PRO 05-07-2012_Layout 1 7/5/2012 1:08 AM Page 1
Thursday, 5 July, 2012
Monti says agrees with Merkel on budgetary discipline Page 02
A sorry state of affairs
PIAF hauls coals over energy crisis
Uncle Sam’s ‘sorry’ brings much needed respite to external account, currency outlook in FY13 KARACHI
F
STAFF REPORT
INALLy, the much awaited “sorry” from the US over last year Salala tragedy that killed two dozen Pakistani troops came on Tuesday. Reciprocating the gesture, Government of Pakistan (GoP) is likely to reopen Ground Lines of Communication (GLOC) that was blocked as a reprisal of the tragic incidence. The agreement is expected to reaffirm Pak-US relationship that has remained fragile ever since the Abbottabed incidence of May 02 last year. Furthermore, the development is likely to pave way for the reimbursement of Coalition Support Funds (CSF) and other foreign flows, providing some respite to country’s fragile external account and currency outlook in Fy13. To recall, following the Nato attacks in November 2011, Pak-US relations which were already fragile after Abbottabad incidence came under considerable strain. As a retaliation, Pakistan closed the GLOC while Pakistan’s biggest donor and trading partner i,e. US reciprocated by curtailing aid and other financial flows to Pakistan, with US providing approx. US$2bn a year in military and non-military aid to Pakistan during 2001-2010. Furthermore, the onus was passed on to the parliament which placed apology from
the US as one of the key determinant to reopen GLOC. yesterday, after US Secretary of State mild statement saying “we are sorry for the losses suffered by Pakistan military”, the DCC (Defense Committee of Cabinet) agreed to reopen while forgoing its demand to put additional taxes and additional transit fees. “The agreement is expected to unlock reimbursement of CSF with certain news corner quoting US will release about US$1.1bn soon to Pakistan’s as part of the deal that lifted the blockade on NATO supplies,” said Topline analyst Nauman Khan. He said the unlocking of CSF, $1.6bn budgeted in Fy13, and other foreign flows including Kerry Lugar from country’s biggest foreign donor and trading partner is expected to provide antidote for country’s external account. “The development could reduce country’s
Cement under stress
The sector remained under financial pressure in FY12
KARACHI ZAIN ALI
Cement sector remained under financial pressure during the fiscal year 2011-12 due to increase in its input cost mainly, electricity, diesel, paper sack, gypsum and devaluation in Pak rupee. However, for the year 2011-2012, the industry’s local cement dispatches were the highest ever in the history of the country. Revealing the performance of the cement sector in the year 2011-12, Spokesman of All Pakistan Cement Manufacturers Association in a statement said that the local cement dispatches increased to record level of 23.947 million tons registering an increase of 8.84 percent. However the exports remained under pressure throughout the year and declined by 9.12 percent to 8.568
million tons. He said 2011-12 was the third straight year when the cement exports declined. He further said that the cement sector added 3 million tons additional production capacity in the year 2011-12 as its total production capacity increased by 7.23 percent to 44.217 million tons from 42.235 million tons in 2010-11. However, for the year 2011-12 its capacity utilization remained under pressure due to sluggish export demand, non revival of construction sector in the country, lack of investment in housing sector and government inability to initiate mega projects. He said that from the peak level of 10.752 million tons achieved in 2008-09 the export have now decreased to 8.568 million tons in the year 2011-2012 showing a decline of 20.4 percent. He said hype created on trade with India has so far not been materialized and export in that market was only 0.605 million tons in 2011-12 which is well below the expectation of the cement sector. However, the Afghanistan market remained stable and cement sector exported 4.715 million tons in 2011-2012. Exports to other destination through sea excluding India declined to 3.247 million tons showing a reduction of 17%. Besides, the capacity utilization of cement sector reached its lowest at 69.67 percent in past one decade in the first two quarters of 201112 that ended on December 31, 2011 while exports continued to decline offsetting the gains in local consumption.
current account deficit to 1.3-1.6% of GDP in Fy13 from our initial estimates of 1.72.0% of GDP, while could keep our overall forex reserves around $11-12bn by the June 2013,” the analyst said. Further, he said, with improving Pak US relationship, the gov’t could leverage its reaffirmed relationship with US at the time of likely re-entry in the IMF program, which is anticipated to happen in later part of this current fiscal year. This in turn could allow country’s excess to tap in other donor agencies funds like World Bank and Asian Development Bank with new commitments contingent on the nod from IMF. However, Khan said Pak rupee had not rallied significantly in the morning trade on Wednesday amid uncertainty as to when and how much flows will come after this deal. PKR has already deprecated by 4.2% against US currency in last 4-months. “Though some stability is expected in PKR in short term but in the medium term pressure will be there in the local currency due to higher debt payment (including US$2.2bn IMF SBA loan repayment), reduce foreign flows amid energy crisis and heightened political noise,” he concluded.
