profitepaper pakistantoday 02 september, 2012

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Sunday, 2 September, 2012

‘1 more bcf gas by 2013’ KARACHI

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M’s Advisor on Petroleum and Natural Resources Dr Asim Hussain said that 1 billion cubic feet (bcf) of natural gas per day from different fields will be added to the system by next winter 2013.

This he said while speaking at Karachi Chamber of Commerce and Industry (KCCI). Federal Minister for Environment Rana Mohammad Farooq was also present on the occasion.

“The good news is that gas supply will be improved in the country in next one year. These fields included Sui, Sawan and Sujawal. OGDC will enhance its production from 900 mmcg to 1.4 bcf from Sui field, making a room for 500 mmcf of gas by mid June 2013, he added. He said that increase in gas from Sawan and Latif gas fields will be ready in next 6 to 8 months.

Dr Asim said that the industry will face gas shortage this winter, but things will be better in next winter.

Similarly, he said, crude oil production will be increased from 60,000 barrel per day to 100,000 barrel per day next year. The domestic consumption is 380,000 barrel per day, he noted. “We need to set up new refineries very soon to process our own crude to reduce dependency on imported petroleum products”, he added.

Responding to a demand, the Advisor said that work was in process on low BTU value gas, tight gas and stranded gas fields in Sindh.

These gas fields will be on line before winter, he observed.

He said the government will implement 18th Amendment regarding exploration of oil and gas fields in letter and spirit. He said that title of field and lease will belong to provinces while profit will be with exploration and production companies. He pointed out that power of allocation of gas was still with the federal government. He observed that natural resources should be equitably distributed in the country.

Dr Asim said that the present government has introduced moratorium on

new connections for industrial units and new housing schemes and CNG sector.

He was of the opinion that return should be calculated on gas sale prices.

Referring to gas infrastructure development (GIDC), he said that the money received under this head was not coming to the government.

It was going to specific account for the upcoming projects like Iran- Pakistan gas pipeline, TurkmenistanAfghanistan-Pakistan-India (TAPI) gas pipeline, LNG terminal.

Responding to the demand for relief to industrial units, the Advisor said that a relief of Rs 34 has been provided to the

industry. I will try my best to provide whatever cut is possible for the industry, he noted. Environment Minister Rana Farooq said that Karachi was the hub of industrial and commercial activities and its value added industries must get relief.

Earlier, KCCI president Mian Abrar Ahmed, Zubair Motiwala and Siraj Kassem Teli urged the minister to withdraw GIDC on industry as it was increasing cost of value added sector, thus making it uncompetitive in the international market.

NBP atop agri financing KARACHI APP

National Bank of Pakistan (NBP) is leading in agriculture credit financing compared to other banks and financial institutions in the country by lending Rs 45.79 billion (106% of achievement) during the year ending June 30, 2012 among nearly 241,296 farmers against a target of Rs 43,200 million. According to NBP sources here Saturday, the total outstanding of the bank stands at Rs,41527.657 million (108% of achievement) during one year exceeded

by Rs 3,027.657 million as on 30th June 12, up against a target of Rs 38,500 million. Out of total 1,283 domestic online branches, 875 are involved in catering to the needs of farmers.

Net Foreign Assets take a plunge ISLAMAABD ONLINE

It’s going down!

Weekly inflation goes down

Follow ADB’s advice to reduce rice shocks ISLAMABAD

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The Sensitive Price Indicator (SPI) of the lowest income group up to Rs 8,000 for the week ended on August 30, registered a decrease of 0.04 percent as compared to the previous week. The SPI for the week under review in the above mentioned group was recorded at 182.28 points against 182.36 points registered in the previous week, according to provisional figures of Pakistan Bureau of Statistics (FBS). The weekly SPI has been computed with base 20072008=100, covering 17 urban centers and 53 essential items for all income groups and combined. The SPI for the combined group decreased by 0.48 percent as it went down from 188.49 points in the previous week to 187.58 points in the week under review. As compared to the corresponding week of last year, the SPI for the combined group in the week under review witnessed increase of 6.97 percent. As compared to the last week, the SPI for the income groups from Rs 8001 - Rs 12,000, Rs 12,001 - Rs 18,000, Rs 18001-Rs 35,000 and above Rs 35,000 decreased by 0.21, 0.36, 0.52 and 0.67, respectively.

