PRO 01-06-2012_Layout 1 6/1/2012 3:27 AM Page 1
Cement prices under the gun
profit.com.pk
Friday, 1 June, 2012
SBP governor vies to erase the writing on the wall Pakistan needs no emergency external aid, SBP rebuts Wall Street Journal g Pakistan does not face any risks in making IMF repayments g Dip in dollar reserves to be offset by worker remittances g Overseas Pakistanis to remit record $ 13 billion this year g GDP growth to be close to 4pc in FY12, 4.3pc in FY13 g Pakistan does not need emergency external assistance g
KARACHI
G
ISMAIL DILAWAR
overnor State Bank of Pakistan Yaseen Anwar Thursday said Pakistan would not face any risk in making repayments to the International Monetary Fund (IMF). Also, the governor said despite domestic challenges, key emerging market countries, like China and Turkey, are keen to open bank branches in the criseshit Pakistan. The governor also said “additional” Foreign Direct Investment, including that from the US company investments in the power sector, was in the pipeline and that unlike the european Union, the banking system in Pakistan had been very resilient, profitable and robust, Anwar asserted. “We face no risk in being able to make next year's IMF payments from our adequate reserves,” the SBP governor said in a rebuttal in response to the misreporting of his interview to the Wall Street Journal (WSJ) and that was published on May 29. In a letter published in the American daily (WSJ) Thursday, the SBP governor clarified that the decline in Pakistan’s projected reserves would be partially offset by an increase in the ballooning worker remittances. The receipts from overseas Pakistanis, he said, would exceed the record $13 billion mark this fiscal year. He said the entry of new foreign banks, increased small- and medium-size enterprise lending to increase employ-
ment, huge potential for the agriculture sector and the export potential for dairy products as the fourth largest milk producer in the world, and the development of capital markets to support housing finance are the positive developments in the country’s economy. He pointed out that Pakistan's current banking restructuring and successful branchless banking strategy was bringing the "unbanked" into the banking sector to increase financial inclusion. The central bank had stated that Pakistan’s Gross Domestic Product (GDP) was expected to be closer to four percent this year than the three percent as reported by WSJ, he explained. “It would
have been nice to see a more positive light on these factors which will, in my view, be a positive toward alleviating the manageable stresses going forward. I see the glass half full and am optimistic about the year ahead,” the SBP governor told the WSJ. Adding: “The article "Pakistan Bank Sees Financial Challenges" (World news, May 29) doesn't fully reflect the economic story I conveyed in my interview with the Journal.” Separately, he said despite economic challenges, Pakistan was not facing a situation which required emergency external assistance. The fiscal deficit and the lack of external financing would continue to challenge Pakistan, especially the central bank, he said. “Let me assure you that Pakistan will not stumble into a situation that requires emergency external assistance,” he added. Dispelling the impression created by some foreign and local media reports regarding pressures on the country’s foreign exchange reserves and exchange rate, the SBP Governor said it would be challenging, but manageable. He pointed out that the SBP, like most other central banks, was only undertaking calibrated interventions to diffuse volatility as appropriate. In recent weeks, the movement in the exchange rate had been somewhat sentiment driven compounded by lumping up of some scheduled payments, rather than any excessive demand and supply mismatches prevailing in the market. “The State Bank is watching the
situation closely and the recent exchange rate movements have been excessive with the market overreacting,” the governor added. He said during the first 10 months of FY12, worker remittances rose by 20.2 percent to $ 10.88 billion, which helped the Balance of Payments (BoP) despite widening of the trade deficit. Pakistan’s fiscal challenges are well known and documented, he said, adding this spillover to the rest of the economy was equally clear. He said at the start of the year (July 2011), external conditions appeared daunting due to rising oil prices and lack of external financing. Despite all odds Pakistan had fared well in the first 11 months of the current FY with not only successfully paying back IMF obligations to the tune of $ 1.2 billion and other debt obligations equaling $ 1.7 billion to date, yet the SBP’s liquid reserves were at stable levels of around $ 11.5 billion, much better and contrary to most analysts’ earlier assessment at the beginning of the fiscal year. Despite domestic challenges, key emerging market countries, like China and Turkey, have shown keen interest in opening bank branches in Pakistan, he said, adding unlike european Union (eU), Pakistan’s banking system had been very resilient, profitable and robust. As stated to the Wall Street Journal and repeated: “I see the glass half full and optimistic about the year ahead as Pakistan’s economy is projected to grow 4.3 percent in the next fiscal year (FY13)”, the SBP Governor concluded.
