PRO 05-09-2012_Layout 1 9/5/2012 3:00 AM Page 1
Wednesday, 5 September, 2012
‘IndIa, PakIstan to sIgn three agreements soon’ Agreements include customs co-operation, trade grievances redressal and mutual recognition
to Pakistan, the Commerce Secretaries of India and Pakistan will meet in Islamabad. This will be another opportunity to take more steps,” he said while addressing a lunch meeting organized for a visiting delegation of Members of Parliament from Pakistan. The meeting was organized by the Federation of Indian Chambers of Commerce and Industry (FICCI). Sharma felt that the recent decision of the Indian Government to reduce the
sensitive list by 30 per cent under the South Asia Free Trade Agreement would benefit Pakistan. He said that the decision covered all sectors that were important to Pakistan. India and Pakistan need to encourage trade by the land route, which currently was very small, he added. The Minister said that India had proposed opening of the land route for trade along the SialkotHussenewala border in Punjab and the MunabaoKhokharapar rail route. It is also proposed that both countries would meet soon to work out a strategy on connectivity by linking each other’s Capitals by air. At present, Mumbai is linked with Karachi and Delhi with Lahore. Sharma also mentioned that banks from both countries were also planning to open branches in each other’s lands. Conceding that problems do exist, Sharma said that while he was not trying to simplify anything, it was imperative that irrespective of the issues there must be “maturity, wisdom and will” to overcome challenges that come in the way of building a durable partnership between India and Pakistan.
related significance due to its capability to grow in different atmospheric and soil conditions and Pakistan produces 468,300 tonnes of the fruit per annum. Agriculture experts have urged growers to complete the process of planting new guava plants in the month of September preferably at soft and fertile land for enhanced production. Botanical growth of the fruit is usually supported by grafting. Experts said that grafting in monsoon season should be shifted to plastic bags in a greenhouse. A mixture of soil, soil from canal and organic fertilisers be put in the bags and the bags be shifted to a shed after three months. Water be applied soon after the shifting and the distance between two plants should be six metres. Small plants should get water regularly after short durations throughout the year, however, grown up plants need more water at the time of fruit formation, they added. Adult guava plants must be saved from a pest
attack through precautionary and curative measures. White-fly can damage the fruit and growers must consult experts in case of a white-fly attack or other diseases, they added.
NEW DELHI
I
INP
NDIA and Pakistan will soon sign three agreements on customs co-operation, trade grievances redressal and mutual recognition, Commerce and Industry Minister Anand Sharma said on Tuesday. “It is a matter of weeks, maximum. There have been delays in visits. There have been changes in the Pakistan Administration. The Commerce Secretaries should have met three months ago. I am told that after the visit of the Indian External Affairs Minister
Going great guavas! ‘Pakistan produces 468,300 ton guava annually’ MULTAN APP
Guava is cultivated at 58,500 hectares in the four provinces of the country. According to a press release issued by the media liaison unit of the Punjab agriculture department on Tuesday, guava has attained trade
Automobile production drives on ISLAMABAD APP
Despite energy crisis and other related challenges, the automobile industry of the country performed well as its production increased during the fiscal year 2011-12 as compared to the previous year. Among the automobile sector, the production of jeeps and cars increased by 14.72 percent during the fiscal year (2011-12) as compared to the same period of previous year, according to the official data. The overall production of jeeps and cars was recorded at 154,706 units during July-June (2011-12) against the production of 134,855 units during July- June (2010-11), data of Pakistan Bureau of Statistics revealed. During the period under review, the production of Light Commercial Vehicles (LCVs) also increased by 9.34 percent by going up from 19,142 units during 201011 to 20,929 units during 2011-12. Production of busses also increased from 490 units to 568 units, showing growth of 15.92 percent. However, the output of Trucks and Tractors decreased by 7.56 percent and 32.04 percent respectively. The production of trucks decreased from 2,810 units in 2010-11 to 2,597 units in 2011-12 while the production of tractors declined from 70,855 units to 48,152 units. The production of motorcycles increased by 0.43 percent by growing from 1,628,457 units in 2010-11 to 1,645,520 units in 2011-12, the data revealed. Meanwhile, during the month of June 2012, the production of cars and jeeps surged by 47.29 percent as it jumped from the output of 10,743 units in June 2011 to 15,823 units in June 2012. The production of LCV’s increased by 10.86 percent to reach 1,970 units during June 2012 as compared to the production of 1,777 units in June 2011. Production of busses, trucks and tractors increased by 46.67 percent, 140.20 percent and 21 percent respectively during June 2012 over the same month of last year. However, the production of motorcycles witnessed 10.20 negative growth by falling from the production of 149,265 units in 2011 to 134,026 units in 2012, the data revealed. It is pertinent to mention here that the country’s large scale manufacturing (LSM) witnessed growth of 1.17 percent during the financial year 2011-12 as compared to the growth of last fiscal year. Growth of 0.75 percent was witnessed in the indices of Provincial Board of Statistics that increased from 124.83 in 2010-11 to 128.63 during the year under review. Similarly, the indices of Ministry of Industries and Production increased from 109.87 points to 111.04 points, showing an increase of 0.74 percent. However, the indices of OCAC witnessed negative growth of 0.32 percent as it declined from 83.27 points to 78.60 points.