During the week under review, average prices of 12 items registered decrease, while that of 15 items increase with the remaining 26 items prices unchanged.

The items which recorded decrease in their average prices included tomatoes, onions, chicken live (farm), potatoes, bananas, mash pulse (washed), red chilies (loose), sugar, gram pulse (washed), vegetable ghee (loose), liquefied petroleum gas (11 kilogrammes cylinder) and mustard oil. The items which recorded increase in their average prices included wheat flour (bag), egg hen (farm), garlic, wheat, masoor pulse (washed), washing soap, cooking oil (tin), vegetable ghee (tin), energy saver (14 wats), milk fresh, curd, rice IRRI-6, rice basmati (broken) and raw sugar. The items which remained unchanged during the week under review included bread plain, beef, mutton, milk powdered, salt powdered (loose), tea, cooked beef (plate), cooked dal (plate), tea prepared, cigarettes,long cloth, shirting, lawn, georgette, sandal gents, chappal (gents), electric charges, gas charges, kerosene oil, firewood, petrol, match box, diesel, telephone local call and bath soap.

The Asian countries can help avoid world rice price shocks by reducing export restrictions, placing less emphasis on self-sufficiency, retooling Thailand’s rice pledging program, and expanding coordinated rice policies with India and Pakistan.

According to a working paper from the Asian Development Bank (ADB) “so far, the rice market appears to be holding steady and current production estimates suggest that overall prices will remain stable, which is good news in a time of worry over the global corn, wheat, and soybean markets,” said ADB, Practice Leader for Agriculture, Food Security and Rural Development in the Regional Sustainable Development Department, Lourdes Adriano. “To enhance resiliency and ensure that rice prices do not jump beyond the reach of the region’s poor, policy makers must think and act regionally.”

The 2007-2008 rice price hike was triggered in part by export restrictions, and panic buying by importers. The work-

ing papers, produced out of the recent ASEAN Rice Trade Forum organized by the ASEAN Food Security Reserve Board, the ASEAN Secretariat, and ADB, show regional trade restrictions pushed global rice prices up 149 per cent.

Instead, the papers recommend that rice importing countries lower their self-sufficiency targets in exchange for commitments from exporting countries to stay away from unilateral export restrictions. Importing countries would feel less need to insure themselves against trade disruptions and exporting countries would gain new markets.

Assuming normal weather conditions and same macro conditions, rice output among ASEAN nations is expected to grow at 1.37 per cent annually, from 110.5 million metric tons in 2010-2011 to 128.3 million metric tons by 2021-2022.

Harvests will increase by 1.22 per cent annually, while harvest area will increase by 0.15 per cent to nearly 47 million hectares by 2022.

Asian countries can avoid world rice price shocks by reducing export restrictions

The Net Foreign Assets (NFA) of the banking system has contracted significantly by Rs 260.3billion in fiscal year 2011-12 which depicts a decrease of 33.4 per cent against corresponding period. According to the State Bank (SBP) Net Foreign Assets of the banking system contracted by Rs 260.3billion during last fiscal which shows a decrease of 33.4 per cent compared to an expansion of Rs 235.0 billion showing an increase of 43.1 per cent during the corresponding period of previous year.

Contraction in NFA is mainly due to reduction in State Bank of Pakistan foreign exchange reserves that arose from the widening of current account deficit and deteriorating capital and fiscal account surpluses.

Gold jumps to Rs 51,000 KARACHI APP

Gold jumped by Rs 429 to close at Rs 51,000 per 10 grams in the local market Saturday as its international price soared to $ 1,692 an ounce, market sources said.

According to Karachi Saraf Association official, tola (11.664 grams) price also surged by Rs 500 to Rs 59,500. Silver closed higher at Rs 900 per 10 grams.

Every bit, worth it Mandviwalla buoyant about BIT g Says signing of BIT with US would multiply investment, help sign FTA’

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ISLAMABAD APP

Signing of a much-awaited Bilateral Investment Treaty (BIT) with United States (USA) would not only help multiply investments and exports of Pakistan but also lead to ink a Free Trade Agreement (FTA) with the US. This was stated by Board of Investment (BOI), Chairman, Saleem H. Mandviwalla while addressing a press conference here at BOI head office.