Head over heels in debt g
Public debt increases to Rs 12.024 trillion ISLAMABAD STAFF REPORT
The public debt of the country has increased 12.3 percent or rs 1.315 trillion to rs 12.024 trillion during the JulyMarch period of the current fiscal year, which will have implications for the economy in the shape of a greater amount of resource allocation towards debt servicing in the future, reveals the economic Survey 2011-12. The increased amount includes rs391 billion consolidated by the government into public debt against outstanding previous years subsidies related to the food and energy sectors. Public debt as a percent of GDP stood at 58.2 percent by endMarch 2012 compared to 55.5 percent of GDP during the same period last year. Historically, public debt stock accounted for almost the same burden from domestic and external sources. However, government has increasingly focused on the domestic part over the last few years owing to non-availability of sufficient external financing i.e. domestic borrowings inched up in share from 46.6 percent in fiscal year 1990 to 59.9 percent at end March, 2012. Pakistan’s public debt position declined slightly in the current fiscal year.
A host of internal and external factors contributed to the decline. Higher interest payments, large subsidies specially food and energy, growing security spending needs, narrow tax base and rising international commodity prices have resulted in large twin account (i.e. fiscal and current account) deficits. Prudent government policy will be necessary to address the issue of public debt. SERvICIng oF PublIC DEbT: Increases in the outstanding stock of total public debt have implications for the economy in the shape of a greater amount of resource allocation towards debt servicing in the future. In order to meet debt servicing obligations, an extra burden is placed on limited government resources and might have costs in the shape of foregone public investment or expenditure in other sectors of the economy. The increase in domestic debt servicing is partly the result of a tight monetary stance taken in order to arrest the monetary overhang caused by previous policies. DomESTIC DEbT: Pakistan’s domestic debt comprises permanent debt (medium and long-term), floating debt (short term) and unfunded debt (made up of the various instruments available under the national Savings Scheme) hav-
ing shares of 21.6 percent, 54.5 percent and 23.9 percent respectively in total domestic debt. Banks’ preference of riskfree sovereign credit in view of mushrooming nonperforming loans augured well for the government securities market and overwhelming participation was witnessed in the auctions of T-Bills, PIBs and Government Ijara Sukuk. Failure to issue new debt in order to mature a large amount of outstanding short term debt may trigger a liquidity or debt rollover crisis. The increase in frequency of such operations (due to their short term nature) coupled with any adverse rise in interest rates may leave the government vulnerable to the high cost of debt. ouTSTAnDIng DomESTIC DEbT: The total domestic debt was positioned at rs7.206 trillion at end-March 2012, representing an increase of rs1.190 trillion in the first nine months of the current fiscal year. This increase stems from net issuance of market debt namely Treasury bills (rs576.4 billion) and PIBs (rs307.5 billion). In relation to GDP the domestic debt stood at 34.9 percent which is higher than end-June 2011 level at 33.4 percent. The domestic debt grew by 19.8 percent in first nine months of current fiscal year. The focus on deficit financing through internal sources owing to lower external receipts has been the major cause.
Page 02
ExTERnAl DEbT & lIAbIlITIES: Pakistan’s external debt and liabilities (eDL) include all foreign currency debt contracted by the public and private sector, as well as foreign exchange liabilities of the State Bank. The eDL has been dominated by Public and Publically Guaranteed Debt having share of 76 percent owing to current account deficit which is financed through loans from multilateral and bilateral donors. Debt obligations of the private sector are fairly limited and have been a minor proportion of the eDL (6%). Borrowing from IMF contributed 13% in eDL Stock which was intended for Balance of Payment (BoP) support and is reflected in foreign currency reserves of the country. DISbuRSEmEnTS: During JulyMarch 2010-11, disbursements of $1.660 billion were for different purposes like Project Aid ($1.113 billion), Programme loans/Budgetary Support ($99 million) and relief ($448 million). Project aid accounted for 67percent of the total disbursements. ExTERnAl DEbT SERvICIng: During fiscal year 2011, external debt servicing summed to $4.799 billion that is 14.3 percent lower than the previous year. A segregation of this aggregate number shows a payment of $2.348 billion in respect of maturing eDL stock where interest payments were $963 million. $1.488 billion was rolled-over.
