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Prospects of the Islamic banking industry Page 4-5 Two pronged European predicament Page 3 Provincial burden to rise by Rs75b Page 7 Pages: 7
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FBR collects Rs846b revenue in 1H2011-12 LAHORE IMRAN ADNAN
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eDeRAl Board of Revenue (FBR) has collected revenue of Rs846 billion during the first six months of the current fiscal 2011-12 (July-December). FBR also witnessed an increase of over 34 per cent or Rs216 billion during the same period of previous year. Figures show that lahore large Taxpayers Unit (lTU) has witnessed an increase of Rs17 billion or 25 per cent in the first six months of the fiscal 2011-12. lahore lTU has collected revenue of Rs53.5 billion during the first half of the current fiscal, whereas, Rs36.5 billion revenue was collected during the corresponding period of last year. Breakup shows that on account of income Tax, lahore lTU has collected Rs12.3 billion in the first half of the current fiscal, while revenue of Rs8.6 billion was collected during the corresponding period of previous year. in General Sales Tax (GST), revenue receipts of lahore lTU has witnessed Rs33.7 billion during the period under review, which showed Rs13.1 billion increase from last fiscal figures. Similarly, on account of Federal excise Duty (FeD), revenue collection has stood at Rs7.5 billion, which showed an increase of Rs0.2 billion from fiscal 2010-11. FBR’s lahore lTU Director General Mustafa Ashraf indicated that despite economic depression and energy crisis, revenue collections had witnessed substantial increase, which showed tax machinery’s efforts to increase tax revenues. he said FBR had initiated an aggressive revenue generation and collection campaign from the start of the current fiscal, considering the overall depressed economic situation in the country. he pointed out lahore lTU had also recovered some Rs1 billion arrears, stuck up in appeals and other cases. in addition, lahore lTU had created a demand for Rs2.5 billion additional revenue collections, during the period under review, he maintained. Ashraf underscored that increase in revenue collection was result of better monitoring and extra efforts of the tax machinery. lahore lTU had ensured timely tax collection from withholdings agents and followed FBR’s Broadening Tax Base (BTB) programme through which a good number of new taxpayers were added to the tax base.
Friday, 13 January, 2012
WAPDA lashes out at govt’s rudderless power sector reforms g
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HESCO, PESCO, QESCO and MEPCO not recovering Rs90 billion per annum Wapda demands reassigning role for integrated power planning, development and transmission GENCOs burning more fuel worth Rs11b per annum ISLAMABAD AMER SIAL
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hile strongly criticising the power sector reforms that are under implementation, Water and Power Development Authority (WAPDA) has demanded improvement in governance in distribution companies (DiSCOs). WAPDA has also called for enhancing accountability in lieu of increasing the already towering power tariff as the revenue gap could be filled through improving their efficiencies, says the entity’s presentation on the energy issues for the National Assembly Special Committee on energy crisis.
PRESENTING TNT The presentation could not be made on Wednesday, as the members were not interested in listening to usual presentations. The presentation contains fireworks that could have ignited the committee into grilling the Ministry of Water and Power (MOWP) on its poor planning and implementation on the power sector reforms which is holding the economy hostage.
ROLE REASSIGNMENT
mal power plants in the public sector as it neither has the mandate nor the planning and implementing departments to undertake these activities.
RESTRUCTURING AND DECLINE Government had started the restructuring of WAPDA, in early 1990s, with the vision that the break-up of its various departments and decentralisation will make management more effective however it has not materialised. WAPDA’s Power Wing was replaced by PePCO, whose top management exercised the same centralized control over DiSCOs. Criticising the boards of directors of DiSCOs, it says they have failed to contribute significantly to the improvement and functioning of these companies. The quality and effectiveness of some of its key departments have deteriorated alarmingly. The Power Planning department, under NTDC, is a particularly example of decline in standards. CPPA has not become fully functional despite the lapse of a significant period since its inception. The operational and financial sustainability of PePCO appears to be seriously threatened unless immediate remedial measures are taken.