SBP’S TWO-PRONGED TRIUMPH SBP’s 5-year plan to expand Islamic banking KARACHI STAFF REPORT
State Bank of Pakistan (SBP) Deputy Governor Kazi Abdul Muktadir on Tuesday said the central bank was developing a new five-year (2013-17) strategic plan for Islamic banking industry. “The new plan will set the strategic direction for the Islamic banking industry. This would define the strategies and action plans to move the industry to the next level of growth and SBP would expect active and meaningful involvement of the industry in development of the plan,” Muktadir said while addressing the Islamic Finance News (IFN) Roadshow–2012 held here at the SBP’s Learning Resource Centre (LRC). He said the Islamic finance industry is likely to increase its share in the banking system to 15 percent during next five years. Growing from scratch in 2002, he said that Islamic banking now constitutes over 8 percent of the country’s banking system with a network of 964 branches and over 500 windows across the country. ‘Encouragingly, the sustained growth of Islamic banking in the country during the last decade has also started catalyzing growth and development of Islamic capital markets, Mutual funds and Takaful companies etc. Presently, we have 5 Takaful operators, about 30 Islamic mutual funds,’ he added. Muktadir disclosed that the State Bank was also developing a comprehensive Shariah Governance framework to further strengthen the Shariah governance in Islamic Banking Institutions (IBIs) and added that the framework will explicitly define the roles and responsibilities of different organs of IBIs including the Board of Directors, Shariah Advisors/Committees and Executive Management for ensuring Shariah compliance. He said the SBP had developed a comprehensive profit distribution and pool management framework in consultation with
Regulator also developing a comprehensive Shariah Governance framework in IBIs g Sovereign Sukuk of $4bn during last two years largely addressed liquidity management issue of Islamic banks g Global Islamic banking industry has swelled to $1.35 trillion with an annual growth rate of over 20 percent g
the industry and added that the framework will be issued most probably within this month. Muktadir said sovereign Sukuk of Rs.369 billion ($ 4 billion approx) were issued during last two years that have largely addressed the liquidity management issue of the Islamic banking industry. ‘The regular issuance of the Sukuk, almost on quarterly basis, has improved market confidence and tradability of the Sukuk,’ he added. He said the central ban had been taking initiatives to strengthen the legal, regulatory and Shariah compliance framework, create awareness amongst the masses and build the Islamic banking industry’s Human Resource capacity. Muktadir said SBP would soon be launching a mass media campaign to create awareness about Islamic banking. “The campaign we believe will be instrumental in enhancing public awareness and would give further boost to the growth momentum of Islamic banking industry,” he added.
