PRO 10-08-2012_Layout 1 8/10/2012 12:35 AM Page 1
Friday, 10 August, 2012
A skeleton in federal govt’s closet Chinese investors demand for sovereign guarantee Engro CEO says the Chinese want the benefits, not the costs of Thar coal KARACHI ISMAIL DILAWAR
T
he lingering issue of circular debt is whereas keeping both the national and international financers at bay in Pakistan, a lukewarm response from the PPP-dominated federal government to over $ 3 billion Thar Coal project is likely to make flee the Chinese banks that have agreed to finance the long-delayed project being envisioned as a key to energy security of the crises-hit country. Sindh engro Coal Mining Company (SeCMC), a joint venture of Sindh government and engro Powergen Limited (ePL), lacks funds to finance the $ 3 billion mining and power generation projects at the Thar coal fields which has 178 billion tons lignite reserves, equivalent to the oil reserves of Saudi Arabia and Iran combined. The Chinese banks, in line with the May 2012 agreements reached at the second Pak-
MULTAN
sponding positively to engro’s proposal of designing the under-construction Japmshoro power plant to run on the Thar Coal. “We concentrated on the need for ensuring that Jamshoro new power plant, which is a government (project), should be designed to run on Thar coal,” he said adding “even on this there is reluctance which is hard to understand”. Thursday’s presentation came after a series of others that were given by the SeCMC to federal government offices ranging from the Presidency to the finance ministry but so far to no avail.
Agriculture experts for safe pomegranate orchards light and the pesticides kill them when they land on it. About chemical treatment, they said that growers can apply spray of water mixture of Trycholorofan 80WP at the rate of 2.5 gram per liter of water. White fly also affects the pomegranate by excreting hazardous substances on the leaf that affects the photosynthesis process (the process of food preparation for the plant).
Unser Freund! Germany supports GSP plus status to Pakistan, says German Ambassador in a meeting with Senior Commerce Minister Makhdoom Amin Fahim
to try harder to convince the federal government to act seriously and swiftly towards Thar Coal project that is a lifeline for the energy-starved Pakistan. Thursday saw the engro chief giving a presentation to the visiting Prime Minster Raja Pervez Ashraf at Thar coal fields outlining that how Thar could be developed. Asked if he believed his presentation to the Prime Minister would reap some fruit in the days ahead, Ansari said: “Let’s hope so”. however, to much of his disappointment the federal government is showing reluctance even in re-
Pomegranate, anyone?
APP
Agriculture experts have advised the owners of pomegranate orchards to save their crop from fruit fly attack during rainy season. In a press release issued by media liaison unit of Punjab agriculture department here on Thursday, experts said that farmers should complete harvesting in time and take all precautionary and curative measures to keep the fruit safe from pest attack. They said that fruit fly hurt the fruit the most because the female adult fruit fly pierces into it and lay eggs inside its skin. The pupae then come out of the eggs and eat the fruit from inside and thus rotten it. They advised farmers to utilize light trap i.e pesticides-laced lanterns that attract the pests by virtue of the
China Joint energy Working Group held in Islamabad, have agreed to conduct due diligence of the Thar mining and power projects leading to their financing of the energy projects. The billions of dollars project is likely to hit a snag as the federal government which, in its frequent politically-motivated public rhetoric, does not feel tired of pledging to resolve at the earliest the energy crises, which has plagued the socio-economic life in Pakistan for years, is reluctant to provide a sovereign guarantee to the Chinese financers. The Chinese banks, naturally haunted by the circular dent issue, have asked for what the sources privy to the project said “direct and independent” sovereign guarantee by the Government of Pakistan for both mining and power projects. “They (Chinese) want to mitigate the risk of circular debt that may impact their loan repayments,” the sources said. When contacted engro Corporation President and Chief executive Officer Muhammad Aliuddin Ansari not only confirmed that the guarantee was required urgently but also expressed his disappointment over the fact that the center was surprisingly giving a cold shoulder to the Thar Coal project. “No response from the government,” Ansari told Pakistan Today when asked about the update on Islamabad’s response to Chinese demand. “If the government is serious on proceeding with Thar they will have to provide it as no financier has confidence due to circular debt,” he said. To a question why the federal government was reluctant in proceeding with the much-needed sovereign guarantee, Ansari said it appeared to “want the benefits but not the costs”. “Federal govt has not made any comitments to Thar not even the transmission line has been sanctioned,” he lamented. Asked if his side was tending to withdraw from the agreement, Ansari said engro was rather tending
