PRO 12-01-2012_Layout 1 1/12/2012 12:24 AM Page 1
Heart of Asia strategy Page 4-5 An opportunistic axis Page 3 Oversees Pakistanis show interest in Thar Coal project Page 7
Pages: 7
profit.com.pk
Thursday, 12 January, 2012
PM urged to take notice of nine new Indian dams on Indus, Chenab rivers MOWP and foreign affairs ministry fail to take up issue with India g India building 7 new dams on main Indus River, along with 2 projects on Suru g
ISLAMABAD
I
AMER SIAL
ndIa is building nine new dams of an estimated capacity of 1055 MW hydroelectricity generation, on the main Indus and Chenab Rivers, in the Indian Occupied Kashmir (IOK) and unfortunately neither the Ministry of Water Power (MOWP), nor the Ministry of Foreign affairs (MOFa) has taken up the case with government of India. In an open letter addressed to Prime Minister Syed Yousuf Raza Gilani, eminent water and energy expert arshad H abbasi highlighting the matter of great national importance said that despite his repeated requests to MOWP no steps have been initiated to take up the issue with India. He requested PM to direct MOWP and MOFa to take up the issue of these projects and implement recommendations with Indian government in the best interest of Pakistan.
THE LETTER The letter says, “I humbly request you to call an inquiry into the matter to identify officials who are responsible for this gross negligence. They own a state within the state in the MOWP and implement their design to destabilise the country. They use energy scarcity as a tool while allowing India to build dams without the required scrutiny under the Indus Water Treaty. I expect that you will take serious note of this gross negligence of all those who take the repute of this country for granted and ignore such developments in IOK and secondly of those who do not take note of the abnormal and unnec-
essary delays in execution of 19 hydropower projects, with an installed capacity of 4325 MW, initiated under power policy 2002.delay of these projects not only weakened the rights of Pakistan over Transboundary Rivers, but also caused serious energy crisis in Pakistan.” Had these projects been completed, the country would have never faced the gas crisis, the letter further added.
CREDIBILITY UNDER SCRTUTINY details of the projects provided in the letter say; India is building seven new dams on main Indus River, along with two other projects on Suru and drass Rivers, in IOK. These projects have been offered to private sector for which modalities are being worked out. This work by the Indian side has been initiated sans due diligence on the project in the framework of Indus Water Treaty. This is to emphasize that we are left with a very short time to plead our case as both projects are likely to be completed in the next five years. “despite my repeated communication by fax and e-mail, I have never heard from the adviser or the additional Secretary MOWP. This raises severe doubts on the credibility of these officials who appear to be intentionally paving way for aforementioned projects of India, by ignoring the interest of Pakistan” the letter says adding that the projects on Chenab and Indus are classified as run-ofriver projects. However, the treaty is not adhered to in letter and spirit, as these projects will have serious consequences for downstream areas of Pakistan.
ADVERSE IMPACTS The accumulative live storage of these projects would have adverse impacts both in terms of causing floods and running Chenab and other rivers dry in the lean period. It should also be noted that during the lean period Pakistan meets the demand of water
from these rivers only. In a detailed meeting with adviser MOWP and the then additional Secretary MoWP in 2009, it was elaborated that the terms of the treaty explicitly bounds both countries to exchange all information and data related to the proposed projects to be installed on the Indus River System in IOK under article VI.
DAM CLASSIFICATION AND FAILURE according to ICOLd, dams having height of more than 15 meters are defined as large dams; therefore, all such dams are to be registered with the commission for dam safety. The judgment passed over Baglihar dam was based on the latest ICOLd bulletin of the commission while deciding the design of the spillways. India has been planning to start more than 67 dams for hydropower generation for a while and all these dams fall under the category of large dams. Unfortunately, dam-failure record of India has been the worst, as nine of its dams have collapsed. Jammu and Kashmir area is earthquake prone hence a minor failure can result in a catastrophe for the downstream areas.
REPEATED REQUESTS despite repeated requests to the then adviser MoWP, for Environmental Impact assessment Report of hydropower and other development projects being or to be executed within watershed of Jhelum, Chenab and
Indus in IOK and Himachal Pradesh (HP), no data or relevant information has been shared. The report holds immense importance as it quantifies transboundary impacts of such projects, inline with the verdict given by the International Court of Justice (ICJ); as in the case of Gabcikovo– nagymaros dam dispute between Slovakia and Hungary on the danube River and paper mill decision between argentina and Uruguay. In Baglihar dam case, India in support of the dam’s design, annexed Gabcikovo– nagymaros dam decision in its counter memorial. Therefore, having appraised the decision taken by ICJ, India is bound by law to share EIa of all hydropower projects with Pakistan before physical executions.
JOINT VENTURE NEEDED abbasi proposed that both the two countries, should agree to the fact that environmental threats respect no national borders. during the last three decades, watershed in IOK has been badly degraded. To rehabilitate watershed in IOK and HP, both countries are to take initiative for joint watershed management in these two states. Glaciers are important and a major source of Indus Rivers System; to preserve these glaciers; there is an immediate need to declare all Himalayan Glaciers as “Protected area” including immediate demilitarisation from Siachen to preserve this second longest glacier of the planet, to fall in the watershed of the Indus River.
NA body directs MOWP to give power crisis solution ISLAMABAD AMER SIAL
GITaTEd over the biased power point presentations of Ministry of Water and Power (MOWP) and its allied departments, national assembly special committee on energy crisis took cudgels on Wednesday and directed the ministry to come straight to the point by giving reasons for the power sector crisis and its solutions. Water and Power development authority (WaPda), alternate Energy development Board (aEdB), Private Power and Infrastructure Board (PPIB) and national Energy Conservation Centre (EnERCOn) gave usual presentations to the committee encompassing their efforts to expedite power generation for future. But no presentation dealt with current problems and their solution. Firing the first salvo, Shahid Khaqan abassi of PML-n said the special committee was formed after the failure of na committee on water and power to address the issue,
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but it too was being led to the same alley as during the last five meetings of the committee, MOWP failed to quantify the reasons for persistent power crisis and its remedy. He said if the government was aware of the problem and its solution, then it should be explained to the committee. “don’t ask us for solutions; simply tell us the reason and its solution,” he complained to the mandarins of power sector entities.” If the government has no solution, then it is a serious issue for the committee to resolve. defending his team, Secretary Water and Power Imtiaz Kazi, said they did not prepare the agenda of the committee and come fully prepared to answer issues raised in the agenda. He said if the committee wants briefing on specific issues then that should be included in the agenda. Former minister in PM Gilani’s cabinet, ayatullah durrani of PPP, said from experience of working in the government, he could say that there was no cooperation among various ministries which was fur-
ther intensifying the crisis. Project started by MOWP is hindered by the petroleum ministry, while finance ministry leaves no stone unturned to block projects of petroleum ministry and so on. He said every ministry wants to create its own fiefdom as nobody could be held accountable. He said at present, different ministries were competing against each other over projects of national importance, while the circular debt continues to escalate every day as the buck was being passed on to each other. He proposed there should be one energy ministry which could plan and execute projects without bothering about approvals and financing and its minister and secretary should be held accountable for not controlling the crisis. nawab Yusuf Talpur of PPP said there was crisis of governance in the energy sector and it should be addressed on top priority. He also supported the demand of his colleagues that the committee should only discuss the solutions.
acceding that the power sector was mired in troubles mainly due to power theft and non recovery of dues, Secretary Imtiaz Kazi said the government was implementing power sector reforms, which no doubt were slow, but the direction was right. He said the government had planned an increase of 12 per cent in power tariff during the current fiscal year, but it got delayed due to court orders. However, he said the stay on monthly fuel price adjustment was vacated and it would be passed on to the consumers. When abbasi asked why rich were given subsidised tariffs for the first three hundred units, Kazi said it was difficult to determine differential tariff, as all the power generated through different fuels were poured into a single pool to determine the price. abassi proposed the solution was simple that the rich should pay whatever the thermal power tariff was while poor should pay according to the hydel power tariff, as it would automatically induce the people to conserve energy. Kazi said circular debt was
compounding the problem, which he said was resulting due to non payment of power dues by the government departments, low recovery and line losses. He said if only the government clears its dues, subsidy will be timely provided and recoveries will improve and the power sector can reach break even level. He said an expenditure of Rs2.3 billion daily was required to keep the power generation at 9,500 MW with up to six hours load shedding from the current 10 hours plus. abbasi asked do they have any authentic data on theft, on which the Chief Operating Officer of national Power Control Centre replied that national Electric Power Regulatory authority (nEPRa) had allowed dISCOs to have line losses of 15 per cent, as compared to average losses of 19.5 per cent. He said they purchased 84 billion units in 2010 and sold 82 billion units to dISCOs. International bench mark for line losses was 10 per cent and the available fuel was only provided to most efficient power plants, he added.
