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SBP reformats data submission for banks’ unclaimed deposits KARACHI: The central bank on Monday notified banks and Development Finance Institutions (DFIs) about its decision to revise the format for uploading unclaimed deposits or instruments’ data. A State Bank of Pakistan (SBP) circular said, keeping in view the difficulty faced by banks and DFIs in uploading data on unclaimed deposits for 2012 separately on Annexure A&D on Data Acquisition Portal-4 (DAP4), it has been decided to revise the format combining variables of both annexure in a consolidated form. Referring to CPD Circular Letter No. 01 issued on January 16, the regulator asked banks to, henceforth, provide requisite data per revised Annexure-A. The details of unclaimed instruments favouring federal and provincial governments would also be provided in the same format by April 15 or by next working day if the due date happened to be a holiday, each calendar year, it said. It said the modified dbf-generator for Revised Annexure “A” along with DAP4 user manual and user guide for preparing the data files for unclaimed deposits would be available on Data Warehouse Portal at the “Knowledge Centre” Tab. STAFF REPORT
Rs 125.5 billion released under PSDP ISLAMABAD: The Planning Commission of Pakistan has so far released Rs125.5 billion under its Public Sector Development Programme (PSDP) against the total allocations of Rs 233 billion for the fiscal year 2012-13. Out of the total funds, Rs 65.4 billion has been released for 345 infrastructure development projects and Rs 56.1 billion for 690 social sector projects. According to data of the commission, till March 1st Rs 1.2 billion had been released for 71 other projects and Rs 2.8 billion for the Earthquake Reconstruction and Rehabilitation Authority (ERRA). The total size of the PSDP for the year 2012-13 is Rs 360 billion, including Rs100 billion foreign aid, which is managed by Economic Affairs Division and Rs 27 billion special programmes, release of which are made by the Cabinet Division or the Finance Division. According to break up details, the total cost of 345 infrastructure projects has been estimated at Rs 2320.3 billion, out of which Rs 211.1 billion have been earmarked in the 2012-13 budget that include Rs 85.6 billion as foreign aid. The cost of the other 71 projects has been estimated at Rs 41.3 billion out of which Rs 3 billion has been earmarked in the PSDP 2012-13 while Rs10 billion has been earmarked for ERRA in the current development programme. The commission has been following a proper mechanism for the release of funds and accordingly funds are released per the given mechanism. The commission releases 20% of funds in the first quarter (JulySeptember), 20% in second quarter (October-December), 25% in the third quarter (JanuaryMarch) and 35% in the fourth quarter (April-June). APP
Hungary invested $1.4 billion in Pakistan’s energy sector. — Hungarian Ambassador to Pakistan Istvan Szabo
SECP unveils roadmap for diversification of non-bank financial sector KARACHI
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he Securities and exchange Commission of Pakistan (SeCP) on Monday unveiled a document titled ‘Report of Non-Bank Financial Sector’ (NBFS) Reforms Committee’ for public feedback. Prepared by senior SeCP officials and leading market professionals, the report contains proposed reforms for the development of the non-bank financial (NBF) sector in Pakistan. SeCP Chairman Muhammad Ali, commissioners and leading professionals and businessmen from the financial sector attended the ceremony. Addressing the ceremony, Ali said it was imperative that the SeCP and the State Bank of Pakistan (SBP) work in close cooperation for effective and seamless regulation across the financial sector in a globally integrated market. he said Pakistan’s financial sector was bank-centric with NBF sector accounting only 4.9 percent (excluding insurance sector) of the financial sector’s total assets. This dependence on the banking sector, he said, made the country’s financial system vulnerable to risks through lack of diversification and also restricted the scope of product innovation. A strong NBF sector would not only promote savings by offering different asset classes to investors, but will also provide alternative fund raising opportunities to participants of the financial system, Ali added. The report highlighted that more than 70 percent of assets of the financial sector were with commercial banks and only nine percent were with the non-banking sector, including non-banking finance companies (NBFCs), insurance companies, etc. Out of the remaining assets, around 17 percent are with the national savings schemes. Keeping in view the present composition of the financial sector, the report suggests some revolutionary ideas to reform it. The suggested reforms are aimed at development of an alternate financial system by way of promoting NBF sector. It is imperative to diversify the inherent systemic risk and provide different asset classes to promote savings as well as cater to the specific needs of participants through product innovation, the report said. To develop the NBF Sector, in line with international best practices, the report proposes implementation of the concept of activity based regulatory regime in Pakistan. In terms of the proposed regime, capital market activities of all entities including that of commercial banks and DFIs are to be regulated by the capital market regulator (CMR), i.e., SeCP and deposit taking/financing/lending activities of all the financial sector participants would be regulated by the banking regulator (BR), i.e., SBP. This recommendation is in contrast with the prevalent concept of entity based regulatory domain in Pakistan. Other proposed reforms for the mutual fund industry include distribution of mutual fund units through stock exchanges, reduction in the annual regulatory fee provided more than 50 percent of a funds’ net assets are held by retail clients, introduction of concept of expense ratio, introduction of multiple classes of units based on the investment amount, improving the skill set of key personnel such as
