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BUSINESS Saturday, 9 March, 2013
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EDERAL Minister for Finance Saleem Mandviwalla on Friday said that a comprehensive roadmap would be left for the upcoming government to get rid of the circular debt and improve performance of Public Sector Companies (PSCs) on sustainable basis. The federal minister was speaking at the signing and launching ceremony of the Corporate Governance Rules 2013 for Public Sector Companies here at a local hotel. “We will leave roadmap for the next government to get rid of circular debt and make other state owned entities effective,” Mandviwalla remarked while terming the circular debt and State Owned Entities as two major challenges. Mandviwalla categorically denied the reports that the government had provided Rs100 billion to Pakistan International Air (PIA) and clarified that Rs. 46 million were provided to the national flag carrier to buy new aircrafts to facilitate the passengers.
ICAP to organise CFO moots in Karachi, Lahore next week KARACHI: Now in its successful 4th year, ICAP is organizing the CFO conference themed as CFO – Meeting Future Challenges on 12 and 14 March 2013 in Karachi and Lahore respectively. The conference is expected to be attended by around 1200 business leaders and professionals from Finance, Audit, Tax and Information Technology. The primary objective of the “CFO Conference 2013” is to explore the key aspects and issues related to creating a faster, leaner and agile finance function and using strategic insight to lead economic growth, establish alliances and meet future challenges. The forum plans to explore the most pressing issues and the best practices being applied in organizations to maintain competitiveness and to achieve profitable growth. The CFO Conference 2013 provides information about the strategies which can be deployed in finance for growth in both mature and emerging markets. The conference will focus on opportunities and challenges that can be expected by the CFOs to encounter in 2013 and beyond. In continuation with the tradition the Third Professional Excellence Awards will also be held. The CFO conference has a unique blend of renowned speakers such as Mr. Mian Muhammad Mansha, Chairman Nishat Group, Shaukat Tareen, Advisor to Chariman Silk Bank. Mr. Saquib H. Shirazi CEO Atlas Honda, Vincet Tophoff, Senior Technical Manager IFAC, USA, Kimihide Ando MD Mitsubishi Pakistan and President OICCI, Aftab Ahmad Chaudhry Managing Director & CEO Lahore Stock Exchange, Muneer Kamal Chairman Karachi Stock Exchange and many others. Key topics to be discussed in the conference will be Critical Analysis on Economy and how it affects the performance of the business, Financial Leaders- Meeting future challenges, Strategic risk management in the face of uncertainty and unexpected risk , public private partnerships, role of CFO in bringing in investment and challenges and opportunities for finance professionals in Middle East. The CFO Conference is managed by Terrabiz for ICAP. STAFF REPORT
Governance rules for public sector companies will result in more transparency. – Finance Minister Saleem Mandviwala
Mandviwalla has some tricks up his sleeve for economic stability The federal minister lauded the efforts of the former Finance Minister, Dr. Abdul Hafeez Shaikh for managing the country’s economic and financial affairs despite challenges. He expressed the hope that the launching and implementations of the Corporate governance rules 2013 for PSCs would help improve the performance of the public sector entities and benefit the country. Meanwhile, speaking on the occasion, Chairman Securities and Exchange Commission of Pakistan Muhammad Ali gave detailed presentation on the Corporate Governance Rules 2013 and expressed the hope that the rules will have far-reaching effect in reviving the PSCs in Pakistan. He said that these rules have been formulated in view of the distinct governance challenges faced by the public sector companies in Pakistan.
