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Inflation drop behind 120 points market gain
Pages: 7
profit.com.pk
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Wednesday, 04 January, 2012
Afghan importers sign separate agreements with Pakistani logistic companies to cater to Nato’s demands
KARACHI
T
ISMAIL DILAWAR
he Nato-led international security forces, fighting militancy in the landlocked Afghanistan, have signed agreements with the Afghan importers for the transportation of supplies through transit country, Pakistan, under the cover of commercial cargo, it emerged on Tuesday. Further, according to well-paced sources, the Afghan importers have signed separate agreements with Pakistani logistic firms for the supply of thousands of containers under commercial cargo that, they said, would in fact go to the multinational military alliance in Afghanistan.
NOV-26 BLOCKADE Post-Nov 26 blockade by Islamabad on the transit of Nato cargo through Pakistan had made the North Atlantic
Treaty Organisation ink these agreements with the Afghan importers under which the latter would ensure cargo supplies to the former up to 2014, said the sources. The agreements’ timeframe stands important, strategically, if viewed in the backdrop of Washington’s 2014 deadline for completing its troop withdrawal from Afghanistan. “At least five Afghan companies are in agreement with Nato,” the sources linked to PakAfghan Transit Trade confided to Profit without naming the firms.
ONCE IN A BLUE MOON They said the Nato, perhaps anticipating such a ban, had already been importing some cargo through a couple of Afghan importers for quite some time. “Those imports used to be once in a blue moon, but the things have been formalised after November 26,” the sources added. Detailing the transportation of Natocargo as commercial cargo, the sources
said after November 26 Pakistan Customs had blocked the clearance of Nato’s non-commercial cargo including essential items like food, cables, infra and other equipment used for setting up the communication network. Nato supplies, they said, used to be cleared by customs authorities on the basis of a sort of exemption letter called “Mafi Nama” whereas the commercial goods are cleared on the basis of a license called “Jawaz Nama”. Mafi Nama and Jawaz Nama are Afghan terminologies with the former meaning that the imported goods were destined for Nato or diplomatic staff in the American embassy in Afghanistan. “The Nato and Afghan importers, after clinching the supply deal, have replaced Mafi Nama with the Jawaz Nama that allows them to get the noncommercial cargo cleared as commercial one,” the sources claimed.
THREE CONTAINER TERMINALS They said Nato cargo was being
LPG producers increase price by Rs11,274 per tonne STOCK PRICE
TAX INCLUSIVE
transported through Pakistan’s three container terminals, QICT, KICT and PICT. Officials at the container terminals also doubt that Nato supplies were going to Afghanistan under the garb of commercial cargo. “We suspect this is happening as the volume of commercial cargo has increased sharply,” said an official at PICT. “But we have no proof in hand to prove this,” the official added. Asked if customs authorities in Pakistan had ever sensed the irregularity, the sources said the customs officials, tending to act as per law, take into account three things: the manifest of cargo, the consignee of cargo and the original documents. “When suspicious they (customs officers) refer the documents to the Afghan embassy in Pakistan which certify the same,” the sources said claiming that the diplomatic staff at Afghan embassy was also aware of the entire situation. To cater to Nato’s demand, the sources said, Afghan importers had
signed separate agreements with Pakistani logistic companies.
PAK-US DIPLOMATIC TUSSLE “The Pakistani logistic firms presently have huge demand from Afghanistan for the transportation of commercial cargo,” they said adding this increased demand had created congestion at Pakistani seaports already chock-a-block with hundreds of stranded containers destined for Nato. “The current congestion at ports is partly because of increased demand for commercial cargo from Afghanistan,” the sources said. The ongoing Pak-US strategodiplomatic tussle proved to be a kind of blessing in disguise for the Afghan importers who, the sources said, are pocketing handsome amounts out of supply orders from the Nato. “They are happily keeping huge security deposits amounting to five to six lac rupees with the shipping lines,” the sources claimed.
Govt to borrow over Rs777b from banks during 3QFY12 Maturity periods for MTBs to be of 3, 6 and 12 months g Coupon rate for PIBs of various maturities to range from 11.25 to 13pc g Bids to be invited separately on each auction g
LPG Rs 79,340
LPG Rs92,136
Rs 69, 623
Rs 80,862
State owned LPG Producers Pak Arab Refinery and Pakistan Petroleum Limited have increased the base stock price of LPG from Rs69,623 to Rs79,340 following the increase in Saudi Aramco Contract Price for January.
The new price inclusive of taxes is Rs92,136 per tonne, which represents an increase of Rs11,274 from the previous month. “The new Saudi Aramco coupled with the devaluation of Pakistani rupee has resulted in the highest ever price charged by local LPG Producers,” said Belal Jabbar, a spokesman for LPG Association of Pakistan.
KARACHI StAff RepoRt
Other LPG producers including Oil and Gas Development Company Limited are expected to match the price. It is pertinent to point out that government is the single largest producer of LPG in the country and accounts for nearly 65 per cent of all LPG produced. “In order to ensure that prices remain affordable, LPG companies have and will be
procuring regular imports in the month of January to keep the market well stocked. At the current pricing, the maximum retail price should not exceed Rs135 per kilo, as companies are selling local and imported product on a weighted average basis,” said Belal. We also urge the government to exercise restraint and refrain from imposing the petroleum levy on LPG which could further increase the local price by Rs13,000 per tonne, said Belal.
KARACHI
T
ISMAIL DILAWAR
he resource-constrained federal government has set a target of over Rs700 billion to be borrowed from the risk-averse commercial banks during the third quarter of current fiscal year. According to State Bank of Pakistan’s (SBP) auction calendars, the federal government would be borrowing Rs575 billion, Rs50 billion and Rs50 billion during January-March FY2012, respectively, through auctioning the government of Pakistan’s Market Treasury Bills (MTBs), Pakistan Investment Bonds (PIBs) and Ijara Sukuk. The federal government has also targeted to raise Rs69.507 billion, Rs3.447 billion and Rs29.566 billion, additionally, during the third quarter through selling the government securities. During the period in review, the central bank would be con-
ducting six auctions; two auctions in one month, on January 11, January 25, February 8, February 22, March 7 and March 21, to sell treasury bills worth Rs75 billion, Rs75 billion, Rs125 billion, Rs75 billion, Rs100 billion and Rs125 billion on the respective dates. Settlement dates for the six auctions have been set at January 12, January 26, February 9, February 23, March 8 and March 22, respectively. Maturity dates for the auctioned government papers would be the same. Whereas, the amount targeted against the auction of PIBs and Islamic bonds would be raised on February 14 and 23 and
March 15. Maturity periods for MTBs would be of 3, 6
and 12 months, while that of PIBs and Ijara Sukuk would be of 3, 5, 10 and 20 year and 3 years, respectively. The coupon rate for PIBs of various maturities would range from 11.25 to 13.00 per cent. Bids would be invited separately on each auction day by domestic markets and monetary management department of SBP. The economic observers are concerned as the cash-strapped governments, both in the center and provinces are heavily relying on banks for catering their ever-increasing budgetary needs. Only the third quarter would see the government sucking over Rs777 billion from the banking system. And if the government kept the same pace, the borrowed amount would accumulate to Rs3.11 trillion at the end of this fiscal year. According to SBP, the banks’ advances to the government, which are to be used for non-productive purpose of running of the government, amount to Rs849.701 billion during July 1 and Dec 23 of this year. The analysts warn that this trend would leave the private sector without liquidity thus risking the government’s target for economic growth for FY12.
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Wednesday, 04 January, 2012
debate
Facing the New Year with new hopes W
DURDANA NAJAM
e are into a new year with old baggage. No electricity, no gas and a shrinking investment base. As the broadcasting media flashed New Year’s greetings, the tickers running on the television screens welcomed its viewers with the news of increase in gas and petrol prices. As I sit here writing this feature, the political stage of Pakistan is beaming with electoral rallies without any election announcement and the populist mood is hooked to street protests against the government. The omen on which we have entered 2012 is too bad. There is one satisfaction that it could not go worse than what it had been. The improvement initiative must surely begin from the government, while the citizenry has to take its share of actions as well.
