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BUSINESS Thursday, 7 March, 2013
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ISMAIL DILAWAR
AKISTAN Auto Manufacturers Authorized Dealers Association (PAMDA) Vice Chairman Iqbal Hussain Shah lamented the decision of the Federal Board of Revenue (FBR) to regularise nonduty paid smuggled vehicles under a new amnesty scheme. The move, he said, would deepen the crises of local auto industry while giving a cover to illegal businesses at the same time. “It is very sad that the government is patronising illegal trade to benefit a few and to demolish the local auto industry with which thousands of people are associated. This is beyond any comprehension,” he said. The FBR on Tuesday issued SRO 172(1)/2013 stating that the federal government is “pleased” to direct that smuggled or non-duty paid motor vehicles, having non-tempered engine or chassis numbers, which have been seized or voluntarily presented to Customs on or before the 31st March 2013 shall be allowed release on payment of redemption fine along with duty and taxes. The deplorable thing, Shah added, was that the scheme would also be applicable on vehicles, having an age beyond 5 years, which is a clear attempt to jeopardize the local auto industry. “It is strange that the government is taking such steps instead of supporting local industries. They are out to destabilize the investment of billions of rupees,” he added. He further said the scheme is meant to
Standard Chartered bank’s profit up 8pc to Rs 9b in 2012 KARACHI: Standard Chartered Bank (Pakistan) Limited has announced profits and income for the year 2012. The bank’s profit (before tax) has grown by 8 percent to Rs 9.1 billion in 2012, with earnings per share up at PKR 1.53 per share from PKR 1.41 per share in 2011. Revenue has been resilient at PKR 26.8 billion despite reduction in net interest margins. The bank continues to deliver consistent financial performance despite a challenging business environment and significant reduction in interest rates. Strategy of focused growth, improved cost discipline and prudent credit expansion has been successfully executed resulting in improved financial performance with steady revenue and reducing net provisions which were 20 percent lower than the same period last year. Administrative costs increased by only 4.7 percent despite ongoing inflation and investments in the franchise. The cost to income ratio however remained more or less the same at 52 percent. Income from consumer banking is stable and focus is on prudently building SME and retail assets portfolio while further enhancing a diversified cost effective retail liabilities base. Wholesale Banking income was slightly impacted due to the reduction in interest rates resulting in lower Net Interest Margins. However enhanced focus on Corporate Finance and Trading activities resulted in mitigating most of this impact. Commenting on the results, Standard Chartered CEO Mohsin Nathani said, “Despite the challenging external environment, these results demonstrate our commitment to delivering consistent and sustained performance.” STAFF R EP ORT
Pakistan has reached a critical balance of payments predicament and will need another package from the International Monetary Fund before the end of the year to avert a crisis. – ADB director Werner Liepach
Local auto-dealers slam FBR for amnesty to vehicle-smugglers help the influential of the country who are involved in smuggling and doing a great deal of damage to the economy. “A media report citing the Customs intelligence said the scheme is to benefit 2.3 million nonduty paid smuggled vehicles. This will immensely the local car industry of the country,” said Shah. This scheme has allowed 60 to 70% depreciation in value of used cars for assessment of duty in case of five-year-old used cars, while in case of those older than five years, five percent real depreciation in value per year for assessment of duty is allowed. Similarly, more than 14-year-old cars would be made subject to a flat rate of Rs 50,000 to Rs 100,000 depending on their make-up, while only one percent redemption fine would be imposed on used cars. “At present the government allows import of only three-year-old used cars. However, the amnesty for smuggled vehicles has no age limit and can be used for legalisation of any car smuggled into the country through illegal routes. Who is going to save the local auto industry from this blatant damage?” Shah remarked. “For example, with a minimum cap of $500 on 1800cc and below cars and $1000 for above 1800cc cars, a land cruiser of 1998 or 2000 model would just pay $1000 to get the status of an officially duty-paid vehicle. This advantage would only be for a particular class–which have bought smuggled used cars in the past few years and not paid any duty and were using fake number plates,” said the PAMDA official. He said a similar sort of amnesty scheme was given to ambulances which are nowadays used as commercial vehicles. “The biggest threat is Afghan Transit Trade