LAHORE ONLINE
Pakistan and Industrial Traders Associations Front (PIAF) Wednesday urged the government to utilize coal to generate electricity as the energy situation is worsening with every passing day thus pushing the economy to the wall. While talking to a group of businessmen, the PIAF Chairman Engineer Sohail Lashari said that the business community was unable to understand that why the government was not initiating coal based power projects when the country owns trillion dollar worth of coal reserves that are enough to produce one lakh megawatts of electricity for 100 years. The PIAF Chairman said that Pakistan is the most resourceful country in the community of developing states but the electricity is the severest in comparison to other nations. Engineer Sohail Lashri said that Africa, Poland, India and China were producing huge quantity of electricity by coal but Pakistan despite having huge resources is producing only 1 per cent electricity through coal means. “Neither any attention was paid to the construction of new water reservoirs nor other resources including solar nor wind were tapped that resulted in a painfully slow economic growth.” The PIAF Chairman said that it is high time that the Federal government should initiate work on coal based power plants to get rid off the electricity shortages that have rendered hundreds of thousands of industrial workers out of jobs besides closure of numerous industrial units. The electricity through would also help curtail oil import bill as at the moment a big chunk of electricity being consumed is being produced through thermal means and a huge amount of much needed foreign exchange is being spent on it.
LCCI and the chamber of secrets
From rental prowess to mental prowess
LAHORE STAFF REPORT
PEW says PM’s renewed energy focus has done the square root of naught for the country
g
ISLAMABAD ONLINE
The Pakistan Economy Watch (PEW) on Wednesday said Prime Minister Raja Pervez Ashraf’s renewed focus on energy offered nothing to the masses. The first meeting that Raja Pervaiz Ashraf chaired after assuming the charge as prime minister was to resolve energy crisis proved another useless effort, it said. Now, the load shedding has increased in the harrowing summer making lives of 180 million full of miseries, affecting industrial and agricultural production, leading to deaths and making mobs more violent, said Dr. Murtaza Mughal, President PEW. Announcement regarding provision of extra fuel to Independent Power Producers (IPPs) was taken positively despite the fact that the problem in not scarcity of fuel but non-payment of dues, he said.
The Lahore Chamber of Commerce and Industry has convened a meeting of all the Chambers of Commerce in Punjab on Tuesday, July 10, to sort out the issues being faced by the business community and to develop a joint strategy for their solution. In a statement issued here, the LCCI President Irfan Qaiser Sheikh said that the Lahore Chamber of Commerce and industry has decided to convene the meeting of all the chamber of Commerce in Punjab as per the directions of the Chief Minister Punjab who would also be sending all the Provincial Secretaries to the said meeting. The LCCI President said that the Provincial Secretary Labour, Secretary Environment and Secretary Home would especially be attending the said meeting as business community in a meeting with the Chief Minister had raised a number of issues that are being created by these departments. Irfan Qaiser Sheikh said that in a meeting with the Chief Minister, he had raised the issuance of notices to the business community by the Labour and Environment departments that are creating troubles for the business doing people in these very challenging times. “Other provinces also have Labour and Environment departments but they are not doing any such practice.” The LCCI President said that this is a time to give relief to the business community but certain provincial departments were doing the other way round by serving notices on daily basis for no reason that has created unrest among the people who are generating huge revenue for the government. Irfan Qaiser sheikh said that only because of ongoing energy crisis the province of Punjab has lost almost two per cent of its GDP which means a net loss of Rs 200 billion with a closure of 40 per cent of the industry. “Another 10 to 15 per cent are on the verge of closure if the federal government fails to take immediate remedial measures.” The LCCI President said that the cost of doing business in the Province of Punjab has increased significantly as compared to other provinces of the country.
Zardari looks east for more power g
President discusses power projects with Chinese delegation ISLAMABAD ONLINE
President Asif Ali Zardari discussed in detail the projects of electricity generation, which were being undertaken in cooperation with Three Gorges Corporation of China. This he said during his meeting with a Chinese delegation headed by Senior Vice President China Three Gorges Corporation Wang Shaofeng, here at Aiwane-Sadr on Wednesday. Spokesperson to the President Senator Farhatullah Babar said that the projects being undertaken with the assistance
of Three Gorges Corporation of China would add into the system around 2500 MW of electricity of which approximately 1950 MW would be the hydro electricity and the rest would be generated through wind and solar means. The President during meeting while highlighting all weather Pak-China friendship appreciated Chinese assistance to the country especially in the power sector. He said that Three Gorges Dam Project was a living testament to the genius and vision of the Chinese people and their leadership and Pakistan was eager to learn from the Chinese experience of growth and development.