LACK OF VISION
Demanding reassignment of the role of integrated power planning, development and transmission to WAPDA as it has mandate under the WAPDA Act, to prepare centralised plans for development of power in hydel, thermal and renewable energy resources including those dealing with transmission lines. PePCO should not be saddled with the responsibility of establishing new ther-
On the circular debt, it says even though it has been cleared many times during last four years, it reemerges as PePCO’s monthly revenues fall, short of its expenditures by Rs20 billion per month. This is unsustainable and the existing revenue gap is solely because of the mismanagement and flawed implementation of the reform program. Criticising the government on its lack of
vision, it says by picking up bank loans for revenue gap of Rs300 billion, the government paid tariff differential subsidies of Rs470 billion since 2007 to PePCO. Despite passing on fuel price impact by making almost 100 per cent tariff increase, the gap between revenue and the cost is still not narrowed.
GROSS MISMANAGEMENT illustrating the gross mismanagement in generation companies (GeNCOs), it says, due to poor maintenance, they were producing almost six billion less units per annum than their optimum level. GeNCOs are burning more fuel worth Rs11 billion per annum more than normal efficiency level. NTDC is losing power worth Rs6 billion per annum in transmissions because of losses more than the normal standards. heSCO, PeSCO, QeSCO and MePCO compositely are losing power worth Rs90 billion per annum in the distribution system. These DiSCOs are also not recovering revenue of almost Rs 90 billion in a year. These are the real reasons of existing circular debt which has paralysed the national economy and has made the life difficult of a common man.
RECOMMENDATIONS it recommends, the MOWP must recognise that PePCO is a transitory entity meant to prepare DiSCOs and GeNCOs for privatisation. They should facilitate PePCO for its strategic objectives only. Day to day management of company’s business affairs should not be a ministerial concern. For improving DiSCOs performance, it asks for taking provincial government boards so that they are administratively involved in controlling line losses and to improve revenue recovery from consumers. To ensure better collection and delivery of services, the selected inefficient feeders of DiSCOs should be leased out. Differential tariff must be implemented without taking into account the administrative losses and poor revenue recovery. The basic issue of most of the DiSCOs is poor governance and limited accountability. There should be no political and administrative interference in DiSCOs. GeNCOs must be leased out. PePCO has deviated from its given role, therefore must be rolled back to avoid further deterioration of performance of exWAPDA entities. The available energy must be consumed prudently and its industrial consumption should be preferred.
The weakening currency dilemma SITUATIONER SAkINA HuSAIN he rupee has been on steady decline since the past two months, with the exception of the past two days. Most are quite aware of the worsening balance of trade position with exports for 1h-FY12 arriving at $11.24 billion and imports standing at $22.71 billion. Remittances, which were the nation’s pride for keeping the economy out of red, have this time failed to buttress the struggling current account despite registering an unprecedented level over $6 billion during the last six months. in the face inelastic imports, exports have seemed to be the only maneuverable saving grace. however, the general
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opinion regarding power shortages causing supply deficits, especially with reference to the textile sector, is also a favourite example and ostensibly a significant impediment. it takes the sector only one year of glory for the SBP and other policy makers to start reveling in the idea of its permanence and glorify the fact that the fiscal imbalance did not affect the external account in the days of cotton gains and surpluses. Reflecting on other interesting correlative developments in the last two months, KiBOR in excess of 12 per cent, ie higher than the discount rate signals impending liquidity constraints in the banking system. The last two T-Bill auctions have also been witness to the low participation levels, extremely unlike the preceding fiscal year, and bid patterns
that showed quotation of high rates that led to complete rejection of the earlier bid in Dec-11. Theoretically this would also imply that banks are either short of funds or unwilling to lend to anyone given that the private sector credit has not ventured further than the Rs3.1-3.2 trillion from the end of FY11, and short-term government bonds seem to hold no spark lately. This implies that the shortage of funds is reflecting itself on the currency as higher interbank exchange rates are being quoted, resulting in the ongoing depreciative phase for the rupee. Delving into the investigation of the first hypothesis, it seems that banks are most definitely not short of funds. A latest report on liquidity held in excess of the CRR shows, that in the later week of