as those vehicles can now easily be given official status at extremely low duty rates,” he added. Shah said it was an irrational estimation which stated that the amnesty scheme would yield Rs 8 to10 billion for the national exchequer, adding that the government ignored the fact that the local auto industry paid more than this amount, only in of taxes. “They are going to make themselves content on a small share of revenue through smuggled and illegal used cars at the cost of huge revenue they receive from
the local auto industry,” he said. Shah said it was beyond comprehension why the government had taken another unpopular decision ahead of general elections and at a time when they were being criticised for their anti-investment policies in their five-year tenure. “It seems the decision makers have lost interest in making the country an investment-friendly nation,” he added. This is the second amnesty scheme announced by the PPP-led coalition government. Last year, the government gave
Wathra appointed as deputy governor SBP
KARACHI STAFF REPORT
The federal government appointed Ashraf Mahmood Wathra as deputy governor of the State Bank of Pakistan (SBP), for a period of three years from the date he assumes office, said a notification issued by the Finance Division. Wathra brings 35 years of commercial and investment banking experience to his new assignment. He is currently serving the National Bank of Pakistan (NBP) as its Senior Executive Vice President and Group Chief, Credit Management Group, since October, 2012. Before joining NBP, Wathra served Habib Bank Limited from April 1999 to September 2012 in various responsible capacities such as Regional General Manager (Bangladesh), Executive Vice President & Regional General Manager
(Singapore), Executive Vice President, Group Executive and Risk Manager & Senior Credit Officer, Asset Remedial Management Group. He was attached with Faysal Bank Limited from May 1992 to March 1999 in senior positions such as Executive Vice President & Country Risk Manager, Executive Vice President & Regional Manager and Senior Vice President & Chief Manager. From 1978 to 1992, he had been associated with many distinguished organisations such as BRR Capital Modaraba, Emirates Bank International, American Express Bank Ltd. and ANZ Grindlays Bank. Wathra is also the Director & Vice Chairman, Himalayan Bank Limited, Nepal. He also served as Director at Habib Finance International, Hong Kong and Habib Finance, Australia. Holding a Masters Degree in Busi-
ness Administration, Wathra has attended a number of seminars, conferences and courses at home and abroad including Wharton/SMU General Management Program, Operational Risk Management and Asian Bonds Summit among others. He holds extensive experience in restructuring and reorganisation of business units. He has extensive knowledge of investment banking and commercial banking operations, trade finance products and underlying delivery systems. Well conversant with Islamic modes of finance, he has extensive marketing experience of a cross section of corporate, government and aid agencies including syndication of large facilities for corporate and public sector. He also has experience in line management, audit & risk review and credit and risk management.
amnesty to those who wanted to whiten their black money by making investment in the stock market. Since then, Shah said, the government had miserably failed to stop vehicles being smuggled into the country. They are launching such schemes at the expense of local industries which reflected short-sightedness of policy makers. “This amnesty scheme for smuggled vehicles has shown the world that the government itself is encouraging unlawful activities,” he concluded.
Corporate profits grow 31% despite all odds KARACHI: Despite all odds facing the economy such as the severe power crisis, deteriorating law and order and fresh investments witnessing historic lows alongside a political transition, the country’s equities are on the rise amidst undeterred corporate earnings growth of the listed sector. “We have taken our coverage sample of the KSE-100 companies that represents over 70% of the benchmark that recorded a massive growth of 31% on a quarter-onquarter (QoQ) basis (Oct-Dec12 over JulSep012),” said analysts at Arif Habib Research. Major sectors driving this QoQ earnings growth were telecom, fertilizer and cement despite heavyweights like E&P, OMC and banking sector being key drags. However, on a YoY basis, the first half of FY13 as well as full-year CY12 (Banking, Chemical, Fertilizer) profits were marginally up by 1%. Despite better-than-expected earnings growth recorded on a QoQ basis by the corporate sector, we conservatively keep our full-year earnings growth expectation intact, the analysts said. STAFF REPORT
ZTBL clarifies position in lieu of petition in IHC ISLAMABAD: In response to a news items published in various sections of press, a Zarai Taraqiati Bank Ltd. (ZTBL) spokesman stated without prejudice that all the bank’s affairs are run strictly according to the statutes and regulations laid down by the State Bank of Pakistan (SBP), which is the regulator. Periodic inspections are made in the bank’s management and the organisation followed and adhered to the observations made by the regulatory authority. He further stated that Board of Directors of ZTBL was constituted by the Federal Government vide Notification dated June 14, 2010 after going through a strict clearance procedure under Fit & Proper Test Criteria carried out by SBP. The non-Executive Directors have not drawn any salary from the Bank, he said. STAFF REPORT
