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Tuesday, 10 July, 2012
Pak, India to discuss all things petroleum ISLAMABAD ONLINE
Secretary Commerce Muneer Qureshi has said that a delegation from Pakistan would visit India during this month to discuss mechanism of Import of Petroleum products and electricity from India. Talking to media men after meeting of Senate standing committee on Commerce Secretary Commerce said that a delegation comprising on representatives of different ministries would visit India during this month for ministerial level talks with India for import of electricity and petroleum products. Secretary said that after this visit an Indian delegation would also visit Pakistan to discuss the mechanism of electricity import to Pakistan. He said that after resumption of NATO supply to ISAF forces in Afghanistan not a single convoy has not crossed the border due to suspension of the supply, containers were in poor condition and after necessary maintenance these containers would be able to utilize.
Shares, euro slump TOKYO AGENCIES
Asian shares slumped on Monday after sluggish U.S. jobs data deepened worries about slowing global economic growth, and reinforced risk aversion ahead of China inflation figures and a meeting aimed at defining steps to shore up europe's banks. The euro fell to a two-year low of $1.2225 in early Monday Asian trade, while commodity-linked currencies such as the Australian dollar and the New Zealand dollar, typically indicative of risk appetite, hit one-week lows. U.S. employers added 80,000 new jobs in June, below 90,000 forecast. While the data was seen as not strong enough to prompt any immediate action, it boosted the chances of the Federal Reserve launching a new round of monetary stimulus to boost growth, a poll showed. MSCI's broadest index of AsiaPacific shares outside Japan fell 0.5 percent after rising 1.6 percent for the first week of the third quarter, and Japan's Nikkei average opened down 1.1 percent. The price of 10-year Japanese government bond futures jumped to their highest since October 2010. The weak U.S. nonfarm payrolls report pushed U.S. stocks down about 1 percent and european shares to post their worst one-day fall in around two weeks on Friday. Borrowing costs in Spain topped the critical 7 percent level and while those for Italy surged.
FINANCIAL ACCESS IN PAKISTAN LOWEST AMONG DEVELOPING WORLD
Rude awakening Only 14pc Pakistanis use financial products, services against 40pc Indians and 30pc Bengalis g Only 0.170m of 187m Pakistanis invest at stocks exchange g 50pc in Pakistan are completely excluded from financial sector, 20pc others unaware of even simplest financial services g Pakistan’s 0.7% insurance penetration against 0.94% of Bangladesh, 4.1% of Thailand and 1.28% of Turkey g Only 2,000 Pakistanis invest in Pension Funds against 3.4m Thais and 2.6m Turks g Saving rate in Pakistan is 13.8% compared to Bangladesh’s 19% and Thailand’s 31% g ICM chief said financial illiteracy the only reason for low financial access g SECP launching countrywide Investor’s Education Program from Friday at KSE g
KARACHI
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ISMAIL DILAWAR
eLATeDLY though the regulators have finally woken up from a deep slumber to mitigate the decades-old problem of lack of financial access in Pakistan where the 187 million people’s exposure to economic indicators like investment, insurance, savings, pension funds etc stands lowest among the comity of developing nations. Apparent reason of the problem is that while majority of Pakistanis are financially illiterate the authorities concerned have done little or nothing at all during last six decades to give them even a basic understanding and knowledge of finances that, if done, must have enabled the former to fully participate in the economic development of the country. A World Bank report on “Bringing Finance to Pakistan’s Poor” says only 14 percent of the politico-judiciallyembattled Pakistanis use a financial product or service from a formal financial institution. This, 14 percent, share in financial access is the lowest when compared with that of Pakistan’s competitors from South and Southeast Asia like India (over 40 percent), Bangladesh (30 percent), Nepal (20 percent), Sri Lanka and Thailand (60 percent), Singapore (100 percent) and China and Indonesia (over 40 percent). According to official data, almost 50 percent of Pakistanis are completely excluded from financial sector while 20 percent others do not know about even the simplest form of financial services or products available in the market. Further, a comparative analysis reveals that Pakistan despite having a bigger population has an “extremely minute” investment and saving base compared to other developing