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Thursday, 12 January, 2012
news
Lahore Chamber calls for withdrawal of SRO 821(I) 2011 LAHORE STAFF REPORT
RESIdEnT of Lahore Chamber of Commerce and Industry Irfan Qaiser Sheikh Wednesday expressed his deep concerns over FBR’s stance to implement SRO 821(I) 2011 despite repeated demands of business community for the withdrawal of the said SRO. LCCI President Irfan Qaiser Sheikh in a statement said that Federal Board of Revenue must avoid implementing any such anti-industry decision without due consultation of chambers of commerce in the country for being the main stakeholders. He said that SRO 821(I) 2011 will have devastating effect on businesses as the compulsory requirement of nTn or CnIC number of each and every purchaser or seller is
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practically impossible. He said given the literacy rate in the country and lack of compliance culture in general masses, it will be very difficult to obtain such personal details from buyers or sellers of the goods. He said that these and many other proposed changes in tax returns will strangle the already crisis-hit businessmen in the country. He said Lahore Chamber of Commerce and Industry feels that Federal Board of Revenue is shifting its burden of monitoring and tracking of the tax system on business community; which is unjust and unethical. He said that it is very difficult to understand that why the people sitting at helm of affairs at Federal Board of Revenue do not consult chambers of commerce in the country before formulating business related
policies. LCCI President said that the ongoing economic situation does not allow any type of new policymaking; rather it calls for incentives to the trade and industry for generating economic activity. Irfan Qaiser Sheikh said due to suspension of supply of gas to the industry in Punjab a large number of industrial units had already curtailed their productions and exports in the month of december registered a decline of more than 11 per cent. He said that it is a general principle that new laws are always made and implemented in soothing economic conditions but in Pakistan the situation is totally different and FBR was trying to enforce SRO 821(I) when the entire economy was facing multiple internal and external challenges. He urged federal finance minister dr abdul Hafeez Sheikh to listen
Due to suspension of supply of gas to industry in Punjab a lot of units have curtailed productions and exports in December registered a decline of more than 11pc
to the genuine concerns of the business community and help withdraw SRO 821(I) 2011 in the larger interests of the economy.
SECP reappoints nominee CCP grants exemption LSE’s takes first step for directors to KSE board to Metro and Thal Limited financial literacy of youth KARACHI: Securities and Exchange Commission of Pakistan (SECP) has renominated Muneer Kamal, Shazad G dada, asif Qadir and abdul Qadir Memon on the board of Karachi Stock Exchange (KSE) for the calendar year, 2012. These nominee directors had also served on KSE board last year as independent directors and their appointment could be seen as a fair balance of the requisite qualifications and skills. Muneer Kamal, presently vicechairman of KaSB Bank Limited, has over 28 years of extensive experience in the banking and financial sector during which he has served locally and internationally on senior positions at various renowned banks. Shazad dada, CEO Barclays Bank PLC Pakistan, is a seasoned banker and a prominent capital market professional. He has over 20 years of major national and international financial markets’ experience. asif Qadir, President and CEO Engro Polymer and Chemicals Limited, has over 30 years of management and marketing experience in chemical and fertiliser sector and has served in key management positions in the chemical giant, Engro Corporation Limited. abdul Qadir Memon, Fellow of the Institute of Taxation Management Pakistan and President Pakistan Tax Bar association, is a senior resource and renowned tax and corporate law expert, possessing an in-depth knowledge about various aspects and implications of corporate matters and company laws. STAFF REPORT
ISLAMABAD: The Competition Commission of Pakistan (CCP) on Wednesday issued exemption to a joint venture agreement (JVa) between Metro Cash and Carry International (Metro) and Thal Limited (Thal) under Section 5 of the Competition act, 2010 (act). Metro and Thal filed a joint application before CCP for the exemption of JVa from application of Section 4 of the act. Through the JVa, the Metro and Thal agreed to restructure their respective subsidiaries in Pakistan, namely Metro Cash and Carry Pakistan (MCCP) and Makro-Habib Pakistan Limited (MHPL), respectively by forming two separate entities namely, OpCo and PropCo. OpCo will carry on the business of wholesale cash and carry distribution initially through the existing cash and carry centers; whereas the PropCo will own and manage, the properties owned by MCCP and MHPL. The exemption was sought from the non-compete clause in the JVa that expanded the scope of restraint from the business of the Metro and Thal, "whole sale cash and carry" to include "retail operations". Therefore, CCP deemed it appropriate to conduct a hearing in the matter. While considering the conditions mentioned in Section 9 of the act for grant of exemption, the commission observed that JVa will facilitate the growth of the wholesale business as the entities will be able to combine their resources and take advantage of the resulting economies of scale, thereby becoming more competitive and benefiting the consumers. STAFF REPORT
LAHORE: Managing director Lahore Stock Exchange (LSE) Mr aftab ahmad Chaudhry initiated the first step towards national financial literacy awareness programme for youth. as part of the young investors scheme (first nation wide campus outreach programme of its kind), the first seminar was held at Economics Society, FC College, Lahore. Mr aftab ahmed briefed the students that the young investor scheme is a national financial literacy training programme for young investors, the primary goal of which is to provide the young investors with skills to learn, save and invest money. He said young people are often confronted with complicated financial decisions in today’s demanding financial environment and financial mistakes in life can have opportunity costs. In order to cope with them, they need better financial education and access to critical resources to make smarter decisions. The young investor scheme aims at enabling the youngsters to efficiently manage their finances and cope with tough financial decisions. He also highlighted various initiatives to be taken by the exchange in future to promote business opportunities and investments in various sectors of Pakistan. He informed the students that there are many opportunities at small and medium scale still waiting to be tapped. The exchange is fully equipped to facilitate these investments. STAFF REPORT
Market stages comeback, Index ends flat KARACHI STAFF REPORT
FTER losing as many as 69 points in the early part of the trading session, KSE-100 index put together a strong comeback and at one stage was up by 33 points before settling for a minor 2 point loss to close at 10,930 points. despite the strong comeback, volumes continued to disappoint at the local bourse as a mere 23m shares were traded today. as is the typical case in trading sessions marred by dismal volumes, index heavy scripts like nESTLE and ULEVER were driving the index in terms of points, as both stocks combined to drag the index down by 58 points. Unfortunately, the late trading surge in the Fauji twins and OGdC could not save the local bourse from a negative ending. With its annual Board of directors’ meeting an-
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CORPORATE CORNER Farzana Raja informs about BISP’s role in socio-economic change
ISLAMABAD: Federal Minister and Chairperson Benazir Income Support Programme (BISP), Farzana Raja had a meeting with Eng. Wassfi Hassan El Sreihin and Secretary General afro-asian Rural development Organisation (aaRdO) at BISP secretariat. Farzana Raja explained the various initiatives of BISP i.e. Waseela-e-Haq, Waseela-eSahat, Waseela-e-Rozgar as well as Waseela-e-Taleem which are designed to uplift the living standards of poor and to enable them to achieve financial self-sustainability. She said transparency is the hallmark of the programme at every level. The recent USaId report has acknowledged the same fact and confirmed that 98.6 per cent of BISP disbursements have been received by recipients in a transparent manner, she added. PRESS RELEASE
President ABF shows concern over energy shortage LAHORE: President american Business Forum (aBF) Salim Ghauri has expressed concerns over the energy shortage that is hampering the economic growth of the country. He said the power and gas supply to major industries in the country has either been cut or suspended for indefinite period. This situation is not only detrimental to the industrial growth, but also having horrific future for the labour class of the country, he said. Salim deplored that the daily wage workers associated with local businesses are facing financial difficulties. He said the government should also undertake the Iran-Pakistan (IP) gas pipeline project on fast track basis, and reduce Unaccounted for Gas (UFG) losses from 12 per cent to 6 per cent to ensure supplies to textile and other gas-dependent industries in the short to medium term. PRESS RELEASE
Schneider Electric acquires Telvent LAHORE: Schneider Electric, the global leader in energy management, has recently acquired Telvent, a leading real-time IT solution and information provider for a sustainable world, to meet the needs of cities across the world. The solution provides cities with an integrated suite that combines state-of-the-art hardware, software and services to improve the efficiency and sustainability of urban infrastructures, leading to more liveable spaces. Worldwide, cities of all types and sizes are feeling the pressure to improve infrastructure, expand to meet the needs of growing populations, and increase their economic competitiveness and attractiveness in the global market. PRESS RELEASE
BOK declares profit rates on PLS deposits PESHAWAR: The Bank of Khyber (BOK) (Conventional Branches Only) has declared profit rates on various PLS deposits for the half year ended december 31, 2011. Some of the rates from July 01, 2011 to december 31, 2011 are: notice deposits Below Rs01 million; PLS 7 to 29 days notice deposit 1.25 per cent, PLS 30 days notice deposit 1.50 per cent. Rs01 million & above; PLS 7 to 29 days notice deposit (w.e.f 01.03.2011) 3.00 per cent, PLS 30 days notice deposit (w.e.f 01.03.2011) 5.00 per cent. Special deposits; Special deposit account (Sda) 5.00 per cent. Saving account; PLS Saving account 5.00 per cent; and so on. PRESS RELEASE
SNGPL extends gas closure for industries
nounced today, FFBL was the market volume leader and propelled 3.4 per cent higher than its previous close. KSE 100 index closed down 3 points as local investor’s chose to stay sidelined due to the Supreme Court interim order given yesterday. Local funds were rumoured buyers while FII’s were sellers. However, market witnessed a late recovery in fertilizer stocks due to the rumours
of healthy year end results and payouts by the fertilizer companies. FFC increased by 2.1 per cent and FFBL by 3.4 per cent. nBP was seen on the weaker scale as the judgment on rental power plant corruption is kept aside that was financed by national bank itself .Volume leaders were FFBL and HUBC. With the political uncertainty raging strong, we expect the market
to remain lackluster until a definite resolution is offered by the Supreme Court, said ali Hussain, Senior Investment analyst at HMFS. The KSE 30 index closed at 10068.49 levels with the gain of 7.05 points, while all Share index closed at 7587.83 levels after losing 1.11 points. Total 122 scrips advanced 87 declined and 117 remain unchanged out of total 326 scrips traded.
