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Saturday, 1 September, 2012
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NEWS DESK
AKISTAN is planning to transfer operational control of its strategically important Gwadar deep water port from Singapore’s PSA International to a Chinese company, according to a Pakistani minister. “We have reached an agreement with PSA where they have decided to leave the port at Gwadar. They are in discussions with a possible Chinese investor,” Babar Ghauri, Pakistan’s minister of ports and shipping, told the Financial Times in an interview. MoRe: Although the transfer of management control is likely to be portrayed in both Pakistan and Singapore as a commercial decision, any step that increases Chi-
nese influence over its ally Pakistan will be watched closely by the US and by India, Pakistan’s neighbour and regional rival. Gwadar, built with the help of a loan from China, is close to the Pakistan-Iran border and the Strait of Hormuz, through which much of the Gulf’s oil exports are carried by ship to international markets. PSA began running the port five years ago under a contract valid for up to 40 years but is now preparing to leave. PSA declined to comment but Mr Ghauri and Singaporean sources confirmed that PSA’s imminent handover of control was triggered in part by Pakistan’s failure to fulfil its commitments, one being the building of a motorway link to service the port. Other differences included the government’s failure to transfer land for the port’s expan-
sion. “There is a decision for PSA to leave and we have given our consent,” said Mr Ghauri, who declined to name the potential Chinese replacement. However, Pakistani officials said strategic as well as commercial interests played a part in the change. China’s assumption of the port contract “will be a landmark development, both for Pakistan and China”, said a senior government official. “This has great value for China,” he said. “We believe the Chinese may use their presence at Gwadar to lay down a pipeline in future for transporting Middle Eastern oil to western China.” Another Pakistani official said the port contract would be “the second most vital Chinese investment in Pakistan after the Karakoram highway”, the road linking Pakistan to western China. Any Chinese
kSe drops bomb, 22 firms gone, 9 survive Decides to de-list 22 defaulting firms from stock exchange, gives a chance to nine others g
KARACHI ISMAIL DILAWAR
The front regulators at the recently-demutualised Karachi Stock Exchange (KSE) have decided to delist almost two dozen listed companies for their failure to comply with the listing regulations, it emerged Friday. Also, the KSE management has accepted the request for extension in time of some nine firms which either have shown their intention to rectify the defaults or are in process of rectification of the default. Friday saw the front regulator notifying the names of at least 22 companies facing delisting from the stock exchange for not complying with the Listing Regulation No.30 that provides for the payment of Annual Listing Fee. The firms under fire have also failed to induct the ordinary shares of the companies into Central Depositary System (CDS) of Central Depository Company (CDC). The 22 firms are: (Colony) Thal Textile Mills Limited, Adil Textile Mills Limited, Dadabhoy Sack Limited, Data Textiles Limited, Genertech Pakistan Limited, Hajra Textile Mills Limited, Kohinoor Industries Limited, Kohinoor Power Company Limited, Mukhtar Textile Mills Limited, (Colony) Sarhad Textile Mills Limited, Annoor Textile Mills Limited, Asim Textile Mills Limited, Central Forest Products Limited, Dadabhoy Construction Technology Limited, Karim Cotton Mills Limited, Khurshid Spinning Mills Limited, Mehr Dastgir Textile Mills Limited, S.S. Oil Mills Limited, Saleem Denim Industries Limited, Service Fabrics Limited, Service Industries Textiles Limited and Taj Textile Mills Limited. The above companies have neither rectified the defaults nor complied with the compulsory direction of the KSE of buy-back of shares from minority shareholders by the sponsors or majority shareholders under the Listing Regulation No.30-A within the stipulated time. These defaulting firms are therefore liable for
action under the said Regulation, said the regulator. Therefore, it said, the Exchange in the interest of investors’ protection and in accordance with Listing Regulation No.30(2)(c) intends to now delist these companies. The concerned companies or their managements have been asked on Friday to inform the Exchange in writing on or before October 1 if they had any objection to the proposed delisting. “Otherwise the Exchange in compliance with the above referred Regulation will proceed further and take action of delisting of the companies,” the notice issued said. The KSE further said trading in the shares of the said companies shall remain suspended under the Sub-section (7) of Section 9 of the Securities and Exchange Ordinance, 1969 and the Listing Regulations of the KSE. On a positive note, the KSE management extended time for the rectification of defaults to some nine listed firms which were put on defaulters’ counter for the non-payment of Annual Listing Fee and/or non-induction of their ordinary shares into the CDS of the CDC. The Dadabhoy Cement Industries Limited, Nazir Cotton Mills Limited, Saritow Spinning Mills Limited, Sind Fine Textile Mills Limited, Bela Automotives Limited, Hamid Textile Mills Limited, Morafco Industries Limited, Redco Textiles Limited and Globe Textile Mills Limited are the firms that got an extension in time up to October 1 (2012) to rectify their defaults. “The Exchange in consideration of the reasons given by the companies and in the public interest have decided to allow an extension in time,” the KSE said. It advised the companies to ensure to rectify the defaults within the stipulated time, failing which the Exchange would initiate further action including delisting of the companies from the Exchange. Despite extension the relieved firms would, however, see trading in their shares suspended under Sub-Section (7) of Section 9 of the Securities and Exchange Ordinance, 1969 and the Listing Regulations of the Exchange.