More gas shortage in winter, industry told LAHORE
ISLAMABAD
Sui Northern Gas Pipe Limited (SNGPL) here Monday warned the industry of serious gas shortages in winter this year, while the gas tariff would also be revised upward to speed up exploration. The SNGP Managing Director Arif Hameed disclosed this to the industrialists and business commuinty, while speaking at Lahore Chamber of Commerce and Industry, where the LCCI President Irfan Qaiser Sheikh updated the MD about industrial meltdown due to gas cuts, while the SVP Kashif Younis Meher, VP Saeeda Nazar, former LCCI Presidents also spoke on the occasion. The SNGPL Chairman Mian Misbahur Rehman, who is also a former LCCI President, was also present. Arif Hameed said that a massive gas loadshedding awaits industrial consumers this winter as the province faces a severe gas deficit at the moment. Currently, the country is facing an acute shortage, which would further increase during upcoming December and January. In the new gas policy, he said, the gas tariff would be improved to facilitate gas exploration in the country, however, a number of projects are well on way to introduce LPG as an alternate fuel. The SNGPL is advising the new Housing So-
The exports of sports good from the country witnessed positive growth of 2.96 percent during the first eleven months of the fiscal year 2011-12 against the exports of same period of previous year. The exports of sports good were recorded at US$302.206 million during July-May (2011-12) as compared to the exports of US$293.525 million during July-May (2010-11), according to the data of Pakistan Bureau of Statistics (PBS). Among the sports good, the major increase of 9.82 percent was recorded in the exports of footballs, as it grew from US$128.448 million to US$141.056 million. However, the exports of sports gloves decreased by 7.06 percent during the period under review, the PBS data revealed. The exports of gloves stood at US$101.016 million against the exports of US$108.687 million in 2010-11. The exports of other sports goods also increased by 6.64 percent by going up from US$56.390 million to US$60.134 million. Meanwhile, during the month of May 2012, the exports of sport goods increased by 3.39 percent as compared to the same month of last year, however witnessed decrease of 7.45 when compared to the exports of April 2012.
2.6 million Turks. Turkey is the only country Pakistan is ahead of in terms of savings as only 12 percent of Turkish people are prone to savings against 13.8 percent Pakistanis. Bangladesh and Thailand with 19 and 31 percent saving base stand far ahead Pakistan. “One of the main reasons for such low involvement in the finical markets by Pakistanis is a lack of awareness… education,” viewed Syed Javed Hassan, chief executive officer of Institute of Capital Markets (ICM), a non-profit organization working since 2009 under the ambit of Securities and exchange Commission of Pakistan (SeCP) to educate the participants of financial sector industry. Urging the need for making efforts to raise financial literacy through structured investors’ education, the ICM chief said the SeCP had devised a three-year Investors’
A winter’s tale
Sports goods export up APP
economies like Bangladesh, Turkey and Thailand. Of the 187 million Pakistanis only 0.170 million or 0.9 percent have a Unique Identification Number (UIN) to invest at the country’s stocks market against 2.804 million in Bangladesh, 3.050 million in Thailand and 4.132 million in Turkey where the populations, respectively, stand at 158 million, 67 million and 74 million. The Collective Investment Schemes (CIS) unit holders in Pakistan account for only 0.14 million against 3.6 million of Turkey and 1.5 million of Thailand. Pakistanis also leg behind in terms of insurance penetration (as a percent of GDP) with 0.7 percent against 0.94 percent of Bangladesh, 4.1 percent of Thailand and 1.28 percent of Turkey. Only 2000 or .001 percent Pakistanis participate in Pension Funds compared to 3.4 million Thais and
APP
cieties to put up LPG plants as there is moratorium on supply of gas to new industrial units and residential societies. Due to high gas tariff, the pilferage of gas has increased but the SNGPL has introduced new technology to detect theft, he maintained. On Pakistan-Iran gas pipeline project, the MD said that tenders for the said projects have already been issued that make the point the government is working on the project efficiently. While, the LCCI President said the shortage of natural gas has become a burning issue for the industries as last year the industry was provided gas for only 180 days and there is a need to find out new reserves as current gas reserves are depleting fast and it will become insufficient to meet the national demand in future. He said that the SNGPL has done a good job on gas theft issue but the current line losses are over 10 percent, adding, the LCCI understands that minimizing the pilferage can result in more revenue collection as well as fair load management. It has been seen that SNGPL is expanding its system without considering the increasing gap of gas supply and demand. Gas shortfall is estimated to reach 2.5 BCFD in 2014-15, 3 BCFD in 2015-16 and 3.5 BCFD in 201617. Hence, the gap is likely to shoot up to 5 BCFD in 2020-21, unless major gas discoveries and field developments are