LAHORE: Sui northern Gas Pipelines (SnGPL) has extended gas closure for industrial sector. SnGPL spokesman said 50 MMCFd gas was expected from Kunnar Pashaki gas field in the second week of January, but it has been delayed and as a result, gas supply to the industrial sector has not been restored in a rotational manner. The spokesman said as soon as the company starts receiving 50MMCFd gas from Kunnar Pashaki, it will consider gradual restoration of gas supply to industrial sector. STAFF REPORT
ISLAMABAD: CEO Orient Advertising, Syed Mahmood Hashmi, has been reappointed as National Commissioner for PR by Pakistan Boy Scouts Association. PRESS RELEASE
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Thursday, 12 Januar y, 2012
EDITORIAL
An opportunistic axis
Revenue trends
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HE deficit continues to be nudged at from both sides as improved remittances partially offset dismal year-end export numbers, implying the fiscal deficit will continue to be pressured to the downside while the rupee’s fall continues. Unfortunately the cycle is self-perpetuating. Currency weakening will further aggravate the trade deficit, with the obvious negative spillover on Islamabad’s fiscal posture, not to mention other important economic indicators. While most measures aimed at expanding revenue are medium to long term initiatives at best, there is still al lot that can be done to inch out of persistent stagflation. For starters, the banking system needs to be stimulated to enhance productive outflow from credit markets. Presently, government borrowing coupled with collective banking sector hesitation to increase private sector lending is compromising much needed investment. and while such arrangements are made and filtered through the system, industry and manufacturing must overcome ex-
cess capacity, failing which the engineered credit flow will have little value. For industry to function, though, relevant authorities must put an end to the energy give-and-take among sectors. Financial prudence dictates that in times of crunch, every possible unit of energy input should be directed towards avenues that generate at least a trifle more in return, while the resulting subsidy toggling can benefit sectors adversely impacted by rerouting energy units. In today’s Pakistan, that implies reorientation of focus for the benefit of industry. The importance of industry functioning at this time has direct implications for overall growth, employment and per capita income. domestic consumers taking a temporary hit in such a scenario will ultimately benefit more when credit flows to right impact targets and the overall economic situation improves. Right now, there should be no bigger policy concern than stabilising growth and stimulating manufacturing and subsequently growth and employment.
Copper politics
Marble market
This is with regards to the article, “Copper politics, and state of economy” published yesterday. I totally agree with the writer, that the political confrontations and differences have resulted in utter wastage of the lucrative zone. Be it the government of Balochistan or indeed the federal government; no one has played their part appositely, according to the interests of the nation. The procrastination of the government has more often than not curtailed prosperity in Pakistan, and the Rekodeq project is one of the most noteworthy examples of how negligence on the part of the government has cost the nation dearly. and of course there are the phantoms of corruption as well.
This is with regards to the news report, “$500b worth Middle East markets remain untapped” published yesterday. neglect on the part of the government has made the nation suffer on many fronts, and it seems as if the market is unfortunately following suit. as highlighted in the news report, the fact that we are actually ignoring invitations of prominent construction companies from around the globe, defies belief! There is so much that we can learn from them, and there is so much that we can enhance through cooperation with foreign countries. When are we actually going to wake up? Things must change.
ASSAD BALOCH
KHADIjA SARfRAz
hydERAbAd
LAhORE
Syed Omer Jan
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HE vanguards of democracy in the asiaPacific region, the United States, India and Japan have come together for a trilateral strategic consultation and have decided upon holding joint naval exercises this year in forming an entente among the trio of nations. Experts are touting this maneuver as a major reshuffle in the dynamics of the most lucrative zone in the world – as far as the economical ramifications are concerned. The latest strategy is asking for a rebalance towards the asia-Pacific zone and Indian cooperation as an economic anchor and of course the hub of security provision in and around the fragile Indian Ocean. This ‘entente’ is an uncanny throwback to the Franco-British-Russian “Triple Entente” of World War I, which was created to counter the German military muscle. almost a century later, the Germany of the 21st century is China, the muscle being flexed by the asian giant is economic and the menace being posed is of its wherewithal in the realm of foreign policy. and another thing reminiscent of the early 20th century is the manner in which the three countries are vying to counter the threat of this leviathan of theirs. The aim – like in the case of Germany – is not to contain China; au contraire, the US policy is to utilise economic interdependence and the integration of China into international institutions to put off their hierarchy from hankering after taking the helm of all matters in asia. Round one of the dialogues has been held in Washington, and the noise being generated from inside the camps is imbued with sanguinity as we approach round two in Tokyo. The word is that australia might also be included
China’s economic wherewithal has brought the US, India and Japan closer, as unfolding events bear an uncanny resemblance to the past
in this strategic triangle, to make it an ominous quadrilateral, which would be touching all the proverbial corners of the world. However, experts believe that a more probable formulation would be of a parallel australiaIndia-US axis, especially considering the fact that the intended four-party coalition talks are seemingly on the brink of nosediving into oblivion. nevertheless, the most important façade that the three nations should be considering is that for this trilateral cooperation to bear the desired fruits, some of their respective policies and strategic preferences need to be revisited. Take for example the fact that Tokyo has only established military interoperability with Washington, with new delhi seemingly nowhere in sight. Japan must also connect with Indian naval forces to further beef up this three layered sandwich. and yes if Indian and the US forces continue along the same lines, which has seen them conduct a multitude of joint ventures in the recent past – the meal would become all the more scrumptious. Considering the geographical dynamics, another important facet as far as the militaristic scheme of things are concerned is that Japan and China are separated by an ocean and US is no way near perilous proximity; hence that leaves India potentially donning the garb of caution, pondering over the ramifications on the southern half of the volatile Himalayan border. That little devil we call history, also divulges an unceremonious Sino-Indian bond and hence India might want to cover all its bases before it takes a veritable plunge into this strategic triangle. america has ramifications of its own to mull over with the fiscal quagmire that the country finds itself in. and Obama has recently announced plans for a leaner military and more profound dependability regional bondage; so he also has his plate full ahead of a momentous year on the personal and national fronts. Hence, all the concerned parties should acknowledge their own limitations and those of their partners, before going gung-ho in global matters. The need of the hour for the three countries is to counter the hindrances that lie ahead before the trilateral companionship can evolve into being a seamless bond. Conjuring up flawless military interoperability will be no mean task – especially since there is a void of US-India treaty relationship – and groundbreaking policy making would have to be brought to the fore, if the potential of this tripartite relationship is to be realised. The writer is Texas A&M University graduate who is currently employed with Telenor in the Products Commercial Division. He can be reached at syed.jan@gmail.com
AvERAGE JOE INvESTOR
Research before taking the plunge
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Agha Akbar
LaT after the bloodbath over four sessions that brought the KSE-100 benchmark below the psychological 11,000 points, was the good news Wednesday. Though around three points down, this still is some recovery from 277 points down and hovering around 10,700 mid-session Tuesday after the temporary pull back from the eyeballto-eyeball confrontation between the government and the judiciary seemed