Conducting auctions of Turkish Lira loan facility KARACHI STAFF REPORT
The implementation of three-year bilateral Currency Swap Arrangement (CSA) between the State Bank of Pakistan (SBP) and the Central Bank of Republic of Turkey (CBRT) amounting to $ 1 billion in equivalent local currencies began yesterday. To this effect, the SBP has issued necessary instructions to the banks for its implementation after due consultations with various stakeholders and completion of operational formalities with CBRT. A bilateral CSA was signed between SBP and CBRT by SBP Governor Yaseen Anwar and CBRT Governor Erdem Baþçý in the presence of presidents of the two countries in November last year. The objective of the currency swap is to promote bilateral trade between the two countries in the respective local currencies and any ‘other’ purpose as mutually agreed between the two central banks. Since the CSA is a bilateral financial transaction, all terms and conditions apply equally to both countries and the pricing is based on standard market benchmarks which are widely acceptable in the respective domestic markets. The CSA between the two central banks would give a positive signal to the market on the availability of liquidity of other country’s currency in the onshore market. The arrangement would augment the pool of liquidity available to finance bilateral trade between the two countries, supplementing the already available sources of liquidity. By virtue of this arrangement, SBP would have the ability to draw on the swap line and provide Turkish Lira (TRY) to banks in Pakistan. The banks would on-lend this liquidity to importers/exporters involved in trade denominated in TRY. At maturity, the importer/exporter would repay the foreign currency to the lending bank which in turn would repay to the respective central bank. In order to ensure transparency in determination of market interest
rates, the SBP has decided to conduct competitive auctions of TRY Loan Facility as under: All commercial banks would be allowed to take FE-25 deposits and extend FE-25 loans in TRY for financing of imports/exports in accordance with the SBP’s prevailing instructions on FE-25 loans/deposits. Necessary instructions to that effect have been issued vide FE Circular No. 4 on Tuesday. To provide TRY funding to scheduled banks so that they can on-lend the TRY to traders with underlying trade documents in TRY, SBP would conduct competitive auctions of TRY Loan Facility using proceeds drawn under the CSA with CBRT. Participation in auctions would be dependent on the submission of documentary evidence of export or import bills denominated in TRY, SBP would conduct ‘uniform price’ competitive TRY auctions in three and six month tenors. All scheduled banks would be eligible to participate in such auctions. Further details on the utilization of TRY in Pakistan on account of PKR/TRY swap are as follows: a) Importers with underlying trade documents denominated in TRY: On the maturity date of the letter of credit (LC), the importer would pay off the overseas supplier by borrowing in TRY. Assuming borrowing is for 6 months, the importer would save on the rupee cost and after six months the importer would buy TRY against PKR and pay off the TRY loan. Availability of onshore TRY financing would encourage importers to open TRY denominated LCs. b) Exporters with underlying trade documents denominated in TRY: Once the contract is established, the exporter would borrow in TRY, sell TRY against PKR and utilize PKR for its local operations. On the maturity date of the contract, the exporter would receive TRY from the overseas buyer and payoff the TRY loan locally. All banks are expected to educate their customers on the additional option of denominating their Trade documents in TRY. SBP would encourage banks to hold sessions with local trade bodies.
PRO 05-09-2012_Layout 1 9/5/2012 3:00 AM Page 2
Business 02 CEMENTING MISERY
Major Gainers COMPANY Rafhan MaizeXD Indus Dyeing National Foods Shezan Inter. Island Textile
Capacity utilization of cement industry dips to decade low of 68pc g Demand in local, international market low during first two months of FY13 g India’s stringent non-tariff barriers decrease exports to India by 38pc g Exports to Afghanistan also shrink due to economic slow down g
KARACHI
T
STAFF REPORT
HE capacity utilization of the cement industry slid to 68.29 percent during the first two months of FY13, the lowest in one decade as demand for cement drastically decreased in both local and international market. The decline of cement demand during July and August was mainly due to Ramadan and heavy rains in the country. According to data released by All Pakistan Cement Manufacturers Association (APCMA), the total cement dispatches that declined by 1.64 percent in July posted a decline of 2.82 percent in August. “The declining consumption of cement is a matter of serious concern for the industry,” said a spokesman of the APCMA. He said the cement industry invested heavily in enhancing its capacities in last decade basically to cater to the expected increase in local consumption. He said cement capacity increased from 16.321 million tons in 2002-03 to over 44.80 million tons in 2012-13. The local
consumption of cement however remained almost stagnant in past five years fluctuating in the range of 22-23 million tons. He said the economic recession kept the construction sector growth very low. However, he said the exports did provide the cement manufacturers a relief at the start of this century when the cement exports jumped from zero in 2001-02 to 10.981 million tons in 2008-09. The exports have been on decline since then reducing to only 8.568 million tons in 2011-12. The decline he added continues in this fiscal year as the exports during the first two months of this year declined further by 5.87 percent from 1,545,879 tons in July-August 2011 to 1,455,061 tons in July-August 2012. He said Pakistan’s exports of cement to India decreased by a whopping 38 percent during the first two months of FY13 to mere 75,784 tons. The exports to India in fact have been on constant decline ever since the two countries opened their borders for liberal bilateral trade. “The decline is not due to lack of cement demand in India but because of very stringent non tariff barriers erected by our neighbor,” he said adding Pakistan’s cement is preferred by
the Indians because of better quality. He said that India has not yet removed the trade barriers it promised to Pakistani planners on numerous occasions. The export of cement to India is allowed through trucks and rail but the industry is unable to export as much as quantity due to trade barriers, labor shortages at Indian side of Wahga border and non availability of Railways wagons. Other barriers like delay in registration of cement plants for granting export license still exist, he added. He said exports to Afghanistan are also on decline due to slowing down of its economy. The cement exports to Afghanistan he added declined by almost five percent during the first two months. Cement industry dispatched 5.096 million tons of cement against dispatches of 5.209 million tons during the corresponding months of last fiscal year. Local consumption declined from 3.664 million tons in July-August 2011-12 to 3.641 million tons in the same months of this fiscal registering a decline of 0.61 percent. Exports declined from 1.546 million tons to 1,455 million tons depicting a decrease of 5.87 percent.