YOU CAN’T HAVE YOUR CAKE, EAT IT TOO A friend of mine, an economist, while discussing the economic situation of Pakistan, got annoyed when I identified problem in every single thing that has happened to this country. he wanted me to see the brighter side of the things. I asked him to show me if there was any. At the end of the discussion, however, we ended up lamenting the people of this country, as to how they have become skewed in their thinking; ever ready to take a free ride; taking this country as a borrowed place without longing, attachment and devotion. The discussion reminded me of Amjad, a peon of our office, who on losing his job had an opportunity to start his own business by getting a CNG rickshaw on instalment, without paying for the down payment. his only obligation was to earn enough to pay the monthly instalment to finally own a rickshaw. Amjad refused the offer flatly, bringing every possible social taboo and behavioural problems attached to rickshaw driving. he did not know the trait. he was at sea about the routes. What would his family say, etc? We tried to convince him, reasoning, that such teething problems are part of every business. Nothing worked and finally he settled for a job where he had to commute ten kilometres each day to earn only Rs6,000 per month. With almost half of his income going in fare, he again approached us to support him financially. We reminded him the opportunity that he had lost, which could have saved him this hardship. We declined to help asking him to learn to survive in the given circumstances.
A COLLECTIVE SIN
SPINELESS PROTESTS
TSUNAMI CAN TURN wILD
One can replicate the character of Amjad with the workers present in this country. From a LUMS graduate to a matriculate from a local college, all of them want to work in a tailor made environment, suiting their liking, with the later usually settling for a difficult life. At times, we choose a difficult life by making wrong choices. The case of consuming excess gas compared to its reservoirs is a collective sin committed by government and the people. If the government was reckless in providing CNG permits and disinterested in regulating the gas sector as per rule of law, the consumers too made the hay without considering future plans for the growth and development of the sector. The civil society showed no concern when multiple CNG stations sprang up at every nook and corner of the country. The talk shows failed to shake the government off its ignorance to realise the haphazard investment in the CNG sector by the consumers and owners alike. No movement gathered storm to force strategising this sector from any quarter. It seems everybody was capitalising on the booty, and now when the axe has fallen, all of us have become aggrieved party.
The debilitating economic crisis is a wake up call, not for the government alone, but for all of us. Though government, having the power to coerce, enjoys more leverage to seek its way out, the society too could contribute to the development by seeking reforms through forcing upon the government for policy action and policy implementation. Presently, NGOs have taken upon themselves to strike this awareness, but the result has been dismal. Unless, people with true representation come to the fore, things would remain shrouded in overloaded discussions on a round table in a five star setting. When people come out on roads to protest for gas or electricity load shedding, the scene hardly induces any sensational mood. It does bring out a feeling of pity, sympathy and grievance. however, the joy that overtakes the people when electricity and gas is temporarily restored and does leave one awed and surprised. Usually such protests are hijacked by the political parties to earn more voters in their electoral list. hardly one finds an organised group coming out of the protesting lot to pressurise the government to mend its ways on permanent basis.
Certainly, a nation that knows only to demand its right, but lags behind understanding its obligations dithers miserably. We need to get rid of the biased approach phenomenon being played both by the people and the government alike. The reason behind this approach of thinking about oneself could be traced to the element of dis-
trust that has spread across the political genres: among the politicians; between the government and the governed; between the Pakistani elite and the international financial institution and donor agencies. The tsunami one sees in Imran Khan’s rally is a manifestation of distrust that people have towards the ruling elite and the opposition. They want to give Imran Khan a chance. They want to see a new approach towards governance, where promises are kept and institutions are rehabilitated. If Imran Khan fails in restoring trust among the people towards the ruling elite, this tsunami will wash him away to oblivion and there will be a long spell of judicial takeover under the mainstay of military command.
STATE AND LEADERSHIP
A nation that knows only to demand its right, but lags behind understanding its obligations dithers miserably
There are certain things that only a state could provide, and there are certain behavioural patterns that only leaders could ensure. Law and order, security, blanket opportunity to education and health cannot be made possible without government coming into action. So is the case with justice, rule of law and discipline, one would not follow the path to anticorruption unless there is a clean person sitting at the helm, directing the country. The trickle down effect of a leadership persona is undeniable. It is here that Imran Khan is getting an edge against his rival politicians. People believe him to be honest enough to infuse this spirit through the rank and file of his party and different organs of the government, if elected to power. We are facing human rights crises that cannot be cured sitting in five star hotels or sending press releases of condemnation on acts of violence. Before we enjoy any bounty, let us make it a point to stop and think if the luxury has any future cost attached to it. We all together looted our gas reservoirs; now let’s celebrate the loss together on this New Year. The writer is a freelance journalist. She can be reached at durdananajam456@hotmail.com
The decline and fall of the Euro? G ReAT empires rarely succumb to outside attacks. But they often crumble under the weight of internal dissent. This vulnerability seems to apply to the eurozone as well. Key macroeconomic indicators do not suggest any problem for the eurozone as a whole. On the contrary, it has a balanced current account, which means that it has enough resources to solve its own publicfinance problems. In this respect, the eurozone compares favorably with other large currency areas, such as the United States or, closer to home, the United Kingdom, which run external deficits and thus depend on continuing inflows of capital. In terms of fiscal policy, too, the eurozone average is comparatively strong. It has a much lower fiscal deficit than the US (4 per cent of GDP for the eurozone, compared to almost 10 per cent for the US). Debasement of the currency is another sign of weakness that often
precedes decline and breakup. But, again, this is not the case for the eurozone, where the inflation rate remains low – and below that of the US and the UK. Moreover, there is no significant danger of an increase, as wage demands remain depressed and the european Central Bank will face little pressure to finance deficits, which are low and projected to disappear over the next few years. Refinancing government debt is not inflationary, as it creates no new purchasing power. The eCB is merely a “central counterparty” between risk-averse German savers and the Italian government. Much has been written about europe’s sluggish growth, but the record is actually not so bad. Over the last decade, per capita growth in the US and the eurozone has been almost exactly the same. Given this relative strength in the eurozone’s fundamentals, it is far too early to write off the euro. But the crisis has been going from bad to
worse, as europe’s policymakers seem boundlessly capable of making a mess out of the situation. The problem is the internal distribution of savings and financial investments: although the eurozone has enough savings to finance all of the deficits, some countries struggle, because savings no longer flow across borders. There is an excess of savings north of the Alps, but northern european savers do not want to finance southern countries like Italy, Spain, and Greece. That is why the risk premia on Italian and other southern european debt remain at 450-500 basis points, and why, at the same time, the German government can issue shortterm securities at essentially zero rates. The reluctance of Northern european savers to invest in the euro periphery is the root of the problem. The German position seems to be that financial markets will finance Italy at acceptable rates if and when its policies are credible. If Italy’s
borrowing costs remain stubbornly high, the only solution is to try harder. The Italian position could be characterized as follows: “We are trying as hard as humanly possible to eliminate our deficit, but we have a debt-rollover problem.” The German government could, of course, take care of the problem if it were willing to guarantee all Italian, Spanish, and other debt. But it is understandably reluctant to take such an enormous risk – even though it is, of course, taking a big risk by not guaranteeing southern european governments’ debt. The eCB could solve the problem by acting as buyer of last resort for all of the debt shunned by financial markets. But it, too, is understandably reluctant to assume the risk – and it is this standoff that has unnerved markets and endangered the euro’s viability. Managing a debt overhang has always been one of the toughest challenges for policymakers. In
antiquity, the conflicts between creditors and debtors often turned violent, as the alternative to debt relief was slavery. In today’s europe, the conflict between creditors and debtors takes a more civilized form, seen only in european Council resolutions and internal eCB discussions. But it remains an unresolved conflict. If the euro fails as a result, it will not be because no solution was possible, but because policymakers would not do what was necessary. The euro’s long-run survival requires the correct mix of adjustment by debtors, debt forgiveness where this is not enough, and bridge financing to convince nervous financial markets that the debtors will have the time needed for adjustment to work. The resources are there. europe needs the political will to mobilise them. A version of this article was first published in Project Syndicate
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Wednesday, 04 Januar y, 2012
EDITORIAL
Banking business in recessions
Gas management
T
heRe is more than a grain of truth in aptma’s argument that a better form of gas rationing can be adopted than the one employed by the petroleum ministry. True, domestic consumers must not be deprived of the precious commodity. But when 10,000 jobs have already been lost to industry suffering from gas closure, and many thousands more likely if urgent measures are not taking, problems of domestic consumers do dwarf in comparison. As things stand, household and CNG concerns have shut all supply to industry, despite promises to the contrary from the concerned ministry. The Chinese example is fitting. Caught between freezing consumers and debilitated production, Beijing chose to save the latter. The result is obvious. Most of those provided gas three decade ago, a good many of whom could not afford it, now have a much better (than before) infrastructure, and salaries to afford it. had they let industry collapse, the resulting wave of unemployment and discontent would have negated
most advantages reaped by households. The proposed solution is perhaps the best mix among possible alternatives. Rather than continue ridiculously subsidising the world’s largest fleet of CNG dependant vehicles, authorities can better transfer the financial cushion to same consumers shifting to oil, channeling resulting gas to industry, propping up employment and setting the more-growth, more-spending train in motion. It is only when households have employment that they can benefit from availability of essential commodities. The gas question of the day is the oldest ‘optimal utilisation of limited resources’ debate in economics. It is apparent that a more focused form of diversification is possible than presently employed. Instead of defending a position that is no longer sustainable, authorities should immediately gather all stakeholders and arrive at an agreed solution. Cost of failure to do so is immense. No government should need lessons on what can happen when popular discontent pushes people on to the streets.