ECB, EU officials warn euro’s survival at risk BRUSSELS REUTERS
The european Commission's top economic official, olli rehn, warned that the single currency area could disintegrate without stronger crisis-fighting mechanisms and tough fiscal discipline. The twin warnings came as worries about Spain's banks and Greece's survival in the euro area pushed the euro to a two-year low against the dollar and hastened a rush into safehaven assets such as Austrian and French bonds, whose 10-year yields hit a euro-era low. Spaniards alarmed by the dire state of their banks moved more money abroad in March faster than at any time since records began in 1990, official figures showed. The 66.2 billion euros ($82.0 billion) net capital flight occurred before the nationalization of Spain's fourth biggest lender, Bankia, in May due to massive losses from a burst property bubble. Irish voters seemed set to approve in a referendum a european budget discipline treaty vital to continue receiving eU aid. But the outcome of a second Greek general election on June 17, seen as crucial for Athens' future in the currency zone, is too close to call. eCB President Mario Draghi urged europe's leaders to clarify their vision for the single currency quickly, warning the european Parliament that the central bank could not fill the policy vacuum. "We will avoid bank runs from solvent banks. Depositors' money will be protected if we build this european guaranteed deposit fund. This will assure that depositors will be protected," Draghi said, calling for an eU-wide banking supervision and resolution system. eU paymaster Germany, reluctant to risk more of its own taxpayers' money in support of euro zone partners, has so far rejected any such joint deposit guarantee. Chancellor Angela Merkel refrained from comment on calls for a banking union but said europe should be ready to consider all options to stem its sovereign debt crisis. "There are integration steps which will require treaty changes. We are not at that stage today but nevertheless there are no taboos," she told a news conference in the Baltic town of Stralsund. Another top eCB official, executive board member Joerg Asmussen, said in Frankfurt that the 25 or so most important banks in the euro area should be supervised by a supranational watchdog rather than just national authorities. Draghi, testifying before eU lawmakers, said the financial crisis had "heightened risk aversion in a dramatic way. "I urge all governments to keep this in mind, because it is better to err by too much in the very beginning rather than by too little," he said, citing the repeated failure of national regulators to correctly assess the needs of failed Franco-Belgian bank Dexia and Spain's Bankia. EDIFICE AT RISK: Another eCB policymaker, Bank of Italy governor Ignazio visco, went further, saying political inertia and bad economic decisions had put "the entire european edifice" at risk and only a clear path to political union could save the euro. "There are now growing doubts among international investors about governments' cohesion in guiding the reform of european governance and even their ability to ensure the survival of the single currency," visco told the Bank of Italy's annual meeting.
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Friday, 1 June, 2012
02 news Cement prices under the gun g
Low PSDP spending cuts cement prices to Rs415-420/bag KARACHI
T
Per capita income rises to $1,372 has been around US $ 108 per ton, the same price as in last financial year. The cement industry did not get any benefit from reduction in coal prices. rupee devaluation is also expected to offset reduction in FoB price. Industry sources informed that cement industry has not yet passed on the impact of recent increases in input prices of electricity, gypsum, devaluation of Pak rupee and transportation of goods from Karachi by any unit in the north zone due to severely depressed demand. energy, which constitutes more than 60 per cent cost of production, has taken a
quantum jump in a couple of years, making the production cost almost double. Government of Pakistan through its power distribution companies is charging fuel price adjustment and during the last month it charged rs. 2 per Kwh. The impact of fuel price adjustment is rs. 10 per bag which is not yet passed on by the industry. After the opening of Wahga border, mine owners are exporting gypsum in bulk quantity resulting in depleting scare resources of the country without any value addition resulting in increased cost of gypsum for local consumers by rs. 100 per ton.
If exports of gypsum increase, cost to local cement units shall also increase further, impacting cement prices. Industry sources question the prudence of allowing gypsum exports? Cement production capacity in Pakistan is 44 million tons while local demand is only 24 million tons leaving a surplus of 20 million tons. Cement industry is striving for survival and making efforts for exports of its surplus capacity. Unfortunately, cement exports are continuously declining and reason for decline in exports is mainly high incidence of transportation cost which makes export unfeasible.
