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BUSINESS Wednesday, 5 June, 2013
Axle load limit restriction cuts cement dispatches
KARACHI: Cement dispatches decreased by one percent in May to 2.888 million tons compared with 2.918 million tons in May 2012. This was mainly due to strict adherence of axle load limit implementation by National Highway and Motorway authorities. Due to axle load limitation, there is a transport shortage in the country impacting the sale of cement and other commodities. It must be understood that in order to keep the wheels of industry running it would now require twice the number of trucks to transport the same volumes of goods which were earlier transported, but at double the freight cost. In May 2013 the cement units located in the Northern part of the country despatched 1.714 million tons of cement for domestic market and 0.571 million tons of cement most of it to Afghanistan and other destinations through sea while exports to India were only 0.061 million tons. The south based mills provided the domestic market with 0.389 million tons of cement while its exports were 0.214 million tons. The total cement despatches in May 2013 was 2.888 million tons which was lower than April 2013 despatches of 3.123 million tons. A spokesman of All Pakistan Cement Manufacturers Association (APCMA) said the axle load rule remained relaxed for decades allowing the trucks to load extra quantities. He said axle load limitation not only impacting the availability of transportation but also increased transportation charges of cement, which is already one of the main components of the cost and further increase under this head, is impacting the sales of cement adversely. He hoped the new government would look into the matter on urgent basis to resolve the issue amicably. The spokesman said that the capacity utilization of the industry this year was almost touching its highest level at 74.45 percent since 2006-07 as the domestic despatches has picked up appreciably during the year. STAFF REPORT
Profit for HUBCO scales up to Rs 64.2 per share KARACHI
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fter incorporating better than expected earnings during 9MfY13, the market observers revised their profitability estimates of Hub Power Company (HUBCO) for fY13. InvesCap analyst Hassaan Bin Ghafoor anticipates bottom-line of the company to grow by 11%YoY to rs 9.86bn (ePS rs8.6). "We believe the aforementioned surge is emanated from i) linearly trimming financial charges ii) higher penal mark up income booked by Narowal and iii) PKr depreciation against the greenback," said the analyst. However, hiccup in the availability of funds to purchase fO for Narowal Plant along with risk of liquidated damages due to shut down of the Narowal Plant most of the time during feb-Apr 13 would screech the bottom line of the company. the company posted a growth of 7% YoY in topline by reporting revenues of rs 132 billion during 9MfY13. "We attribute such rise in revenues to i) Increase in fO prices by 3.5%YoY and
ii) higher load factor," he said. In 9MfY13, HUBCO's power plant generation was stood at 6,052GWh depicting a mere growth of 6%YoY in comparison with similar period last year. While Narowal Plant has utilised its capacity of only 795GWh during the said period, it is down by 17%YoY, lowest since start of its operation. Since the mid of 3QfY13 the Narowal plants has been operating at a capacity of 22% and despite under-sized power generation contribution by Narowal plant, the total generation mirrored an increase of nominal 3%YoY during the period. According to National transmission & Distribution Company (NtDC), the current power shortfall remains at 4,500MW6,000MW. "We believe the newly elected govern-
ment will not leave this matter unattended," the analyst said adding apart from raise in power tariff, the only instant solution to minimize load shedding is to resolve circular debt issue. HUBCO, being the second largest power player in Pakistani IPP's space, would benefit the most if any liquidity is injected in the energy chain. "We assume this liquidity injection would further enhance the company's payout capacity therefore higher dividend payments in future cannot be ruled out," said the analyst. the scrip has appreciated by 11% since elections on the back of any immediate resolution of circular debt. "We maintain our expectation towards company's fY13 payout of rs 7.0/share, translating into a dividend yield of 11.0%," the analyst said. After rolling forward, the Dec-13 tP of HUBCO would work out to the tune of rs 64.2/share, offering a mere upside potential.