Dec-11 when KiBOR hit the12 per cent high, banks on average held around Rs10 billion/day (Rs70 billion/wk) in excess of the CRR. Similarly, an OMO conducted over the last two days extracted liquidity worth Rs41 billion. Why would SBP further squeeze liquidity if the market was already short? On the other hand, the ‘unwillingness’ hypothesis may very well hold some truth. During the first half of FY12, the SBP has lent an incremental Rs151 billion (versus Rs80 billion during 1h-FY11) and scheduled banks have lent Rs668 billion (versus Rs206 billion) to the government for budgetary borrowing. This coupled with a decline in Net Foreign Assets of Rs130 billion during the 1hFY12 (Rs127 billion increase during 1hFY11) is pre-
sumably rendering a double whammy on the exchange rate. Simple arithmetic would reveal that banks have an incremental hold up of around Rs662 billion, explaining their reservations about money lending and raising the price of the rupee. On the darker predictive side, the rupee can be expected to go even further down as the date of iMF payment approaches. And touching base with the well known exports and power deficit connection, the slow growth in external receipts can be expected to continue as no resolution of the power and gas supply issue seems to be approaching. Since this is the land of the impure, the rent seeker and the opportunist, i would suggest lets all speculate and thrive! Cheers!!
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Friday, 13 January, 2012
news
Azerbaijan has market for Pakistani rice and fruits zeRBAiJAN has a huge demand for Pakistani agricultural products especially, Basmati rice and fruits, including mango, dates and others. The two countries also have a potential of joint ventures in pharmaceutical and manufacturing of surgical goods. This was said by ambassador of Azerbaijan in Pakistan Dashgin Shikarov in a meeting with office bearers of Karachi Chamber of Commerce and industry (KCCi) at KCCi head office on Thursday. he informed President Asif Ali zardari’s visit to Azerbaijan was expected shortly and during his visit Pakistan-Azerbaijan Business Forum will be established.
he further stated in the Joint Ministerial Session held in December 2011 that both sides have decided to enhance economic relations at par to the political relations. According to the ambassador, Azerbaijani visa regime is strict for countries worldwide, however, for the citizens of Pakistan and Turkey, the visa policy is open. Pakistan and Azerbaijan are two Muslim brother countries, having profound love and regard for each other. he said Pakistan after Turkey was the second country to recognise Azerbaijan. Pakistan supports Azerbaijan on the dispute of Armenia and likewise, Azerbaijan supports Pakistan on the dispute of Kashmir. he said Karachi Chamber’s recommendation will be treated as adequate requirement for issuance of business visas. he invited President
KCCi to take a business delegation to Azerbaijan and informed about the possibility of investment in oil and gas exploration sector and electricity export to Pakistan. The ambassador informed Pakistan can export its value-added agricultural products to Azerbaijan like, mangoes, dates, fruits, sports and surgical goods. he said Azerbaijan has a liberal investment policy and Pakistani can invest there. Azerbaijan also has a strong industrial base and textile industry. Talking to the ambassador, President KCCi Mian Abrar Ahmad urged the Azerbaijani investors to invest in oil and gas exploration sector in Pakistan and highlighted the possibilities of trade in agricultural value-added products. he was of the view that economic relations between Central Asian Republics and SAARC countries will be a win-win
situation and bring economic revolution in the region. Azerbaijan while taking advantage of the geostrategic relations of Pakistan, can export their consignments via Gwadar and other ports of Karachi to SAARC, ASeAN and GCC countries. he opined the Western countries never liked the idea to develop Gawadar port for the progress and prosperity of Pakistan. According to Abrar, with the efforts of KCCi, Pakistan-Afghanistan Joint Chamber is formed and efforts are underway to establish BombayKarachi Joint Chamber. he also proposed the ambassador about the similar cooperation with KCCi’s Azerbaijani counterpart. he also requested the ambassador to invite exhibitors to participate in Karachi Chamber’s My-Karachi Oasis of harmony exhibition, scheduled to be organised in July 2012.