to be edging towards its denouement. The volumes have remained extremely thin and values have dropped. This is not likely to improve a great deal in the short term. and unless there is some shocking news that sends the bears on a rampage, the market would keep on hovering between here and 11,500. To those average Joe Investors who have taken a pasting in this sizable dip, my commiserations. But they need to remember: the possibility of a bounce back is always there, and in the mid-short term (which is over the next six months, as Mr ali Malik, CEO of the First national Equities predicts), it could claw its way back to the recent high of 12,000 points. So those who have made their buying after due diligence and in fundamentally strong shares have only to bide time. The good thing about low values
is that it may provide the prop the market needs, for cheap buys always hold an attraction for all sorts to make a punt. despite the gas shortages, the fertiliser remains a popular sector and on Tuesday the recovery was led by it – with FFC up by Rs3.49 and FFBQ Rs1.43. To Hammad Malik, senior associate at the First national Equities, Fatima Fertiliser (the entity that has reportedly suffered the least owing to friends at the right places) is likely to go up to Rs27 – a gain of around Rs4 from its current value. It has already touched Rs25 some weeks ago, and may indeed still have some juice. This is a cheap option where even if there is a fall, it is not likely to be big. But one thing needs to be remembered: the company has never paid any dividend, though it is now said to be in the black. So there are both good
SHAHAB JAFRy Business Editor
KuNwAR KHuLDuNE SHAHID Sub-Editor
BABuR SAGHIR Creative Head
ALI RIZvI News Editor
MAHEEN SyED Sub-Editor
HAMMAD RAZA Layout Designer
The good thing about low values is that it may provide the prop the market needs
and bad reports about it. Read between the lines and tread carefully. In the oil sector, the additional public offering of Pakistan Petroleum Limited is expected in a few weeks, perhaps some time in February. That is anxiously awaited, for it might bring some spark to thus far an otherwise mostly cheerless season. For the moment, the company is going through a ‘size determination’ process. Once that is complete the price per share of the offering will be revealed. For the moment, it is being traded at Rs164 apiece – way short of its recent high of Rs210-220 range. Mr ali Malik is one analyst who has a very special knack of finding nuggets at places which most people ignore. He has come up with two in-
expensive beauties in the power sector that have so far never paid a dime in dividend but are sitting on a sizable stash of cumulative profits that they are bound to dish out to shareholders this coming June. These are: nishat Chunian Power and nishat Power. The group is a force to reckon with – the largest in the country, the power sector is profitable and the price at an identical Rs13 apiece for both is a bargain. This is what you call a better than a decent tip – and in such times of turmoil worth its weight in gold. That said, dear average Joe Investor, do make your own research before taking the plunge. The writer is Sports and Magazines Editor at Pakistan Today
For comments, queries and contributions, write to: MuNEEB EJAZ Layout Designer
Email: profit@pakistantoday.com.pk Ph: 042-36298305-10 Fax: 042-36298302 website: www.pakistantoday.com.pk
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An independent, prosperous, stable and sovereign Afghanistan is in Pakistan’s interest. We however do not want an Afghan solution that could destabilise us
news
Prime Minister yousaf Raza Gilani
Heart of Asia strategy DR SALMAn SHAH
T
HE summit to place afghanistan at the heart of asia took place in november last year in Istanbul. all the neighbouring and regional countries as well as members of the European Union and north america participated. The building blocks of the “new Silk Road” initiative were discussed, prominent among them roads, railways, mining projects and gas pipelines. The summit floundered over Pakistan’s objections to giving India a pivotal role in the new Silk Road Initiative. The Salala Post naTO attack gave Pakistan the opening to opt out of the recently held Bonn conference which was to endorse the way forward for afghanistan based on an India centric supervisory role, a role not acceptable to Pakistan. It is hoped that in the new engagement with the US, the role of India in afghanistan will be appropriately modified to cater to Pakistan’s sensitivities.
FLAGSHIP OF STRATEGIC THINKING Before the Salala event, during her recent visit to Pakistan to reset the Pakistan US relationship, Secretary Clinton along with her high powered team of military and intelligence leaders spelled out amongst military and political goals the economic goals of placing trade and connectivity of the region as a means of cementing the future of afghanistan as a bridge between central and south asia. The new Silk road Initiative has become the flagship of US strategic thinking regarding a stable post war afghanistan. The concept first articulated by the Central asia Institute at the John Hopkins University has been adopted by the Obama administration as a key initiative. It was carried forward two years ago at the Regional Economic Cooperation Conference on afghanistan (RECCa) held in Istanbul from november 2-3, 2010 in a paper entitled “The Silk Road Initiative (SRI),” by President Karzai’s top economic advisor, Sham Bathija, who persuasively argued
for a Eurasian regional trade and transport network with afghanistan at its epicenter.. not surprisingly, India has come out strongly in favor of this concept and in the words of its foreign minister Krishna, “afghanistan’s growth strategy (should be) built upon the country’s comparative advantage of abundant natural resources and its strategic geographical location.” afghanistan should become a hub linking Central and South asia through pipelines, trade and transit routes.
HISTORy OF THE HuB For centuries before the ascendancy of the west, afghanistan was part of the vast Islamic regions which were basically free trade zones where goods and people moved from one end of the empires to the other with-
not be accomplished without Pakistan. Geographically Pakistan and afghanistan are so intertwined that only together they are at the heart of asia and not individually. It is therefore important that the two countries come on the same economic and political wavelength and have convergence of interests and policies. In an earlier article, I had argued that the future of a sustainable afghan/Pakistan trade relationship depends on Pakistani involvement in the exploration and extraction of afghan mineral resources in collaboration with international finance and technology. at the moment Indian and Chinese bidders are front-runners for deals to mine afghanistan’s vast mineral and oil deposits, which is not only worrying Western firms who have hesitated to invest in the war-torn region but also for Pakistan which has been left out of the loop.
CONSPICuOuS By ABSENCE
The New Silk road Initiative has become the flagship of US strategic thinking regarding a stable post war Afghanistan. The concept first articulated by the Central Asia Institute at the John Hopkins University has been adopted by the Obama administration as a key initiative
out let or hindrances and afghanistan was certainly at the hub of this movement. However with the advent of the Russian and British Empires afghanistan became a buffer state between the two empires and collapsed into a wild isolated and impoverished wasteland. during the cold war afghanistan was a soviet satellite cut off from the world and later during the afghan jihad and Taleban rule the country was destroyed physically and regressed back into medieval times. Since 9/11 the country has been devastated with unending violence and war. Thus the task of converting afghanistan back to a trading hub after centuries of isolation and violence is going to be a Herculean task and it can-
that India is encircling it. 2. It will give afghanistan access to the sea, thus, reducing its dependence on Pakistan. 3. It will open opportunities for Indian companies to explore afghanistan’s mineral wealth, believed to be worth $1-3 trillion (Rs50-150 l a k h crore), for mut u a l benefit. Just
Recently, afghanistan opened up its massive Iron ore reserves estimated at 1.8 billion metric tons with a concentration of approximately 62 per cent Fe at Hajigak, 100 kilometers (60 miles) west of Kabul for international bidding. Unfortunately, Pakistan was conspicuous by its absence as were European and american companies. afghanistan received four bids, none of which were from the world’s biggest mining groups. The bids had to be accompanied by plans for the transportation of ore to international markets. The bidders included an Indian steel consortium backed by the government of India, two Iranian steel companies and a bid by a Canadian company. apart from Iran’s bid (since the two countries share a border) none of the others are viable without Pakistan’s participation due to issues relating to the transfer of ore. India’s bid for example is premised on building a railway track from Hajigak to the Iranian port of Chahbahar for onward shipment to India and thereby strategically bypassing Pakistan.