The President said that Pakistan was also keen to have Chinese assistance in conservation of its water resources. While appreciating the company’s involvement in various electricity generation projects, solar power project and the wind project in Sindh, the President invited the company to also invest in new projects and to participate in the construction of small and medium sized dams in various parts of the country. He reiterated Government’s assurance of all possible facilitation to the Three Gorges Dam Project Company in construction of dams and alternate en-
Govt urged to utilise coal to generate electricity to overcome energy crisis
ergy projects in the country. The Spokesperson said that China Three Gorges International Corporation a large scale clean energy group that specializes in the development and operation of hydropower project construction and management, electric power generation and providing professional technical assistance was assisting Pakistan in various projects that aim at overcoming the energy shortages.
PRO 05-07-2012_Layout 1 7/5/2012 1:08 AM Page 2
Thursday, 5 July, 2012
Uncle Sam is sorry… and so are the bulls
Major Gainers
Index ends 22.69 points southwards as investors await the corporate earning announcement. Nobody paid much heed to Hillary’s ‘sorry’ apparently KARACHI
P
STAFF REPORT
AKISTAN Stocks closed lower amid profit taking ahead of corporate earning announcements due next week, as viewed by Ahsan Mehanti, Director at Arif Habib Investments Limited. The Karachi Stock Exchange (KSE) 100-share index declined 22.69 points or 0.16 percent to close at 14,178.10 points as compared to 14,200.79 points of the previous session. The KSE 30-share index shed 1.17 points to close at 12,303.77 points as compared with 12,302.60 points. The market turnover was down to 100.826 million shares after opening at 119.364 million shares. The overall market capitalization declined 0.02 percent and traded Rs 3.610 trillion
as against Rs 3.616 trillion. Losers outnumbered gainers 133 to 131, while 96 stocks were unchanged. Mehanti added “Institutional support witnessed in blue chip stocks after unblocking of Nato routes. Apologies from US for killing of Pakistan troops kept investor sentiments positive.” The KMI 30-share was plunged by 46.09 points to close at 24,448.64 points from its opening at 24,402.55 points. The KSE all-share index closed with a loss of 16.13 points to 9,961.81 points as against 9,977.94 points. He said that limited foreign interest amid uncertain global markets played a catalyst role in bearish activity at KSE. D.G.K Cement was the volume leader in the share market with 10.946 million shares as it closed at Rs 41.06after opening at Rs 41.08. Pakistan Telecom Company P.T.C.L.A
Shares rise on hopes of Monti says agrees with more monetary stimulus Merkel on budgetary discipline
TOKYO: Asian shares rose to a sevenweek high on Wednesday as investors kept hopes high for more monetary policy stimulus to support the faltering global economy, starting with a likely rate cut by the European Central Bank. European shares looked set to marginally extend gains after closing at a two-month high on Tuesday, with spreadbetters predicting that region’s major markets would open up 0.1 percent. U.S. markets are closed for the Independence Day holiday. MSCI’s broadest index of Asia-Pacific shares outside Japan advanced as much as 0.8 percent to its highest since mid-May, led by the energy and materials sectors. Resource-reliant Australian shares were the region’s top performers with a 1 percent gain. AGENCIES
bERliN: Italian Prime Minister Mario Monti said in an interview published Wednesday hours before hosting talks with German Chancellor Angela Merkel that the two wanted growth but not at “the expense of budgetary discipline.” The Frankfurter Allgemeine Zeitung quoted Monti on its website as saying that after last Thursday’s Brussels EU summit the press should have written “Angela + Monti = a step forward for European economic policy.” The German daily said Monti rejected the impression that there had been deep differences between him and Merkel over debt mutualisation. He explained that while Italy had gone for growth, it was “not at the price of budgetary discipline” which is treasured by Merkel. AGENCIES
Business 02
traded 8.022 million shares as it opening at 14.60 and close at 14.52. Jahangir Siddiqi Company traded 5.261 million shares as it closed at Rs 13.33 after opening Rs 13.55. Fauji Fertilizer traded 5.048 million shares as it closed at Rs 115.54 from its opening at Rs |114.28. Nishat Mills Limited traded 4.323 million shares and closed at Rs 51.13 as against its opening at Rs 49.30. National Bank of Pakistan traded 3.842 million shares as it closed at Rs 44.87 as compared to its opening at Rs 45.14. On the future market, the turnover decreased to 10.010 million against 11.244 million shares of Tuesday. The UniLever Pakistan and Nestle Pakistan Limited, up Rs 71.16 and Rs 14.28, led highest price gainers while, Rafhan Maize XD and Colgate Palmolive down Rs 77.34 and Rs 30.09 respectively, led the losers.