SINGAPORE
AFP
HIGH 4199.00 399.21 258.15 242.60 268.50
LOW 4198.00 399.21 240.01 241.50 268.50
CLOSE CHANGE 4198.00 189.20 399.21 19.01 258.15 12.29 242.60 11.55 268.50 11.39
TURNOVER 40 100 6,800 300 100
1110.50 347.00 1010.00 145.00 96.25
1068.47 343.00 1000.00 140.57 96.00
1099.99 343.00 1000.00 140.59 96.00
-24.71 -16.00 -8.00 -7.37 -5.00
6,600 300 500 7,500 1,500
9.15 19.85 9.82 6.94 3.14
8.31 18.71 8.51 6.75 2.83
8.71 19.03 9.51 6.77 2.85
0.45 -0.01 0.69 0.05 -0.20
17,455,000 15,795,000 11,205,500 10,126,000 9,460,500
Major Losers
Asian markets steady, euro Oil up in Asia on China, Europe up ahead of ECB meeting stimulus hopes HONG KONG
OPEN 4008.80 380.20 245.86 231.05 257.11
Bata (Pak) Limited Mithchells Fruit Wyeth Pak Limited Atlas Honda Ltd AL-Abbas Sugur
1124.70 359.00 1008.00 147.96 101.00
Volume Leaders Maple Leaf Cement P.T.C.L.A Pak Elektron Ltd. Fauji Cement WorldCall Telecom
8.26 19.04 8.82 6.72 3.05
Interbank Rates US Dollar UK Pound Japanese Yen Euro
94.7857 150.6144 1.2084 119.4394
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
BUY
SELL
94.60 117.82 149.04 1.1919 94.72 11.98 25.58 25.04 95.50
95.10 119.17 150.71 1.2051 96.29 12.18 25.84 25.29 98.02
CORPORATE CORNER Dubai Islamic Bank Pakistan and Western Union – A-new partnership!
AFP
Asian markets were mixed but the euro rose Tuesday as attention turns to a European Central Bank policy meeting later in the week, with dealers hoping for plans to restart a bond-buying programme. With US markets closed for the Labor Day holiday on Monday and few catalysts, regional investors took a wait-and-see approach with the ECB meeting on Thursday as well as closely watched US jobs figures due on Friday. Tokyo, Hong Kong and Shanghai were flat, while Sydney eased 0.30 percent, and Hong Kong and Seoul was 0.10 percent higher. Expectations rose that the ECB would announce a new round of sovereign bond purchases after European lawmakers said the bank’s head, Mario Monti, had indicated such a move. With struggling economies such as Spain, Italy and Portugal desperate for help to push down their borrowing costs Monti said any central bank intervention would include only short and medium-term debt, the lawmakers said. He said in a closed-door meeting that bondbuying in the past was justified to help stabilise and protect the 17-nation eurozone, they added. “The only question is whether or not it (the ECB) will print more money between now and November,” Nicholas Smith, equity strategist at CLSA in Tokyo, told Dow Jones Newswires. Draghi’s comment helped push the euro to a two-month high of $1.2618 Tuesday in Asia, compared with $1.2598 late Monday in London trade. It also fetched 98.93 yen, compared with 98.68 yen. The dollar was at 78.40 yen against 78.32 yen. Investors brushed off data that showed eurozone manufacturing activity contracted for a seventh straight month in August. A purchasing managers index survey of thousands of eurozone manufacturers compiled
by research firm Markit came in at 45.1 in August. While it is up from 44.0 in July it still shows the sector is deep in contraction. Any score below 50 indicates shrinkage. Asian markets mostly rose on Monday on hopes for fresh stimulus measures after figures showed manufacturing in giants China and India continued to weaken. Also in traders’ sights was the release of jobs figures out of the United States as they look for clues on the state of the world’s biggest economy with its recovery stuttering. Another weak result would stoke expectations for another round of bond-purchasing by the Federal Reserve, or quantitative easing. Oil prices rose, with New York’s main contract, light sweet crude for delivery in October, advancing 78 cents to $97.25 a barrel and Brent North Sea crude for October up 37 cents at $116.15. Gold was at $1,696.80 at 0245 GMT compared with $1,688.65 on Monday.