Dollar under pressure in Asia after weak US data TOKYO APP
the dollar came under pressure in Asia on tuesday after sinking in New York following a poor manufacturing report that pointed to weakness in the world's largest economy. the greenback fell below 100 yen for the first time in nearly a month on Monday as the ISM purchasing managers index for May showed a surprise contraction. Markets are watching US jobs data this week for more clues about the state of the economy, a key factor in whether the US federal reserve rolls backs its monthly asset-buying plan, known as quantitative easing, in the near term."the market was priced for virtually no change in May (for manufacturing activity) but the outcome was on the soft side, immediately spurring selling of the US dollar," National Australia Bank (NAB) said. Credit Agricole added that "hesitation ahead of friday's payrolls data may also explain some of the inability of the (dollar) to strengthen". In morning tokyo trade the dollar fetched 99.58 yen, against 99.52 yen in New York late Monday, although it is down considerably from the levels around
100.46 yen in Asia earlier Monday. Yuji Saito, director of foreign exchange at Credit Agricole, said markets would keep a close eye on a speech on Wednesday by Japanese Prime Minister Shinzo Abe about the government's growth strategy. Investors "will be watching to see if there is anything that would excite Japanese stock markets," he told Dow Jones Newswires. Movements in dollar-yen trade and the tokyo stock market are closely interlinked as the value of the currency directly affects the profitability of Japanese exporters. Japanese officials tuesday played down the yen's volatility, which has seen it fall from 80 to the dollar in November to 103 last month. "the yen has rapidly weakened from such high levels," Chief Cabinet Secretary Yoshihide Suga told a regular press briefing. "It is natural for the market to adjust itself." the euro bought $1.3062 and 130.09 yen from $1.3076 and 130.13 yen in US trade, with the single currency supported by May manufacturing data that showed a slight improvement from April, in line with other recent economic data. "the euro was done no harm by some modest upward revisions" to the manufacturing data, NAB said. the european Central Bank, which holds a policy meeting later this week, cut interest rates last month in an attempt to stimulate the eurozone's recession-hit economy.
INDUSTRY URGES GOVT TO ENHANCE TAX BASE, NOT TAX KARACHI STAFF REPORT
the Pakistan Business Council (PBC) and Overseas Investors’ Chamber of Commerce and Industry (OICCI), the country's two premier business organisations, have asked the government to have pragmatic approach towards the tax culture at this critical juncture of country’s history. “It is PBC’s understanding that the incoming government is formulating critical policies relating to revenue. PBC is most concerned that contrary to tax equity, the incoming government is possibly considering, substantial increase in turnover, withholding, GSt and Income tax along with in-
troduction of Asset tax.” “the PBC is the biggest supporter of documentation of economy and increasing the tax base. However, the new elected government should concentrate on long term measures to document the economy and increase the number of tax payers instead of pressurizing the entities which are already paying heavy taxes,” Kamran Mirza, PBC CeO, said. He said when WHt was proposed earlier it was taken as a temporary measure which will eventually abolish with improvement of tax regulations and collection by fBr but it is sad to see such
proposals instead of long term concrete measures. this proposed five percent WHt, he mentioned, would further hurt the manufacturing industry which was already suffering due to economic conditions of the country and this will not only increase borrowing from banks but will also adversely affect the liquidity and cash flows adding to the miseries of the manufacturing industry. PBC warned that now taxpayers are more serious and wary of the fact that tax system in Pakistan is skewed against them. So any measure to further burden them would not be welcomed. the OICCI said that it believed that the ongoing democratic process was creating a positive international perception which was partially reflected in increasing level of fPI in the stock market. “this window of opportunity can be used to
channel the longer term fDI to bolster the manufacturing and infrastructure sector for sustained business activities which will help increase employment and economic growth,” the statement said. “OICCI has regularly put forward specific proposals to help achieve an environment that is conducive to economic growth that include increasing tax base, changes in public sector and measures to improve policy implementation in various sectors which the chamber is hopeful that the government would like to consider.” the members of both OICCI and PBC, local automobile manufacturers have also strongly protested against the recently proposed 5 percent withholding tax on the purchase of new motor cars as this will increase burden on the industry that is already paying 33% of vehicle rSP as duty/taxes.
