen

Household Goods

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

symboL

Food Producers 419.23 109.78 21.96 6.56 84.52

Industrial Engineering

Interbank Rates US Dollar Uk pound Japanese Yen Euro

oPen

Chemicals

Major Losers Clariant pakistan Attock petroleum millat Tractors Ltd. Atlas Battery Ltd. Oil & GasXD

symboL

Adamjee Ins Atlas Insurance Century Insurance EFU General Ins IGI Insurance Ltd.

42.06 36.00 6.78 35.06 41.94

43.38 36.90 7.23 35.05 43.25

41.38 36.00 6.45 35.00 42.00

42.63 36.00 7.23 35.00 42.65

0.57 0.00 0.45 -0.06 0.71

37,504 65,132 1,500 7,753 600

13.50 1.40 65.53

14.50 1.40 65.53

0.00 0.00 0.00

2 1 157

0.29 13.82 0.65 0.85 2.55

-0.06 -0.61 0.00 0.19 0.00

5,018 32,976 10 1,700 458

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 Ltd. Dawood Cap.man XB Dawood Equities F. Nat.Equities

0.35 14.43 0.65 0.66 2.55

0.38 14.89 1.14 0.99 2.55

0.28 13.70 0.65 0.60 2.55

Equity Investment Instruments AL-Noor modar Allied Rental mod B.R.R.Guardian Cres. Stand.mod Elite Cap.mod

3.50 22.45 2.01 0.48 2.55

4.50 22.45 2.10 0.55 3.00

4.20 21.70 2.01 0.50 2.55

4.50 22.45 2.01 0.54 2.55

1.00 0.00 0.00 0.06 0.00

131,240 25 100 33,349 26

31.13 35.20 31.76 13.15 64.09 1.13 63.60 5.25 7.00 3.37 14.75 8.20 133.00 28.58 16.00 8.58 1.80 4.42 16.20 18.25 14.18 66.08 1.25 8.95

31.15 35.20 32.00 13.30 64.09 1.15 63.73 5.25 7.00 3.55 15.76 8.20 140.00 28.58 16.00 8.58 1.80 5.42 16.44 18.50 14.75 67.27 1.29 9.03

0.02 -0.40 -1.30 0.30 0.00 0.00 0.18 -1.00 0.99 0.05 1.00 0.00 0.00 -1.50 0.25 0.00 0.00 0.00 -0.01 -0.39 0.00 1.30 -0.06 -0.07

2,400 12,500 2,201 602 222 452,475 1,990 3,000 500 97,653 525 303 9 4,621 500 473 7,001 10 201,637 27,949 200 800 7,487 72,614

Miscellaneous pak paper prod.

Security paper pakistan Cables p.N.S.C. pak.Int.Con. SD TRG pakistan Ltd. murree Brewery Shakarganj Food Hala Enterprise pak Elektron Ltd. Singer pakistan Tariq Glass Ind. philip morris pak.

Shifa Int.Hospitals Hum Network Ltd. media Times Ltd p.I.A.C.(A) p.I.A.C.(B) Sui North Gas Sui South Gas American Life EFU Life Assur pace (pak) Ltd. Netsol Technologies

31.13 35.60 33.30 13.00 64.09 1.15 63.55 6.25 6.01 3.50 14.76 8.20 140.00 30.08 15.75 8.58 1.80 5.42 16.45 18.89 14.75 65.97 1.35 9.10

31.25 35.85 32.10 13.88 67.29 1.25 64.10 5.26 7.00 3.60 15.76 8.90 140.00 30.95 16.00 9.50 1.88 5.42 17.45 19.30 14.75 69.25 1.39 9.21

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

PDF Profit_Layout 1 12/22/2011 1:25 AM Page 7

Thursday, 22 December, 2011

07

At Ufone, it’s all about our valued customers and our team strives to provide the best products and services in the country

news

President and ceo Ufone, mr abdul aziz

mohmand marble city to be completed by september 2014 PeSHAWAR

T

Urea price increase and impact on industry KARACHI

A

STAFF REPORT

S per management sources, Engro has announced Rs100 per bag price hike of urea. The new price of urea is Rs1,580 per bag. Fauji Fertiliser Company and Fatima Fertiliser would be the prime beneficiaries of this latest increment.

On the other hand, FFC’s Goth Machi Plant II encountered a technical glitch which caused the plant to shut down. The estimated maintenance time stands at eight day and it has an annual capacity of 635k tonnes. Furthermore, due to winter gas curtailment, FFBl’s urea plant will be shutting down until further notice. With management anticipating a complete shutdown during January and February 2012, it is unlikely that the plant will resume operations anytime before the year end.