INDIAN CENTRALITy an Indian newspaper concluded that when completed, this railway track will throw up both tantalising geo-political and economic opportunities for India as well as potential for bad blood with both friends and foes. It wrote that; 1. It will increase Indian leverage in afghanistan and its strategic presence in the region. In the past, however, new delhi has refuted Pakistani fears
why I am bullish on the energy market SHAn SAEED
E
nERGY analysts say the price of oil would start to soar and could rise 50 percent or more within days, according to new York Times. In a development that has edged the world closer to full-scale war in the Persian Gulf, European powers stated Wednesday that a tentative ban would be placed on exports to Iran. The European announcement comes on the heels of three very publicised long-range missile tests conducted by the Iranians earlier in the week.
GEO-STRATEGIC ANALySIS It marks an escalation of sanctions against Iran for continuing to pursue nuclear materials enrichment program which many experts and government officials believe can only be aimed at the production of weapons of mass destruction. With more than 16 per cent of the world’s oil supply passing through a key shipping lane just two miles wide in certain places, Iran’s threat to blockade the Strait of Hormuz has already met with international outrage.
SAuDI REACTION Some of the worst criticism has come from Iran’s own neighbours, among them the world’s largest oil producers who depend on the Strait of Hormuz for access to the Persian Gulf on a daily basis. To close the Strait of Hormuz would be an act of war against the whole world, according to Sadad Ibrahim al-Husseini, former head of exploration and development at the world’s largest and wealthiest oil company, Saudi aramco. You just can’t play with the global economy and assume that nobody is going to react in this precarious situation.
uSA REACTION The response from the US State department has been no less stern. In a recent interview, david L. Goldwyn, former State department coordinator for international energy affairs, said; “If the Iranians chose to use their modest navy and anti-ship missiles to attack allied forces, they would see a probable swift devastation of their naval capability. We would take out their frigates.”
STRATEGIC OIL ROuTE In total, 15.5 million barrels of oil pass through the Strait of Hormuz every day — including crude from Iraq, Kuwait, Qatar, the United arab Emirates, and Iran itself. almost 90 per cent of this daily volume winds up in asia, with China being the most ravenous consumer by far. although some military analysts have dismissed these threats as “empty talk,” Iran does have a history of leveraging international influence by disrupting or outwardly attacking ships passing through the Strait. In the 1980s, the Iranian navy mined the Strait and attacked Kuwaiti tankers hauling Iraqi oil into the Persian Gulf, a move that led the Reagan administration to intervene by escorting and, in some cases, re-designating Kuwaiti ships under the american flag. a modern repeat of what happened during the Reagan administration, however, would likely lead to far worse consequences. Given the level of tension in the Persian Gulf, any military engagements would
PRO 12-01-2012_Layout 1 1/12/2012 12:24 AM Page 5
Thursday, 12 January, 2012
news
05
civilisAtion links
consider: the entire Indian economy is valued at $1.2 trillion (Rs60 lakh crore); 4. It will add to the economic rationale for Indian investment in Chabahar; 5. Once the entire network comprising of road, rail and port is in place, it can become a launching pad for greater economic and strategic involvement of India in the oil and mineral-rich Central asia;
As far as India is concerned it has not hidden its great ambitions to connect with Afghanistan and Central Asia for exploiting the riches of the area. Prime Minister Manmohan Singh has said that he can foresee the day when we can have breakfast in Amritsar, lunch in Islamabad and dinner in Kabul. This is a laudable goal but cannot be achieved in an atmosphere of rivalry and animosity between India and Pakistan
Our cooperation with Afghanistan is an open book. We have civilisational links, and we are both here to stay MAnMOhAn SIngh Indian Prime Minister
historic deAl
THING wITH THE BIDS The transport infrastructure for this plan would alone cost around US$10 billion. In contrast a railway track from Hajigak to Kohat Pakistan would cost a mere one fourth of the Indian transportation plan. Moreover the Indian plan would run afoul of US legislation and sanctions on Iran. The Indian bid is also being criticised by the European Union as unfairly subsidised and funded by the Indian government. On the other hand the two bids from Iran may also be problematic because of US concerns, and it remains unclear how the Canadian company intends to transport the ore out of afghanistan. It is possible that due to lackluster response, non viability of most of the bids and american rethink this round of bidding may be cancelled and this would open up an opportunity for Pakistan to put together a proposal for exploiting the afghan reserves with Saudi and Gulf financing, western technology and Pakistani manpower and evacuation infrastructure. The ore could be processed in Kohat which can be designated as Pakistan’s Steel City which can easily supply through the domestic logistic network the 10 million ton per year demand of Pakistan and the rest can be shipped south to Karachi and Gwadar for Middle East and global markets and north to China and east to India. The project could cement afghan/Pakistan economic relationship and create tremendous incentives for promoting peace and reconciliation in Pakistan and afghanistan. It
likely lead to widespread hostilities that could disrupt global oil prices in ways not seen since the 1970s arab oil embargoes.
OIL PRICE IN 2012 Energy analysts have already predicted a 50 per cent plus jump in oil prices, even if a partial blockade were to be imposed by Iran’s 250-plus vessel navy. I have already predicted bullish trend emerging in the energy market since last year. This is much anticipated as such a radical shift in price could send average gas prices past the $4 mark in the space of a few days. Of course, the problem with situations like this one isn’t so much the disruption in commercial traffic as it is the trickledown effect of the panic to all levels of business and industry. I don’t rule out the possibility of oil touching 2008 levels i.e. ranging from $130 to $147 /barrel in 2012.
PROLONGED RECESSION Oil price spikes have been blamed for entire recessions, including one that lasted for most of the 1970s when the arab world closed the valve on US exports in protest of the Yom Kippur War in 1973. are we due for another one? It’s impossible to say what this standoff will lead to in the long term, especially given that the Iranian Government is making no friends in their own region. What I can say
with almost total certainty with my connections in the west is that as long as sanctions against Iran are on the table, oil prices will be creeping upward. as they have been in the last week, since this heightened level of tension took hold.
PROSPECTS FOR INvESTORS This could mean one of two things for investors and countries to move further into the winter months. It could mean higher heating bills, more money spent on gas, more money spent on air travel, even more money spent on food and water, as shipping costs go up across the board. For a majority of people globally, this is will be the greatest lasting effect of a gradually deteriorating diplomatic climate. For some, however, an increase in oil prices — during a season when energy costs are already astronomical is a predicament that spells profit. You see, thousands of miles away from the Persian Gulf, a brand-new generation of energy companies is laying the groundwork for a massive industrial resurgence, on american soil. Taking advantage of the Bakken Oil Shale formation — massive crude reserve which remained untouched during the first golden era of american oil — these energy companies represent the vanguard in fossil fuel production. With at least three decades of upward production on the horizon, north american shale oil will still be growing many years after the Saudis, the Kuwaitis, the Iranians, and everyone else in the region has pumped their last drop. But don’t wait for OPEC
would also successfully lay the foundation of the heart of asia strategy.