Pomegranate butterfly also pierces into the fruit and eat it from inside besides inviting fungus and bacterial attack. The fruit affected by pomegranate butterfly must be buried to kill the pests. Scales also suck juice from the leaf, branches and fruit and leave branches dry
ISLAMABAD APP
Germany fully supports Pakistan for getting Gernalized System of Preference (GSP) Plus status by european Union and intends to invest in Pakistan as a production base for exports to other SAARC countries. This was said by Ambassador of Germany to Pakistan Dr. Cyrill Nunn in a meeting with Senior Commerce Minister Makhdoom Amin Fahim here on Thursday. The ambassador remarked that Germany is desirous and committed to further enhancing trade relations and many German companies are keen to invest in Pakistan especially in energy and power sector. Besides huge economic benefits of GSP Plus status to Pakistan, this scheme will also be favorable for Germany in political terms as after implementation of GSP Plus, Pakistan will strictly comply all human rights matters in return, added by ambassador. Senior Commerce Minister thanked Germany for playing positive role in GSP Plus status to Pakistan and for support in getting enhanced market access for Pakistani products in eU. The meeting was informed that Germany and Pakistan are working on strengthening bilateral trade relations besides Pakistan specific trade relations with eU. In this context, Agriculture Minister of Germany is going to visit Pakistan after two months talk on agricultural trade products with Pakistan, informed by Ambassador. In the same way, Minister for Foreign Affairs of Pakistan hina Rabbani Khar is planning to
Govt borrows like there’s no tomorrow… or the day after KARACHI
in case of intense attack besides inviting black fungus. G r o w e r s should apply suitable spray in consultation with agriculture officials after noticing pest attack, they added.
visit Germany in next month. The meeting also discussed fisheries exports to eU. Senior Commerce Minister informed ambassador that our fisheries establishments are now meeting international standards and we hope to get early resumption of fisheries exports to eU and Germany may assist Pakistan in this matter. It is worth mentioning here that Germany is Pakistan’s largest trading partner within the european Union accounting for 20 percent of Pakistan’s total exports to the eU and 21% of Pakistan’s total imports from the eU. Pakistan’s exports to Germany have increased from US$ 579.8 million in 2002-03 to US$ 1.27 billion in 2010-11 and imports from Germany have increased from US$ 562.5 million in 2002-03 to USS$ 938.48 million in 2010-11.
STAFF REPORT
The data released by the central bank on August 7 reveals that the deposits of the total scheduled banks declined by 5% MoM to reach at Rs 6.1tr in Jul-12, observed the analysts at InvestCap Research. however, they said, during 7MCY12 the deposits registered growth of 4.0% CYTD compared to 4.7% growth witnessed in the total deposits during the same period of last year. “The decline in deposits was due to June-end impact as well as increase in consumption factor due to Ramadan,” said Mazhar A. Sabir. This decline, the analyst said, in deposits was also revealed in the money supply figures, in which M2 declined by 2.40% during the month, while incorporating the total time and demand deposits decline was at 4% FYTD. On the same pattern, he said, the 6M KIBOR was also down by 6bps MoM and averaged out at 12.01% during the month of Jul-12. In line with the deposits trend, the credit off-take of the total banking sector remained stagnant during the month of Jul-12 and declined by a meager 1.0% MoM to reach Rs3.7tr, while during last 7MCY12 the credit-off-take surged by 6.0%. The Advance to Deposit Ratio (ADR) of the banking sector has reached 61%, up 216bps MoM during Jul-12 and 112bps during 7MCY12. On the other hand, the investments side of the total banking sector showing a significant surge of 5.6% MoM to reach at Rs3.3tr during Jul-12 and during 7MCY12 the investment of the banking sector increased by 13%. “This growth under the investments head was in line with the extraordinary growth of Govt. borrowing, in which Govt. borrowed Rs181bn from commercial banking channels in Jul-12, registering growth of 147% WoW and 101% YoY,” Sabir said.