Non-tax payers, the main culprits
Iranian defiance
This is with regards to the situationer, ‘Pressure on reserve position, external balance to persist in ’12’, published yesterday. The key to booming economy lies in the hands of those earning and not paying due Income Tax. In this regard, the businessmen and industrialists are the main culprits, followed by agriculturists. Also, business houses that are supposed to collect General Sales Tax do not honestly deposit the same in the treasury. There may be other reasons too, but basically, these are the people who make us dependent on foreign loans and we cannot stand up as a respectable nation in the world.
This is with regards to the article, “Distrust, diplomacy and defiance” published yesterday. I think we as a nation need to take a leaf out of the books of Iran. They don’t crumble under pressure, and continue to stand up to the US bullying. We, on the other hand, dutifully comply with whatever Uncle Sam asks us to do, and do things that are against our national interest. Mahmoud Ahmedinijad would never do anything that is against the national interest of Iran. We need a leader like him to lead us, or else things would continue to be gloomy. Let’s keep our fingers crossed.
SHAHID MALIK
TALHA ASIF DAR
LAhoRe
LAhoRe
Javed Gilani
M
ARKeT routs like the ’08 recession leave deep imprints in collective investor/observer psychology. even though the term ‘credit crunch’ is not used as often as it was in the aftermath of Lehman Brothers’ collapse, it implied that the immediate effect of this particular downturn was complete drying of credit markets. The Fed/eMU decision to flood the financial sector with unprecedented liquidity banked on easing these credits markets, so banks could begin lending, subsequently stimulating investor activity, resulting in job creation and increased consumer spending. That, as we have seen, was not to be. every time a giant stimulus package was exhausted, banks were seen rolling back into the post ’08 risk-averse shell. That these cycles of central bank largesse invariably witnessed same pre-recession banker bonuses, which some quarters reacted to very strongly, is perhaps a topic for another occasion. But largely banks were able to convince governments of the need of continuous ‘quantitative easing’, that despite zero interest rates, if the money stopped flowing, the economy would stop working. And despite little empirical proof of the assertion, governments on both sides of the Atlantic seemingly bought into the argument. In essence, the sovereign debt crisis in europe is little different. even though on the surface we read about peripheral governments’ inability to handle debt burdens, a phenomenon creeping into mainland europe with frightening speed, the actual effort revolves around preventing europe’s banks from collapsing. Some of the continent’s biggest banks have extremely high exposure to stalled debt, and the collapse of one can trigger a run on the entire banking sector, with catastrophic consequences for the financial elite that has had its way with policy makers for far too long. Whether or not the lot of the common man would change much in case of default(s) is debat-
There are important lessons for economies like Pakistan’s in the post-recession international banking saga
able. Already, europeans are subjected to harshest peacetime austerity. how a sovereign default can squeeze them further seems hard to justify. There are important lessons for economies like Pakistan’s in the post-recession international banking saga. No matter how much one disagrees with the official handling of the credit squeeze in the west, it cannot be debated that a progressive market economy cannot function without solvent banks. And while for once our weak integration with the international financial system spared us the worst of the recession’s effects, we are still caught in chronic stagflation, and the depressed economy needs similar remedy. At such times, banks comprise the monetary intermediary that oils the wheels of economic expansion by leveraging private sector investment. Unfortunately, Pakistan’s monetary policy over the last few years, coupled with static, risk averse banking, has severely wrongfooted crucial private participation. And the main culprit is reckless government borrowing. First, when interest rates were kept high to control inflation, government borrowing diluted the tight monetary stance, inflation remained high, and private sector offtake was discouraged. Then when rates were reduced, the government refused to cease borrowing, again crowding out private sector participation. The result has been too much money in the market (expect inflation to grow in short time), a weakening rupee (further aggravating inflation), and an unfortunate inability of private investment to create jobs and induce consumer activity. This way, there are no chances of the economy expanding beyond its unimpressive two per cent or so GDP growth. however, the government is not the only party to blame. Banks too have failed to exhibit responsibility expected of them, particularly after their impressive growth and diversification in the years following successful restructuring and privatisation. They are only too happy with the present situation, willingly facilitating government borrowing, since they provide the best, most risk-free advances the banks can make. This also exposes poor risk management, a banking sector feature held responsible for the epic collapse that plunged the entire international financial system in a tail spin. Pakistani banks, and authorities alike, must not repeat mistakes that have prevented a coordinated bottoming out of the international downturn. Banks must make credit available to the private market. And the government must withdraw from the money market. At a time when the political/security situation has turned international investors away for at least the foreseeable future, the need for facilitating local investment cannot be stressed enough. And as much as the government, our banks must ensure our engines of growth are provided proper platforms to posture from. T he writer is chief manager SME bank and a seasoned banker with over 30 years of experience
Market flooded with used cars
Aqam-ud-Din Khan
S
OMe quarters believe that the import of used cars is the answer to providing affordable cars for local consumers. They also seem to suffer from the misconception that this will create an environment of healthy competition and will ensure a steady supply of quality and reasonably priced cars to the local market. On the other end, the government has still not recovered from the embarrassment of allowing import of five year old cars in order to provide cheaper vehicles to con-
sumers despite the fact that most of these vehicles are priced at the rates of locally made new cars. It appears the tax-evading mafia lobby is at its dirty tricks again and has mustered the courage to further enhance the government’s embarrassment by demanding additional relaxation on commercial import of used cars of up to 10 years old which could prove suicidal for Pakistan’s already precarious economy. The used cars dealers lobby propounds the faulty theory that the import of used vehicles would be beneficial for the government as it will expand the tax net and add to the tax base. It is unfortunate that this lobby ignores the fact that such an approach to fiscal policy would fatally harm the local auto industry and cause huge dent in the national economy. These short-sighted elements are also of the view that commercial import of used cars of up to 10 years age would generate revenue for the national exchequer. They ignore the tremendous manner in which
such a move would upset auto parts vendors and car makers. In reality the local auto industry has been greatly beneficial for the local economy – a fact that cannot be overemphasiszed. The importance of the local auto industry can be gauged from the contributions that the auto sector has made to the national economy, which amounted to more Rs60 billion during 2010-11 whereas passenger cars and the LCV sector contributed Rs40 billion during 2010-11 out of a total FBR collection of Rs 1,558 billion. It needs to be understood very clearly that import of used cars will cause immense damage to the local industry and will also result in depletion of valuable foreign exchange through dumping of junk cars in the country. The signs of revenue loss are already visible as the Government of Pakistan has lost almost 715 million rupees between January and October, 2011, by allowing used car imports compared to what it could
SHAHAB JAfRY Business Editor
KUNwAR KHULDUNE SHAHID Sub-Editor
BABUR SAGHIR Creative Head
ALI RIZVI News Editor
MAHEEN SYED Sub-Editor
HAMMAD RAZA Layout Designer
Mostly luxury cars are being imported under the used cars import facility
have earned in shape of dutys and taxes from local CKD car sales. The local car market in Pakistan is flooded with imported used cars and their prices are extremely high compared to their age. The alarming increase in the import of used cars is expected to reach around 20,000 units by the end of this year. The majority of imported used cars are in the 1300 cc range and above, which clearly falls in the luxury segment. Out of the 16, 620 used cars imported so far this year, 55 per cent% were in the 1300cc and above luxury cars category, 38 per cent in the 1000 cc cars segment and a mere seven per cent in the 800cc cars segment. According to media reports, PAMA officials have stated that mostly luxury cars are being imported under the used cars import facility which is depriving the government of valuable foreign exchange.