Dispelling an impression created by some section of media regarding the BIT with USA, the BOI Chairman said “We will not sign any treaty with any country against the interest of Pakistan”.

He added that present government

has taken initiative for concluding a BIT with USA which would attract even more US investments for Pakistan and help also lead to sign an FTA with USA which would greatly benefit our country.

Replying to a question, he said that BOI has sign 47 agreement regarding investments with other countries adding that the investors who want to invest in any sector of the economy are first cleared by the Country’s security agencies before setting up any industry or company.

He welcomed the much awaited BIT and added that this treaty with US would be in the best national interest and benefit Pakistan more than any other country”, he added.

Saleem H Mandiviwala said that the

US is the largest investor in Pakistan and conclusion of BIT would further cement economic and investment relations. “The BIT is a commitment to reciprocally promote and protect the investment thereby; Pakistani investment in US will also get the reciprocity under international law and covenants”, he remarked.

The BOI Chairman further added that signing of BIT will lead to Free Trade Agreement (FTA) between the two countries resulting in market access with furtherance of exports to US markets and more investment from US. “This is an investment treaty if there is any concern of the other party we are ready to resolve them”, he remarked.

Salaeem H Madiviwala said that if

Pakistan wanted to sign an FTA with US its has to seal a BIT with the USA. He further informed that the President would sign Special Economic Zone Bill 2012 on September 10 after that road shows would be organized for the promotion of these SEZs. The road shows would be organized in UK, Huston and Chicago, where as the top US companies are sponsoring these shows in different countries, he added.

The Chairman said that last year overseas chamber of commerce had invested about US$ 1 billion in different sectors of national economy and added that foreign direct investment (FDI) was recorded at US$ 816 million in the wake of international recession.

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Business 02 Bulls take Bernanke’s cue Bernanke lifts Wall Street, keeps stimulus in play

Shares, euro rise after Bernanke speech

NEW YORK

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HOUGH Bernanke, speaking in Jackson Hole, Wyoming, dashed some hopes for a signal of quick action, his comments bolstered bets that the central bank was closer to providing more stimulus for an economy that is close to stalling. Stocks had been flat for much of the week ahead of Bernanke’s speech, though expectations of additional stimulus from the Fed helped the market this month. All three indexes posted gains for August. “I think the debate is how strong growth is and how aggressive the Fed is going to be,” said Giri Cherukuri, head trader at OakBrook Investments LLC, in Lisle, Illinois. “Hopefully the economy will just get better on its own, but I think the Fed is saying they’re going to be there and is trying to tell the market that they have some power to help things along.”

Energy and materials shares were among the best performers, with the S&P energy index .GSPE up 0.9 percent and the S&P materials index .GSPM up 1.1 percent. The Fed’s next policy meeting is in midSeptember, and many analysts are looking to it for a decision on a third round of quantitative easing. The Dow Jones industrial average .DJI was up 90.13 points, or 0.69 percent, at 13,090.84.

The Standard & Poor’s 500 Index .SPX was up 7.10 points, or 0.51 percent, at 1,406.58. The Nasdaq Composite Index .IXIC was up 18.25 points, or 0.60 percent, at 3,066.96. Even with the advance, each of the major indexes posted a second straight weekly decline.

The Dow was down 0.5 percent for the week, while the S&P 500 was down 0.3 percent and the Nasdaq was down 0.1 percent. For the month, the Dow rose 0.6 percent, the S&P 500 gained 2 percent and the Nasdaq climbed 4.3 percent, its best monthly performance since February. Volume was light but above the low levels of earlier in week. The four other days this week were among the five lowest for volume all year. The day’s volume traded on the New York Stock Exchange, the Nasdaq and the Amex, was about 5.3 billion shares. The year-to-date average is about 6.6 billion. Investors are looking ahead to the European Central Bank meeting on Thursday that is expected to take pressure off highly indebted countries. Comments from ECB Executive Board member Benoit Coeure rekindled expectations for central bank action. Among the day’s best performing stocks, SAIC Inc (SAI.N) was up 3.4 percent at $12.21 after the computer contractor reported a drop in secondquarter profit and said it would split its business into two independent public companies. On the data front, consumer sentiment climbed more than expected to a three-month high, while the Institute for Supply Management-Chicago’s index of Midwest business activity fell in August to 53.0 from 53.7 in July.