made. Irfan Sheikh said the LCCI members often complain of the rigid behaviour of the staff of SNGPL with regard to imposing penalties unilaterally. Without serving any show-cause-notice to the clients, their meters are disconnected for lab testing. He suggested the concerned clients should be informed before taking any action and there should be third party testing or inspection. Despite making number of complaints about low gas pressure, there are still many industries that are suffering to a great extent. Their whole lot/batch gets wasted and they remain under this fear while making productions. He said that the investment in gas exploration and extraction is seriously lagging behind demand trends. As a result the country continues to rely heavily on fuel oil. He suggested restructuring Pakistan's gas sector to make it more efficient and to attract private sector investments. The reserves at Kunar Peshaki near Hyderabad could produce 280mcf of gas per day. These reserves could be vital to improve the supply position and bridge the present shortfall. There are known gas reserves at Kohlu as well. This huge reserve cannot be put on the back burner and needs to be explored immediately as it is sufficient to meet Pakistan's energy requirements for several years.
education Program (IeP) starting from Friday, July 13, at the Karachi Stock exchange (KSe) and to spread countrywide subsequently. “Investment Basics being the theme of it, the Program would aim at educating the investors on the college and university level,” he explained. Ideally, investment base in the 187 million Pakistan must be at least 100 million. “This lower investment rate does not allow the local equity market to expand,” said Hassan who tends to agree that the 2005 and 2008 market crashes had created a credibility dilemma for the stocks markets. He, however, lures the riskaverse investors by claiming that: “A lot of measures have been taken by the apex and front regulators to manage the risks previously involved on the stocks markets.” The ICM executive said gone are the days when the equity market was plagued with speculative trading, pumping and dumping and leveraging. “In next three to four months the stocks market would be in no one’s but in general shareholders’ control,” Hassan said referring to the SeCP-backed steps like launching of a liquid thus more representative benchmark index at the KSe and demutualization of the stocks exchanges. One can hope for the best as the SeCP has eventually recognized that all of the past initiatives it had taken on investors’ education were “fragmented” and lacked coordination with other stakeholders. This time, however, the IeP is being carried out on a broad scale with the SeCP partnering with key capital market stakeholders including country’s three stock exchanges, Pakistan Mercantile exchange, Central Depositary Company, National Clearing Company of Pakistan Limited and Mutual Funds Association of Pakistan.
Bank deposit growth falls amid less provisioning KARACHI STAFF REPORT
While overall slowdown in M2 growth has been witnessed in 1H2011, increase in demand for money has rendered into higher growth in currency in circulation (CIC) that has restricted deposit growth of commercial banks in the country at 4% during Jan-June 2012 based on June 22 data to reach Rs 6.1 trillion ($65bn). “This growth is lowest in last few years as average deposit growth stood at 10% in last 5 years,” said Topline analyst Farhan Mahmood. In Pakistan, the analyst said, deposit mobilization generally remained higher in first half of FY12 compared to the second half. Interestingly, he said, the banks advances after remaining flat since last one year posted a growth of 5 percent to Rs 3.5 trillion ($37bn) during 1H2012. That said, out of Rs 250 billion additional deposits generated during this period, approx.50% of the funds were parked in advances while the rest were diverted to government securities. “This is against the trend where banks are aggressive in investing in risk free high yielding government securities,” Farhan said.