INDO-PAK BOTTLENECKS as far as India is concerned it has not hidden its great ambitions to connect with afghanistan and Central asia for exploiting the riches of the area. Prime Minister Manmohan Singh has said that he can foresee the day when we can have breakfast in amritsar, lunch in Islamabad and dinner in Kabul. This is a laudable goal but cannot be achieved in an atmosphere of rivalry and animosity between India and Pakistan. The confidence building dialogue that started with the Musharraf-Vajpayee initiative has seen one sided Indian gains whether in trade or political issues. India has used the last three years to smother the Kashmir spring with ruthless force, backed off from a deal on Saichen and resisted any movement on Sir Creek. In the arena of trade, it has successfully scuttled Pakistani exports to India while Indian exports to Pakistan continue to grow. With Pakistan granting MFn status to India this trend will grow. India has to come clean on its intent. PaKISTan Can EaSILY BRIdGE THE TRadE GaP WITH India if its cement and home textile exports to India are not hampered by non Tariff Barriers and high tariffs. If United States and India want Pakistan to be the gateway for India to reach afghanistan and Central asia, they must realise that this will be dependant on India and Pakistan seriously resolving their historic disputes in an equitable manner. The writer is a former finance minister
Energy analysts have already predicted a 50 per cent plus jump in oil prices, even if a partial blockade were to be imposed by Iran’s 250-plus vessel navy. I have already predicted bullish trend emerging in the energy market since last year. This is much anticipated as such a radical shift in price could send average gas prices past the $4 mark in the space of a few days heavyweights to start running dry. as we are all definitely heading in that direction, it won’t happen until the end of the decade (at the earliest). Instability like the kind we’re witnessing in the Persian Gulf at this very moment promises to shift the balance of the oil market back to north america long before the arab oil empire goes into full-scale decline. Shan Saeed is a financial market economist with 12 years of solid global experience based in Asia Pacific. He has graduated from Uni of Chicago, Booth School of Business, USA and IBA Karachi. Comments and queries: Blogs at www.economistshan.blogspot.com
Today is a historic day in Afghan history. This is the first time that Afghanistan signs a great contract for the country’s oil exploration WAhIduLLAh ShAhRAnI Mining Minister Afghanistan
the oil fActor
Iran is also an extremely big oil supplier to China, and we hope that China’s oil imports won’t be affected, because this is needed for our development ZhAI jun Chinese Vice Foreign Minister
AfghAn reconstruction
Our policy is full support for the Afghan people and Afghan government and reconstruction of Afghanistan MAhMOud AhMAdInEjAd Iranian President
PRO 12-01-2012_Layout 1 1/12/2012 12:25 AM Page 6
Thursday, 12 January, 2012
06 Markets top 10 sectors
42% 06% 15% 07% 03%
Chemicals
02% 13% 09% 02% 01%
Industrial Transportation
Construction & Materials Electricity Banks
Fixed Line Telecommunication
Oil & Gas
Financial Services
Personal Goods
Equity Investment Insturments
top 5 perForMers sector wise SyMBOL
OPEN
HIGH
LOw CuRRENT
414.00 108.25 24.99 6.85 86.15
412.00 106.73 23.50 6.73 85.15
CHANGE
vOLuME
Oil and Gas Attock Petroleum Attock Refinery Burshane LPG Byco Petroleum Mari Gas Co.
STOCK MARKET HIGHLIGHTS Index 10930.49 2867.31 2353.24
KSE-100 LSE-25 ISE-10
Change -2.69 11.98 +38.55
Volume 19,706,601 668,379 20,807
Agritech Limited Agritech(PREF)(R) Arif Habib Co SD Clariant Pakistan Dawood Hercules
Open 611.43 81.98 86.06 220.32 155.79
High 642.00 86.07 89.99 225.20 159.79
Low 641.00 84.99 89.99 221.00 154.26
Close 641.97 86.07 89.99 223.94 158.98
Change 30.54 4.09 3.93 3.62 3.19
Turnover 87 907 1,500 217,711 1,928,689
Major Losers UniLever Pak Ltd. Nestle PakistanXD Millat Tractors Ltd. Salfi Textile Faisal Spinning
5308.57 2910.73 371.87 41.27 44.10
5311.00 2940.00 370.00 40.00 42.25
5180.00 2830.00 365.51 39.21 42.25
5188.05 2844.22 368.41 39.21 42.25
-120.52 -66.51 -3.46 -2.06 -1.85
92 78 2,523 621 500
Volume Leaders Fauji Fert Hub Power Co. Fauji Fertilizer National Bank Engro Corp
41.94 33.68 155.79 43.44 95.38
43.53 33.75 159.79 43.55 96.18
41.45 32.85 154.26 42.71 94.25
43.37 33.34 158.98 42.88 95.51
1.43 -0.34 3.19 -0.56 0.13
3,290,838 2,346,089 1,928,689 1,307,141 1,195,179
Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)
Per Tola (PKR) 55,119.00 51,608.00 1,004.00 1025.00
Per 10 Gm (PKR) 47,306.00 44,245.00 861.00 880.00
Per Ounce US$ 1,635.00 – 35.05 –
Crescent Steel Dost Steels Ltd. Huffaz Seamless Pipe Int. Ind.Ltd. Inter.Steel Ltd.
19.01 1.15 8.16 31.37 10.13
2.60 51.25 1.70 13.90 8.60
15.62 0.14 27.46 151.00 37.90
15.01 0.01 27.15 148.80 36.85
15.50 0.01 27.27 149.07 37.10
0.00 0.00 0.02 -0.37 -0.86
155 1 207,852 875 146,986
26.02 3.60 40.10 7.99 78.17
18.99 1.18 8.49 32.09 10.80
18.10 1.06 8.01 31.42 10.02
18.13 1.15 8.49 31.42 10.13
-0.88 0.00 0.33 0.05 0.00
10,510 4,505 2,410 801 7
5.50 179.10 5.50 0.61 6.40
Agriautos Industries Atlas Engineering Atlas Honda Ltd. Bal.Wheels Dewan Motors
56.27 58.00 120.00 26.12 1.80
Abdullah Shah Adam Sugar AL-Abbas Sugur AL-Noor Suger Mills Baba Farid
4.51 18.74 86.06 50.63 39.00
4.51 18.65 89.99 50.63 39.00
2.70 52.95 1.70 13.90 9.47
2.42 51.00 1.70 13.60 8.26
2.60 52.95 1.70 13.90 8.60
0.00 1.70 0.00 0.00 0.00
26.75 3.70 41.00 8.00 81.00
26.02 3.70 40.10 8.00 78.00
5.80 180.90 5.60 0.61 6.59
5.30 179.10 5.50 0.60 6.40
55.51 58.00 120.00 26.12 1.90
55.50 58.00 119.00 26.00 1.80
203 6,398 1,500 98 12,003
4.51 18.55 89.99 50.63 39.00
0.00 -0.19 3.93 0.00 0.00
1 5,621 1,500 106 5
24.50 8.20 3.49 15.94 8.20
25.50 8.93 3.64 15.94 8.30
24.50 8.20 3.35 14.94 8.01
24.50 8.20 3.40 15.94 8.22
0.00 0.00 -0.09 0.00 0.02
1 1 18,006 1 3,417
(Colony) Thal Ali Asghar Textile Amtex Limited Artistic Denim Mills Azam Textile
1.15 0.50 1.25 22.10 1.08
1.15 0.64 1.37 22.50 1.55
1.10 0.45 1.23 22.15 1.25
1.10 0.50 1.31 22.50 1.34
-0.05 0.00 0.06 0.40 0.26
610 79 19,439 1,045 7,522
AHCL-JAN ATRL-JAN DGKC-JAN ENGRO-JAN FFBL-JAN
27.22 108.02 19.69 96.11 42.15
27.50 109.00 19.90 96.70 43.78
27.25 107.26 19.51 95.30 41.70
27.40 108.36 19.75 96.05 43.59
0.18 0.34 0.06 -0.06 1.44
24,000 107,000 113,000 390,500 724,000
101.50 73.62 65.87 15.77 139.73
1.18 0.00 0.63 -0.30 0.00
4,010 52 665 3,881 2
Pharma and Bio Tech 26.02 3.70 40.10 8.00 80.01
0.00 0.10 0.00 0.01 1.84
210 1,814 1 1,000 9,945
5.30 179.10 5.50 0.61 6.58
55.50 58.00 120.00 26.12 1.85
109.00 111.18 145.05 145.58
Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. IBL HealthCare Sanofi-Aventis
100.32 73.62 65.24 16.07 139.73
101.50 74.00 66.25 16.09 146.00
100.99 73.62 65.31 15.30 138.00
Fixed Line Telecommunication -0.20 0.00 0.00 0.00 0.18
1,000 5 45 20 1,136
-0.77 0.00 0.00 0.00 0.05
963 1,917 41 100 28,336
Beverages 110.49 111.43 150.02 150.00
AL-Abid Silk Mills Diamond Ind. Pak Elektron Ltd. Singer Pakistan Tariq Glass Ind.