The payments for used cars are made through illegal channels commonly known as “hawala” in the market which makes it difficult for State Bank to even track this money laundering. The government definitely has all the information in this regard and should have reprimanded the dealers who had earlier assured that the prices of used cars would be much lower so that ordinary consumers would benefit from the facility. Allowing commercial import of used vehicles is not only unfair to the unfortunate consumer but is detrimental to the local auto industry, which has invested millions of rupees over the past decade and has been a source of gainful direct and indirect employment for millions of people. The writer is a media and marketing professional
For comments, queries and contributions, write to: MUNEEB EJAZ Layout Designer
Email: profit@pakistantoday.com.pk Ph: 042-36298305-10 fax: 042-36298302 website: www.pakistantoday.com.pk
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Wednesday, 04 January, 2012
04
We have been very prudent with our financing over the past few years. In the new branches outside KPK, we are dealing with customers who have a clean history
news
Bank of Khyber MD, Bilal Mustafa
POL outshines amidst unimpressive sector yield KARACHI
I
StAff RepoRt
NDex movers sink the benchmark in 2011During CY11, Oil & Gas exploration and production (e&P) companies, a sub-segment of the oil and gas sector, underperformed relative to the KSe-100 index by 6.5 per cent, yielding a negative return of 12.1 per cent. KSe-100 contracted by 5.6 per cent during CY11 to end at 11,348. Inferior performance by e&P was led by retraction in PPL by 22.5 per cent followed by index heavy OGDC (11.2 per cent) during CY11. Pakistan Oilfields Limited (POL) yet again outshined both its peers and the KSe-100,
yielding a staggering 17.1 per cent return during CY11 albeit a lower market capitalization corresponding to the benchmark couldn’t saviour the overall sector’s performance. Underperformance of PPL during 2hCY12 subsequent to the news of divestment of 2.5 per cent stake by the government was one of the primary causes of gloomy sectoral performance. Significant weight of e&P sector, 36.4 per cent at the beginning of the period, dragged down the overall sector and index’s performance whilst constricted the e&P weights down to 35 per cent. The oil and gas sector contributed -541 points to overall index’s retrenchment of 675 points during the year. OGDC hauled the
e&P contribution by 331 points as thin float kept investor participation limited. Dismal performance stems from retrenchment in multiples on account of heightened systematic risks as price action contradicted the expected earnings growth of 25 per cent (FY12F) for the sector and Arabian Gulf oil price jump of 21.3per cent to $108 per billion during the calendar year. Despite underperformance, the sector continues to trade at FY12F PeR of 7.24x that is at a premium to the market multiple of 5.8x. OGDC with an index weight of 24 per cent bloated the overall sector multiple as it trades at a FY12F PeR of 8.2x. Overall oil and gas sector market capitalisation however, contracted by 10.1 per cent, un-
KP chamber displeased over provincial disparity PESHAWAR StAff RepoRt
P
ReSIDeNT Khyber Pakhtunkhwa Chamber of Commerce and Industry (KPCCI) Afan Aziz said the province was economically far behind other provinces and was totally ignored. he said traders in Khyber Pakhtunkhwa were given Rs31billion bank loans while Rs1200 bank loans were released to traders in Punjab, meaning a person in Punjab was getting Rs15000 loans while a person in Khyber Pakhtunkhwa was getting Rs1500 loans, which is blatant injustice towards KP traders. Aziz was addressing a meeting between KPCCI and Bank of Khyber (BoK) at the chamber. Aziz presided over the meeting, also attended by KPCCI vice president
The province of Khyber Pakhtunkhwa is economically far behind other provinces and is totally ignored Ziaul haq Sarhadi, KPCCI executive members and BoK officials. Speaking to the participant during his visit to KPCCI, MD BoK Bilal Mustafa said Rs2 billion loans allocated by provincial government to the small traders and industrialists would soon be disbursed at easy terms and conditions. Aziz said KP lagged behind other provinces, economically and socially, and bank lending to small traders would curb backwardness and poverty to some extent. however, he added the mechanism to ac-
quire bank loans should be easy and simple. he agreed to a suggestion that a committee should be formed in collaboration with BoK to remove the reservations of loans obtaining loans. Aziz said Rs2 billion loans approved by provincial government should be disbursed as quickly as possible. To a question, BoK MD said the loan scheme was introduce on fixed mark-up rate and thus loans could not be released under Islamic law. MD denied BoK was charging more than other banks.
derperforming by 4.5 per cent against KSe-100. Better return yielded by other oil and gas sector stocks especially APL curtailed the losses for the sector during CY11. Salman Vidhani at hMFS said since our earnings forecast for the sector is based on a conservative long term oil price assumption of $95/b, we have performed a sensitivity analysis for earnings and fair value estimates at various oil price levels. It is pertinent to note that Arabian Gulf light oil has averaged $110/b while PKR has depreciated by 4.6 per cent during 1hFY12. Furthermore we estimate every $10/b movement in oil price to cause earnings estimates to change by 6-7 per cent, he added.
fPCCI condemns gas shortage LAHORE StAff RepoRt
F
eDeRATION of Pakistan Chambers of Commerce and Industry (FPCCI), which is the apex body representing the business community of Pakistan, has condemned the gas crisis presently afflicting the country in very strong terms. Senior leaders of the business community have criticised government’s failure to manage the ongoing gas crisis, terming it disastrous for the country’s industry, already reeling from the effects of a precarious law and order situation and the falling competitiveness. Senator haji Ghulam Ali, Presdident-FPCCI; Mr Tariq Sayeed, VP-CACCI, Mr S.M. Muneer, President-India Pakistan CCI and Mr Iftikhar Ali Malik, VP-SAARC CCI have condemned the curtailed supply of gas to industry on one hand, and the government’s decision to raise CNG prices on the other.
