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BUSINESS Wednesday, 11 September, 2013
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STAFF REPORT
There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else. — Sam Walton
govt getS tIpS on economy
from malaysian minister
nawaz says terrorism hamPering economic growth
RIME Minister Nawaz Sharif on Tuesday said that economic development is the key to progress and development but terrorism and extremism are badly hamper- countable. The PM expressed dissatisfacing the economic turnaround in Pakistan. tion over the performance of the PIA durNawaz was chairing the special meet- ing the meeting and said that it is incurring ing of the Federal Cabinet at the Prime Rs 3.3 billion monthly losses due to its inMinister’s Office on Tuesday. efficiency, corruption and malpractices. “The country is passing through diffi- “At present we are only dealing with day cult times and we are evolving a consensus to day crisis at PIA. Taxpayer’s hard strategy to sort out all issues confronting earned money is being paid to PIA to bail the nation.” it out of economic crisis and sustain itself, He said that during his previous and this situation cannot continue anytenures as the PM his government was fol- more,” Nawaz added. lowing the policy of The PM said that free market econthis money should be omy which led to invested in power secfaster economic tor and development growth at that time. of other resources inWe have again stead of sustaining the started with the same inefficient PIA. He policy with enlarged said that overemployvision and increased ment and low quality vigour, the prime services have led to minister added. downfall of our naThe cabinet distional airline, which cussed good manonce was the world’s agement practices to best. He directed the be adopted by the PIA management to government sector to provide a detailed NAWAZ SHARIF briefing on the present make it more effective, efficient and acPaKistan Prime minister situation of PIA and
bring about concrete proposals to reform the national airline. Senator Dato’ Siri Idris Jala, Minister in Malaysian Prime Minister’s Office and CEO Performance Management and Delivery Unit (PMDU), attended the cabinet meeting on invitation of Nawaz. He shared his experiences of Malaysian Economic Programmes and Government Transformation. He informed the cabinet that Malaysia transformed its economy by devising short term plans within the framework of its larger strategic programmes and set timeline for achieving those plans by giving key performance indicators. The public as well as private sectors were involved, through
The country is passing through difficult times and we are evolving a consensus strategy to sort out all issues confronting the nation
Banks deposits up 15pc; advances 6pc Karachi: Aggregate banking deposits depicted an impressive growth so far in 2013. The sector, however, continued to opt for a prudent approach towards lending, said a report issued by Shajar Research. According to latest figures released by the SBP, the banks' average deposits grew to Rs 7.2tn in Aug’13, up 7% from Dec’12 while credit offtake is down 1 percent to Rs 3.8tn. Subsequently, the banking sector’s average ADR (Advance to Deposit Ratio) has slipped to 53% which compares unfavorably with 58 percent recorded in Dec’12. Investment came down by 5 percent to Rs 3.7tn in Aug’13 against Rs 3.9tn recorded in Dec’12. On an average basis, banking deposits grew by 15 percent in 8M2013 while advances grew by 6%. On the other hand, investment grew by a significant 24 percent during this period. "With the central bank likely to continue its accommodative monetary stance in the first year of the IMF program, we believe the approach of prudent lending is likely to keep banking spreads at subdued levels," the report said. STAFF REPORT
MOODY'S, APC HELP bulls-run on Karachi stocKs KARACHI STAFF REPORT
The Karachi stocks market witnessed a bullish trend Tuesday on the back of politico-economic positives, prominently Moody's favourable remarks regarding IMF's $6.64 billion loan for the dollar-hungry Pakistan. The day saw the benchmark KSE 100-share index gaining 153.33 points, 0.67 percentage, to close at 22,992.17 points. The index had finished at 22,838.54 points on the previous day. The free-float KSE-30 index too set in the green zone having gained 95.45 points at 17,859.81 points against Monday's 17,764.36. "(The) stocks closed bullish amid higher trades after International Rating Agency Moody's termed $6.6 billion loan approval for dealing of economic crises in Pakistan is credit positive," said Ahsen Mehanti of Arif Habib Corporation.