Honey, I shrunk the security settlement value g
RTGS transactions down as securities settlement value shrinks to Rs16tn KARACHI ISMAIL DILAWAR
W
ITH overall payment systems infrastructure in the country moving northward, the value of real Time Gross Settlement (rTGS) transactions decreased during third quarter of the current fiscal year, FY12. The reason for the decrease cited by the central bank is a steep slump in the securities settlement value that slid from rs 18.7 trillion to rs 16.1 trillion during January-March FY12. “Although the volume of large-value payments through rTGS increased by 8.8 percent, the value of transactions recorded a decline of 8.2 percent,” said the State Bank in a latest review. However, the regulator said despite the 8.2 percent dip, the major portion of rTGS transactions continued to be in respect of settlements against securities fol-
lowed by Interbank Funds Transfers and settlement of retail cheques through multilateral clearing contributing 57.7, 31.5 and 10.8 percent, respectively. The country’s overall payment systems, the bank said, kept growing during the quarter in review. It said a total of 203 more ATMs were added bringing the total number of ATMs in the country to 5,612 whereas 269 more bank branches were up-graded to real-Time online Branches (rToB). Currently, 9,174 bank branches are offering rToB services out of total of 10,009 bank branches across country. The number of plastic cards also increased by 9.47 percent compared to the numbers recorded in the preceding quarter. By the end of quarter under review, there were 16.7 million plastic cards circulating in the country. The volume of overall e-banking transactions in the country during the quarter under review registered an increase of 5.9
percent to 70.9 million. At this level, the value of these transactions also depicted a growth of 6.47 percent compared to the preceding quarter ended December, 2011. The overall number of ATM transactions also showed an increase of 5.6 percent and the value increased by 8.6 percent. The average value per ATM transaction stands at rs 9,828. The share of ATM transactions in total e-banking transactions in terms of volume and value worked out to 59.6 percent and 6.0 percent respectively. Compared to the figures reported in previous quarter, the number of real Time online Branches (rToB) transactions also increased by 6.15 percent whereas the value of transactions increased by 6.14 percent. The volume and value of transactions through PoS terminals stood at 4.5 million and rs 21.2 billion depicting 7.0 and 8.3 percent growth, respectively, compared to the figures reported in the previous quarter.
PAKISTAn ECOnOMIC SURVEY REVEALS
GDP’s not a big fan of democracy it seems g
GDP growth in past 4 years averaged at 2.9pc against 6.6pc of Musharraf era g Pakistan’s GDP growth rate remains lowest in South Asia KARACHI STAFF REPORT
The country’s economic health in FY12 like the previous four years continued to be marred with energy crisis, structural weakness and heightened security environment. According to the economic Survey, unveiled on Thursday by Federal Finance Minister Dr Abdul Hafeez Sheikh, many challenges like floods, rising fuel and commodity prices, global recessionary trends and weak inflows restricted country's economic output. The economic Survey 2011-12 reported the GDP growth at 3.7 percent below the envisioned target of 4.2 percent. “The compares unfavorably with last 10 years average GDP growth of 4.8 percent and last 65 years GDP growth of 5.0 percent,” said the analysts at Topline research. Furthermore, they said, last 5 years
PPL wins exploration contract in Iraq KARACHI: The Pakistan Petroleum Limited (PPL) has succeeded in wining an exploration contract in Iraq. According to the energy giant, it had submitted a bid on Thursday for the exploration Block-8 in the Middle Eastern country. “PPL today has submitted a bid for exploration block-8 in iraq which stood successful,” M Mubbasshar Siddiqui, company secretary PPL, told the company’s shareholders at three stock exchanges of the country in Karachi, Lahore and Islamabad. “Block-8 lies at about 110 kilometers east of Baghdad,” the secretary said. Pioneer of the natural gas industry in the country, the PPL is a major supplier of natural gas and currently caters to around 25 percent of the country’s total natural gas requirements besides producing crude oil, Natural Gas Liquid and Liquefied Petroleum Gas. STAFF REPORT
STAFF REPORT
He cement prices remained under immense pressure in the north and receded from rs 435440 to rs 415-420 per bag during the month of May. This was due to commencement of wheat harvesting, unscheduled load-shedding, rains, shortage of labor and reduction in spending on the PSDP, said the industry sources. They said the immediate impact was evident by the fact that daily dispatches had reduced to a mere 60,000 tons from about 80,000 tons. Sharp fall in demand and resultant over supply has resulted in price decline of rs 20 to rs 25 per bag for different brands, marketing head of one of the cement manufacturing company located in north of the country said. The current decline is fueled by excessive load shedding which hampers construction activities in north Zone particularly, which is the major market for cement consumption and has been witnessing massive load shedding which has dampened industrial and construction activities, he said. Cement sector, being a process industry is always required to maintain adequate stock levels for smooth operations. Coal prices have dropped to US $ 95 per ton FoB South Africa, but during the current financial year, average cost to the industry