ments that the BOD shall comprise of at least 40% independent directors while with regard to transparency, the rules have laid down specific requirements pertaining to corporate, financial reporting and accounting framework. All PSCs are required to adopt International Financial Reporting Standards (IFRS) and the Directors’ report to the members shall also include detailed disclosures specific to the PSC operations based on its social mandate. Moving to the third key aspect, accountability, the Rules lay down specific requirements with regard to creation of the BOD’s audit committee, internal and external audit for all PSCs. Further, the Rules also lay down criteria for the appointment and removal of the Chief Internal Auditor as well as separating the position of the Chairman and CEO to achieve an appropriate balance of power, increasing accountability and improving the BOD’s capacity for decision making, independent of management. Director General (ERU) Finance Division, Dr. Khaqan Hassan Najeeb said that the formation of these rules was a difficult and lauded the efforts of the task force that put on its untiring efforts to make this possible. Delivering the inaugural address,
According to official estimates, the eight major PSCs are receiving more than Rs300 billion in annual support and bailouts from the federal government, thereby draining fiscal resources which may otherwise be used for improving public services. He said that the rules would go a long way in defining the overall objectives of state ownership, avoiding day-to-day interference in the management of PSCs, granting operational autonomy to the board of directors (BODs), centralizing the ownership function through a coordinating entity, and exercising ownership rights according to the legal structure of each PSE, including respecting the rights and interests of minority shareholders in case of partially owned PSCs. With regard to board empowerment, the Rules h a v e l a i d down the require-
No US duties on more than 3,500 export items: diplomat ISLAMABAD STAFF REPORT
The United States is the largest and most open economy to trade and investment in the world and Pakistani businessmen can export more than 3,500 items to the country without paying any duties, a US diplomat said on Friday. James Fluker, Commercial Counselor at the US Embassy, said this at a session at the KP Chamber of Commerce and Industry to help local businesses understand how to be competitive in US markets. “The US government allows Pakistani businesses to export more than 3,500 items, including jewelry, most manufactured items, and many types of carpets, agricultural products, minerals, and marble without paying any duties on them. It is clear to us that trade, investment, and private sector growth are key to the future of the US-Pakistan relationship,” he
said. The US Commercial Service is the trade promotion office of the US government. It connects US exporters with international buyers through a network of 100 offices in the United States, and in over 70 cities around the world, including offices in Islamabad, Karachi and Lahore. It also helps Pakistani buyers locate US products, services, and business partners; meet suppliers and partners face-to-face; and participate in trade shows that feature thousands of US companies. “We are grateful to the US government for their financial and technical support in numerous development plans,” said Chamber President Dr Yuosaf Sarwar. “American support will play a vital role in reviving the business activities in the province and bringing economic prosperity to Khyber Pakhtunkhwa,” he added.
It is clear to us that trade, investment, and private sector growth are key to the future of the US-Pakistan relationship JAMES FLUKER
We will leave roadmap for the next government to get rid of circular debt and make other state owned entities effective SALEEM MANDVIWALLA Country Director CIPE, Moin Fudda also highlighted the salient features of the rules. Representatives of World Bank and Asian Development Bank were also present on the occasion who observed that PSCs wer eating up budget but were not providing service and expressed the hope that new rules would help improve the overall situation.
SBP moves to regulate exports to and via Afghanistan to CARs KARACHI: In view of peculiar nature of trade with Afghanistan, the central bank Friday asked the authorized dealers to accept the cash convertible currencies brought over their counter by the exporters and convert the same at the prevailing buying rate applicable for normal export proceeds for credit to the PKR account of the exporter. Further, the regulator said the banks will ensure that the said proceeds are backed by proper export documents as per prescribed procedure and terms & conditions issued from time to time “Attention of Authorized Dealers is invited to EPD Circular Letter No. 03 dated March 12, 2002 on the subject containing therewith SRO No. 137(1)/2002 dated March 7, 2002 issued by the Ministry of Commerce, Government of Pakistan,” said an SBP circular issued Friday. In this regard, the bank said, it is clarified that as per FE Regulations, the export made against convertible currencies is subject to Form ‘E’ certification by the Authorized Dealers. Accordingly, the export proceeds received as per sales terms are required to be surrendered in the inter-bank market for which the concerned Authorized Dealer will issue Proceeds Realization Certificate (PRC) at the prevailing buying exchange rate and credit the equivalent rupees in the PKR account of the concerned exporter. STAFF REPORT
China Mobile looking for overseas market after Pakistan success BEIJING APP
Setting precedent after successful operation in Pakistan, China Mobile looking for target with positive ‘business synergy’ around the world. China Mobile Communications Corp, the parent company of the world’s biggest mobile operator by subscriber, is seeking merger-and-acquisition (M&A) opportunities in the global market, the company’s chairman said. The only acquisition by a Chinese telecom carrier was made in 2007, when China Mobile bought Paktel Ltd, a money-losing Pakistani carrier, for $284 million from Millicom International Cellular SA. “The Pakistan case set the precedent for Chinese operators going global,” said Xi Guohua, China Mobile’s chairman, on the sidelines of the annual session of the 12th Chinese People’s Political Consultative Conference National Committee in progress these day in Beijing. The company was renamed China
Mobile Pakistan, or CMPak, and its services were rebranded in 2008 as Zong. “China Mobile is determined to go global. We keep an eye on every opportunity that is suitable,” China Daily quoted Xi. He added that he can’t elaborate because of financial rules that govern a listed company. Wang Jianzhou, former chairman of China Mobile, said in an interview last year that the company’s experience in China and Pakistan will boost its confidence in stepping into other overseas markets. He pointed out that China Mobile hoped to become a minority shareholder in telecom carriers in the European or North American markets. “We would like to be strategic investors (in them),” Wang said. However, compared with counterparts in the energy, manufacturing and financial industries, Chinese State-owned telecom operators have fallen behind in terms of overseas expansion, reports China Daily. Premier Wen Jiabao reiterated the “going out” strategy on Tuesday, when he
delivered his government last work report to the annual session of the National People’s Congress. Wen encouraged Chinese companies to invest overseas and conduct global operations. Xi said there are many mergers and acquisitions opportunities, whether the global economic climate is good or bad. “But it is very difficult for telecom carriers to make M&A decisions because we are not manufacturers, which finish every deal and that’s all,” he said, adding Telecom carrier’s M&A’s could be a longterm investment. “The process can be rather complex. We consider not only returns, but also local policies, laws and cultural differences. Besides, the M&A target should have a business synergy with China Mobile,” Xi said. According to China Mobile’s 2012 interim report issued in August, the company, which is one of China’s most profitable State-owned enterprises, had cash and cash equivalents of 96.4 billion yuan ($15.5 billion) as of June 2012.