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We appreciate US support for the energy sector in Pakistan. Projects like these (Tarbela restoration) will help minimise power shortages in the country. – WAPDA Chairman Syed Raghib Shah SECP issues 8 show-cause notices to insurance firms KARACHI: The Securities and Exchange Commission of Pakistan (SECP) issued five warning letters, eight show-cause notices and one order to various insurance companies for failing to comply with corporate laws, insurance laws and accounting standards and regulations. The warnings, show-cause notices and the order were issued by the SECP Insurance Division in February. Among these notices, one was issued to a takaful operator for compromising the principles of Shariah as envisaged in the Shariah Guidelines issued by eminent Shariah scholars, whereas the remaining notices were issued to various insurance and takaful companies for not complying with the provisions of the 1984 Companies Ordinance, the 2000 Insurance Ordinance, and rules and regulations made under them. The SECP also fined Pak Qatar Family Takaful Limited an amount of one million rupees for non-compliance with Section 76(1) read with Sections 95 and 156 of the Insurance Ordinance. The Insurance Division also initiated proceedings on appeals filed against orders of the federal insurance ombudsman. Three appellants were heard and two parties were brought to the point of settlement offers by the insurance companies, to which they are yet to respond. The offers were made owing to the SECP’s mediation. Sixteen complaints were received which were satisfactorily handled during the month. STAFF REPORT
Stable cotton prices shrug off rainfall impact in Sindh, Punjab
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KARACHI
ISMAIL DILAWAR
OWER production of cotton was witnessed in the country caused by heavy rains. Despite this decline, lower international prices coupled with inventory backlog can be accredited for keeping cotton prices in the local market at bay. During the current season, average cotton prices were seen at Rs 5,847 per maund (37.324 kg), rising by a minimal 1.5% YoY from Rs 5,761 per maund in the corresponding period last year. Cotton arrival figures, revealed recently by the Pakistan Cotton Ginners Association (PCGA) for the period until March 1st, show a decline of 10 percent YoY due to heavy rainfall in upper Sindh and lower Punjab. During the said period, a total of 12.63 million bales arrived in the market compared to 14.10 million in the corresponding period last year, said a research report compiled by Abdul Azeem of InvestCap Research The report said Punjab contributed 73% (9.26million bales) in total cotton arrival so far, while Sindh contributed 27% (3.38 million bales) during the aforementioned period. On a fortnightly basis, cotton arrivals declined by a massive 47% YoY to 255,000 bales.
In Punjab, districts of Bahawalpur, Bhawalnagar, Rahim Yar Khan, Khanewal and Vehari, accounted for 55% of total production in the country, as cumulative cotton arrivals touched 5.19 million bales. In Sindh’s districts of Sanghar, Tharparkar and Hyderabad, cotton arrival reached 1.98 million bales, translating into a 16% share of the country’s total cotton arrival so far. “We foresee the country to be able to produce 13million bales during the current season, which will be 12% YoY lower than last year’s arrivals of 14.8 million bales,” said Abdul Azeem in the report. The government, he said, having initially established the cotton production target at 14.6 million bales for FY13 had now revised it to 13.3 million bales after deteriorating weather conditions for cotton crop in the country. “Despite the revision we see achievement of the target to be difficult as production figures are lagging behind,” he added. The textile sector of the country is currently in the limelight due to the increasing profitability on the back of a low interest rate scenario. Furthermore, the newly developed demand of cotton yarn from China has a positive impact on the sales of the local textile spinning businesses. In addition to that, resumption of dutyfree export to EU is likely to improve the sales of local textile companies.
02
BUSINESS B Thursday, 7 March, 2013
Major Gainers COMPANY UniLever Pak Indus Motor Co Philip Morris Pak. Indus Dyeing SD Attock Refinery
OPEN 10500.01 328.24 212.54 437.50 192.37
HIGH 10575.00 344.65 223.16 450.00 201.98
LOW 10400.01 320.05 215.00 445.00 195.50
CLOSE 10575.00 339.71 223.16 447.75 201.16
CHANGE 74.99 11.47 10.62 10.25 8.79
TURNOVER 1,700 31,500 68,600 400 2,786,200
900.00 315.00 155.99 132.47 302.00
900.00 312.00 150.01 125.01 300.00
900.00 314.00 150.60 126.08 300.50
-12.00 -11.00 -5.95 -4.97 -4.50
200 2,500 7,600 4,267,500 1,700
8.48 8.66 6.24 18.08 16.55
7.66 8.16 5.80 17.15 15.61
7.82 8.23 5.89 17.86 15.62
-0.17 -0.07 0.12 0.71 -0.99
62,943,500 28,756,500 25,978,500 19,533,500 19,288,000
Major Losers Wyeth Pak Limited National Foods Pak Gum & Chemical Engro Foods Ltd. MithchellsFruit
912.00 325.00 156.55 131.05 305.00
Volume Leaders Lotte PakPTA Fauji Cement Lafarge Pakistan Maple Leaf Cement Jah.Sidd. Co.