fund managers by specifying a minimum criteria among others. Investment finance services are broken down and redefined as stock brokerage, investment advisory, corporate advisory, securities financing and securities underwriting services and each component has been further defined. Flexibility has been offered to an entity to be reclassified as nonbank finance company to obtain either a full scope or limited scope. The suggested regime for IFS outlines a mechanism to transform existing brokerage houses as NBFCs to become part of NBF sector. The inclusion of brokerage services in NBF sector is expected to open up a new era of licensed activities for brokers including advisory and other ancillary services. To facilitate the launch of the real estate investment trusts (ReITs) in Pakistan, the committee has proposed a reduction in ReIT fund size to address the issue of capital constraints and allow launching of medium-size ReIT projects having better potential for growth and return. In order to develop non-banking financial services, the committee, in line with best international practices has proposed the implementation of the concept of activity based regulatory regime in Pakistan for cluster one entities. In terms of the proposed regime, capital market activities of all entities are to be regulated by the SeCP and deposit taking, financing and lending activities of all financial sector participants will be regulated by the SBP.
GDP SHARE OF FINANCIAL SECTOR WhIle the overall assets of the country’s financial sector increased from Rs 5.202 trillion in 2005 to Rs 11.107 trillion in 2011, the share of the financial sector in terms of GDP is very low at 57.4 percent, said State Bank of Pakistan (SBP) Governor Yaseen Anwar while addressing the SeCP Conference on Non-Bank Financial Institutions (NBFI) on Monday. “The low financial sector to GDP ratio and NBFIs declining share in financial sector assets clearly underscores the need for financial sector development and diversification of financial sector assets to attract investors with different return expectations and risk appetite and channelise financial resources for the economic development of the country,” he said. The “shadow banking system” was defined as the system of credit intermediation that involves entities and activities outside the regular banking system, he said, adding the emergence of the term reflected recognition of the increased importance of entities and activities structured outside the regular banking system that perform banklike functions. Anwar said the financial system in Pakistan was yet to grow to its full potential and play a more meaningful role in the economic development of the country. “We definitely need to add to its
diversification and depth,” he said. NBFIs can play a meaningful role in this pursuit, he said, adding that in light of the global financial crises, we are better informed about the various risks that NBFIs/shadow banking carries with it. “As regulators we need to remain vigilant to ensure that those risks are mitigated without inhibiting sustainable nonbanking financing models,” he said. The SBP governor briefly outlined four major constraints that the NBFI sector in Pakistan faced. Although there had been an increasing effort by NBFIs to broaden the range of their business activities and product base, thereby diversifying their revenue streams, the sector was yet to make a breakthrough in this regard, said Anwar. Second, the sector was fragmented and each NBFI is trying to create its niche market in pursuit of establishing a sustainable revenue stream, he said. In this regard, most companies are concentrating on financial advisory and other feebased income segments. “Unfortunately, the sector is yet to capitalise on the huge opportunities offered by previously relatively untapped areas like SMes, consumer, and agriculture segments to enhance avenues for fund deployment,” he said. Thirdly, Anwar said, the sector needed to develop and diversify sources of funding for sustainable growth. This would require a shift from traditional sources for lending to clients. The NBFIs needed to develop capital market instruments to pool funds from a diverse set of investors to ensure certainty to the source and cost of funding, he added. Fourth, he said, there was a need to strengthen the oversight and regulation of NBFIs to reduce the risks emanating from “shadow banking”. As observed by Financial Stability Board (FSB), the objective of this exercise should be to ensure that shadow banking was subject to appropriate oversight and regulation to address bank-like risks to financial stability emerging outside the regular banking system while not inhibiting sustainable non-bank financing models that do not pose such risks, said Anwar.