BRIEF CORnER
average GDP growth stood at 3.04 percent which is the lowest 5-yearly average economic growth in the history of Pakistan. The survey has also adjusted previous two years (FY10-11) growth rate to 3.1 percent and 3.0 percent from 3.8 percent and 2.4 percent. The Per Capita Income in dollar terms rose by 9 percent to $1372 in FY12 versus revised $1258 in FY11. Cumulatively, country's 4-year (FY09-12) average GDP growth in PPPled government stood at a mere 2.9 percent as against 6.6 percent recorded in preceding 5-years (FY04-08). In the corresponding period (FY0812), regional peers namely India, Sir Lanka and Bangladesh showed a growth of 7.8 percent, 6.8 percent and 6.1 percent, respectively, while developing market growth stood at 7.9 percent. The impetus of growth once again resided with service sector in FY12, depicting a growth of 4.0 percent but it
was still below the initial target of 5.0 percent. “The performance was dominated by Finance and Insurance (6.5 percent), Social and Community Services (6.8 percent) and Wholesales and retail trade (3.6 percent),” said nauman Khan. The Topline analyst said the agricultural sector grew by 3.1 percent against the target of 3.4 percent on account of 1.3 percent decline in minor crop output. Major crops depicted growth of 3.2 percent thanks to post 2010 flood recovery in Punjab that more than compensated constrained output from Sindh due to floods. Cotton, Sugar-cane and rice showed robust growth of 18.6 percent 4.9 percent and 27.7 percent, while wheat production decline by 6.7 percent. Manufacturing, remained victims of unfavorable investment climate and energy crisis, but managed to register a growth of 3.6 percent that is close to its initial target of 3.7 percent. LSM, as per the latest data, grew by 1.1 percent in 9MFY12 as against 1.0 percent last year. The national savings as percentage of GDP decline to 10.7 percent from 13.2 percent a year ago, while investment to GDP dropped further to 12.5 percent, resulting increase resource gap to 1.8 per-
cent. Both the trend are of concern, as declining investment implies restricted future growth and saving means higher reliance on external loans. The survey puts 10MFY12 fiscal deficit at 5 percent which is already above full year revised target of 4.7 percent of GDP. We believe the actual deficit could balloon to 6.5 percent (excluding electricity arrear payments). With electricity arrears it would reach 8.3 percent. Though the gov't is expected to come close to its announced tax target, but higher expenditure due to increased subsidy were the culprits. Furthermore, we estimate 90 percent of escalating deficit would be financed through domestic sources that is excreting pressure on the domestic liquidity and keeping interest rate downward sticky. “Due to record high fiscal deficit Pakistan's public debt according to survey reached rs12tn (58 percent of GDP) by March 2012 end,” Khan said. The survey estimates inflation to remain close to targeted 11 percent, in line with our estimates and down from 13.7 percent last year. The decline in inflation was due to tight monetary policy despite sharp increase in international oil and domestic food prices.
ISLAMABAD: Pakistan's per capita income rose from $ 582 in 2002-03 to $ 1,372 in 2011-12, according to Economic Survey of Pakistan released here Thursday.The major factors, which contributed in the rise of per capita income, include acceleration in real GDP growth, inflows of workers remittances and the stable exchange rate. Per capita income is widely used and recognized as one of the important indicators of economic growth and general well-being of a society. Per Capita Income in dollar terms grew at a modest rate of 9.1 percent in 2011-12 compared to 17.8 percent growth last year, it added. APP
Remittances surge by over 20pc ISLAMABAD: Workers' Remittances totaled $ 10,876.99 million in July-April 2011-12, as against $ 9,046.61 million in the comparable period of last year, showing an increase of 20.23 percent, according to Economic Survey of Pakistan released here Thursday. Remittances from Saudi Arabia recorded massive growth of 43.25 percent, followed by U.K. (27.52 percent), USA (14.57 percent), Other GCC countries (15.34 percent) and UAE (14.10 percent). Monthly data on remittances suggests that the monthly average for the period of July-April (2011-12) stood at $ 1,087.70 million compared to $ 904.66 million during the corresponding period last year. APP
Pak-Afghan annual trade volume rises to $ 2.5b ISLAMABAD: The Afghan Transit Trade Agreement (APTTA) has encouraged formal trade between Pakistan and Afghanistan and its volume has risen to around $ 2.5 billion annually. According to Economic Survey launched by Finance Minister, Dr. Abdul Hafeez Sheikh here on Thursday, efforts are underway to formalize gree trade agreements and preferential trade agreements with many countries. It will help boosting the country's exports. Efforts are also underway to normalize trade relations with India. APP