0.69 -4.44
1,170 203
P.T.C.L.A Pak Datacom Ltd Telecard Limited Wateen Telecom Ltd WorldCall Telecom
10.03 34.50 0.80 1.73 0.94
10.30 36.00 0.80 1.87 1.05
10.03 32.78 0.76 1.73 0.91
10.25 33.75 0.77 1.78 1.01
0.22 -0.75 -0.03 0.05 0.07
965,945 2,100 27,104 56,020 907,573
0.35 33.68 0.56 1.80 16.00
0.35 33.75 0.65 1.90 16.47
0.27 32.85 0.60 1.71 16.00
0.28 33.34 0.65 1.88 16.00
-0.07 -0.34 0.09 0.08 0.00
12,385 2,346,089 56,402 299,154 5
54.12 9.94 5.54 11.41 28.86
54.90 10.05 5.69 11.45 29.49
52.01 9.89 5.42 11.30 28.52
54.02 10.01 5.53 11.31 28.67
-0.10 0.07 -0.0 -0.10 -0.19
117,197 168,339 181,099 67,277 33,201
Electricity Genertech Hub Power Co. Japan Power K.E.S.C. Kohinoor Energy
Banks Allied Bank Ltd Askari Bank B.O.Punjab Bank Al-Falah Bank AL-Habib
SyMBOL
OPEN
HIGH
LOw CuRRENT
CHANGE
vOLuME
Non Life Insurance 4.50 17.80 89.99 48.10 37.05
Future Contracts
Industrial Engineering Ados Pakistan AL-Ghazi TractorsXD AL-Khair Gadoon Dewan Auto Engg Ghandhara Ind.
vOLuME
Personal Goods
General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass Ltd MACPAC Films Packages Limited
CHANGE
Household Goods
Construction and Materials Al-Abbas Cement Attock Cement Bal.Glass Berger Paints Cherat Cement
LOw CuRRENT
Adamjee Ins Atlas Insurance Century Insurance EFU General Ins Habib Insurance
46.90 36.02 6.77 38.90 9.61
46.89 36.25 7.00 39.00 10.00
46.20 36.00 6.40 38.90 10.00
46.73 36.25 6.95 38.90 10.00
-0.17 0.23 0.18 0.00 0.39
1,374 6,148 7,021 14 5,001
13.50 1.40 65.53
14.50 1.40 65.53
0.00 0.00 0.00
2 1 157
0.38 14.36 14.48 1.69 2.72
0.00 0.00 0.28 0.00 0.00
2,988 4 11,825 10 4
Life Insurance American Life East West Life Assur EFU Life Assur
14.50 1.40 65.53
14.50 2.34 68.80
Financial Services AMZ Ventures A Arif Habib Investmen Arif Habib Ltd. Escorts Bank F. Nat.Equities
0.38 14.36 14.20 1.69 2.72
0.42 15.36 14.49 1.69 2.80
0.28 14.36 14.10 1.35 2.72
Equity Investment Instruments AL-Noor Modar Allied Rental Mod Atlas Fund of Fund B.F.Modaraba B.R.R.Guardian
4.07 22.45 5.30 4.00 2.35
4.00 22.45 5.50 3.85 2.40
3.85 21.34 5.50 3.70 2.40
3.85 22.45 5.50 3.80 2.40
-0.22 0.00 0.20 -0.20 0.05
25,300 200 1,000 500 2,042
12.06 35.70 32.50 11.50 70.25 1.12 64.50 4.50 110.00 3.50 8.01 22.99 52.01 27.00 16.44 498.12 1.81 15.80 18.50 13.76 1.07 22.60 1.26 8.29
13.06 36.00 32.99 12.00 70.69 1.15 64.55 5.10 110.07 3.58 8.12 23.00 52.41 28.26 17.01 524.33 1.99 15.90 18.79 13.83 1.09 22.60 1.30 8.37
0.06 0.00 0.99 0.17 0.69 0.01 1.02 0.60 0.00 0.04 0.09 0.00 -1.22 0.62 0.00 0.00 0.06 0.10 0.30 -0.17 0.04 0.00 0.00 -0.07
17,652 1,101 1,770 6,325 522,752 166,325 1,012 2,000 125 81,826 17,119 2 6,284 2,269 50 11 14,379 30,741 2,599 600 3,000 1 56,051 17,193
Miscellaneous Century Paper Security Paper Pakistan Cables P.N.S.C. Pak.Int.Con. SD TRG Pakistan Ltd. Murree Brewery Shakarganj Food Shezan Inter. Pak Elektron Ltd. Tariq Glass Ind. Grays of Cambridge Pak Tobacco Co. Shifa Int.Hospitals Hum Network Ltd. Dreamworld P.I.A.C.(A) Sui North Gas Sui South Gas American Life East West Life Assur AKD Capital Ltd. Pace (Pak) Ltd. Netsol Technologies
13.00 36.00 32.00 11.83 70.00 1.14 63.53 4.50 110.07 3.54 8.03 23.00 53.63 27.64 17.01 524.33 1.93 15.80 18.49 14.00 1.05 22.60 1.30 8.44
13.20 36.00 33.55 12.00 72.50 1.20 64.55 5.10 111.25 3.59 8.38 23.00 55.50 28.99 17.01 524.33 2.03 16.10 18.80 14.00 1.50 23.68 1.40 8.55
Mutual Funds Buy 90.50 114.45 138.67 1.1652 88.27 11.47 24.55 24.06 92.34
International Oil Price WTI Crude Oil
$101.42
1,744 295,757 1,002 100,878 10,847
Industrial metals and Mining
Murree Brewery Co. Shezan Int’l
89.9848 139.1075 1.1691 114.9196
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
-0.49 0.29 -1.00 -0.01 -0.36
Automobile and Parts
Interbank Rates US Dollar UK Pound Japanese Yen Euro
15.50 0.01 27.25 149.44 37.96
HIGH
Food Producers 412.47 107.66 23.50 6.79 85.51
Chemicals
Market Value 1,217,607,296 21,315,705 1,632,101
Major Gainers Company Colgate Palmolive Mithchells Fruit AL-Abbas Sugur National Refinery Fauji Fertilizer
412.96 107.37 24.50 6.80 85.87
OPEN
SyMBOL
Sell 91.50 116.47 140.77 1.1792 90.85 11.74 24.82 24.29 95.25
Brent Crude Oil
$113.28
Fund
Offer
Repurchase
Alfalah GHP Cash Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Income Fund Atlas Islamic Income Fund Atlas Money Market Fund Atlas Stock Market Fund Crosby Dragon Fund Crosby Phoenix Fund Dawood Islamic Fund Faysal Income & Growth Fund Faysal Islamic Savings Growth Fund Faysal Money Market Fund Faysal Savings Growth Fund First Habib Cash Fund First Habib Income Fund First Habib Stock Fund HBL Income Fund HBL Islamic Money Market Fund HBL Islamic Stock Fund
501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800 102.5100 0.0000 103.9600 101.4000 101.1400 101.4400 100.8800 100.8900 101.4400 98.8551 100.2278 105.1082
501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500 102.5100 0.0000 102.9300 101.4000 101.1400 101.4400 100.8800 100.8900 99.4500 98.8551 100.2278 103.0473
NAv 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500 102.5100 0.0000 102.9300 101.4000 101.1400 101.4400 100.8800 100.8900 99.4500 98.8551 100.2278 103.0473
Fund
Offer
Repurchase
HBL Money Market Fund HBL Multi Asset Fund HBL Stock Fund IGI Income Fund IGI Stock Fund JS Principal Secure Fund I JS Principal Secure Fund II KASB Cash Fund Lakson Equity Fund Lakson Income Fund MCB Cash Management Optimizer Fund MCB Dynamic Cash Fund MCB Dynamic Stock Fund NAMCO Income Fund National Investment Unit Trust PICIC Income Fund UBL Capital Protected Fund II UBL Islamic Savings Fund UBL Savings Income Fund
100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000 106.3763 102.2115 100.5994 103.2259 83.2931 108.2753 26.55 101.3261 106.7800 100.4576 101.9855
100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000 103.2779 100.7009 100.5994 101.6775 83.2931 108.2753 25.74 101.3261 101.4400 100.4576 100.9757
NAv 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087 103.2779 100.7009 100.5994 101.6775 85.4288 108.2753 25.74 101.3261 106.7800 100.4576 100.9757
PRO 12-01-2012_Layout 1 1/12/2012 12:25 AM Page 7
Thursday, 12 January, 2012
07
We are going for 3G and we will be the first to compete for a 3G license, we have no option but to succeed
news
PTCL CEO and President, Mr walid Irshaid
Car sales up 20pc to 81,931 units in 1HFy12
Thar Coal project
Oversees Pakistanis show interest want to give $115 million to underground gasification project g NRO caused Rs45 billion losses to the nation: Dr Shahid Hassan g
KARACHI
a
TEXTILE, TERRORISM AND TAXES
ghuLAM AbbAS
FTER successful testing of underground gasification of coal project started by dr Samar Mubarak at Thar, oversees Pakistanis have showed their interest in giving financial assistance to the important project, which was facing a financial predicament.