The only acquisition by a Chinese telecom carrier was made in 2007, when China Mobile bought Paktel Ltd, a moneylosing Pakistani carrier, for $284 million from Millicom International Cellular SA SALEEM MANDVIWALLA
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Hungry is keen to enhance trade relations with Pakistan. – Hungarian Ambassador Istvan Szabo
IWCCI calls for national debate on pros and cons of pipeline project ISLAMABAD ONlINE
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HE Islamabad Women’s Chamber of Commerce and Industry (IWCCI) on Friday said it doubts will and ability of the government to ensure import of natural gas from Iran through a controversial pipeline. Government claims to relieve country of energy crisis by importing natural gas from Iran, the quickest and cheapest way to fulfil our energy needs, remained confined to statements over the years, it said. In December 2012, President Zardari unexpectedly cancelled a trip to Iran due to US opposition to the project but now government has been issuing statements of rejecting US pressure days before dissolution of assemblies, said Farida Rashid, President IWCCI. She said that all the statements of politicians claiming to reject US pressure on pipeline from gas surplus Iran are aimed at gaining popularity as country remained ill prepared to face US confrontation. What took government to become
aware of the political and economic risks posed by chronic power and gas shortages after five years of rule, asked Farida Rashid. Why government did not initiate the project
soon after coming to power which would have disallowed energy issue to undermine the country’s stability, helped revive economy and saved millions of jobs, she questioned. Farida Rashid said that US would never allow Iran to increase its presence and influence and boost foreign exchange reserves at a time when west has imposed tighter sanctions on Tehran even if it means crumbling Pakistan’s economy, a long-time American ally. Government should clarify how it would deal with tough US sanctions when country is heading towards a default due to mismanagement and corruption, she said. We are facing a highly unstable balance of payment situation, forex reserves are at unsatisfactory level and government is unable to pay for imports for over sixty days which necessitates entering into a stand-by agreement with IMF, she added. President of the IWCCI called upon a national debate on pros and cons of the project at a time Pakistan needs an IMF loan of 9-10 billion dollar loan from the IMF which will be impossible without US nod, she added.
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BUSINESS B Saturday, 9 March, 2013
Major Gainers COMPANY Colgate Palmolive Wyeth Pak Limited Shezan Inter. Exide (PAK) Indus Dyeing SD
OPEN 1680.01 900.00 412.30 328.65 468.33
HIGH 1764.01 940.00 432.91 345.08 480.00
LOW 1764.01 940.00 432.91 331.00 450.00
CLOSE CHANGE 1764.01 84.00 940.00 40.00 432.91 20.61 344.87 16.22 479.66 11.33
TURNOVER 1,200 100 100 13,500 500
11103.75 1351.00 246.02 174.05 490.05
11000.00 1324.00 222.60 165.35 480.10
11000.00 1325.00 223.00 165.45 482.81
-103.75 -67.67 -11.31 -8.60 -7.19
200 750 44,200 500 14,800
22.09 6.89 128.27 3.22 6.25
20.71 5.50 118.60 2.70 5.90
20.76 5.75 127.98 3.00 5.99
-1.04 -0.67 5.81 -0.24 -0.17
45,387,000 29,107,500 21,776,300 13,681,000 11,414,500
Major Losers UniLever Pak Bata (Pak) Philip Morris Pak. Sapphire Fiber XD Attock Petroleum Ltd
11103.75 1392.67 234.31 174.05 490.00
Volume Leaders P.T.C.L.A Telecard Limited Engro Corporation WorldCall Telecom Lafarge Pakistan
21.80 6.42 122.17 3.24 6.16
Interbank Rates USD GBP JPY EURO
PKR 97.7769 PKR 146.9782 PKR 1.0234 PKR 128.0486
Forex BUY
State Bank injects Rs 489.95b in banking system
Car dealers expect election sales boost
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal
99.10 127.97 146.92 1.0184 95.62 12.53 26.87 26.37
SELL 99.35 128.21 147.14 1.0290 97.31 12.78 27.12 26.57
ISLAMABAD AGENCIES
KARACHI STAFF REPORT
The State Bank of Pakistan on Friday injected Rs489.95 billion into the money market through a 7-day reverse repo to help banks meet their liquidity requirement ahead of the weekly settlement. In a statement, the central bank said it injected the amount at 8.93 percent per annum. The banks had offered bids worth Rs531.45 billion for the open market operation.