Inflation drop behind 120 points market gain KARACHI StAff RepoRt
S
INGLe digit inflation number for Dec11 at 9.75 per cent helped index post decent gains of 120 points amid broad based participation in the market. Month on month inflation in Dec fell by 0.7 per cent raising hopes for another round of monetary easing in the next monetary policy. Banking stocks led the advance with NBP and MCB hitting their respective upper circuit breakers over expectations of better payout in the forthcoming full year corporate announcements. Oil stocks witnessed mixed trend with OGDC remaining out of favour closing down 0.6 per cent, while both POL and PPL jumped 2.1 per cent and 1.5 per cent respectively over local institutional buying. Moreover, PSO jumped 3.8 per cent over expected increase in motor gasoline demand due to increasing
Planning Commission likely to scrap 20 projects ISLAMABAD: The Planning Commission is likely to scrap 20 of its non performing projects which are going on for last many years without any productivity and have simply become abode of retired bureaucrats and officers on deputation for getting lucrative salary packages and other benefits. An official source said Deputy Chairman Planning Commission had ordered formation of a committee to look into the performance of the projects and recommend their fate. however, he was shocked to learn a few days back that the committee consisted of project directors, in whose presence, an independent evaluation of the projects could not be made. he ordered reconstitution of the committee including, members of the Planning Commission. AMeR SIAL
US launches prog to strengthen Pak agriculture sector LAHORE: United States has launched a new programme to strengthen Pakistan’s agriculture sector. United States Agency for International Development (USAID) and Agribusiness Support Fund (ASF) will jointly implement a five-year USAID’s Agribusiness Project to increase competitiveness and productivity of horticulture and livestock sectors. “This project is part of the broader US government commitment to help strengthen Pakistan’s economy,” said Dr Andrew Sisson, director of USAID office in Islamabad. “The project will have a positive transformative effect on Pakistan’s agriculture sector and will assist in alleviating poverty through economic development.” StAff RepoRt
OGRA to revise wellhead gas prices KARACHI: OGRA is likely to revise wellhead gas prices for 2hFY12 up to nine per cent on the back of 10 per cent hoh increase in both Arab Light Crude oil and high Sulphur Furnace Oil (hSFO) prices during Jun-Nov 2011. During this period, rupees has also depreciated by three per cent against dollar, which will further improve the gas pricing for e&Ps in rupee terms. Arab light crude and hSFO prices up 10 per cent hoh OGRA revises wellhead gas prices for e&Ps every January and July, based on the average Arab Light crude oil and hSFO prices during the first six months of the preceding seven month period. The Arab Light crude oil prices have averaged at $107 epr bbl in Jul-Nov 2011 as against $97 per bbl in the previous six months, resulting in an increase of 10 per cent hoh. Similarly, average hSFO prices are up by 10 per cent hoh to $650 per tonne. StAff RepoRt
fPCCI opposes immediate implementation of SRO 821(I)/2011 LAHORE: Senator haji Ghulam Ali, President, the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) and other business community leaders have demanded deferment of SRO 821(I)/2011 being enforced by FBR from 1st January 2012 making mandatory requirement on Registered Sales Tax sellers, manufacturers, importers and exporters belonging to all industrial sectors (except sugar) to issue invoices containing National Tax or CNIC numbers to their unregistered buyers and traders. In a press statement and letter to chairman FBR, FPCCI has expressed its point of view that the said SRO has caused a great deal of unrest and anxiety amongst the business community of Pakistan already confronted with many unnecessary challenges in the shape of shortage of gas and electric crisis. StAff RepoRt
ECC approves 375,000 tonne of sugar at Rs 46,250 per tonne gas prices. Cement stocks witnessed renewed buying interest with DGKC hitting its upper limit, while LUCK gaining 3.8 per cent over sustainable cement prices over last four months and decreasing trend in international coal prices. In what seemed like forever, the New Year spirit finally descended upon the local bourse as the KSe-100 index surged 120 points to close at 11,402 points. Volumes, which have been a constant sore subject in recent times, were also on the up as 63 mil-
lion shares were traded in today’s session. After being sidelined for months, LOTPTA made its presence known as it accounted for seven million shares and perched itself on top of the volume leaders board. Fertiliser sector remained a hub of activity as the major players closed in positive territory in tandem with strong volumes. But it was the banking sector which surprisingly led the charge as MCB established an upper circuit and along with peers hBL and NBP accounted for 55 points towards
the index gain. While the market performance today was indeed a welcome relief, the economic fundamentals at the moment do not give us much faith that this will remain a regular phenomenon, said Ali hussain at hMFS. KSe 30 index closed at 10378.23 levels with the gain of 183.03 points, while All Share index gained 80.04 points to close at 7895.18 levels. Total 155 scrips advanced 53 declined and 116 remain unchanged out of total 324 scrips traded.
ISLAMABAD: economic Coordination Committee (eCC) of the cabinet approved purchase of 375,000 tonnes of sugar at the rate of Rs46,250 per tonne from the local sugar mills, $200 million sovereign guarantee for the Iran Pakistan (IP) gas pipeline project. An official source said the committee also directed federal secretaries of finance and industries to meet the CM Punjab to resolve the price row on urea between Sindh and Punjab. Punjab had earlier procured urea from Sindh’s surplus stocks, but now was ready to return the quantity if Sindh government cleared the difference of Rs50 per bag. eCC also approved hiring of the Chinese bank ICBC led consortium as the financial advisor for the implementation of Iran Pakistan gas pipeline project, establishment of dry port at Prem Nagar Railway Station Lahore, and grant of 50 per cent relief to outstanding loans of all Sindh Balochistan rice millers and traders affected by the recent rains and floods. AMeR SIAL
PRO 04-01-2012_Layout 1 1/3/2012 10:47 PM Page 5
Wednesday, 04 January, 2012
Mobile phones have inherently become social devices and the industry is just beginning to discover what's possible
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facebook CEO, Mark Zuckerberg
THE BEIJINGPyongyang bond With scores of geo-political and economic ramifications for China, Beijing cannot afford an unstable Korean Peninsula g
KUNWAR KHULDUNE SHAHID OR a long time China has been the source of an economic lifeline for North Korea; and now with the ramifications of Kim Jong Il’s death shrouding the global geo-political scene, one feels that Beijing would continue to shore up the its ties with Pyongyang as the latter traverses this transitional phase. experts opine that its bond with Beijing provides Pyongyang the desired foreign investment and gives the former the economic and political influence that it yearns for. Over the past decade or so, China’s economic ties with North Korea have gone from strength to strength, as massive trade numbers have been posted. China is responsible for nearly 45 per cent of North
F
Korean trade, according to recent estimates. Of course the overwhelming Chinese flavour in North Korean economic cauldron ensures that Beijing is a domineering authority in Pyongyang’s political shapeup. The Chinese are of the opinion that North Korea should brace itself of a reform and opening process which would be reminiscent of the transformations in China after the death of Mao Zedong. One of the key steps in bolstering mutual ties for China is the construction of Rason Special economic Zone. This warm water port is within close proximity of the Chinese and Russian border, and a Chinese company has signed a ten-year lease to rebuild a pier over there. Such a move is designed to make full use of the potential of transport cost reduction that the port would
accompany. According to recent estimates, since the year 1999 China’s trade with North Korea has escalated from around $300 million to more than $3 billion. And, another facet worth considering is the fact that posting such towering numbers does not merely benefit North Korea, it also provides the northeastern provinces with an outlet for economic exploration. The aforementioned Chinese provinces have been in a relative lull in the recent past, as their industrial base is on a descent, unemployment is rising and the agriculture sector is also marred by uncertainties; and these factors, when coupled with other social concerns, throw a massive question mark over the stability of the region. On the political front, Chi-