IMF BAILOUT, OPTIONAL PAKISTAN has enough leverage making it optional for cash-strapped Islamabad to opt for the muchspeculated-upon fresh IMF bailout package, said Anwar. “Most of the articles contributed (recently) in local newspapers are misleading,” Anwar told reporters on the sidelines of the SeCP conference. “Yes, we are engaged with the IMF, but it is our decision to go for a loan package when the time is right,” he added. Time, the SBP governor believes, is not ripe for asking the international lender for a fresh bailout package as economic challenges in the country are “manageable”. “This does not mean things are
perfect. But the challenges we are facing are manageable,” he said. Asked about the possible impact of the ever-worsening law and order situation in the country, the governor said it would take its toll on the country in terms of offshore investment. As for local investors, bankers, experts and other market participants, they were well aware of the resilience of Pakistan’s economy, especially the banking system, he said. “Those who know our markets know our banking system is very resilient and that our fundamentals are strong,” he said in response to a question. Illustrating his claim, Anwar said not even a single bank had failed during the last five years, unlike the 1990s when several banks had defaulted. If analysed against the backdrop of country’s Balance of Payment (BOP) situation, which mostly pushes economic managers towards the IMF, the tall claims made by the SBP governor seem to carry some weight. According to official data, Pakistan’s dollar reserves stood at $ 13.185 billion till February 22. Of the total, $ 8.227 billion belong to the central bank. A week earlier, till February 15, the country possessed $ 13.058 billion, of which $ 8.141 billion were held by the SBP. “We still have enough reserves,” is the statement the government officials, including the SBP governor, have been making when asked if the country had enough of the greenback to repay the half-paid loan it had secured in 2008 from the IMF under a stand-by arrangement (SBA). According to the central bank, from July 2012 to February 26 this year, Pakistan has “successfully” repaid $ 3.232 billion to the IMF under the SBA. The balance amount to be cleared until September 2015 stands at SDR 3.239 billion. The next, 11th, installment worth SDR 258.4 million is due to be paid in May. The economic managers have been repetitive in reminding the inquisitive media that all the IMF repayments have been budgeted and, therefore, pose no risk to stability on a macroeconomic level. What can be more comforting is that the country’s BOP list, despite all odds, lies in the green zone. According to the central bank, during the first seven months of the current fiscal year, the country’s current account witnessed a surplus of $ 62 million against a huge deficit of $ 2.79 billion that the country had braced in last year’s corresponding period. Major stimulus, according to SBP, was the trade gap which narrowed down during the review period to $ 8.77 billion against FY12’s $ 9.41 billion with exports growing to $ 14.17 billion from $14.04 billion and imports remaining subdued at $ 22.94 billion compared to $ 23.46 billion of last year. The resumed inflows from the United States on account of Coalition Support Fund (CSF) happen to be another positive for the country’s current account surplus. Since August last year, the country’s CSF receipts have been counted at $ 1.86 billion, of which $ 1.18 billion were reimbursed in August and $ 688 million in December. Another relieving head for the economic managers is the everburgeoning worker remittances that during July-Jan FY13 amounted to $ 8.207 billion compared to $ 7.436 billion of FY12.