The analyst said the Asian Development Bank's assent to $245 million loan for Pakistan's for power sector, easing political concerns after the national leaders decided to hold talks to tackle terrorism during APC meeting and the finance minster's remarks on no IMF deal regarding devaluation of rupee paved the way for exchange rate stability in the country. "The rally was led by oil and cement stocks on strong valua-
well defined process, in devising these policies and making them achievable, he added. He informed the cabinet that the procedures were made simple to attract investors, both foreign and domestic. Nawaz said his government is following an economic model whereby key development sectors have been identified and prioritized. Moreover systems are being simplified. The PM said his government has prioritised economy, energy and modernizing infrastructure all over the country and investment in power sector. He added that a team of experts is working on the reforms action plan, Pakistan can learn from the success stories of tions followed by higher local prices," said Mehanti. He said consolidation continued as the equity investors awaited the State Bank's policy rate announcement this week. The trading turnover at the ready-counter was recorded higher at 265 million shares compared to 212 million traded a day earlier. The scrips traded also moved upward by Rs 2 million in terms of value climbing to Rs 9.7 billion from the previous Rs 9.5 billion. Of the total 357 scrips traded on the day 220 gained value, 109 lost and 28 remained unchanged. The market capitalisation also rose by Rs 4 billion to Rs 5.65 trillion as against Rs 5.61 trillion of the previous trading session. Fauji Cement appeared as a volume leader of the day by counting 42.737 million of its listed shares traded. The scrip appreciated by 68 paisas by closing at Rs 14.18. Other well performing equities included PIA, DG Khan Cement, Lafrage Pak, PTCL, Bank of Punjab, Nimiri Industries Chemicals, Maple Leaf Cement, Dewan Cement and Dewan Motors. The future marker too remained bullish as the trading turnover swelled to 27.49 million shares from 22.45 million of Monday.
Govt facilitating private sector for promoting export of manpower: Qureshi ISLAMABAD ONLINE
Ministry of Overseas Pakistanis and Human Resource Development Secretary Munir Qureshi said the government is taking various initiatives to facilitate export of Pakistan’s manpower to all potential markets. He expressed these views while addressing business community at Islamabad Chamber of Commerce and Industry. He said the main focus of the government is to reduce the unemployment from the country and Ministry of Overseas Pakistanis and Human Resource Development would take all possible measures to address the problems of Overseas Employment Promoters (OEPs) and facilitate them to enhance the export of manpower. Qureshi said efforts are afoot to improve the working of vocational training institutes to increase the competitiveness
of our human talent and export well trained and skilled manpower abroad. He said the insurance cover for Overseas Pakistanis is being enhanced from current two years to their first employment contract period. He said pension plans for returning Overseas Pakistanis are being considered so that when they re-
turn home, they may not face financial problems. He assured that all problems highlighted by the OEPs would be looked into to facilitate them. He acknowledged the positive role of OEPs in improving the economy and said that the top performer OEPs would be duly recognized by the government. In his welcome address,
Zafar Bakhtawari, President, Islamabad Chamber of Commerce and Industry said that Pakistan has huge potential to promote export of its manpower by developing skills and providing proper training to its human resource and government should fully support the private sector to fully realize the manpower export potential of the country. He said the Overseas Employment Promoters (OEPs) are playing very important role in reducing unemployment as from 2008 to 2013, they sent 2.6 million Pakistanis abroad and government should provide them maximum facilitation to further enhance manpower export. He said Overseas Pakistanis sent $13.92 billion as remittances and government should come up with better incentives for them and take private sector on board while making manpower policies so that with joint efforts we could further promote manpower exports.
Malaysia and replicate the same in Pakistan, he added. Nawaz said, “We look forward to working closely with Malaysian government. He also recalled his association with Mahatir Muhammad, the then prime minister of Malaysia, and said that they had extensive discussions on the economic reforms and shared experiences of each other.” Nawaz said that a high powered delegation would soon visit Malaysia to further strengthen cooperation particularly in the economic field between the two countries. He thanked the Malaysian delegation and extended invitation to Malaysian Prime Minister to visit Pakistan.