Pakistan all out for boosting regional trade, FPCCI tells China moot
KARACHI: the 4th South Asia-Sichuan Business Promotion roundtable Conference in Chengdu commenced tuesday. fPCCI President Zubair Ahmed Malik and Patron In-Chief Pak-China Business Council tariq Sayeed, the keynote speakers, opined that Sichuan forum had given new dimensions to the promotion of regional trade in South Asia and Pak-China bilateral relations. Malik, while speaking on the occasion, said fPCCI as Pakistan’s apex trade organisation had committed its positive role in strengthening and advancing the bilateral trade relations between Pakistan and regional economies, particularly China. tariq Sayeed called upon the regional countries to strengthen bilateral trade ties as the regional trade was not only need of the hour but the key of success and economic viability. He indicated that South Asian intra-regional trade is increasing and getting more attractions to foreign investment, while economy developed rapidly in Sichuan, tariq invited the Sichuan entrepreneurs to South Asian countries to invest enterprise and expand cooperation. He said Sichuan and South Asian countries economies were well connected through the roundtable forum which has established a long-term cooperation mechanism. He hoped to strengthen economic and trade cooperation with Sichuan and achieve greater cooperation and development with Pakistan. Sichuan Vice Governor Gan Lin hoped to boost trade between countries in the region. Addressing the inaugural session of the forum, Gan said the roundtable forum would definitely enhance the mutual understanding and the friendship between Sichuan and South Asian countries, strengthen bilateral economic and trade cooperation and sustainable development. the vice governor extended his warmest welcome to tariq Sayeed, the founder and former president of SArrC and leader of the Pakistani delegation. STAFF REPORT
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'PIA following aggressive strategy for restructure' MULTAN
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IA has come up with an aggressive strategy for its restructuring though it had faced loss of rs 200 billion during the last eight years. Secretary Defence and Chairman Pakistan International Airlines (PIA), Lt-Gen (r) Asif Yasin Malik, made the remarks addressing representatives of the business community of South Punjab at Shamim Committee room of the Multan Chamber of Commerce and Industry on tuesday noon. "We are flying wrong aircraft on wrong routes," he said and added that they were going to buy eight aircraft for the national flag carrier by October or December this year. He disclosed that PIA had not added new aircraft to its fleet for a decade. About Multan International Airport's completion, the PIA chairman announced that it would be operational by the
first quarter of 2014. "It is too big for today. However, it will need expansion after 2025," he added. Malik added that Prime-Minister designate Nawaz Sharif was keenly interested in steering the country out of crises and he also had devised a plan for PIA. recalling PIA's golden era, he said that it was the first airline in Asia that started serving meal to passengers during flights and added that it was also the first airline that introduced jet aircraft. President MCCI, Muhammad Khan Sadozai, in his welcome address urged the PIA chairman to fly direct flights to england and Saudi Arabia from Multan besides enhancing Haj flights. Sadozai said that exporters of Multan especially mango exporters should be provided with space on priority. Senior Vice president MCCI, Bakhtawar tanvir Sheikh, extended the vote of thanks to the PIA chairman.
Expo Pakistan attracting buyers and local exhibitors alike KARACHI STAFF REPORT
Over the last seven years, expo Pakistan has developed into a reputable international event, where over 2,000 Pakistani exhibitors and 3,000 foreign visitors, most of them representing large buying houses, and reputable foreign brands have attended the event. this fair is a one stop forum for the foreign buyers to view full range of Pakistan export products and develop long term business relations for enhancing exports from Pakistan. this year as well we have confirmations of foreign visitors’ having impressive profiles, who will be attending the event. this year the event will be held from 26th to 29th September at Karachi expo Centre. exhibitors have shown overwhelming response and have vehemently welcomed and appreciated the tDAP’s initiatives and have agreed reserving their space. engineering Development Board (eDB) to have their engineering Pavilion and participating with 50 renowned companies. Similarly, Pakistan Carpet Manufacturer Association is also managing their Pavilion. towel Manufacturer Association (tMA) has also confirmed participation of 10 renowned exhibitors in the expo. Major international delegations are expected from Malaysia, Indonesia, Hong Kong, Poland, Brazil, Argentina, UAe, USA and UK.