Yuan closes in on becoming a truly global currency BEIJING: The Bank of China (BOC), China's thirdlargest lender, announced Thursday that it has been approved as one of the country's first market makers in yuan-yen direct trading, which is set to start Friday. The BOC said in a statement that it will comply with its duties, quote both the buy and sell prices of the yuan against the Japanese currency on the interbank foreign exchange market and provide liquidity for the market. The BOC's announcement came after HSBC Bank (China) Co., Ltd. said Wednesday that it was approved as a market maker in yuan-yen direct trading on China's interbank market, reports Xinhua news. APP
Forex reserves slip to $ 16.006b KARACHI: Country's foreign exchange reserves have slipped by $ 305 million to around $ 16.006 billion as on May 25, 2012 on foreign payments. According State Bank of Pakistan here Thursday, the foreign exchange reserves held by the Central Bank decreased to $ 11.699 billion while reserves held by banks dropped to about $ 4.307 billion during the week. APP
Fisheries record 1.78pc growth ISLAMABAD: The fisheries sector witnessed a growh of 1.78 percent against the growth of 1.94 percent during last year, according to Economic Survey of Pakistan 2011-12. Components of fisheries such as marine fishing and inland fishing contributed an overall increase in the value addition in the fisheries sub-sector. The gross value addition of marine fish increased by 1.3 percent and that of inland fish by 1.96 percent. APP
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Friday, 1 June, 2012
03
news
It’s samba time! g
Pakistan, Brazil to sign pact to promote trade and economic activities: Brazilian envoy ISLAMABAD
Bears hold on tight to the honey jar g
APP
Pakistan and Brazil will sign a number of agreements and memorandum of understandings to promote trade and economic activities and strengthen bilateral ties during the forthcoming visit of Prime Minister Syed Yusuf raza Gilani to rio de Janeiro in second week of June. Talking to newsmen informally here at Brazilian embassy after donating US# 250,000 to Pakistan for the repatriation of Afghan refugees, the Brazilian ambassador to Pakistan Alfredo Leoni said, although Prime Minister Gilani will visit Brazil to attend the United nations Sustainable Development Conference but there will be bilateral talks between Pakistani and Brazilian leadership during this visit. He said the expected agreements and MoUs to be signed between Pakistan and Brazil during this visit will be related to technical cooperation in agriculture, health and education sectors, sugar cane production, sports cooperation, eradication of poverty, visa regime that include visa to Pakistani business community and establishing Joint Ministerial economic Commission. The Brazilian ambassador said Pakistan's export to Brazil have been doubled in the last two years from US$ 39 million to US$ 80 million and there are more prospects for further increase in trade and economic cooperation between the two countries while the trade volume between the two countries is US$ 260 millions. Welcoming the visit of Prime Minister Gilani to Brazil, the ambassador said it will promote bilateral relations and strengthen the ties. He said the visit will also provide a chance to Prime Minister Gilani to meet world leaders, as 120 heads of governments will be in Brazil on the occasion of Sustainable Development Conference of United nations being held from June 20 to 22.
Major Gainers
THE JAR LID OPEnS TODAY
KSE sheds 85 points as investors remain cautious ahead of the budget announcement KARACHI
S
STAFF REPORT
ToCKS closed lower amid thin trades at KSe as investor remained cautious ahead of federal budget announcements due tomorrow. viewed by Ahsan Mehanti, Director at Arif Habib Investments Limited. The Karachi Stock exchange (KSe) 100-share index declined 85.14 points or 0.61 percent to close at 13,786.62 points as compared to 13,871.76 points of the previous session. The KSe 30-share index shed 70.28 points to close at 11,951.07 points as compared with 12,021.35 points. The market turnover was down to 124.763 million shares after opening at 129.271 million shares. The overall market capitalization declined 0.04 percent and traded rs 3.527 trillion as against rs 3.548 trillion. Losers outnumbered gainers 106 to 185, while 74 stocks were unchanged. Mehanti added “Uncertain global stocks and commodities, concerns over fall in rupee dollar parity amid macroeconomic instability and uncertainty over Pak-US relations on nATo supply issue played catalyst role in bearish sentiments
despite support in cement and power sector on pre-budget speculations.” The KMI 30-share was plunged by 117.17 points to close at 23,976.43 points from its opening at 24,093.60 points. The KSe all-share index closed with a loss of 56.97 points to 9,714.33 points as against 9,771.30 points. D.G.K Cement was the volume leader in the share market with 12.394 million shares as it closed at rs 41.14 after opening at rs 41.49. Jahangir Siddiqi Company traded 11.123 million shares as it closed at rs 14.85 after opening rs 15.62 engro Corporation traded 9.459 million shares as it closed at rs 107.60 from its opening at rs 108.50. Lucky Cement traded 7.987 million shares and closed at rs 126.29 as against its opening at rs 126.38. engro Foods Limited traded 5.753 million shares as it closed at rs 65.19 as compared to its opening at rs 68.20. on the future market, the turnover recovered remarkably to 13.488 million against 11.403 million shares of Wednesday. The rafhan Maize XD and Mithchells Fruit, up rs 20.70 and rs 15.79, led highest price gainers while, Unilever Pakistan XD and nestle Pakistan Limited down rs 68.61 and rs 20.44 respectively, led the losers.