PRO 10-08-2012_Layout 1 8/10/2012 12:35 AM Page 2
Business 02 China’s auto sales slow in July: industry group SHANGHAI AGENCIES
BULLS, BEARS play out a draw ISLAMABAD
I
AGENCIES
SLAMABAD Stock exchange (ISe-10) here on Thursday witnessed bearish trend as the index was down by 4.07 points to close 2937.13 as compared to the previous day’s trading. Stock Analyst, Zaheer Ahmed told APP that the result announced by Pakistan State Oil (PSO) and Oil & Gas Development Corporation(OGDC) led the positive activity in the local stock market. The investors were seemed very positive about the result of PSO because it has announced cash dividend of Rs.2.5 per share or 25 per cent, despite its earning per share (ePS) has decreased from Rs.86.17 in July-Jun 2011 to 52.80 in the same period last year, he added. The turnover of the market has also wit-
ISE-10 sheds 4 points
nessed an increase owing to the major positions taken in Cement and Oil sector by investors, Analyst said. however, cash dividend of Rs.2.75 or 27.5 per cent announced by OGDC was not according to the expectation of the market, despite registering a rise in the ePS from Rs.22.53 in 2012 to Rs.14.77 in same period of last year, Ahmed said. Total volume of shares traded was 145,600, which was up by 67,100 when compared with a day earlier’s closing. Out of 122 companies’ shares traded, the price of 62 was increased while the price of 60 decreased. The price of top gainer Unilever Pakistan was increased by Rs.101.00 while the price of top loser top loser Mitchell Fruit Farma decreased by Rs.10.00. Fauji Cement Company, Fatima Fertilizer and PTCL remained volume leaders with volume of 100,000, 40,000 and 2,000 shares respectively.
ADB, VietnAm Agree
on country partnership strategy ISLAMABAD APP
The Asian Development Bank (ADB) and Vietnam have agreed on a new four-year country partnership strategy (CPS) that will focus on promoting inclusive and sustainable growth, and economic efficiency. According to an ADB press statement issued here on Thursday, Vietnam has made impressive progress in reducing poverty, regional disparities remain, with poverty most among ethnic minority groups. however, the poor are vulnerable to environmental degradation and climate change, it said adding adapting infrastructure and building climate resilience will safeguard human and natural resources, and protect the poor, it added. The new strategy will focus support on six core sectors: agriculture and natural resources; education; energy; finance; transport; and water
supply and other municipal infrastructure. It will continue to support structural and policy reforms including reforms, promote inclusive growth by targeting disadvantaged regions, and strengthen the government’s ability to address environmental and climate change challenges. ADB’s support for infrastructure, rural development, and education will help enhance the poor’s economic opportunities and access to services. ADB’s engagement in public sector management supports policy and institutional reforms for enhancing economic efficiency and improving social services for the poor while minimizing the risk of external and internal shocks pushing them back into poverty. Planning figures suggest total lending for 2013-2015 could amount to $2.6 billion from ordinary capital resources and $1.2 billion from concessional Asian Development Fund. Funding for technical assistance could reach $8 million annually, the press statement added.
Growth in Chinese auto sales slowed to 8.2 percent on-year in July, traditionally a slack season in the world’s largest car market, an industry group said Thursday. Total vehicle sales were around 1.38 million vehicles, the China Association of Automobile Manufacturers said in a statement. In comparison, China’s auto sales rose 9.9 percent year-on-year in June to 1.58 million units, previous figures showed. The nation’s auto sales began to slow last year after the government rolled back buying incentives and some cities imposed tough restrictions on car numbers to ease chronic traffic congestion and pollution. Just last month, the southern city of Guangzhou set rules to limit the number of cars through a quota on the number of vehicle number plates made available by the government. China’s overall vehicle sales rose just 2.5 percent to 18.51 million units in 2011, compared with an annual increase of more than 32 percent in 2010. For the first seven months of the year, auto sales rose 3.6 percent to 10.98 million vehicles, the association said.
Every quarter, please Prices of petroleum products be revised on quarterly basis: ICCI ISLAMABAD APP
The Islamabad Chamber of Commerce and Industry (ICCI) Thursday urged the government to revise the prices of petroleum products on quarterly basis rather than on weekly basis. Commenting on the decisions of economic Coordination Committee (eCC), ICCI President Yassar Sakhi Butt said implementation of eCC decision of revising the prices of petroleum products on weekly basis would create problems for the trade and industry. he was of the view that business community would not be able to calculate return on investment when the cost of doing business would fluctuate on weekly basis. he was of the view that the new petroleum policy should focus on enhancing oil and gas production in the country to seek a respite from the crippling oil import bill, and ease domestic pains of power and gas shortages.
Toyota announces $495m investment in Brazil BRASILIA AGENCIES
Top Japanese automaker Toyota plans to invest $495 million dollars to build an engine plant in Brazil, the company’s president said Wednesday after meeting Brazilian President Dilma Rousseff. Akio Toyoda made the announcement a day before he was to attend the inauguration of Toyota’s third factory in Brazil, in Sorocaba, located 91 kilometers (56 miles) from Sao Paulo in the country’s southeast. The engine factory, to be located in Porto Feliz — 20 miles from Sorocaba — will be ready in 2015, employ 600 people and churn out engines for etios and Corolla cars. It will eventually enable Toyota to produce the two models with 85 percent local content and thus avoid being subject to the 30 percent import tax.