ImpAct On kEy sEctORs: According to news reports, the government has is-

sued a gazette notification to increase gas prices for all sectors including fertiliser, industrial, commercial and domestic consumers, with effect from January 1, 2012.

The gas prices are likely to be increased by Rs197/mmbtu for fertiliser sector (in the form of Gas Infrastructure Development Cess (GIDC)) and Rs13/mmbtu for industrial consumers. It is believed that the increase in the gas prices will put downward pressure on the margins of fertilisers, cements and textiles; if not passed through.

FERtILIsER: On account of GIDC, the government has decided to increase fertiliser feedstock gas prices by 193 per cent to Rs299/mmbtu from Rs102/mmbtu. It is likely to impact old urea plants only, while Engro’s Enven and F will remain immune to the changes due to their Gas Supply Agreement with the government.

Therefore, the incremental cost impact on Engro due to GIDC will be 50 per cent compared to FFC. To recall, FFC and FFBl have been gainers of previous urea

price hikes by Engro. However, in this situation we believe Engro will only raise urea prices to cover its incremental cost impact which will see FFC and FFBl taking a brunt on their respective earnings due to a pass through of only 50 per cent of the incremental cost. cEmEnt: Cost of gas constitutes approximately around 20 per cent of the total energy costs in the sector. Assuming a 14 per cent rise in gas prices with the incremental rise in costs per bag to be roughly around Rs5. However, in view of the pricing power, the cement industry has enjoyed recently. It is believed that the industry is likely to pass on the cost increase immediately. Thus, cement prices may increase to Rs425-430 per bag from current levels of Rs415-420 per bag. tExtILE: Already being faced with gas supply issues and lower cotton prices (Rs4,900 per maund, down 62 per cent from its peak), the textile sector is now set to feel the brunt of increased gas prices

from January 1, 2012. The increase in gas prices is likely to bode negative for textile sector, in general, affecting the margins of the manufacturers. Usually, the manufacturers are able to pass through the incremental cost impact by increasing the end product prices, however, as believed, small textile units which enjoyed wind falls, gained last year to come under immense pressure given the current scenario.

Nonetheless, big composite units like Nishat Mills limited (NMl), which have established efficient captive cogeneration power plants to run on alternative fuels, will remain immune to such cost hikes.

Ipps: The cost of gas supplies to IPPs (running on gas) are also expected to be increased by Rs70/mmbtu. However, this is not expected to impact the earnings of IPPs because of their fuel cost pass through agreement with the government.

Although, it may result in heightened circular debt concerns if the power consumer tariff is not increased accordingly.

STAFF REPORT

HE first phase of Mohmand Marble City is scheduled to be completed by September 2014. The work contract is set to be awarded in March next year. The first phase includes development as well as allotment of 60 plots to the interested investors to set up their marble factories in this first ever well established Marble City in this part of the country. This was told at a presentation given to the Governor Khyber Pakhtunkhwa Barrister Masood Kausar at Governor’s House on Wednesday. Additional Chief Secretary FATA Fazal Karim Khattak, Chief Executive FDA Shah Rukh Arbab and Chief Executive Officer Pakistan Stone Development Company (PASDEC) Ihsanullah Khan besides officials of FDA and FATA Secretariat attended the meeting.

Spread over an area of 305 acres, Marble City will have 298 plots of different sizes besides modern processing and other facilities. Chief Executive PASDEC in his presentation informed the meeting that the process of acquisition of land, construction of 4.5 km access road, master plan, detailed design and tender documents had been completed whereas work on construction of grid station and incentive plan was in progress. He said in the first jumpstart phase, 60 plots would be developed whereas the intending investors would be provided financial facilitation and ease in doing business besides tax relief, power tariff subsidy and freight subsidy. Governor described the Mohmand Marble City a landmark project in the development of mineral resources in FATA adding that it would have far reaching effects on the socio-economic conditions of the entire area. He said project would not only create employment opportunities for the local people but it would also help in skill development. He urged the need for establishment of a training centre where the youth of the area could be imparted training and skill in the relevant technologies. He said the incentive package should be carefully prepared so as to avoid the bitter past experiences in different similar projects in other parts of the province. He stressed that the master plan must be strictly followed.

Govt to capitalise on human capital reliance on Us aid: perception vs reality!

ISLAMABAD

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STAFF REPORT

OVERNMENT is committed and striving hard to enhance the potential of the human capital in the country.

Minister for professional and technical training Riaz Hussain Pirzada Wednesday stated while addressing a one day Pre-National TVET roundtable consultative meeting of federal and provincial policy makers and senior executives. Minister said developed countries are achieving success and glory by introducing advanced training and knowledge and government is also committed to enhance potential of human resource in Pakistan.