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We wish to expand the bilateral trade volume between the two countries up to $5 billion over the next few years. — Ambassador to South Korea Shaukat Ali Mukadam
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BUSINESS B Tuesday, 5 March, 2013
Major Gainers
KARACHI
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STAFF REPORT
LThOugh cement exports marked a record increase of 15.40 percent in February, local sales remained almost stagnant showing a nominal growth of 1.16 percent compared to the preceding month of January. The country’s overall cement despatches increased by 4.01 percent to 21.207 million tonnes during the first eight months of FY13 compared to the corresponding period of FY12. The growth, according to industry experts, is not enough to provide comfort to cement manufacturers. In February, cement units located in the northern part of the country dispatched 1.556 million tonnes of cement to the domestic market and exported 0.444 million tonnes, most of it to Afghanistan and other destinations through sea, while exports to India were only 0.032 million tonnes. The south-based mills provided the domestic market with 0.397 million tonnes of cement while its
exports were 0.209 million tonnes. The total cement despatches in February was 2.610 million tonnes which was nominally lower than the January 2013 figure of 2.646 million tonnes. Industry experts are pinning hopes on economic revival to spur cement consumption after the elections. “The cement industry was established to fulfil local demand, based on projections of growth in 2003,” said a cement manufacturer. unfortunately, he said, the growth remained much below projections after 2008 that resulted in huge idle capacities. he said India was not in the feasibilities when industries were planned. however after thaw in relations between the two countries it looked like the best prospect for cement exports. he said much has been said about the impediments to exports to India most of which need action from the Indian side. unfortunately, he added, the Pakistani trade negotiators have been unable to convince Indians to remove their non-tariff barriers and mindset towards Pakistani products. The manufacturer said Afghanistan remained a good market for Pakistani cement but with the gradual withdrawal of western forces from the country, prospects of growth had diminished. Taha Khan Javed, an analyst at Taurus Securities, said the increase in exports was a welcome change after low exports numbers witnessed in January.
COMPANY Sanofi-Aventis Pak Sunrays Textile Philip Morris Pak. Indus Motor Co Bhanero Tex.
OPEN 374.84 214.00 192.79 307.32 300.00
HIGH 393.58 224.70 202.42 319.00 305.00
LOW 370.00 224.00 194.00 302.00 300.00
CLOSE 393.58 224.70 202.42 316.45 305.00
CHANGE 18.74 10.70 9.63 9.13 5.00
TURNOVER 900 1,000 2,800 27,900 300
230.50 182.12 148.51 515.00 140.00
230.50 164.78 147.50 500.00 140.00
230.50 164.78 147.50 507.91 140.00
-11.87 -8.67 -7.13 -7.09 -7.00
500 32,800 4,600 19,600 500
7.96 8.63 7.49 7.20 17.65
7.29 8.34 6.18 6.55 16.75
7.69 8.40 6.77 6.83 16.92
0.45 -0.14 -0.32 -0.14 -0.58
30,127,500 17,241,500 15,003,500 8,738,000 7,459,500
Major Losers Sapphire Textile XD Pak Gum & Chemical Murree Brewery Millat Tractors XDXB Gillette Pak
242.37 173.45 154.63 515.00 147.00
Volume Leaders Lotte PakPTA Fauji Cement P.I.A.C.(A) Telecard Limited Maple Leaf Cement
7.24 8.54 7.09 6.97 17.50
Interbank Rates USD GBP JPY EURO
PKR 98.1529 PKR 147.4649 PKR 1.0484 PKR 127.5203
Forex Australian Dollar Canadian Dollar China Yuan Euro Japanese Yen Saudi Riyal U.A.E Dirham UK Pound Sterling US Dollar
BUY
SELL
103 98.5 13.5 132.8 1.055 26.5 27 153.4 99.05
105 99 14 133.2 1.11 26.7 27.25 154.4 99.3
CORPORATE CORNER Khushhalibank honours governance in financial reporting. PRESS RELEASE Coca-cola announces Rs Malala Yousufzai with 7b investment in multan LADIESFUND Khushhali LAHoRe: Coca-Cola Beverages Pakistan Ltd. held a Bank Idol Award ground-breaking ceremony of its new greenfield