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HE euro and European shares rose as signs emerged of progress toward a deal to tackle the euro zone’s debt crisis. The dollar dropped to an eightweek low against the euro and two-week low versus the yen after Bernanke said high unemployment is a “grave concern,” remarks that reinforced expectations for further stimulus to revive growth. Bernanke told central bankers in Jackson Hole, Wyoming, that progress in bringing down U.S. unemployment was too slow and that the central bank would act as needed to strengthen the economic recovery. Investors focused on what he had to say about monetary policy and the stagnation in the U.S. labor market. Bernanke said the Fed had to weigh the costs and the benefits of further stimulus, but he also downplayed potential risks from unconventional policies. He argued the Fed’s asset purchases, known as quantitative easing, had been quite effective at boosting growth and fostering job creation. “I think when he talks about ‘grave concern,’ that says it all. Further accommodation is coming, it’s just a question of how it manifests itself,” said Scott Graham, head of U.S. government bond trading at BMO Capital Markets in Chicago. The Dow Jones industrial average was up 107.70 points, or 0.83 percent, at 13,108.41. The Standard & Poor’s 500 Index was up 8.80 points, or 0.63 percent, at 1,408.28. The Nasdaq Composite Index was up 20.14 points, or 0.66 percent, at 3,068.85. In Europe, the FTSEurofirst of top regional shares closed up 0.5 percent at 1,082.93 in thin trade, erasing the previous session’s losses and ending the month almost flat. MSCI’s all-country world equity index .MIWD00000PUS rose 0.6 percent to 322.32. “The basic problem for investors at this point in time is that everyone knows the Fed considers the current economic performance to be unacceptable, but is it unacceptable enough for them to act today or tomorrow before the election?” said Cary Leahy, senior managing director at Decision Economics in New York. “I don’t think this speech answers that question,” he said. Bernanke said the Fed would provide additional policy accommodation as needed, a remark seen as a somewhat weaker hint of policy easing than the minutes of the Fed’s last policy meeting had delivered. “The market was looking for him to not throw any cold water on the prospects for QE and he didn’t throw any cold water on it,” said John Canally, investment strategist at LPL Financial in Boston. “The timing is a little bit iffy, but he didn’t come out of the box saying that there has been substantial and sustainable improvement in the economy. Because he didn’t do that, I think it’s just a matter of time,” Canally said. The August payrolls report is due next Friday, days before the next meeting of the Federal Open Market Committee on September 12-13. Many analysts say there is a strong possibility the Fed will announce a third round of bondbuying at the meeting. The euro was up 0.6 percent at $1.2576, while the U.S. dollar index .DXY was down 0.6 percent at 81.218. Investors have hoped that more monetary easing would revive economic growth and support demand for oil, for example. was up $1.61 at $114.26 a barrel, while U.S. crude gained $1.85 to settle at $96.47 a barrel. U.S. Treasuries yields fell to their lowest levels in three weeks. Treasury prices rose. The benchmark 10-year U.S. Treasury note was up 16/32 in price to yield 1.5722 percent.

The India Iran love-in New Delhi’s amorous fit on the Iranian front has many – Mitt Romney included – bemused CRUDE AWAKENING KUNWAR KHULDUNE SHAHID

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ere’s a question: what exactly is India up to on the Iranian front? It seems as if New Delhi is all set to defy the odds – and geo-political logic – and continue

being the “largest purchaser” of Iranian oil. The US sanctions on Iran’s oil have been reverberating in all the proverbial corners of the world – minus 10 European nations and Japan, of course, but they are Uncle Sam’s strategic chums so they’re forgiven – but New Delhi seems to be paying no heed to the echoes for the time being, and is showcasing no intention of doing so in the near future.