nese leaders’ condolence visit to North Korean embassy, following Kim Jong Il’s death was a conspicuous statement. As sceptical binoculars gazed into the broadcast on China Central Television, the leaders bowed in unison towards the late Korean leader’s portrait, as they paid their homage, much to the displeasure of the Western powers. With the recent visit of Japanese Prime Minister Yoshihiko Noda, China has divulged its stance of vying for stability on the Korean Peninsula. The reason is simple: with so much at stake for the Chinese hierarchy in the peninsula, they can’t afford something bordering on the Arab Spring or an eastern european style colour revolution to be instigated in the region. Another important façade is that North Korea provides the perfect place as a buffer zone for China. This mindset has long been etched in Chinese ethos, and even a throwback to the Ming Dynasty depicts the perception of North Korea as a “fence”. And now with the visit of Assistant Secretary of State Kurt Campbell to Beijing, the biggest issue being discussed would obviously be North Korea – an
05
old US foe – and the resumption of the long stalled six-nation nuclear talks. China is all for the recommencement of the talks but after shoring up its
support behind Kim’s successor- his son Jong-Un – China has flaunted its unremitting backing of North Korea. The writer is Sub-Editor, Profit. He can be reached at khulduneshahid@gmail.com
CORPORATE CORNER PIA and Make a wish foundation arrange air journey for children
avail this service is as simple as sending the keyword of query to 310 SMS Channel. Similar methodology can be used by the customers to register complaints. pReSS ReLeASe
PTCL awards its Top Agent of Karachi Contact Center
LAHORE: PIA and Make a Wish FoundationPakistan arranged air journey for five seriously ill children to fulfill their desire of becoming a pilot and fly an aeroplane. Two children wearing PIA pilot’s uniform went on board PIA flight as pilots from Karachi to Lahore while other three children wanting to travel by an aeroplane accompanied them. PIA’s Pilot in Command made an onboard announcement that the flight was of special importance as it had four Pilots; two regular pilots and two children namely, Muhammad Waseem Ali and Ansa Abul Sattar, desirous to become pilots. pReSS ReLeASe
ZONG makes access to Customer Services easier for its subscribers ISLAMABAD: To welcome the New Year, ZONG – China Mobile Pakistan has launched a brand new service to provide convenience to its customers. The telecom company has once again proved its commitment of giving the best services to its subscribers by introducing SMS helpline. Now the helpline service number 310 will be accessible through text messages. This service is completely automated and easy to use. Users can effortlessly access the required information through SMS without having to wait for the customer service representative. The procedure to
KARACHI: In recognition of her outstanding efforts for provision of best customer care and outreach services by Pakistan Telecommunications Company Ltd (PTCL), Ms Soofia Khanum, was given the "Top Agent of the Karachi Contact Center Award” at the Annual Dinner Gala and Awards Ceremony of PTCL Contact Center Karachi. Ms Soofia received her award from PTCL Senior executive Vice President Business Zone South, Mr Furqan habib, who was the chief guest on the occasion. pReSS ReLeASe
disease, including pneumonia, in adults 50 years and older represents a significant personal and societal health burden in the US. pReSS ReLeASe
UMT School of Business welcomes Dr faheem ul Islam as dean
LAHORE: Dr Faheem ul Islam has joined the University of Management and Technology (UMT) as Dean, School of Business and economics. Dr Faheem holds a PhD degree from the University of Cambridge, UK and MBS from National University of Singapore. An heC approved PhD supervisor in the area of management strategy, Dr Faheem brings extensive experience as a corporate consultant, researcher and educationist. Dr Faheem ul Islam said that he was delighted to join UMT. As leader of the business school, he said, ‘I shall be pushing everyone from behind to progress to the next level.’ pReSS ReLeASe
TCS and AsiaCare sign collaboration agreement
signed by Mr Ghazanfar Azzam, CeO TCS Financial Services (Pvt) Ltd, and Dr Mahmood Mehdi Kazmi, CeO AsiaCare health and Life Insurance Co Ltd. Other senior members of the management of both companies were also present on the occasion. Speaking on the occasion, Mr Ghazanfar said, “In addition to offering all insurance products, our aim is to make TCS Financial Services a one-stop financial service provider.” Dr Mahmood said, “We plan to generate superior customer awareness of our product through this collaboration with TCS Financial Services.” pReSS ReLeASe
peShAWAR: Abdul Rehman, 52, is ready to move to his rehabilitated shelter in hajizai Refugee Village, peshawar. A total of 13,722 shelters are being rehabilitated by UNhCR with support of “from the people of Japan”. PRESS RELEASE
Pfizer Inc receives fDA approval for Pneumonia Vaccine NEW YORK: Pfizer Inc (NYSe:PFe) announced that the US Food and Drug Administration (FDA) has granted approval of the company’s pneumococcal conjugate vaccine Prevenar 13 (Pneumococcal 13-valent Conjugate Vaccine) as a single dose for use in adults. Prevenar 13 is indicated for adults 50 years of age and older for active immunization for the prevention of pneumonia and invasive disease caused by the 13 Streptococcus pneumoniae (S pneumoniae) serotypes contained in the vaccine. “Pneumococcal
KARACHI: TCS Financial Services (Pvt) Ltd and AsiaCare health and Life Insurance Co Ltd signed an agreement related to collaboration of services between two companies. The agreement was
BURhBAN: the Bank of Khyber (BoK) executive Director, Mir Javed hashmat with BoK 4th Batch of training after Certificate distribution ceremony organised by National Institute of Banking and finance at Murree. MD NIBAf Mr Amer Aziz, is also present on the occasion. PRESS RELEASE
PRO 04-01-2012_Layout 1 1/3/2012 10:47 PM Page 6
Wednesday, 04 January, 2012
06 Markets top 10 sectors
49% 09% 10% 04% 04%
Chemicals
01% 03% 01% 02% 17%
Real Estate Investment
Construction & Materials Electricity Banks
Fixed Line Telecommunication
Oil & Gas
Financial Services
Personal Goods
Equity Investment Instruments
top 5 perForMers sector wise SYMBOL
OPEN
HIGH
LOw CURRENT
CHANGE
VOLUME
412.90 108.58 22.52 6.61 81.94
408.60 106.51 21.90 6.53 80.51
410.84 107.72 22.52 6.60 81.45
-1.66 0.07 0.00 0.03 0.45
13,856 244,929 300 135,943 7,131
15.99 0.13 27.15 5.45 152.88
14.36 0.01 25.35 5.00 148.01
14.36 0.01 26.89 5.00 150.00
-1.00 0.00 0.98 0.00 1.00
1,001 100 1,414,035 1 4,060
Oil and Gas Attock Petroleum Attock Refinery Burshane LPG Byco Petroleum Mari Gas Co.
STOCK MARKET HIGHLIGHTS Index 11402.04 2900.94 2496.72
KSE-100 LSE-25 ISE-10
Change +120.03 +83.39 +10.74
Volume 53,124,167 1,961,228 97,575
Agritech Limited Agritech(PREF)(R) Arif Habib Co SD Bawany Air Products Clariant Pakistan
Open 227.47 346.76 137.08 203.00 160.30
High 236.90 354.90 143.93 209.00 165.90
Low 227.01 345.50 137.21 203.00 160.30
Close 236.12 353.88 143.93 209.00 165.90
Change 8.65 7.12 6.85 6.00 5.60
Turnover 374,976 584,859 1,141,535 4,650 10,000
Major Losers Nestle PakistanXD Wyeth Pak Limited Siemens PakXD AL-Ghazi TractorsXD Service Industries
3453.50 819.95 994.32 191.96 194.99
3448.00 780.00 1000.00 187.01 195.00
3280.83 778.96 944.62 185.10 190.00
3285.12 780.00 958.32 186.78 190.80
-168.38 -39.95 -36.00 -5.18 -4.19
601 193 42 184 3,009
Volume Leaders Lotte PakPTA Fatima Fert.Co. Jah.Sidd. Co. Bank Al-Falah Fauji Fert
9.30 23.84 4.00 11.35 43.22
10.05 24.03 4.40 11.80 44.65
9.21 23.45 3.95 11.17 43.05
9.98 23.85 4.28 11.75 44.40
0.68 0.01 0.28 0.40 1.18
7,030,165 4,816,968 4,171,433 3,669,518 3,217,513
Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)
Per Tola (PKR) 53,719.00 51,608.00 973.00 1025.00
Per 10 Gm (PKR) 46,104.00 44,245.00 835.00 880.00
Per Ounce US$ 1,591.00 – 35.05 –
Al-Abbas Cement Attock Cement Bal.Glass Berger Paints Buxly Paints
2.50 51.00 1.78 13.20 5.61
18.00 1.10 36.11 11.05 6.51
18.24 1.10 37.05 11.61 6.51
0.09 -0.05 -0.96 0.00 0.00
9,008 8,097 2,767 203 18
27.35 3.66 41.03 7.50 82.72
2.60 51.99 1.78 13.50 6.50
2.40 50.50 1.75 13.00 5.61
2.50 51.00 1.78 13.20 5.61
0.00 0.00 0.00 0.00 0.00
3,008 874 20 477 1
5.46 192.84 5.10 28.50 7.28
Agriautos Industries Atlas Battery Ltd. Atlas Engineering Atlas Honda Ltd. Bal.Wheels
57.50 161.71 58.00 122.18 26.12
18.72 53.37 11.99 7.99 54.60
18.70 51.89 12.99 8.98 57.29
27.30 3.88 42.15 7.30 83.00
26.71 3.38 40.05 7.25 81.00
5.70 193.00 5.90 28.99 6.50
5.50 184.24 5.85 28.50 6.30
57.50 161.80 58.00 122.99 27.35
26.80 3.45 41.03 7.27 82.66
-0.55 -0.21 0.00 -0.23 -0.06
2,318 4,313 16 500 10,512
18.38 51.89 12.99 7.99 54.60
-0.34 -1.48 1.00 0.00 0.00
1,725 1,000 500 1 1
5.57 191.96 5.90 28.50 6.49
834 231 504 10 4,050
57.50 161.40 58.00 122.18 26.12
0.00 -0.31 0.00 0.00 0.00
4 167 31 25 145
109.00 111.18 145.05 145.58
0.69 -4.44
1,170 203
Beverages 110.49 111.43 150.02 150.00
24.50 8.20 3.49 15.94 8.20
25.50 8.93 3.64 15.94 8.30
24.50 8.20 3.35 14.94 8.01
24.50 8.20 3.40 15.94 8.22
0.00 0.00 -0.09 0.00 0.02
1 1 18,006 1 3,417
AL-Qadir Textile Amtex Limited Artistic Denim Mills Aruj Garments Azam Textile
13.00 1.20 21.75 4.50 1.11
13.25 1.36 22.75 5.00 1.11
13.00 1.19 20.75 4.50 1.11
13.00 1.29 21.75 4.50 1.11
0.00 0.09 0.00 0.00 0.00
501 278,611 253 1 1
26.19 108.55 19.15 93.63 42.70
AHCL-JAN ATRL-JAN DGKC-JAN ENGRO-JAN FFBL-JAN
27.25 109.10 19.19 96.50 43.70
25.60 107.05 18.90 91.20 41.21
26.98 108.38 19.10 95.68 43.43
0.79 -0.17 -0.05 2.05 0.73
120,500 96,500 17,000 1,460,500 1,355,500
Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. IBL HealthCare Searle PakistanXD
99.79 81.99 67.08 16.65 45.06
101.00 81.99 67.85 17.65 45.06
99.73 81.99 67.34 17.65 45.05
-0.06 0.00 0.26 1.00 -0.01
5,070 293 2,278 18,473 550
99.00 77.90 67.00 16.65 45.05
Fixed Line Telecommunication 0.11 -0.88 0.80 0.00 -0.79
56.50 161.00 58.00 122.18 26.12
AL-Abid Silk Mills Diamond Ind. Pak Elektron Ltd. Singer Pakistan Tariq Glass Ind.