FPCCI woos Iranian investors islamabad: The Federation of Pakistan Chambers of Commerce and Industry (FPCCI) has said that Pakistan offers tremendous opportunities for investors specially in power sector projects in the province of Khyber Pakhtunkhawa and urged the Iranian investors to take optimum benefits from the opportunities. Offer to this effect was made during the visit of a business delegation led by Vice President of FPCCI Zubair Ali which is currently visiting Iran on a business to business tour. A statement of the FPCCI issued here Wednesday said that upon the arrival of the delegation at Khurasan a city of Mashad (Iran), its governor Gulli Dadi, President Khurasan Chamber of Commerce and Industry (KCCI) Agha Mehdi, Ambassador of Pakistan to Iran Habibullah and Commercial Director Ministry of Commerce Iran Mehdi Latifi received the delegation. APP
COMPANY
OPEN
HIGH
LOW
CLOSE
CHANGE TURNOVER
UniLever Pak Nestle Pakistan Ltd. Indus Motor Company Pak Gum & Chemical Agriautos Industries
7078.84 4058.14 254.86 118.37 81.25
7205.00 4174.99 267.60 124.28 85.30
7076.00 4021.01 256.80 123.99 84.98
7150.00 4072.42 267.56 124.06 85.30
71.16 20 14.28 29 12.70 69,601 5.69 800 4.05 34,391
Major Losers Rafhan Maize Prod. 3144.34 Colgate Palmolive 1000.09 Bata (Pak) Limited 683.30 Philip Morris Pak. 158.39 National Foods 190.53
3270.00 970.00 660.00 156.00 190.00
2990.00 970.00 660.00 150.48 185.00
3067.00 970.00 660.00 150.48 185.79
-77.34 33 -30.09 500 -23.30 200 -7.91 24,686 -4.74 1,162
Volume Leaders D.G.K.Cement P.T.C.L.A Jah.Sidd. Co. Fauji Fertilizer Nishat Mills Limited
41.08 14.60 13.55 114.28 49.30
42.00 14.88 13.97 116.25 51.70
40.80 14.35 13.25 114.65 49.81
41.06 14.52 13.33 115.54 51.13
-0.02 10,946,368 -0.08 8,022,166 -0.22 5,261,568 1.26 5,048,384 1.83 4,323,853
Interbank Rates US Dollar UK Pound Japanese yen Euro
94.4650 147.8282 1.1836 118.8842
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
BUY
SELL
94.30 116.94 145.55 1.1655 91.88 11.96 25.47 24.98 95.58
95.50 119.16 148.28 1.1872 94.11 12.22 25.92 25.38 98.82
Eurozone retail sales rebound BRUSSELS: Eurozone retail sales rebounded in May, rising by 0.6 percent from the level in April, when they had declined by 1.4 percent, European Union figures showed on Wednesday. Sales of food, drinks and tobacco rose by 0.2 percent and non-food items by 1.0 percent in May compared to April, according to the Eurostat statistics agency. However the retail sales index fell by 1.7 percent in May compared to the same month last year, with non-food sales down by 1.5 percent and food, drinks and tobacco sales dropping 1.1 percent. AGENCIES
CORPORATE CORNER Qatar Airways celebrates launch PACRA maintains ratings of flights to Western Australia of Soneri Bank
PERTH: Qatar Airways today launched scheduled flights to the Western Australian city of Perth, officially marking the start of thrice-weekly services to the country’s mining and exploration hub. Perth becomes Qatar Airways’ second gateway in Australia after Melbourne – and the carrier’s 117th destination worldwide. It is also the latest of several route launches by the rapidly-growing global airline this year. Operated by the award-winning airline’s flagship long-haul Boeing 777 aircraft, passengers will fly in supreme comfort, with fine dining onboard and access to more than 1,000 in-flight audio and video entertainment options in every seat.