The basic reason for this “heedlessness” is twofold: 1. Iran is the biggest oil supplier for India 2. Substitutes for Iranian oil are not that easy to find And hence, Indian oil companies are vying to carve out opportunities whence they could continue importing oil from by working around the financial restrictions.

“We are still the biggest buyers of oil.

We will continue doing so. Companies pick and chose,” sources in Indian government stated in the buildup to Indian Prime Minister Manmohan Singh’s visit to Iran. Now this is one statement that would have had Washington going the whole gamut between bemused and downright shocked.

Considering that India is the biggest purchaser of Iranian oil along with China, giving the U.S. sanctions the tongue-out would mean that the Western intentions of squeezing Iran into submission on its nuclear program via targeting Tehran’s fiscal nerve would be pointless if the biggest purchasers don’t follow the sanctions. Furthermore, India is also one of the non-permanent members on the United Nation Security Council (UNSC) as things stand and considering that Iran’s nuclear program and the resulting sanctions is one of the biggest concerns on the Security Council’s agenda, India’s reluctance to join the party is definitely not something that would be warmly received. Mitt Romney, Republican Party’s nominee for the November 6 presidential elections this year, is one of many that are raising their eyebrows.

The presidential candidate has reiterated U.S.’s stance on giving India a permanent seat on the UNSC and hence, demanded New Delhi to “do more” apro-

BOK elated with Rs 705 million pre tax profit and branch inauguration SAIDU SHARIF: The Bank of Khyber (BOK) earned Rs 705 Million profit before tax for the period ended 30th June. This was stated BOK Managing Director by Mr. Bilal Mustafa in his key note address at BOK Raast Islamic Banking Branches Operational Performance Review Manager’s Conference held in Saidu Sharif Swat. The Band on the same day inaugurated The Bank of Khyber (BOK) Raast Islamic Banking Branch. The inauguration was done by Khyber Pakhtunkhwa Minister for Finance Engr.

Humayun Khan yesterday at a graceful ceremony at Bank’s Square, Main Bazzar Mingora Swat. PrESS rELEASE

Facebook hits new low NEWS DESK Early investors got the green light to sell Facebook shares for the first time on August 16, sending its stock down 6.3 percent and prompting price target cuts. About 243 million shares will become available for trading from mid-October, with November 14 being the big day when more than 1.2 billion shares will enter the market. The company’s current free float is about 628 million shares. “We expect investor attention to return to fundamentals after the technical challenges presented by lockup expirations over the next six months have been absorbed by the stock,” BMO Capital Markets analysts said in a note.

They added that Wall Street sentiment on Facebook is now much worse than advertiser sentiment. The brokerage cut its price target by $10 to $15, 60 percent below the price at which the company’s stock started trading on May 18. Media reports said BofA Merrill Lynch, an underwriter to the IPO, cut its price target by $12 to $23.

The company’s shares fell to $18.23 on the on Friday amid heavy trading.

pos reduction in importing oil from Iran.

However, what India is “doing more” is that it is encouraging their companies to find ways to dodge the sanctions bullet and to focus on their business – something that any nation that puts its interests over skewed global policies would do.

And not only that, the word is that Iranian banks are also exploring the Indian banking arena – this after global banks, including names like Standard Chartered, have been on the wrong end of Uncle Sam’s ‘wrath’ owing to posting trade numbers with Iran.

India’s stratagem is perplexing both from the International Relations rulebook and from its own foreign policy. Granted India has always shared a bit of a love-in with Iran owing to its oil needs, and the desire to trace a tranquil path to

Afghanistan, but to cling onto the relationship despite the global antagonism depicts passion that Romeo would have been proud of. Shakespeare’s aficionados would agree that there is more than an inkling of his love stories that can be traced in this bilateral bond. And now with Indian Prime Minister Manmohan Singh signaling a victory of sorts for Iranian President Mahmoud Ahmadinejad by not only attending the NAM summit but also parrying away any talks of “doing more” on the Iranian oil front, the blend of the great writer’s tragedies and comedies is also pretty palpable. It’s a comedy of errors for Washington, while New Delhi claims that there is much ado about nothing.

Comments & queries: khulduneshahid@gmail.com

Sunday, 2 September, 2012