Senate body tells govt not to buy electricity from India COMMITTEE SAYS THE GOVT NEEDS TO EXPEDITE WORK ON ONGOING HYDRO PROJECTS ISLAMABAD: The Senate’s Standing Committee on Water and Power has recommended the Water and Power Ministry to stop work on import of electricity from India and not to take up this issue at any level. A meeting of the committee was held on Tuesday with Senator Zahid khan in the chair. The body criticized the import of electricity from India. The body said that rather to expedite work on the ongoing hydro projects in the country, the government is focusing on import of power from India that is also facing 30,000 megawatt of electricity shortage. Chairman Zahid Khan said that more than 12000 projects of WAPDA for power production are under progress therefore government should expedite work on these projects as these projects will produce cheap electricity. Senator Shahi We should work for Syed said, “We the great national should work for the great national interest and not for the interest and not for sake of headlines in the sake of headlines in the the newspapers newspapers.” Water and Power Additional Secretary Sohail SHAHI SYED Akbar informed senator the committee that India is not ready to provide AC power but emphasizing to provide DC power which is more expensive. He said that Asian Development Bank (ADB) is giving financial aid for feasibility study of the project. The committee said that ADB is financing the feasibility of the project then later we have to repay that amount. Why we are putting extra burden on the national kitty just to make headlines of the newspapers, committee observed. ONLINE
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Sometimes when you innovate, you make mistakes. It is best to admit them quickly, and get on with improving your other innovations. — Steve Jobs
power Sector OUTPERFORMED KSE WITH 60pc returnS In Fy13 hubco, KaPco anD Kohinoor energy ltD announc DiviDenD of rs 4.5, rs 4.5 anD rs 3.0 resPectively KARACHI
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STAFF REPORT
HE country's power sector outperformed the Karachi stocks market (KSE-100) by 11 percent in FY13, generating a return of 60 percent compared to 49 percent by the market. According to analysts at InvestCap Research, after receipt of the circular debt amount by various power sector companies on June 28, a significant growth in final dividends of these companies was witnessed. Hubco, Kapco and Kohinoor Energy Ltd (KOHE) announced a final dividend of Rs 4.5, Rs 4.5 and Rs 3.0, respectively, in FY13 translating into a final payout ratio of 112 percent, 108 percent, and 104 percent. "Such payout was a marked improvement when compared to a final dividend of Rs3, Rs3.15 and Rs1.5 by the relevant companies in FY12 taking the final payout ratio to 70 percent, 82 percent, and 54 percent respectively," said InvestCap analyst M Irfan Saeed. In order to analyse the same more objectively, the analyst calculated the final payout ratio based on final dividend and 2H earnings and keeping all other factors constant for payout except for circular debt resolution. In addition to a higher final dividend, surprise interim payout of Rs 6.75 by KOHE and Rs2 by NCPL also delighted investors, placing the above mentioned stocks amongst the top dividend yielding stocks at KSE, said Saeed. Final dividend of NPL and NCPL is yet to be announced. "We are quite hopeful that the same will be a positive surprise for investors," he said. Such an exemplary dividend payout can be attributed to the circular debt settlement of FY13, the analyst
added. "Going forward, we expect improved liquidity to prevail in the sector on account of recent power tariff hike however; we do not foresee any surprise interim payouts during FY14," said Saeed. Currently, the government is bearing Rs 5 per unit power tariff differential subsidy mainly due to high electricity generation cost. The current generation mix is 44% dependent on FO and HSD with an estimated cost of Rs17/unit. The government is currently pursuing a paradigm shift in generation mix from oil based generation to low cost coal based generation. In its recently released power policy, the govt emphasized a shift in generation mix to coal in addition to increased generation by adding new capacity to the national grid. Hubco, Lalpir power, Pakgen and NPL are key candidates for coal based conversion. Currently all these plants are running on furnace oil. "Though, physical working on coal conversion remains pending requiring heavy upfront outlay, changes in existing contracts and various complex new agreements, we expect the government to pursue the same on a war-footing basis. However, we do not expect any conversion before FY16," said he. Energy reforms already taken by the present government and continuous efforts to resolve energy crises of Pakistan are expected to bode well for power sector. "We expect the power sector to remain one of the best dividend yielding sectors during FY14," the analyst said.