Last April, Brazilian authorities introduced a new directive known as Inovar Auto aimed at spurring innovation by forcing automakers to invest in vehicle and component research and product development. The move triggered a flood of inward investment in the domestic auto market by companies hoping to avoid the import tax. Toyota plans to introduce etios compact cars, currently produced for the Indian and South African markets, in Brazil in September, with engines imported from Japan. “We can say that the etios will be a car made by Brazilians for Brazilians,” Toyoda said. The
A reception arranged by the Thai Airways at PC on 8th August. Mr. Bilal of Samsung Pakistan distributed the iPads to the top agents of the Thai Airways.
Japanese automaker said the new investments are aimed at boosting local production “now that the Brazilian auto market is showing signs of consistent growth.” Sales in Brazil — the world’s fourth largest auto market after the United States, China and Japan — fell 1.2 percent in the first half of 2012, compared with the same period last year, according to the National Association of Motor Vehicle Manufacturers (ANFAVeA). But government stimulus measures fueled signs of a rebound in June, when sales rose 22.9 percent to 353,200 units, from 287,500 in May, according to the auto trade organization.
Media iftar-dinner hosted by Nestle Pakistan Manager Corporate Media Relation Saira Iftikhar also seen in the picture CMC CEO Syed Jawaid Iqbal
Major Gainers COMPANY UniLever Pak Bata (Pak) Limited Siemens Pakistan Wyeth Pak Limited P.S.O.
OPEN 8548.00 700.00 790.00 999.75 241.77
HIGH 8649.00 735.00 815.00 1010.00 253.85
LOW 8548.00 720.00 815.00 1010.00 240.49
CLOSE CHANGE 8649.00 101.00 735.00 35.00 815.00 25.00 1010.00 10.25 250.31 8.54
TURNOVER 220 650 50 100 2,126,900
4090.00 350.00 249.00 97.00 223.00
3895.00 350.00 245.02 89.54 222.00
4090.00 350.00 247.75 89.54 223.00
-10.00 -10.00 -8.25 -4.71 -3.98
100 100 900 134,700 7,300
15.29 4.69 7.50 46.00 53.90
14.82 4.24 7.12 45.00 53.00
15.11 4.27 7.38 45.02 53.64
0.38 -0.22 0.10 -0.41 0.43
6,063,000 4,963,000 4,110,000 3,661,000 3,311,500
Major Losers Nestle Pakistan Ltd. Mithchells Fruit Shezan Inter. Akzo Nobel Pak. National Foods
4100.00 360.00 256.00 94.25 226.98
Volume Leaders Jah.Sidd. Co. 14.73 K.E.S.C. 4.49 Maple Leaf Cement 7.28 Hub Power Company45.43 Nishat Mills Limited 53.21
Interbank Rates US Dollar UK Pound Japanese Yen euro
94.0469 147.2305 1.1976 116.0821
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
BUY
SELL
94.00 115.99 145.76 1.1906 93.20 11.96 25.53 25.03 98.46
94.80 117.05 147.05 1.2010 94.53 12.13 25.73 25.18 100.78
CORPORATE CORNER P&G and moms unite to nurture tomorrow’s sports stars KARACHI: Procter & Gamble, a Worldwide Partner of the London 2012 Olympic Games, inaugurated its first sports facility at a local school in Karachi under the P&G Thank You Maa campaign. PRESS RELEASE
NBP launches remittance services arrangements KARACHI: National Bank of Pakistan and Al Rostamani International exchange (ARIe), considered as one of the largest, most reputed and reliable exchange companies in the UAe have launched NBP Foree Cash and NBP Foree Transfer remittance services in this auspicious month of Ramadan which will further facilitate the celebration of Ramadan/eid festivities. PRESS RELEASE
Conference on global trends in legal education LAHORE: Center for Law and Policy at University of Management and Technology (UMT) will be hosting a conference, Global Trends in Legal education, on Saturday, 11 August 2012 at Crystal hall A, Pearl Continental hotel, Lahore. The main sponsor for the conference is higher education Commission. PRESS RELEASE
Srilankan Consul General D.W.Jinadasa, founder president Majyd Aziz, Rauf Tabani, Farrukh Mazher, Tasneem Bandookwala, Syeda Amna,with other guests.
Sultan Ahmed is receiving the Man-of-the-Match award from former test opener Shoaib Mohammad at Advance Telecom Corporate T20 Cup DHA Sports Club. Secretary Coordination Maj. Ahmed Sohail is also present.
Friday, 10 August, 2012