P.T.C.L.A Pak Datacom Ltd Telecard Limited Wateen Telecom Ltd WorldCall Telecom
10.39 34.50 0.80 1.79 1.00
10.17 36.20 0.84 1.89 1.05
10.00 34.50 0.77 1.75 0.91
10.09 34.50 0.80 1.82 1.00
-0.30 0.00 0.00 0.03 0.00
219,504 1 6 60,883 410,692
0.37 34.20 0.65 1.60 15.77
0.38 34.50 0.66 1.62 16.24
0.30 34.00 0.61 1.58 14.80
0.30 34.32 0.62 1.60 14.86
-0.07 0.12 -0.03 0.00 -0.91
504 208,043 5,254 41,015 2,341
53.87 10.03 5.41 11.25 28.53
54.50 10.14 5.62 11.50 28.80
52.00 10.00 5.27 11.25 28.11
53.54 10.11 5.56 11.35 28.45
-0.33 0.08 0.15 0.10 -0.08
60,371 19,802 799,088 139,838 63,734
Electricity Genertech Hub Power Co. Japan Power K.E.S.C. Kohinoor Energy
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 18.36 51.89 12.99 7.99 54.60
Pharma and Bio Tech
Industrial Engineering Ados Pakistan AL-Ghazi TractorsXD AL-Khair Gadoon Bolan Casting Ghandhara Ind.
Adam Sugar AL-Noor Suger Mills Bawany Sugar Chashma Sugar Mills Clover Pakistan
Future Contracts
General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass Ltd MACPAC Films Packages Limited
VOLUME
Adamjee Ins Atlas Insurance Century Insurance EFU General Ins Habib Insurance
46.51 36.10 7.11 38.15 9.85
47.75 37.00 7.11 38.47 10.00
45.10 36.99 6.94 36.51 9.70
46.55 36.99 7.11 37.38 9.91
0.04 0.89 0.00 -0.77 0.06
50,992 801 1 4,287 1,398
13.50 1.40 65.53
14.50 1.40 65.53
0.00 0.00 0.00
2 1 157
0.35 14.36 14.28 0.89 1.69
-0.03 0.00 0.10 0.00 0.19
8,836 36 5,540 1 1,000
Life Insurance American Life East West Life Assur EFU Life Assur
14.50 1.40 65.53
14.50 2.34 68.80
Financial Services AMZ Ventures A Arif Habib Investmen Arif Habib Ltd. Dawood Equities Escorts Bank
0.38 14.36 14.18 0.89 1.50
0.37 15.00 15.14 0.90 1.69
0.32 13.40 13.75 0.89 1.69
Equity Investment Instruments 1st.Fid.Leasing Mod AL-Noor Modar Allied Rental Mod Asian Stocks Fund B.R.R.Guardian
1.52 4.20 22.45 2.50 2.53
1.61 4.06 22.45 3.50 2.70
1.61 4.06 21.33 2.50 2.17
1.61 4.06 22.45 2.50 2.26
0.09 -0.14 0.00 0.00 -0.27
12,001 2,500 26 1 4,711
13.00 31.50 35.00 12.75 66.50 1.18 64.30 3.35 8.06 23.00 54.00 132.50 24.89 17.23 12.40 0.40 501.00 1.90 4.42 15.51 19.00 13.00 0.72 71.62 62.25 23.50 1.24 8.40
13.30 32.00 36.00 12.94 72.00 1.20 65.99 3.61 8.12 23.00 55.50 139.00 26.20 16.25 12.40 0.40 527.00 1.96 5.42 16.03 19.30 14.01 1.70 73.94 62.50 23.78 1.43 9.01
0.30 0.04 -0.25 0.23 2.72 0.03 1.48 0.21 -0.10 0.00 0.00 0.00 0.00 0.00 -1.00 0.00 0.00 0.01 0.00 0.39 0.12 0.01 0.00 0.96 0.11 0.00 0.11 0.56
8,200 2,500 2,525 31,861 4,784 1,400,468 2,190 165,118 12,125 625 100 70 300 1 1,002 66 3 10,513 11 1,126,150 13,852 21,175 5 536 1,000 222 569,515 643,960
Miscellaneous Century Paper Pak Paper Prod. Security Paper P.N.S.C. Pak.Int.Con. SD TRG Pakistan Ltd. Murree Brewery Pak Elektron Ltd. Tariq Glass Ind. Grays of Cambridge Pak Tobacco Co. Philip Morris Pak. Shifa Int.Hospitals Hum Network Ltd. Media Times Ltd Media Times(R)SPOT Dreamworld P.I.A.C.(A) P.I.A.C.(B) Sui North Gas Sui South Gas American Life East West Life Assur EFU Life Assur Jubilee Life In AKD Capital Ltd. Pace (Pak) Ltd. Netsol Technologies
13.00 31.96 36.25 12.71 69.28 1.17 64.51 3.40 8.22 23.00 55.50 139.00 26.20 16.25 13.40 0.40 527.00 1.95 5.42 15.64 19.18 14.00 1.70 72.98 62.39 23.78 1.32 8.45
13.35 32.10 36.00 13.49 72.69 1.25 66.00 3.74 8.34 23.00 54.00 135.00 24.89 17.23 12.40 0.40 501.00 2.12 4.42 16.20 19.49 15.00 0.72 75.99 62.50 23.90 1.50 9.35
Mutual Funds Buy 89.60 115.60 138.80 1.1603 87.81 11.39 24.38 23.89 91.52
International Oil Price WTI Crude Oil
$100.72
18.65 1.22 38.50 11.61 6.88
Construction and Materials
Murree Brewery Co. Shezan Int’l
89.9349 138.5807 1.1590 116.1599
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
18.15 1.15 38.01 11.61 6.51
CHANGE
Personal Goods
Industrial metals and Mining Crescent Steel Dost Steels Ltd. Int. Ind.Ltd. Inter.Steel Ltd. Siddiqsons Tin Plate
LOw CURRENT
Household Goods
Automobile and Parts
Interbank Rates US Dollar UK Pound Japanese Yen Euro
15.36 0.01 25.91 5.00 149.00
HIGH
Food Producers
Chemicals
Market Value 2,308,958,259 32,257,809 980,167
Major Gainers Company P.S.O. Pak Oilfields Ltd. MCB Bank Ltd Indus Motor Co. Tri-Pack Films
412.50 107.65 22.52 6.57 81.00
OPEN
SYMBOL
Sell 90.60 117.51 140.74 1.1729 90.28 11.65 24.62 24.09 94.32
Brent Crude Oil
$107.27
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 Crosby Phoenix Fund Dawood Islamic Fund Faysal Income & Growth Fund Faysal Islamic Savings Growth Fund Faysal Money Market Fund Faysal Savings Growth Fund First Habib Cash Fund First Habib Income Fund First Habib Stock Fund HBL Income Fund HBL Islamic Money Market Fund HBL Islamic Stock Fund
501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800 102.5100 0.0000 103.9600 101.4000 101.1400 101.4400 100.8800 100.8900 101.4400 98.8551 100.2278 105.1082
501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500 102.5100 0.0000 102.9300 101.4000 101.1400 101.4400 100.8800 100.8900 99.4500 98.8551 100.2278 103.0473
NAV 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500 102.5100 0.0000 102.9300 101.4000 101.1400 101.4400 100.8800 100.8900 99.4500 98.8551 100.2278 103.0473
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 Lakson Equity Fund Lakson Income Fund MCB Cash Management Optimizer Fund MCB Dynamic Cash Fund MCB Dynamic Stock Fund NAMCO Income Fund National Investment Unit Trust PICIC Income Fund UBL Capital Protected Fund II UBL Islamic Savings Fund UBL Savings Income Fund
100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000 106.3763 102.2115 100.5994 103.2259 83.2931 108.2753 26.55 101.3261 106.7800 100.4576 101.9855
100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000 103.2779 100.7009 100.5994 101.6775 83.2931 108.2753 25.74 101.3261 101.4400 100.4576 100.9757
NAV 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087 103.2779 100.7009 100.5994 101.6775 85.4288 108.2753 25.74 101.3261 106.7800 100.4576 100.9757
PRO 04-01-2012_Layout 1 1/3/2012 10:47 PM Page 7
Wednesday, 04 January, 2012
07
Mobile-banking can be an important tool to access the unbanked. As compared to approximately 28 million bank accounts there are almost 60 million unique cell-phone users
analysis
HBL President, Zakir Mahmood
RICE EXPORTS
Pakistan losing Iranian market to India KARACHI
P
GhULAM ABBAS
AKISTAN has started losing the highly valued Iranian market of rice as importers of our western neighbour are now focussing on the cheaper commodity from India. According to sources in Rice exporters Association of Pakistan (ReAP), Pakistan’s export of rice, which has already been reduced under the increased import duty in Tehran, has now started facing stiff competition with the cheaper rice of India.