KARACHI: The Dawood global Foundation in partnership with Dawood Capital Management Ltd., the 5h LADIESFuND® Women’s Awards for Pakistan ceremony was held today at The Mohatta Palace Museum, Karachi, with 300 of the most influential women in Pakistan in attendance. Chief guests included First Women Bank Ltd. President Shaqfat Sultana and Poetess of Pakistan Zehra Nigah, who was also the Lifetime Achievement Winner. This event was sponsored by KhuShhALIBANK Ltd., OBS, First Women Bank Ltd., Burj Bank, 21st Century, gSK, Atlas Asset Management Ltd, hESCO, JS Investments Ltd., et al. highlight of the event was when Malala Yousufzai was announced KhuShhALIBANK Idol Award winner and her Award was accepted by two of her friends Shazia Ramazan and Kainat Riaz, who had been injured alongside Malala and had flown to Karachi with their families for this special occasion. PRESS RELEASE
PTCL’s annual report earns SAFA’s award ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL), the largest Information Communication Technology (ICT) service provider in Pakistan, has won distinction for the country, with South Asian Federation of Accountants (SAFA) conferring the ‘Best Presented Accounts Award 2011’ to the company, in the category of ‘Communication and Information Technology’. The award is presented to companies that exceed industry standards in quality and transparency of financial reporting parameters. SAFA, consisting of the institutes of chartered and management accountants in the SAARC countries, holds these awards every year for different categories on the basis of evaluation of the published annual reports of companies across the South Asian Region to improve transparency, accountability and
project in Multan. The ceremony was inaugurated by Senior Advisor of Chief Minister Punjab Zulfiqar Khosa, and attended by a huge gathering, including key government officials, media personnel, local dignitaries and Coca-Cola employees. The greenfield project in Multan is one of the three greenfield projects being set up in the country by Coca-Cola Pakistan. A total amount of $379million will be invested over the next three years, with the funds being utilized for expanding the business and bringing about infrastructure and systemic improvements in the Coca-Cola system. PRESS RELEASE
Sikander Mustafa Khan is the new PBC Chairman KARACHI: The Board of Directors of the Pakistan Business Council (PBC) elected Sikander Mustafa Khan as the new Chairman of the PBC. The members of the PBC had earlier elected a 13 member board which besides Sikander Mustafa Khan includes; Abdul Razak Dawood, Ali S. habib, Aliuddin Ansari, Asif Saad, Atif Aslam Bajwa, Bashir Ali Mohammad, Ehsan Malik, hussain Dawood, Iqbal Lakhani, Muhammad Ali Tabba, Shabbir Diwan & Syed hyder Ali. The newly elected board appreciated the efforts of the previous board members for enhancing the image of the PBC as Pakistan’s premier business policy advocacy forum and especially thanked the outgoing Chairman Ali S. habib for his services. Sikander Mustafa Khan is also Chairman Millat Tractors and has previously served as Vice Chairman of the PBC. PRESS RELEASE
Intel Helps Developers Simplify the ‘Internet of Things’ LAHoRe: Intel Corporation recently announced several new advancements in support of the Intel Intelligent Systems Framework, including a ecosystem growth, framework-ready products and two new software tools designed to help reduce time-to-market and costs for developers. To simplify the deployment of intelligent systems, which comprise what is frequently called the “Internet of Things,” Intel recently released the Intel Intelligent Systems Framework. The framework is a set of interoperable specifications designed to address connecting, managing and securing intelligent