OvERSEES INTENT after the news appeared in media regarding financial constraints faced by the only successful project – touted as having the potential of at least 100 megawatts electricity – the oversees Pakistanis have their flaunted their willingness to provide around $115 million to the project. This was said by dr Mirza Ikhtiar Baig, advisor to Prime Minister on Textile while addressing a conference on ‘We need Crisis or Growth’ here at Federation House on Wednesday. However, he said dr Samar informed that government has already released the required installment to the project as the project was in need of the amount to keep the developing works going on. However, oversees Pakistanis could send related machinery and equipments to the project, he reiterated. The underground gasification project was only success story of the year, a veritable ray of hope for the nation, he said.
Talking about textile industry, Baig said even though the sector was facing multi-pronged challenges – especially the energy crisis – the exports have still showed a growth of 15 per cent during the last six months. In spite of the shortage of energy, demand of which has been increased by 60 to 65 per cent in the last 10 years, a single megawatt has not been added by the successive governments. Baig also said the crisis-hit country should come out of the war on terrorism which has hampered national progress with the loss of $ 265 billion. Talking about corruption, mismanagement, tax evasion and non-imposition of taxes which have veered the country’s economy towards a sticky situation, dr Shahid Hasan Siddiqui, chairman and chief executive of Research Institute of Islamic Banking and Finance, Karachi, said the much debated national Reconciliation Order (nRO) has caused the nation with losses to the tune of Rs45 billion.
who is also a renowned economist claimed that Pakistan was losing Rs1, 200 billion annually because of corruption and another Rs1, 900 billion because of tax evasion and non-imposition of taxes by the present government. In addition, around Rs300 billion losses were being made due to corruption in the public sector enterprises. according to Transparency International and World Bank, he said, at least 40 per cent of the development budget of the country was being misappropriated. He further claimed that the present government is not serious about Iran-Pakistan Gas Pipeline and it was waiting for a US sanction on the project. Whatever development shown by the government so far was no more than a political point scoring and propaganda. He alleged that the hidden forces were trying to separate Gawadar (Balochistan) which could b an alternative strait to the Bandar-e-abbas which has Iranian domination.
ATTENDEES PRESENT GOvT’S PERFORMANCE The present government inaugurated diamar Bhasha dam for the second time in 2011 since it was already inaugurated by former President Musharraf in 2006 causing a jump in the cost of the approved mega project, he said. dr Shahid
The conference was also addressed by Sardar Showkat Papulzai President Balochistan Economic Forum, Pervez asghar, director General, national Center for Maritime Policy and Research Bahria University Karachi, and others while Jaan Jamali deputy Chairman Senate also made a telephonic address.
KARACHI: Car sales during 1HFY12 improved by healthy 20 per cent to 81,931 units compared to 68,099 units in the same period last year, said nauman Khan, an analyst at Topline Securities. “apart from June-July deferred sales were affected on account of reduced tax structure in federal budget, the yellow cab scheme announced by Punjab government has also played its due role in this volumetric growth,” said nauman Khan. In december, Khan said car sales dipped by 6 per cent to 11,214 units compared to 11,924 units in preceding month, as buyers prefer to defer orders due to year end phenomenon. However, sales in december showed a phenomenal growth of 25 per cent as against the same month last year. On company wise basis, Pak Suzuki Motor Company Limited (PSMC) continued to show robust growth of 32 per cent in 1HFY12 to 50,718 units, versus 38,320 units seen in the same period last year. This growth trajectory primarily stems from higher sales of Mehran and Bolan, up 47 per cent and 36 per cent respectively, on account of taxi scheme launched by Punjab government, while comparatively new addition in PSMC product offering, Swift, also lend its due hand. Swift sales increased by 2 folds to 3,247 units in the period under review, while it is contributing 6 per cent to overall PSMC volumetric sales. Overall, company has been able to improve its market share by 6pps to 62 per cent in this period. On the other hand Indus Motors’ sales grew by 7 per cent to 24,066 units compared to 22,408 units in the same period last year with company’s flag ship product, Corrala, depicting the same growth trend. despite launch of new variants by the company in 1600cc segment and CnG vehicles (Eco), Corolla sales showed declining trend on account of reduced farmer income amid falling cotton prices. despite recovery in volumetric sales, strained margins on account of continuous appreciation of Japanese Yen and high regulatory risk, we maintain “Market-weight” stance on local assemblers. STAFF REPORT
Investment to GDP ratio dips KARACHI: The security situation in Pakistan is being considered as one of the biggest hurdle for foreign investors. One positive change that, according to analysts, has emerged in last few months is the considerable improvement in law and order situation of the country. “This can be gauged by the fact that the frequency of suicide blasts had reduced by 34 per cent in 2011,” said Farhan Mahmood of Topline Securities. This, the analyst said, would somehow provide a breather to local and foreign investors where political and ongoing energy issues were already hampering the investment climate. “Pakistan investment to GdP ratio has fallen to 13.4 per cent in 2011 from a high of 22.5 per cent in FY07,” he said. Referring to the data compiled by Pakistan Institute of Peace Studies (PIPS) Mahmood said, a total of 45 suicide attacks took place at different places in Pakistan in 2011 compared to 68 blasts/attacks occurred during 2010. “This translated into a massive decline of 34 per cent, thanks to the prolonged military operation in border part of Pakistan and afghanistan.” Moreover, there is a marked improvement in the security situation over the last 2 years, as frequencies of blasts have reduced to almost half. Interestingly, suicide attacks have reduced significantly overall the last couple of months. “This is primarily due to the ongoing peace talks by US and Pakistan with the insurgent groups, according to media reports,” the economic observer viewed. STAFF REPORT
SBP, PTA sign MoU to promote mobile banking KARACHI
S
STAFF REPORT
TaTE Bank of Pakistan (SBP) and Pakistan Telecommunication authority (PTa) Wednesday signed a Memorandum of Understanding (MoU) to develop an appropriate technological and regulatory framework to promote mobile banking in the country. The MoU was signed by Inayat Hussain, Executive director SBP and dr Muhammad Saleem, director General Commercial affairs PTa in the presence of SBP Governor Yaseen anwar and PTa Chairman dr Mohammed Yaseen. The main objective of the MoU is to develop an appropriate technological and regulatory
framework through a consultative process to strengthen mobile banking with a view to supporting the provision of banking services as authorised by SBP. Under this collaboration, PTa and SBP will act as facilitators by means of regulatory oversight and issuance of license to Third Party Service Providers (TPSP) and setting performance benchmarks through standardised Service Level agreement (SLas) between telecom operators or TPSPs and the authorised financial institutions for carrying out financial transactions in a prudent manner through mobile banking, under relevant legislative structure. The MoU is meant to develop a cohesive regulatory framework, in consultation with all the stakeholders and to assist
each other in achieving the common objective of providing the low cost mobile banking services. In order to coordinate smooth implementation of mobile banking and to resolve any disputes among the stakeholders, a SBP-PTa Joint Coordination Committee shall be constituted comprising firstly four officials from SBP including the Executive director (BPRG), director-Banking Policy and Regulations department, director-Payment Systems department and director- Information Systems and Technology department. The committee would be jointly headed by the Executive director (BPRG), SBP and director General (Commercial affairs), PTa. To monitor the progress, representatives of both the parties shall
meet on a quarterly basis and suggest measures to improve or further expand the framework as and when the need arises. Speaking on the occasion, Governor State Bank of Pakistan Yaseen anwar said over 0.8 million branchless banking accounts have so far been opened while the average number of transactions per day is around 0.18 million and the average ticket size per transaction stands at Rs3,700. He said the agent network under branchless banking umbrella had exceeded 20,000 agents, who have helped to channelise 50 million financial transactions worth more than Rs190 billion while the number of bank branches at present was only ten thousand (10,000). He said these agent outlets are spread across several cities,
towns and smaller villages in Pakistan. anwar said technology has made it possible for banking industry to offer a wide gamut of services such as e-Banking, Branchless/Mobile Banking, Electronic Clearing Systems, Electronic Funds Transfer, Smart Cards, plastic cards of various forms etc. appreciating the initiatives of Pakistan Telecommunication authority (PTa) and the Ministry of Information Technology (MOIT) to promote and develop the emerging field of branchless and mobile banking in the country, he said that it is also heartening to note that PTa is also playing an important role by encouraging it’s regulatees to play their due part in provision of smooth and efficient Branchless Banking services.