IDB offers additional $850m to pakistan ISLAMABAD: The Islamic Development Bank (IDB) has offered to disburse an additional $850 million to Pakistan in the next three years for project assistance. The offer was made by Birama Boubacar Sidibe, Vice President (operations) Islamic Development Bank (IDB) who called on Finance Minister Ishaq Dar at his office. The Finance Minister also thanked IDB for financing Neelum-Jhelum Hydropower Project and hoped that the project whose cost had tripled due to neglect of the previous government would be completed by 2016 as Prime Minister Nawaz Sharif was taking personal interest. Similarly, work on Nanidpur Project which had been delay for over three years had been started in full swing. Dar informed the IDB delegation that introduction of reforms, economic initiatives taken by the government, clearance of circular debt and successful conclusion of a program with IMF had set a direction of the economy which was now on the road to recovery. INP
02
BUSINESS B
Wednesday, 11 September, 2013
ctA goes on strike for indefinite duration, Att, nAto supply threatened
Major Gainers COMPANY nestle Pak. wyeth Pak ltd unilever food abbott lab.XD lucky cement
OPEN 6140.00 3075.00 5210.00 395.00 243.66
HIGH 6299.00 3228.75 5290.00 414.75 255.84
LOW 6270.00 3075.00 5289.00 404.74 243.66
CLOSE CHANGE 6299.00 159.00 3217.25 142.25 5290.00 80.00 410.86 15.86 255.84 12.18
TURNOVER 60 5,860 40 34,200 1,138,200
544.00 370.00 400.00 167.20 174.00
544.00 360.00 400.00 167.20 162.26
544.00 360.00 400.00 167.20 162.87
-26.00 -17.00 -14.00 -8.80 -7.92
100 300 1,000 300 1,541,800
14.37 8.65 81.35 8.64 12.76
13.61 7.15 77.57 8.00 12.35
14.18 7.76 81.01 8.50 12.43
0.68 -0.27 3.44 0.61 -0.17
42,737,000 19,804,000 18,099,000 13,661,500 12,655,000
Major Losers sanofi-aventis Philip morris Pak. fazal textile shield corporation mari Petroleum KARACHI: The Custom Trading Agents (CTA) have announced strike for indefinite period in all across the country, while threat of custom clearance of Afghan Transit Trade (ATT) and NATO supply has been also increased. Media reports said on Tuesday, after the failure of negotiations between Federal Board of revenue (FBR) Collectors and Custom Agents, strike was announced by CTA for indefinate duration. Karachi Custom Agents Association (KCAA) President Saifullah Khan said that, during strike Clearing Agents would not do custom clearing, while neither duty will be performed nor import export will be held on port. He said that strike is being held against the levy being collected under ATT. Earlier, before in Khyber Agency, Joint Secretary Pak-Afghan Joint Chamber of Commerce Zia Sarhadi said that clearing agents are unnecessarily being targeted in NATO containers disappearance issue. He said that responsibility of NATO containers disappearance could not be imposed on clearing agents in fact real responsible should be appointed. ONLINE
570.00 377.00 414.00 176.00 170.79
Volume Leaders fauji cement P.i.a.c.(a) D.g.K.cement lafarge Pak. b.o.Punjab
13.50 8.03 77.57 7.89 12.60
Interbank Rates usD gbP JPy euro
PKr 104.8256 PKr 164.5867 PKr 1.0477 PKr 138.7996
Forex uK Pound sterling euro us Dollar canadian Dollar australian Dollar uae Dirham Japanese yen saudi riyal china yuan
BUY
SELL
164 138.5 104.9 100.45 96.5 28.45 1.052 27.85 16.5
164.25 138.75 105.15 00.6 96.75 28.7 1.065 28.1 16.75
usaiD promotes knitted garments sector usaiD is suPPorting smesto builD uPtheir ProDuction base ISLAMABAD APP
The United States Agency for International Development (USAID) is promoting the knitted garment sector in Pakistan by supporting small and medium enterprises (SMEs) in making exports to the International markets. Recently two among the group of twenty SMEs have made exports worth $3.3 million to the US markets by exporting their products to the world famous US retail outfits. The export products which were selected on the basis of their compli-
ance to international quality and environmental standards include knitted tops and bottoms, T-shirts, pullovers and polo shirts. The USAID through its firms project is supporting these SMEs to build up their production base and cater to the demands of mid-tier international buyers in the knitted garment sector. The twenty selected SME's have been facilitated in receiving accredited certifications, such as Worldwide Responsible Accredited Production (WRAP) and Customs Trade Partnership against Terrorism (C-TPAT). In addition, the selected SMEs are being supported with training and workforce development, machinery upgrades, enterprise resource planning system and creation of market linkages.