Chairman National Vocational and Technical Training Commission (NAVTTC) Mumtaz Akhtar Khaloon said the consultative meeting has been arranged to develop consensus on the objective and agenda, as well as to define roadmap and identify themes for the national TVET roundtable meeting. Director United Nations Educational, Scientific and cultural Organisation (UNESCO) Kouzay Kay Nagata highlighted that Pakistan is a country with 60 per cent of young people under the age of 25 while less than 20 per cent of them complete secondary education. She emphasised upon the policy makers, TVET planners and senior executives to identify challenges, opportunities and themes for further attention during the forthcoming National TVET roundtable. The Pre-Roundtable meeting is a fore-runner to the main event “National TVET Roundtable” planned jointly by NAVTTC and

UNESCO for early 2012 to provide a forum to discuss selected key issues that pose challenge to the development of TVET including introduction of technical and vocational education in general school curricula. Participants were divided into two groups, i.e. general education and TVE group. Each group discussed the devised themes for the national roundtable meeting separately.

The groups accepted the already proposed themes which included TVE in general education, sustainability of funding and the coordination of TVET after 18th amendment. The groups proposed additional theme titled, “Awareness and Advocacy campaign to promote TVE”. It was finalised in the plenary session of the meeting that the proposed new theme should be added in the upcoming national roundtable meeting. The participants were of the view that introducing TVE at too early a level might expose children to child labour. They said children may only be sensitised and oriented in early classes preferably in primary to elementary classes. Participants stressed upon the need to promote TVE as a viable career option for females so that more and more females get vocational and occupational skills to earn a respectable living. The meeting was organised by National Vocational and Technical Training Commission (NAVTTC) in collaboration with United Nations Educational, Scientific and Cultural Organisation (UNESCO).

He further stated that developed countries are achieving success and glory by introducing advanced training and knowledge. He added that government is committed to enhance the potential of human resource in Pakistan.

KARACHI

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STAFF REPORT

HE year is reckoned worst in terms of USPAK relationship. The recent standoff between the two countries resulted in the US senate approving a bill entailing the freeze of $700m aid. The fundamental question that arises is how the US aid restrictions will impact Pakistan’s economy?

“We believe even if the US decides to block all aid, the damage to the economy will be relatively limited given Pakistan pursues economic reforms and increase savings,” said Furqan Ayub at JS. 2011 REvIEW: A yEAR tO FORgEt FOR tHE tWO “ALLIEs”!: This year has been extremely turbulent for US-Pak relationship. Pakistan’s response following the killing of its soldiers by NATO air strikes includes cutting of NATO supply routes, boycotting the Bonn Conference and getting the US to vacate the Shamsi Airbase.

On the other hand, US reaction includes not apologising and threatening to freeze aid or

adding further conditions to it.

From the Raymond Davis issue to the NATO strikes the relationship has ebbed and is perhaps at a new rock bottom after May 2 (killing of OBl).

Is pAkIstAn’s EcOnOmy dEpEndAnt On Us AId?: The recent approval by the US senate to freeze $700m in aid may weaken the general economic sentiment. Although the US State Department has reassured that it is merely a reporting requirement assessing the “general relationship” of the two countries that has been added to the legislation.

Whatever the case may be, the general reliance on US aid is perceived to be overstated. Since 2002, Pakistan has received $1.7- $1.8b (avg. per annum) military and economic aid.

Thus, the total contribution is nominal, standing at 0.8 per cent of GDP and 2.7 per cent of external trade. Furthermore, it is important to note that a good chunk of aid is not cash dollar transfers to the government but in the form of military assistance. On the economic aid front, the bulk of the money is channeled through USAID or

other NGO’s. This impacts the social sector more but from the perspective of the balance of payment funding has a minimal affect. Hence we believe, the dent to the economy is limited and far less than generally perceived, he added. However the country needs to continue its reform process and concentrate on increasing savings. lastly, Furqan said, we rule out that US will suspend all military and economic aid to Pakistan considering US strategic interest in the region.

WILL tHE “ALLIEs” pAtcH Up? Historically, after a reasonable interval, we have seen the two countries patch up. In fact the period of economic assistance has been longer than the economic tightening/sanctions phase. Considering the reliance (albeit to varying degrees) of both the countries on each other for various objectives, the patch up cannot be ruled out. However, politicians are less likely to accommodate their counterparts due to their rising accountability leading to a relationship on a more equal footing from Pakistan’s perspective (relatively speaking of course).