IMPORT FROM INDIA: Soon after lifting the ban on export of rice from India after three-year sanctions, many of Iranian importers, sources claim, have moved towards our eastern neighbour which has a huge stock of the commodity at a considerably lesser price. Iranian rice market was being taken over by Indian exporters despite having a delayed payment issue. According to sources, owing to US sanctions, there were lots of payment issues in the trade with Iran as payments were being diverted through Dubai. India had exported at least 900,000 tonnes rice to Iran last year which was almost 30 per cent of total export from India. IMPORT FROM PAKISTAN: Talking to Profit, Taufiq Ahmed Khan, former vice chairman of ReAP said the fresh development was another blow to the country’s rice exporters who were already facing stiff competition in the international market after arrival of the Indian commodity. Iranian importers were earlier importing around 0.3 million tonnes rice annually from Pakistan, especially basmati, which is
very popular among Iranians. To a question, he said there was little impact of the import duty in Iran on the import of rice from Pakistan as it varies as per the Iranian demand and existing stock. IRAN’S IMPORT REQUIREMENT: however, sources claimed, the smuggling of rice through border area was going on and in turn generating huge losses for the national exchequer. It is also exacerbating legal trade with the neighbouring country badly through official channels. According to a report Iran’s annual import requirement of rice of 0.8-1.0 million metric tonnes was mainly imported
O
StAff RepoRt
IL and Gas Development Company Limited on Tuesday announced finding significant reserves of hydrocarbons at well Zin x-I in district Dera Bugti Balochistan. A statement issued by the company said OGDCL operator of 95 per cent working interest in Zin exploration license, together with its joint venture partner Government holdings Private Limited having five per cent working interest has discovered a hydrocarbon bearing horizon in its exploratory well Zin x-I. It said the well was drilled down to the depth of 2300 meter targeting to test the hydrocar-
bon potential of pab sandstone and sui main limestone formations. Significant reserves of hydrocarbons have been found at well Zin x1. The first targeted zone pab sandstone of cretaceous age has tested 5.48 mmcfd as through 32/64” choke at well head flowing pressure 1050 Psi. This discovery will add to the hydrocarbon reserves base of the company and its joint venture partner, bringing significant savings to the country. The national flag carrier, OGDCL started exploratory drilling in the block located in Dera Bugti district and first well x-1 was spud in May this year. The company had obtained exploration license for Zin block in 1996. But due to the law and order issues, it could not be drilled for last 14 years. Zin block is considered a very prospective block as it is s u r -
rounded by major natural gas producing fields of Pirkoh, Loti, Sui and Uch. The work on the site was started in 2010, when the government provided the required security to the company. If the drilling proves successful the gas from the field will start flowing within next one year, the source said. The country’s first major discovery of Sui gas field located in Dera Bugti was made in 1952. Its neighbouring district of Kohlu is attributed by experts as the most prospective area for finding major conventional hydrocarbon reserves. OGDCL has applied for security clearance for four licenses in the district including Kohlu, Jandran, Jandran West and Kalchas. OGDCL is the largest upstream company in the country having a portfolio of 77 fields, out of which 45 fields are 100 per cent owned and operated, and 32 are non-operated fields. As of December 2010, it holds 48 per cent of the country’s recoverable oil reserves, and 37 per cent of the country’s recoverable gas reserves. In terms of production, currently OGDCL delivers 56 per cent of Pakistan’s oil output, and 22 per cent of its gas production.
tube-well bills and purchase of seeds, etc to the farmers who have land holdings of 10 acres and less. Such a programme will not only help the farmer directly but will also avoid any distortion in the market and supply of rice for exports. REMINDER: While stating its reservation ReAP again reminds all concerned authorities and the economic managers that owing to recent devaluation of Indian rupee versus the dollar by a good 20 per cent during the last four months; lifting of ban on export of non basmati rice and releasing two million tonnes of non basmati rice for export and 20 to 30 per cent decrease in the basmati and non basmati rice export prices, Pakistani rice is already facing tough competition from cheap Indian exports. And at this important juncture, if government proceeds with any intervention it will be contrary to its pledge to rice exporters. EFFORTS NEEDED: Such an effort made in last two years programmes, where TCP and PASSCO purchase primarily benefited big hoarders and traders, not only left the small farmer benefit objective unfilled, the state carried these stocks at exorbitant bank markups cutting off export targets by a good $500 million. ReAP fears any intervention at this time will put a halt on rice exports causing huge losses in foreign exchange earnings up to $1 billion and an expensive carryover stock in the country.
A typical sale window for Pakistan is between October 2011 through to February 2012 after which the two largest exporters Thailand and Vietnam harvest their main crops combined with the 2nd Indian crop, ReAP fears any intervention at this time will shut off sale opportunity and disrupt rice supplies for exports, and leave rice exports stagnant.
from Pakistan, India, Vietnam and Uruguay. The better quality rice i.e. Basmati and Sela was imported from Pakistan, which exports almost 88 per cent of its total rice exports to the host country. REAP SHOWS CONCERNS: On the other hand in statement issued by ReAP, the association has ex-
Significant reserves of hydrocarbon discovered in Zin Block ISLAMABAD
pressed serious reservations fresh demands of farmers made to government for buying rice via Trading Corporation of Pakistan (TCP) to stabilise the rice prices, as an effort in the wrong direction. ReAP said such efforts in the recent past by PASSCO and TCP are prime examples where the state objective of supporting the farmer was not met and in return the state not only lost billions but due to intervention by PASSCO and TCP the markets were inflated artificially, which in turn resulted in huge loss of export earnings. FIRM SUPPORT: ReAP firmly stands in support of the farmers and would like to see government’s effort in the right direction to directly support the farmers. ReAP would support government to provide financial assistance in the shape of subsidies for buying fertiliser, reduction in electricity
work on Rs59 billion Kurram Tangi dam from July this year ISLAMABAD StAff RepoRt
W
ORK on Kurram Tangi Dam will commence from July this year and estimated cost of the project is Rs59 billion, which is estimated to generate 83.4MW electricity and will irrigate 350,000 acres command area in the Northern Waziristan. This information was provided to Senate Standing Committee on Water and Power chaired by Senator Lashkari Raisani. The meeting was informed the project would take four yeas to complete. Chairman WAPDA, Shakeel Durrani said that the donors were ready to finance the project. he said the dam was estimated to earn Rs15 billion per annum and the total cost would be recovered in four years. The government had already allocated Rs100 million for the project for the current fiscal year’s public sector development programme.
Managing Director Private Power and Infrastructure Board (PPIB) N A Zuberi told the committee that during the tenure of the present government 2500 MW were added in the system and an investment of $4.5 billion was made in the sector. he said PPIB was working on 37 projects having 11,000 MW capacity. The meeting deferred approval of PPIB Bill 2011 after it was mentioned that the draft mentions Gilgit Baltistan as a province. The authorities were asked to rectify the mistake and submit it for approval on January 13 meeting. earlier MD PPIB told the committee that the board was operating for the last 18 years on a notification of the Prime Minister Secretariat and investors were concerned of its legal status. he said passage of the bill would help in that regard. he said the bill was moved many times in the past but before its passage the assemblies were dissolved.