Crude rose in Asia on Tuesday as weak manufacturing numbers from Europe and China boosted hopes of fresh central bank stimulus measures, analysts said. New York’s main contract, light sweet crude for delivery in October, advanced 78 cents to $97.25 a barrel and Brent North Sea crude for October delivery gained 37 cents to $116.15. Traders were hoping that the bleak European and Chinese manufacturing data would lead to more stimulus soon, said Nick Trevethan, senior commodities strategist for ANZ Research in Singapore. “Certainly the data of late I think has been supportive of policy easing. China’s in particular do suggest something needs to be done there,” he told AFP. Chinese figures released Monday showed manufacturing activity in the world’s largest energy consumer falling for a tenth consecutive month to its lowest level in more than three years in August. The weak performance showed that previous stimulus measures enacted by the government were insufficient and more policy easing was needed, analysts said. In Europe, survey data compiled by the Markit research firm and released Monday showed eurozone manufacturing activity contracting for a seventh month in a row in August, with the fall sharper than initial forecasts. The purchasing managers index (PMI), a survey of thousands of eurozone manufacturers, came in at 45.1 in August, down from a flash estimate of 45.3 Any score below the 50 mark indicates contraction.
KARACHI: Dubai Islamic Bank Pakistan Limited (DIBPL), a leading Islamic Bank in Pakistan and Western Union (WU), a leader in money transfer and global payment services have launched a convenient remittance solution for sending money to families living in Pakistan. DIBPL is now servicing Western Union customers for inward remittances through its branches across Pakistan. An inauguration ceremony was held in Karachi, which was attended by PRI Head Najam us Saqib, WU CEO Mr. Hamid Farid and others. pRess ReleAse
EDT HP wins court ruling in Itanium Litigation KARACHI: HPQ -3.18% issued the following statement in response to proposed ruling in the ongoing litigation with Oracle relating to the Intel(R) Itanium(R) platform: “The proposed ruling is a tremendous win for HP and its customers. The Superior Court of the State of California, Santa Clara County, has confirmed the existence of a contract between HP and Oracle that requires Oracle to port its software products to HP’s Itanium-based servers. We expect Oracle to comply with its contractual obligation as ordered by the Court.” pRess ReleAse
Engro Foundation celebrates unsung heroes of Pakistan IslAMABAD: Engro Foundation, the CSR arm of Engro Corporation Limited, launched a digital competition to recognize the efforts of Pakistani individuals and institutions that continue to impact life for the under-privileged in the sphere of education, health and livelihoods. The objective of the digital competition is to honor the efforts of individuals and organizations doing commendable social and humanitarian work and learn about their best practices and innovative approach towards the betterment of society. pRess ReleAse
ACCA students commence professional careers
Samsung Pakistan-Afghanistan Senior Manager, Mobile Phones Roy Chung presenting a one million cheque to famous pop singer QB on behalf of lucky winner Shahzad Aslam at the Samsung Eid Banao Smart lucky draw event.
KCCI President Mian Abrar Ahmad jointly cutting the ribbon along with Govt. of Sindh Secretary Industries Zamir Ahmad Khan, Korangi Association of Trade and Industries, (KATI) Chairman Etheshamuddin to inaugurate 10th PLATIC & PACK Pakistan, 9th IFTECH food + beverage-Pakistan & 1st food + hospitality-2012, at Karachi Expo Centre on Tuesday.
lAHORe: Results from the ACCA (Association of Chartered Certified Accountants) examinations in June 2012 show that a record number of students have successfully completed their final exams. Candidates around the world took almost 370,000 papers, with 7,160 students successfully completing their final ACCA exams, representing a 13.4% increase on last session. pRess ReleAse
Wednesday, 5 September, 2012