Major Gainers COMPANY OPEN Colgate Palmolive 1889.00 Bata (Pak) 1730.00 Wyeth Pak Ltd 1561.35 Sanofi-Aventis 426.99 MCB Bank Ltd. SPOT 269.09
HIGH 1980.00 1816.50 1639.41 439.99 282.50
LOW 1980.00 1816.50 1561.35 439.99 268.90
CLOSE CHANGE 1980.00 91.00 1816.50 86.50 1638.17 76.82 439.99 13.00 281.02 11.93
TURNOVER 50 50 4,350 100 1,462,300
6550.00 715.00 594.00 349.00 158.99
6450.01 686.00 539.12 339.00 148.00
6455.00 700.00 555.54 339.50 148.18
-145.00 -19.67 -11.95 -7.50 -6.32
440 1,400 3,500 5,600 34,000
5.30 12.70 23.17 6.11 15.19
3.90 12.05 21.95 5.22 13.75
5.04 12.50 22.95 5.70 14.88
0.74 0.20 0.88 0.31 0.69
71,822,000 42,369,000 33,487,500 31,457,000 21,708,500
Major Losers Nestle Pak. Shezan Inter. Indus Dyeing XD Indus Motor Co XD IGI Insurance
6600.00 719.67 567.49 347.00 154.50
Volume Leaders B.O.Punjab(R) Fauji Cement Maple Leaf Cement Colony Mills Ltd B.O.Punjab
4.30 12.30 22.07 5.39 14.19
Interbank Rates USD GBP JPY EURO
PKR 98.5517 PKR 150.6955 PKR 0.9829 PKR 128.8663
Forex UK Pound Sterling Euro US Dollar Australian Dollar Canadian Dollar Japanese Yen UAE Dirham Saudi Riyal China Yuan
BUY 151.2 129.5 99.8 97.5 97.2 0.98 27.15 26.4 16.05
SELL 151.7 130 100.05 97.75 97.45 0.99 27.4 26.65 16.1
CORPORATE CORNER LESCO intensifies ongoing anti-electricity theft campaign LAHORE: The LESCO Board of Directors in their meeting has decided to aggressively curb the KUNDA Culture and electricity theft. In this regard it was decided that LESCO teams will be mobilized to operate in their areas of jurisdiction to carry out surveillance and raids. Severe action against defaulters has also been planned. As regards revenue recovery, the CEO LESCO Muhammad Saleem has announced, in the light of the policy decision of the board that top three officers and officials will be rewarded recovery incentives on improved revenue recovery in their divisions and sub-divisions. PRESS RElEASE
Atlantis, The Palm launches its Summer Family Fun Package for Visa Card Holders
Visa, one of the world's leading payment solutions providers, and Atlantis, The Palm, the ultimate entertainment resort destination, have launched a fun-filled summer family package exclusively for Visa cardholders. The package runs from May to September 2013. Running for the second year, the promotion offers guests and their families an allinclusive summer package of one night stay in a luxurious room in Atlantis, The Palm with views over either The Palm or the mesmerizing Arabian Gulf and an AED 800 dinner voucher at Ronda Locatelli, Rostang or Levantine restaurant with a wide variety of mouth watering cuisines to choose from. In addition, two adults and two children below the age of 16 will be offered free breakfast daily at two of the resorts interactive buffet style restaurants, Kaleidoscope or Saffron. To top off the package, guests can indulge in a spa treatment with a special offer of two spa sessions for the price of one at ShuiQi Spa & Fitness. “Atlantis, The Palm is thrilled to partner with Visa again to offer exceptional value to Visa cardholders,” says Ravini
Perera, Senior Vice President, Sales and Marketing, at Atlantis, The Palm. “This summer, families can enjoy new experiences at Atlantis at this very special rate.” Marcello Baricordi, General Manager for Visa in the UAE, said: “Following the success of Visa’s 2012 Atlantis promotion, we are pleased to announce this special package for the summer of 2013. This family package is one of many benefits that Visa cardholders can enjoy during their summer vacation. Atlantis, The Palm is a unique destination for many travellers and local residents who choose to get away for a few days to relax and enjoy the luxurious 5-star services and activities and Visa aims to facilitate this breakaway with a unique promotion.” PRESS RElEASE