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Tuesday, 10 July, 2012
Don't leave cotton crop water stressed! MULTAN APP
Agriculture officials have urged the growers not to leave cotton crop water stressed because it was passing through an important growth phase, the flower and fruit stage. eDO agriculture Sardar Mohammad Akbar Khan told participants of a mega farmers training programme at Kotli Najabat village of Shujabad that cotton growers should pay special attention to application of water at this stage and keep the fields clean from weeds and pests, says a release issued by media liaison unit of Punjab agriculture department here Monday.
Crude up in Asia on bargain-hunting SINGAPORE AGENCIES
Oil prices inched up in Asian trade Monday as traders bought up cheap crude following a price plunge late last week caused by disappointing US jobs figures, analysts said. New York's main contract, West Texas Intermediate (WTI) light sweet crude for delivery in August, gained 38 cents to $84.83 a barrel and Brent North Sea crude for August delivery rose 55 cents to $98.74.
Bulls at LSE LAHORE APP
Lahore Stock exchange on Monday witnessed bullish trend by gaining 1.68 points as the LSe-25 Index opened with 3641.87 and closed at 3643.55 points. The market's overall situation also corresponded to an upward trend as it remained at 1.881 million shares to close against previous turnover of 1.807 million shares, showing an upward move of 73,448 shares. While, out of the total 95 active scrips 17 moved up, 61 remained equal and 17 shed values. engro Foods Limited, KSB Pump Company Limited and Lucky Cement Limited were Major Gainer of the day by recording increase in their per share value by Rs 2.82, Rs 2.60 and Rs 2.10 respectively.
Monday blues for the bears Bulls off to a flying start this week as they take the index from the scruff of its neck and take it up 69 points. All this courtesy, institutional support after global stocks and commodities recover KARACHI STAFF REPORT
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He bulls kept dominating Karachi stocks market on first working day of the week Monday with benchmark, KSe 100-share index gained 69.36 points. The day saw the index closing up by 0.48 percent at 14, 379.54 points against 14, 310.18 points of Friday. Pakistan stocks closed higher on institutional support after global stocks and commodities recover, as viewed by Ahsan Mehanti, Director at Arif Habib Investments Limited. On Monday, the trading volumes at the ready-counter were recorded lower at 89.542 million shares against 94.336 million shares of the previous day. The trading value increased to Rs 3.801 billion compared to Rs 3.756 billion of the previous session. The intraday high and low, respectively, stood at 14, 397.93 and 14, 253.39 points. He added that the Pakistan stocks closed bullish as investors speculated ahead of SeCP chairman visit to KSe to discuss pending issues. The market capitalization increased to Rs 3.662 trillion from Rs 3.644 trillion a day earlier. Of the total 349 traded scrips, 138 gained, 100 lost and 111 finished as un-
changed. The free-float KSe-30 index went up by 52.61 points to close at 12, 504.61 points against the previous 12, 452.00 points. Jahangir Siddiqui Company was the day’s volume leader counting its traded shares at 13.497 million with the opening and closing rates standing at Rs 13.51 and Rs 14.24, followed by D.G.K Cement, engro Foods Limited, Bank Al-Falah and Azgard Nine with turnover of 12.509 million, 9.827 million, 3.608 million and 3.448 million shares respectively. According to analyst the institutional interest witnessed in stocks across the board ahead of corporate earning announcements due next week amid hopes for recovery in global stocks and commodities. On the future market, the turnover decreased by over four million shares to 5.808 million against 9.379 million shares of last working day of the week. Mehanti said that hopes for improvement in macroeconomic situation after release of US coalition support funds kept sentiments positive. The UniLever Food and Colgate Palmolive, up Rs 62.75and Rs 30.84, led highest price gainers while, Nestle Pakistan Limited and Abbott Laboratories, down Rs 35.93 and Rs 4.11 respectively, led the losers.