Open
High
Low
Close
Change
Turnover
Rafhan MaizeXD Mithchells Fruit Island Textile Attock Refinery Ltd Ismail Industr
2715.00 316.14 197.21 125.99 99.98
2850.75 331.94 206.75 131.90 104.97
2700.00 325.00 187.35 125.50 95.02
2735.70 331.93 203.31 130.98 104.70
20.70 15.79 6.10 4.99 4.72
271 3,570 309 2,961,997 3,350
Major Losers UniLever PakXD Nestle Pakistan Ltd. Shezan Inter. Attock PetroleumXD Habib Bank Limited
7239.18 3878.44 219.23 453.32 109.98
7499.00 3975.00 219.75 458.00 110.00
7151.00 3755.00 210.02 445.00 105.00
7170.57 3858.00 210.18 446.61 105.26
-68.61 -20.44 -9.05 -6.71 -4.72
47 41 134 39,369 405,226
Volume Leaders D.G.K.Cement Jah.Sidd. Co. Engro Corporation Lucky Cement Engro Foods Ltd.
41.49 15.62 108.50 126.38 68.20
42.53 15.95 110.20 132.00 69.90
40.50 14.70 105.50 125.25 64.81
41.14 14.85 107.60 126.29 65.19
-0.35 -0.77 -0.90 -0.09 -3.01
12,394,731 11,123,280 9,459,363 7,987,901 5,753,448
Interbank Rates US Dollar UK Pound Japanese Yen euro
93.9193 145.7910 1.1910 116.6948
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
Buy
Sell
93.40 114.44 142.79 1.1777 89.37 11.84 25.27 24.76 89.73
94.00 116.68 145.54 1.2003 91.60 12.13 25.73 25.20 92.92
HAnDS FULL
CORPORATE CORNER PTCL holds Retailers’ Conference 2012 in Lahore
Company
Warid Telecom participated in engaging career fairs at leading Business & Technical Institutes of the country. These sessions were held at U.e.T (University of engineering and Technology) LUMS (Lahore University of Management Sciences) , LSe (Lahore School of economics) , Bahria University and IBA Karachi. Under the same flagship Warid also attended a networking night at LUMS. Senior technical and management employees facilitated students as mentors and provided thorough career advice that will be instrumental in shaping their future and strengthening Warid’s bond and commitment towards society.
Bank of Punjab 21st annual general meeting
Oh the liabilities! g g
Govt’s contingent liabilities increase by Rs 146.6b Out of Rs 487b, total outstanding guarantees extended to PSEs, liabilities amounting to Rs256b are in local currency, guarantees equivalent to Rs231b are in foreign currency ISLAMABAD
lAHoRE: Pakistan Telecommunication Company Limited (PTCL) held a rigorous retailers’ Conference 2012 in Lahore, which was attended by a large number of PTCL’s retailers, business partners and national distributors. PTCL SevP Commercial, naveed Saeed; SevP Business Zone Central, Jamal Abdalla Saleem Hussain Al Suwaidi; and other senior PTCL officials also participated in the event held at a local hotel. Comprised of team-building sessions, the conference gave participants an exciting opportunity to share their observations, experiences and successes regarding PTCL’s product sales & services, initiatives & promotions, and distribution & revenue streams. A lucky draw for evo nitro, evodriod and bumper prize of evo TAB was held amid cheers of retailers, and gift hampers were also distributed. In addition, a signature wall and media wall was created to register participants’ feedback and comments.