LAHORE: Picture shows Abdul Aziz, President and CEO Ufone (centre) and Jaffar Khalid, Chief Technical Officer Ufone (left) receive the ISO 9001:2008 certification from Mallick Mustafa Iman, Country Director DNV.
islamabad: The Pakistan Credit Rating Agency (PACRA) has maintained the long-term and shortterm entity ratings of Soneri Bank Limited at “AA-” (Double A minus) and “Al+” (A one plus), respectively. These ratings denote a very low expectation of credit risk emanating from a very strong capacity for timely payment of financial commitments. The rating of unsecured, subordinated TFC issue of PKR 1,200mln has also been maintained at “A+” (Single A plus). The rating denotes a low expectation of credit risk emanating from a strong capacity for timely payment of financial commitments. The ratings reflect the revitalization being brought into the bank through a) Induction of seasoned team while adding clarity to the organizational structare, b) Focus on energizing its franchise value, c) Development of a bank-wide integrated information system, in tam, a strong control environment, and d) Expansion as well as diversification in income streams. These initiatives are expected to hold the banks respective position in the peer universe that was increasingly under pressure due to deterioration in asset quality, subdued profitability, and limited system presence.
NESPAK a great national asset: state minister laHORE: NESPAK is a great national asset of Pakistan which has been rendering valuable services in the field of engineering consultancy throughout Pakistan and in 36 other countries of the world. This was stated by Mr. Tasneem Ahmed Qureshi, Minister of State for Water and Power during his visit to NESPAK House here on Wednesday. Asad I. A. Khan, Managing Director of NESPAK, gave a detailed presentation on the role and achievements of NESPAK to the visiting Minister. He informed the Minister that NESPAK was established by the Government of Pakistan in 1973 to create a pool of talented engineers; attain self-reliance in engineering consultancy and replace the foreign Consultants. NESPAK has achieved these objectives to a large extent, he
added. To date, NESPAK has completed 3288 projects including 472 overseas projects.
Emirates’ major network expansion
wholesale market is estimated at over $ 42 billion a year which is serving a population approaching 180 million – thereby, attracting foreign retail chains like MCC and Carrefour and allowing local retail markets to expand said Chairman BOI.
ZONG announces Flutter
dUbai: Emirates is embarking on a major expansion of its route network with three additional destinations to be launched in the next six months, on top of the 12 new routes already being rolled out in 2012. From 1 st November, Emirates will launch four weekly flights to Adelaide, rising to a daily service from 1 st February 2013. Adelaide will be the airline’s fifth destination in Australia which is currently served with 70 flights per week. The airline’s current double-daily service to Perth will grow to 19 weekly flights from 1 st December, becoming a triple daily operation from 1st March next year.
Metro, Makro merger finalised islamabad: The merger of German Metro Cash and Carry (MCC) and Makro is finalized and the German group will be taking over all Makro stores, including three in Karachi. This was informed by Vice President International Affairs Metro Group Tino Zeiske during a meeting with the Chairman Board of Investment Saleem H. Mandviwalla. After over taking all the Makro stores, MCC will become a big group in the country having turnover of more than Rs 40 billion annually. The merger can increase the revenues of the MCC by 20 billion per annum. MCC already has five stores in Pakistan with two of them in Lahore and one each in Karachi, Islamabad and Faisalabad. In October 2007, MCC launched its first wholesale store in Lahore. Within four years, it has been able to launch four more stores. This new acquisition will add five more stores taking the existing business to a total of 10 stores nationwide. Pakistan’s retail and
KaRaCHi: After launching various inimitable packages, ZONG – the digital partner of Pakistani nation, is now announcing its first ladies package called Flutter. This deal is designed while keeping in mind the fact that women have different requirements as compared to men and these needs have to be addressed differently. Realizing that women are an underrepresented segment of our society, ZONG has come up with Flutter which talks to women directly in their tone of voice. The package is available to all ZONG customers who can subscribe to it by simply sending “Sub” or “Y” to 369 via SMS. After activation, subscribers will be able to enjoy 75 free minutes, 100 SMS, Flutter lounge and call block service.
UCP’s ICIBM-2012 laHORE: The 2nd International Conference on Contemporary Issues in Business Management 2012 (ICIBM-2012) was held on July 4th at Pearl Continental Hotel Lahore. ICIBM provides an exclusive platform for researchers, academicians and professionals across the world to share their research contributions and experiences. Participants from cross business disciplines met and interacted with each other in this dynamic event for future research directions and applied research needs.
KARACHI: Group photo of Hinopak Management at the grand launching ceremony of ‘New Hino Dutro 300 Series’, held at a local hotel.