These efforts are expected to increase sales revenues by an additional million dollars by December 2014. Sharing his experience of working with USAID, one of the SME's said, "Previously, we used to earn less profit as we had to export our products through intermediaries since we did not have international certifications. Thanks to USAID for supporting us in receiving international certifications, we are now sending our garments directly to the international markets." "These certifications have breathed a new life into our businesses and have provided us with direct and easy access to 700 member companies of the American Apparel and Footwear Association (AAFA) with a safe and secure supply chain," added another SME beneficiary.
CORPORATE CORNER Director ICT Naveed Ehtisham were also present on the occasion. President IIUI Dr. Ahmad Yousif AlDraiweesh and Engineer Javed Ahmad Tepo also congratulated and appreciated Zulfiqar Ahmad on securing distinction. PRESS RELEASE
Program in aligning workforce training and professional development, ensuring that ACCA trainees and members continue to acquire the learning needed to do their jobs to the highest standard whilst upholding the ethical standards expected from an ACCA professional. PRESS RELEASE
uSAID power Distribution program joins hands with moot held under eu Funded trtA-11 to AccA pakistan investigate changes in iSLaMaBaD: Through partnerships with over Ict student clinches first 8,500 employers across the world, the Association FDI regulations of Chartered Certified Accountants (ACCA) seeks to position in KpK technical formally recognise and reward leading organisations Karachi: Better investment policies are the key that offer continual learning and development to promote investment in the country ; said Ms. education Board support to ACCA trainees. Following this lead, ACCA Rabyia Javeri Agha, Secretary Trade Development iSLaMaBaD: A brilliant student of Iqra college of Technology (ICT) a constituent unit of the International Islamic University, Islamabad (IIUI), Zulfiqar Ahmad Khan clinched first position in Khyber Pakhtunkhwa Board of Technical Education in the discipline of Diploma of Associate Engineering (Mechanical) by securing 2649 marks. During prize distribution ceremony organized in Peshawar, senior minister of Khyber Pakhtunkhwa Sikandar Hayat Sherpao awarded a shield and cash prize of rupees 10 thousands to Zulfiqar Ahmad Khan. Principal ICT, Engineer Javed Ahmad Khan Tepo and Deputy
Pakistan recently awarded the USAID Power Distribution Program with platinum approved employer status. The USAID Power Distribution Program works jointly with government-owned power distribution companies (DISCOs) in Pakistan to improve their performance through a reduction in losses, and improvement in both revenues and customer services. Through this program, the United States Government provides assistance and support to the Government of Pakistan in its efforts to reform the power sector to end the current energy shortfall. The ACCA-approved employer program will assist the USAID Power Distribution
Authority of Pakistan (TDAP) while addressing the inaugural session of the training workshop on 09 September on “Trade and Investment” organized at Karachi under the European Union funded TRTA II programme. She mentioned that trade and investment are two sides of the same economic coin and the countries that are integrated in the global supply and investment chain would be the driver of future economic growth. She emphasized that Pakistan needed to become one of those nations by building its capacity and becoming a reliable supplier of goods and services. She further informed the audience that
Pakistan has executed Bilateral Investment Treaties with 47 countries and 52 agreements for avoidance of double taxation. The EU funded TRTA II programme is implemented by the United Nations Industrial Development Organization (UNIDO) in association with the International Trade Centre (ITC) and World Intellectual Property Organization (WIPO). The training course is jointly conducted by ITC and PITAD in collaboration with TDAP Karachi. The program has three main components where Component 1 is about trade policy capacity building. The training is delivered by Professor Julien Chaisse from the University of Hong Kong. PRESS RELEASE
Karachi: Taher G Sachak, MD and cEO EFU Life assurance, receives 29th corporate Excellence award for best Life insurance company in Pakistan from President Mamnoon hussain. PR