Transforming futures
lAHoRE: It’s that time of the year when leading universities of Pakistan schedule recruitment fairs and networking nights for graduating students. In order to guide them about possible career opportunities in the company, the recruitment & Staffing team from
Etisalat Group to adopt ISO 26000, GRI Standards ISlAmAbAD: etisalat has announced its ambition to deploy international social responsibility and sustainability reporting standards including Global reporting Initiative (GrI) and ISo 26000 across Asia, the Middle east and Africa. The Global reporting Initiative (GrI) works towards a sustainable economy by providing organisations with reporting guidance. It has pioneered and developed a comprehensive Sustainability reporting Framework that is widely used around the world. ISo 26000 is an ISo International Standard giving guidance on Social responsibility and assisting companies in their efforts to operate in a socially responsible manner that society increasingly demands.
SME Financial Expo 2012 lAHoRE: SMe Business Support Fund (BSF) , Ministry of Finance, Government of Pakistan is arranging SMe FInAnCIAL eXPo 2012 in collaboration with State Bank of Pakistan on 31st May 2012 at Pearl Continental Hotel, Lahore. This event is planned with respect to the launch of our first SMe Development Centre at Sundar Industrial estate, which is an initiative taken by BSF to foster private sector development in Pakistan by providing high quality information support, competent policy advice and research, ensuring a wide dissemination of best practices of SMe support in business community and providing effective professional services to the Industrial estate. While taking to the media before the inauguration of the event, Syed Saquib Mohyuddin, Ceo SMe Business Support Fund said that SMe sector is the backbone of Pakistan’s economy in terms of their contribution towards GDP, employment Generation and export Development.
AMER SIAL
lAHoRE: Mr. Ghafoor Mirza Chairman BoP chaired the meeting and presented the salient features of the achievements of the Bank over the past 3 years. He appreciated the efforts of the management and Staff coupled with the patronage of the Government of Punjab, State Bank of Pakistan which also assisted in the Bank’s remarkable recovery. The President, Mr. naeemuddin Khan made a detailed presentation of the achievements and fielded questions of the attendees satisfying them, in the knowledge that the figures for the current year were showing even better improvement. The meeting ended with the appointment of M/s M Yusuf Adil Saleem & Co. a member of M/s Delloite Touche Tohmatsu Limited.
Pakistan inks 1000 MW electricity import agreement with Iran lAHoRE: The spokesman of national Transmission and Despatch Company Limited (nTDCL) has said that the Govt of Pakistan has signed the agreement of 1000 MW import of electricity with Iran today. The agreement was signed between the delegation of Pakistan, headed by Managing Director nTDCL Mr rasul Khan Mahsud and deputy Iranian Minister for energy Mr Muhammad Behzad.
PESHAWAR: Mr Bilal Mustafa MD Bank of Khyber presiding over the BoK EOGM at Bank Head Office.
The government’s contingent liabilities have increased by rs 146.6 billion which is around 0.7 percent of GDP, during the current fiscal year from rs 62.4 billion in the last fiscal year, says the economic Survey. The major jump in contingent liabilities came from the new guarantees issued by the government in March 2012. The survey says that the explicit and implicit guarantees issued to Public Sector enterprises (PSes) and unfunded losses of State owned entities, pushed the total outstanding stock of government contingent liabilities to rs 487 billion by March 2012. Contingent liabilities are a kind of guarantee by the government due to the possibility of an obligation to pay dependent on future events. These are the secured loans obtained mainly for the public sector enterprises, with the defined obligations that the company must meet, but in case of any probability the loans are guaranteed by the government. The survey has pointed out that out of rs 487 billion, the total outstanding guarantees extended to the PSes, liabilities amounting to rs256 billion are in local currency and guarantees equivalent to rs231 billion are in foreign currency. When translated into greenback the total contingent liability of the country stands at $2.544 billion. Under the Fiscal responsibility and Debt Limitation (FrDL) Act 2005, the government guarantees, including those for rupee lending, bonds, rates of return, output purchase agreements and all other claims / commitments as well as renewal of existing guarantees, should not exceed 2.0 percent of the gross domestic product (GDP) in any financial year. However, the guarantees issued against commodity operations are not included in the stipulated limit of 2 percent of GDP. “This is because the loans for commodity operations are secured against the underlying commodity and self liquidating which do not create a long term liability for the government,” the survey notes. It highlights that the quantum of these guarantees depends on the supply-demand gap of various commodities, their price stabilization objectives, volume procured, and domestic and international prices. The guarantees were issued against the commodity financing operations by TCP, PASSCo, and provincial governments which were reduced. The survey notes that by June 2011, stock guarantee position was rs397.5 billion but after ten months in April 2012 the outstanding stock remained at rs303.9 billion, due to retirement of rs93.6 billion on behalf of commodity financing operations.