Business 02 Major Gainers COMPANY
OPEN
HIGH
LOW
CLOSE
CHANGE TURNOVER
Unilever Food Colgate Palmolive Mithchells Fruit UniLever Pak Siemens Pakistan
2687.18 1041.33 262.03 7290.00 672.03
2790.00 1093.39 275.13 7325.00 704.95
2687.18 1030.00 265.00 7250.00 674.01
2749.93 1072.17 275.13 7302.50 683.48
62.75 30.84 13.10 12.50 11.45
68 566 2,429 313 48
Major Losers Nestle Pakistan Ltd. Abbott Laboratories Attock Refinery Ltd IGI Insurance Ltd National Refinery
4116.71 125.93 127.30 65.71 242.45
4100.00 125.00 127.50 65.50 242.97
4063.00 120.01 124.61 63.25 240.06
4080.78 121.82 125.07 64.27 241.09
-35.93 -4.11 -2.23 -1.44 -1.36
11 1,678 1,235,262 3,384 14,793
Volume Leaders Jah.Sidd. Co. D.G.K.Cement Engro Foods Ltd. Bank Al-Falah Azgard Nine
13.51 42.72 67.93 17.88 6.55
14.44 43.55 71.32 18.01 6.97
13.55 42.65 67.31 17.75 6.50
14.24 43.46 70.78 17.95 6.83
0.73 0.74 2.85 0.07 0.28
13,497,822 12,509,140 9,827,701 3,608,504 3,448,618
Interbank Rates US Dollar UK Pound Japanese Yen euro
94.0247 146.1050 1.1765 116.3743
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
BUY
SELL
93.50 114.12 143.99 1.1607 90.67 11.89 25.32 24.83 94.09
94.70 115.85 146.13 1.1779 92.52 12.10 25.67 25.14 96.94
SPLC lacks funds to repay over Rs 528.208 million debts KARACHI ISMAIL DILAWAR
The Saudi Pak Leasing Company Limited (SPLC), one of the country’s leading leasing firms, has no money to clear its financial liabilities amounting to over Rs 528.208 million, it emerged Monday. Also, the company is planning to double its current authorized capital of Rs 1 billion through the creation of 100,000,000 preference shares of Rs 10 each. The SPLC owes over Rs 333.2085 million and Rs 195 million, respectively, to the Saudi Pak Industrial and Agricultural Investment Company Limited (SAPICO) and the Bank of Khyber (BOK) on account of subordinated loan and term loan. “Due to the current fi-
nancial position it was unlikely for the company to meet its financial obligations towards its lenders,” conceded Muhammad Ali Siddiqui, SPLC’s company secretary, in a formal communiqué with the Karachi Stock exchange under Section 160(1)(b) of the Companies Ordinance, 1984. The leasing giant is, therefore, all set to convert the respective loans of the SAPICO and BOK into preference shares. “The company has negotiated with lenders to convert their respective loans into preference shares,” said Siddiqui. The secretary said after “successful” negotiations with the lenders, the Board of Directors of the SPLC, in its June 11th meeting, had considered and approved the Term Sheet for the purpose. The com-
pany tends to issue non-voting, non-cumulative convertible unlisted preference shares to the two lenders. The SPLC proposes to issue 33,320,850 and 19,500,000 preference shares worth Rs 10 each to SAPICO and BOK, respectively. The leasing firm would issue one preference share for every Rs 10 of debt financing for a five year period with an option to convert the preference shares into the ordinary ones. To be issued, tentatively, on July 31, the preference shares would be convertible if the lenders so will. The listing of the unlisted shares would also be optional for the lenders who may like to list the same at time of conversion. The move, however, requires the consent of the company’s ordinary
shareholders, the front and apex regulators and the Board of Directors in the face of a resolution. The Board extraordinary General Meeting (eOGM) would be held on the 31st of this month in the federal capital Islamabad to discuss the two prominent agenda items. To facilitate the issuance of preference shares, the SPLC propose to increase its authorized capital from the current Rs 1 billion (divided into 100,000,000 ordinary shares of Rs 10 each) to Rs 2 billion. The capital would be doubled through the creation of some 100,000,000 preference shares each valuing Rs 10. “The Board of Directors has already approved the increase in authorized capital,” the company secretary said.