2nd Int'l Islamic Finance Expo from June 20 Pakistan's 2nd International Islamic Finance Expo & Conference will be held on June 20–21, 2013 at Karachi Expo centre. This mega event is being organized by publicity channel with the support of all relevant stake holders and planned & directed by Ernst & Young Ford Rhodes Sidat Hyder. Mehmood Tareen Project Director told to newsmen the main objective of the event was to create awareness about Islamic banking, investment, takaful, mutual funds, modarba, mutual funds, musharka & financing among masses & corporate sector as well. He said an exclusive session of shariah adviser's will be held to understand various segments of Islamic Financing. Leading experts, heads of Islamic Banking & Financial Institutions will also deliver their speeches. The two-day event will be a key initiative in creating the mass awareness of Islamic Finance industry in all the levels of masses and will be attended by the bankers, investment & portfolio managers, corporate professionals from it & telecom, entrepreneurs, industrialists, regulators / government officials, consultant & lawyers, Islamic scholars, students and general public. PRESS RElEASE
prolific background and an in depth understanding of banking industry are expected to give a new impetus to the growth and success of KASB Bank. Bilal Mustafa commented on this occasion, “I am positive that the bank will outperform in coming years.” PRESS RElEASE
Explore the World in style for less with Emirates’ three day business class sale Emirates, one of the world’s fastest growing airlines has announced a three day sale on its’ Business Class fares worldwide between 4-6 June 2013 with tickets starting from PKR 252,930 for travel from Karachi to London. Passengers travelling from northern part of the country to London can also avail the special fare starting from PKR 287,680 from Islamabad, PKR 289,800 from Lahore and PKR 265,330 from Peshawar. Travel is for the period July 12 and August 4 and passengers will be able to choose from 134 destinations across Emirates’ global network which spans six continents. When it comes to Business Class, Emirates goes to great lengths to ensure comfort, efficiency and attention to detail for our passengers. On the ground, Business Class customers and Gold card members of Skywards, Emirates’ award-winning frequent flyer programme can relax before their flights in one of Emirates’ 35 global Business Class lounges, including the world’s largest Business Class lounge located in Concourse A in Terminal 3, Dubai International Airport. Opened in January this year and spanning over 16,000 square metres, the lounge features:
MuzAffARAbAd: Azad Jammu and Kashmir Chief Secretary Alam din bullo along with Rashid Rauf banday, General Manager Pearl Continental Hotel Muzaffarabad, inaugurates authentic Chinese restaurant “Tai-Pan” at the Pearl Continental Hotel Muzaffarabad. PR showcase kitchens, business centres, fully stocked bars and restaurants, a Timeless Spa with 29 treatment rooms and an entertainment zone. Onboard, Emirates’ award-winning Business Class offers passengers state-of-the art seats with fully connected inflight communications and entertainment. A highlight is its renowned ice inflight entertainment system which offers passengers up to 1,400 channels of the latest multi-lingual entertainment and has been voted the world’s best at the World Airline Awards for eight consecutive years. PRESS RElEASE
Bilal Mustafa appointed KASB Bank president The Board of Directors of KASB Bank Limited, with the approval of State Bank of Pakistan, has appointed Bilal Mustafa as president and CEO of the bank. Mustafa is a seasoned banker with over 38 years of diversified experience working in key positions for Habib Bank, Allied Bank, First Allied Bank Modarba and The Bank of Khyber. He is regarded as highly accomplished, results oriented leader with demonstrated success in driving growth & profitability of very large portfolios. He has broad based experience in general banking, corporate banking, credit risk management, international trade finance, transactional banking, audit & inspection and human resources. His dynamism,
Mrs Nida Shahid, winner of the grand prize of “Suzuki Mehran Car”, at the prize distribution ceremony along with her family and Soya Supreme team. PR