devices in a consistent and scalable manner. “In just less than 6 months since the Intel Intelligent Systems Framework was released, we’ve seen impressive support and adoption from this rapidly expanding ecosystem,” said Naveed Siraj, Country Manager, Intel Pakistan. PRESS RELEASE
‘Discover your shade’
Silkbank Announces Annual Results
The Board of Directors of Silkbank Limited, in their meeting held on March 01, 2013, announced the annual results of the Bank for the year ended December 31, 2012, showing growth in the asset and the deposit sides of the business. The Bank significantly improved the deposit mix through increase in low cost current and saving accounts as well. The Bank also made strategic investments in new business lines and successfully launched its credit card and Islamic banking business, during the year which was received positively by the market. The investments related to the launch of new businesses, coupled with an industry wide one-off provisioning resulted in the Bank posting a loss of Rs.344 million for the year. however, with the revenue pipeline from new businesses and the existing product portfolio, the Bank is well positioned to increase revenues and declare profits in the year to come. PRESS RELEASE
LAHoRe: Alkaram Textiles launched their dazzling spring / summer collection volume 1, 2013 in Alkaram galleria, Y Block, DhA, Lahore . Each theme is an exploration in design and color inspired by seven selected moods which personifies an alkaram woman. A wide array of distinct themes is made available in one collection which includes Nouvelle Collection, Vintage Collection, Summer Tribes, Intricate Patterns, hand Crafted, Avant garde and Splendor Shade. The concept was brought to life at A.K galleria, Y block, D.h.A, where top notch models like Marium Shah, Sana Khan, Nooray, Anoshay Asad, Aleezay Rasul, Anoshay looked spectacular in different shades of alkaram’s collection. Aside from the models, seven renowned personalities such as Aasma Mumtaz, Asfa Nabeel, Sara Shahid, and Frieha Altaf were adorned in extravagant apparels in various hues by alkaram. PRESS RELEASE
STARfALL initiates FIRST LEGO®
About The Coca-Cola Company The Coca-Cola Company (NYSE: KO) is the world’s largest beverage company, refreshing consumers with more than 500 sparkling and still brands. Led by Coca-Cola, the world’s most valuable brand, our Company’s portfolio features 15 billion-dollar brands including Diet Coke, Fanta, Sprite, Coca-Cola Zero, vitaminwater, Powerade, Minute Maid, Simply, georgia and Del Valle. globally, we are the No. 1 provider of sparkling beverages, ready-to-drink coffees, and juices and juice drinks. Through the world’s largest beverage distribution system, consumers in more than 200 countries enjoy our beverages at a rate of 1.8 billion servings a day. With an enduring commitment to building sustainable communities, our Company is focused on initiatives that reduce our environmental footprint, support active, healthy living, create a safe, inclusive work environment for our associates, and enhance the economic development of the communities where we operate. PRESS RELEASE
STARfALL has initiated FIRST LEgO® League (FLL – www.firstlegoleague.org) robotics program, an international robotics competition, for the first time in Pakistan. STARfALL is the Operations Partner of FLL in Pakistan. For very first time in Pakistan a global event of robot games is being held in Pakistan. A pilot program was launched in Lahore in 2011, this program concluded in June 2012 with the National Championship Event held at LuMS (Lahore university of Management Sciences). About 40 children participated in the pilot program and it was very well received by the local community, the feedback from academia and industry was very encouraging. This year Islamabad and Karachi region was added along with Lahore. Regional championship event held in January-February 2013 in all three cities followed by Pakistan National Championship event in March 2nd, 2013. PRESS RELEASE