CORPORATE CORNER Summit Bank receives International Rock Award
Food Prints book launch
of the subsidiaries: NBP exchange Company and NBP Capital Limited . Dr Brohi has rich experience of banking and administration.
‘ACE Way Forward Conference 2012’
KARACHI: Summit Bank received ‘The Rock Award for 2011-12’ from Xpress Money Services Limited in a prestigious ceremony held recently in Abu Dhabi (UAe). Mr. Farrukh Majeed, Head of Home Remittance, collected the award on behalf of Summit Bank for overall best performing agent in the Middle east, North Africa, Afghanistan and Pakistan regions receiving markets.
Soneri Bank Wins CFA Association’s Runner-Up Award KARACHI: Soneri Bank is proud to have been honored by the CFA Association with the ‘2011, Best Bank of the Year’ award in the medium banks’ category. This accolade marks the Bank’s impressive and growing performance during the last year in transaction banking and the trade sector.
KARACHI: Oxford University Press launched its latest publication Food Prints: An epicurean Voyage through Pakistan—Overview of Pakistani Cuisine written by Shanaz Ramzi. Pakistan is home to many diverse communities, each boasting a cuisine that has been influenced by the country’s rich history and varied topography.
‘EOBI above its assigned target’ KARACHI: employees Old Age Benefits Institution has collected Rs 900 million above its assigned target of Rs 10 Billion for the financial year 2011-12, inspite of unfavourable economic conditions.
Dr Asif A Brohi appointed COO NBP KARACHI: Noted banker Dr Asif A Borhi has been appointed the Chief Operating Officer (COO) of National Bank of Pakistan (NBP). He is also appointed the Chairman of the Board
MUZZAFFARABAD: President & CeO PTCL, Walid Irshaid, delivering inaugural keynote address at the company’s annual ‘Way Forward Conference 2012: Accelerating Customer experience (ACe),’ held at the picturesque Pearl Continental Muzzaffarabad, Azad Jammu Kashmir on July 6-7, 2012
came soon after Sri Lankan Airlines opened its new office here on Friday morning following the appointment of the TCB Aviation Limited as the Airline's General Sales Agent in Pakistan.
UBL Funds announces final payout KARACHI: UBL Fund Managers announced final payout for the year/period ended June 30, 2012 from its open-end investment schemes. The Company announced a stock dividend of Rs.9.00 per units of par value RS. 100 from its UCIF which gave an year to date return of 17.75% p.a. From UBL United Stock Advantage Fund (USF), the Company announced a payout of RS. 4.50 per unit of par value RS. 100. This scheme has given a year to date return of 12.43% p.a. While from UBL Principal Protected Fund-I (UPPF-I) UBL Funds announced a payout of RS. 7.50 per unit of par value of RS. 100. This scheme has given a year to date return of 7.90% p.a.
SL eyes expansion in Pakistan KARACHI: Sri Lankan Airlines on Friday vowed to expand its presence in the country with promises of frequent flights from Islamabad and Lahore in the near future. G.T Jeyaseelan, Chief Marketing Officer of Sri Lankan Airlines, told a press conference here at a local hotel that Pakistan was an extremely important market for his carrier which operates a daily flight between Karachi and Colombo. His remarks
KARACHI: Delegation of Defence Residents Society (DRS) had a meeting with Brigadier Anis Ahmed CBC Station Commander Karachi, CBC Executive Officer Muhammad Hayat Maher and others also present.