expansion of its interests in south Asian ports is likely to reinforce concerns in India about “encirclement” by China. Liang Guanglie, China’s defence minister, is visiting Sri Lanka and is expected in India early next week. Last year, Chaudhry Ahmed Mukhtar, then Pakistan’s defence minister, told the FT that it had asked China to build a naval base at Gwadar and expected the Chinese navy to maintain a regular presence there, although Mr Liang said the Chinese government had not discussed the proposal. Chinese military experts have been debating how the People’s Liberation Army Navy can transform itself into a deep water force and support missions far from home, where ships need access to foreign ports to refuel, change staff or replenish food supplies. The PLAN has used its
Urea sales in August to touch 200k ton mark g
anti-piracy missions in the Gulf of Aden to use some ports along the way on a case-bycase basis but Beijing has been careful not to commit to plans for fixed foreign bases. Beijing agreed to lend Sri Lanka more than $800m for the second phase of development at Hambantota port on the island’s south coast, Reuters reported from Colombo last week. The first phase was financed with a US$400m Chinese loan. The port is being built by China Communications Construction, a state contractor. Gwadar port, which had a total investment of $248m, received $198m in funding from China, according to the commerce ministry in Beijing. The port was built by China Harbour Engineering Company, a subsidiary of China Communications Construction. COuRTESy: FINANCIAL TIMES
200,000 tons!
KARACHI STAFF REPORT
The sale of urea during the month of August is anticipated to reach 200k tons, as the total sales till August 29 stood at around 190k tons, according to the market sources. This will be approx 49 percent lower than the July 2012 sales of 389k tons as dealers were anticipating decline in urea prices as there were rumors that government may supply imported urea at a higher discount than local branded urea. Thus for first eight months of 2012, urea sales to reach at 3.3mn tons versus 3.7mn tons compared to last year. However, local manufacturers sales during 8M2012 is anticipated to be lower by 31 percent to 2.3mn tons. The company-wise data shows that out of 200k tons urea sales in August, it is estimated that Fauji group has sold around 55 percent followed by NFML (solely involved in marketing of imported urea) which contributed 16 percent of the industry sales so far. Similarly Engro’s share is around 16 percent while others contribute the rest.
“We believe that more than 140k tons of imported urea out of 300k tons of import will still be available with the government during next
Further rate cut likely KARACHI: The inflation numbers in the country continue to remain in single digit during the month of August to 32-months low at 9.05 percent as against 9.6 percent the country braved in July (2012). On month-on-month basis, the price hike stood at 0.9 percent as against 0.22 percent of the preceding month, while the average inflation in 2MFY13 stood at 9.3 percent. “The number break-up reveal that soft numbers is due to subdued numbers from food and housing that cumulatively contribute 64 percent,” viewed the analysts at Topline Reserach. The food inflation rose by 8.1 percent in August compared to last year while housing head rose by 4.4 percent. “These soft numbers attach a lower side bias to our average FY13 inflation forecast range of 10-11 percent,” the analysts said. They maintained the view that these soft inflation numbers could allow the room for the central bank to continue the process of monetary easing. The State Bank in its latest moitary policy decision revised downward, by 1.5 percent, to 10.5 percent the discount rate from the previous 12 percent. STAFF REPORT
1month while 300k tons of fresh import is expected to come by middle of October 2012,” said Topline analyst Farhan Mahmood.
Pakistani stocks hit four-year high Pakistani stocks closed at a four-year high on Friday after investors were encouraged by a slowdown in inflation, dealers said
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KARACHI AGENCIES
The Karachi Stock Exchange (KSE) benchmark 100-share index closed 0.90 percent, or 137.87 points, higher at 15,391.58, on volume of 13.12 million shares. Pakistan’s Consumer Price Index (CPI) rose 9.1 percent in August from a year earlier, the Pakistan Bureau of Statistics said on Friday. The yearon-year rate was 9.60 percent in July. “A further slowdown in inflation numbers enticed investors to take fresh positions,” said Samar Iqbal, a trader at Topline Securities. In the currency market, the Pakistani rupee ended slightly weaker at 94.56/94.61 to the dollar, compared to Thursday’s close of 94.48/94.54. Overnight rates in the money market ended at 10.40 percent compared with 7.50 on Thursday.