Motor dealers are expecting a huge surge in sales this month as political parties equip themselves for the upcoming election campaign. A caretaker setup is scheduled to take over in less than two weeks from Prime Minister Raja Pervez Ashraf’s government, which will become the first elected civilian administration in Pakistan to complete a full-term in office. The dissolution of parliament will mark the start of campaign season and H M Shahzad, chairman of the All-Pakistan Motor Dealers Association, said his members were looking forward to a boom in business. “We expect a 100 percent increase in car sales during the election campaign,” Shahzad said. Rental vehicles are expensive so candidates and their supporters are likely to buy new or second-hand cars to travel around the country canvassing for votes, he said. But Shahzad warned that recent moves to relax rules on buying and importing cars could have damaging consequences and may see vehicles used as bargaining chips during the election campaign. The government has done away with the need to submit national tax certificate numbers for purchasing new cars, and Shahzad has written to the chief election commissioner to warn this would
CORPORATE CORNER
make it easier to buy influence at the polls. “Influential non-tax payers can buy any number of cars to give as bribes to voters, workers and in horse-trading, without coming into the limelight,” he said. Shahzad added that a government amnesty for smuggled vehicles, which will see thousands legalised in the coming weeks, will penalise importers who played by the rules. “We pay millions of rupees of import duties and taxes to the government, but the amnesty on smuggled vehicles will discourage legal imports and impact government revenue,” he said. Government officials were not immediately available for comment.
SME sector possesses huge potential of jobs LAHORE APP
Small and Medium Enterprises (SME) sector has a huge potential to create employment and investment opportunities in Pakistan. This was said by Nihal Pitigala, team leader of United States Agency for International Development (USAID) experts on Asia Middle East Economic Growth Project at a meeting with Sardar Ahmad Nawaz Sukhera, Chief Executive Officer of the Small and Medium Enterprises Development Authority (SMEDA). Pitigala informed that the USAID had deputed a team of economic experts to assess industrial sectors in Pakistan those had a potential for future growth and investment. The agency was interested in industries that could create new jobs and increase incomes of firms and entrepreneurs in the provinces of Sindh and Punjab , and the two provinces were important for large urban population that could benefit from future donor assistance programmes to be launched by USAID for addressing urban poverty issues, he added. SMEDA Chief Sardar Ahmad Sukhera wel-
comed the guest and apprised him about the five year business plan to be developed by SMEDA for future SME development initiatives. The plan, he said, was focused on creating
new jobs and investment opportunities. He assured of SMEDA assistance in the initiatives to be taken by USAID for SME development in Pakistan.
LAHORE: Emirates SkyCargo recently held its annual award ceremony to honour the most productive cargo agents in Pakistan. Picture shows Emirates Pakistan Vice President Khalid Bardan and the winning cargo agents. PR
ZONG to light up rural lives, empower women ISLAMABAD: ZONG, the international brand of China Mobile, in collaboration with Buksh Foundation, a leading microfinance organization, is set to light up rural lives through the project ‘Lighting a Million Lives’ that will provide solarpowered lighting to 2 villages as a start of a long term partnership. The initiative is a part of the TERI project that aims to provide lightning to a billion people worldwide through solar power. Under the partnership, ZONG will sponsor the establishment of Solar Charging Stations in the selected villages in Chiniot District, providing solar lanterns for the use of the villagers, which can be regularly charged at the solar-charging stations. This is the first time in the country’s history that a telecom company is investing in a clean energy initiative to provide much needed lighting to those living in the depth of darkness in rural parts of the country. The initiative has important socio-economic benefits as well. As the solar-charging stations will be operated by women from the same villages, the project directly promotes women empowerment. Two female microentrepreneurs will be selected from each village to run these stations. They will then either rent out the charged solar lanterns every evening to fellow villagers at an affordable fee, or will sell the lanterns to individual households as per their need. Further, project will contribute to improvement of education and health standards, as has been observed in other countries where the project has been implemented. The use of solar lanterns, over its life span of about 10 years will also result in 500 to 600 liters of kerosene not being used for kerosene lamps, eliminating about 1.5 tons of carbon emissions into the atmosphere. PR