7.99 8.30 5.77 17.15 16.61
Interbank Rates USD GBP JPY EURO
PKR 98.0771 PKR 148.0180 PKR 1.0499 PKR 127.8828
Forex BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal
99.10 128.18 148.13 1.0472 95.17 12.53 26.85 26.35
SELL 99.35 128.66 148.64 1.0600 97.04 12.79 27.15 26.60
CORPORATE CORNER Visa registers 19 percent Day of HOPE celebrated LAHORE: increase in international Patient Welfare Society of spending during Dubai Institute of Nuclear Shopping Festival 2013 Medicine and DUBAI: International visitors to the UAE spent over $589m on their Visa cards during the Dubai Shopping Festival 2013, registering a 19 percent year-on-year growth over DSF 2012, according to data issued by Visa Inc., the world’s largest retail electronic payments networks and a lead sponsor of the region’s premier shopping event. The results collected by the company’s VisaVue® Travel data service indicated the month-long retail and shopping extravaganza got off to an excellent start, with spending on overseas-issued Visa cards in the first week of DSF touching $153.35 million [January 3-9, 2013]. The Friday of the first weekend of the sale [January 4, 2013] also witnessed record spending, with over $25 million spent on overseas Visa cards. The data also revealed that cardholders from Russia, Kingdom of Saudi Arabia and the United Kingdom were the top spenders during DSF 2013, contributing in excess of $82m, $66m and $53 million respectively to the UAE economy. Visa cardholders from each of these countries showed significant increase in spending compared to DSF 2012, with Russians spending 34pc more on their Visa cards compared to last year’s sale, while Saudis spent 26 percent more than DSF 2012. PR
The Educators national speech contest The Educators is the largest franchise based network of schools in Pakistan in more than 200 cities with a student body of 150,000 plus. It has been providing opportunities to its students
Oncology (INMOL) celebrated the HOPE day along with the Cancer Patients. A large number of patients who are already cured and the newly affected cancer patients participated in this event. Beside Doctors, Scientist and paramedical staff of INMOL, students from different schools also participated in large numbers. The existing and new patients shared their experiences on the occasion. These children also performed Nats, recitations and plays. Addressing the occasion INMOL Director Dr Abu Bakar Shahid said the hope day was celebrated to assure new patents that they could be cured. He said doctor-patient relation is a deep one and the doctor felt happy when the patient recuperated and was disappointed otherwise. Patients Welfare Society President Yasmeen Zia said the day was only organised for the encouragement of patients. She extended gratitude to all those healthy patients who had come from all over the country to attend the function. She said her society had been providing free medicine to cancer patients since 1984. At the end gifts were provided to all children.Young boys and girls from different schools met their fellow cancer patients and shared views. A magic show was also organised for these children. PR
to excel in curricular & co-curricular activities. In this context a speech contest is organised on a yearly basis to provide opportunity to its students to develop not only their linguistic skills but to inculcate leadership qualities in them. This contest is organised at 3 levels i.e. cluster level, regional level and then the winners compete at the national level. The 5 regions are given responsibility to host the final
MAP organises 14th Management Convention Picture shows Datuk Seri Mohamed Iqbal Rawther, Chairman Malaysian Institute of Management receiving a plaque from Kamal A. Chinoy President Management Association of Pakistan [MAP] at 14th Management Convention organized by MAP, recently. Picture shows [L to R], Mr. Kamal Chinoy President Management Association of Pakistan [MAP], Datuk Seri Mohamed Iqbal Rawther, Chairman of the Malaysian Institute of Management, and Melito “Mel” S. Salazar, President Management Association of the Philippines at 14th Management Convention organized by MAP, recently. The Convention was attended by over 250 delegates from the corporate sector.
event on a rotational basis. The 9th National Level Speech Contest was held on February 25, 2013, hosted by southern Punjab region. Multan Commissioner Khurram Agha graced the occasion as chief guest and highly appreciated the young speakers. The Educators Project Director Ali Raza congratulated the winners, the network associates and teachers of participating campuses for their untiring efforts. PR
The Coca-Cola Export Corporation Pakistan & Afghanistan General Manager Rizwan U Khan, Senior Advisor to Punjab Chief Minister Mohammad Pervaiz Malik and other government officials at the ground breaking ceremony of Coca-Cola Beverages Pakistan Limited, Multan Greenfield project.