Industrial stakeholders mull over energy crisis
Dr Ismail becomes PBIT’s new chairman
Fisheries department holds training course
PIAF urges govt to fulfill its commitment
LAHORE: industrial stakeholders are all set to suggest a way forward on energy crisis to the government which is to be finalised at the taskforce meeting at APTMA Punjab office today. it may be noted that Prime Minister Yusuf Raza Gilani had desired from Gohar ejaz last Saturday, to advise the federal cabinet on ways to overcome the energy crisis; after consulting the stakeholders of the industry. Accordingly, a special taskforce on energy has been set up under the leadership of Gohar ejaz and represented by the industrial stakeholders from chemicals, fertiliser and power sectors. This taskforce would devise a roadmap to address the energy shortage faced by the industrial sector. Prime minister has desired finalisation of recommendations from the taskforce within six days. The taskforce would recommend a way forward to overcome the gas shortage of up to 1,000 MMCFD, during winter and 500 MMCFD, during summer on SNGPl network to keep industry wheel running throughout the year. Representatives from industrial stakeholders would finalise recommendations on uninterrupted gas supply to industry, fertiliser and power sectors. STAFF REPORT
LAHORE: Government of Punjab has appointed Dr Miftah ismail as the new Vice Chairman of Punjab Board of investment and Trade (PBiT). Dr ismail has a PhD in Public Finance and Political economy from Wharton School, University of Pennsylvania. he has previously worked at the iMF in Washington, DC and is an industrialist whose business interests include confectionery, biscuits, plastics and financial services. he aims to be a bridge between the business community and government, trying to encourage and facilitate local and foreign businesses to invest in Punjab. At his appointment Dr ismail said Punjab offers some of the most lucrative and low- risk opportunities for investors in Asia, especially in the fields of energy, agriculture, livestock and dairy, mines and minerals, and tourism. “i am, therefore, looking forward to working with the professional and enthusiastic team at PBiT to deliver the Chief Minister Shabaz Sharif’s vision,” he added. PBiT has been functioning as an investment promotion agency of the Punjab government since 2009 and has had many successes during a short tenure. it was previously led by two very dynamic private sector professionals, Rizwanullah Khan and before him, Pir Saad Ahsanuddin. STAFF REPORT
LAHORE: Fisheries Research and Training institute, Fisheries Department Punjab is holding a three day training course for fish farmers on “Prosperity through Fish Farming” from 16th to 18th of January, 2012. The objective of this training is to provide essential modern scientific techniques about aquaculture and fish farming to farmers and to inform them about soil and water conditions. This training course is being touted as going a long way in increasing the knowledge of the fish farmers. The scientific techniques that would be divulged in the course are in synchrony with modern day techniques, and hence, the farmers would be able to enhance their farming techniques via this programme. it is an ideal opportunity for them to learn the various methodologies in making fish farming a prosperous exercise.The interested persons may contact the office of director Fisheries Research and Training institute on Wahaga road, opposite Manawan Police Station, lahore on 16th January at 9:00 am. hostel facility for participants will be available free of charge. For further details, the interested candidates may contact on the following phone numbers: 042-36522895 and 04236522896. STAFF REPORT
LAHORE: Pakistan industrial and Traders Association Front (PiAF) has urged the government to fulfill its commitment with the business community and ensure two-day gas supply to Punjab. in a joint statement issued on Thursday, Chairman lahore Township industries Association iftikhar Bashir Chaudhry and Chairman Auto Parts Manufacturers and exporters Association Tahir Javed Malik said it was very unfortunate that despite an assurance by governor Punjab to Presidents of all Chambers of Commerce and industry in Punjab and Chairmen of Trade and industrial Associations gas supply could not be restored. They said gas load shedding has pushed industry to the wall, which is already facing huge difficulties, like electricity shortage, high input cost and high markup, etc, but government was playing the role of a silent spectator. They said the industry is already facing unannounced prolonged electricity load shedding that has already crippled the industrial activities, while closure of gas is putting more fuel to the fire. At the moment, when the industrial production was at its lowest ebb and the business community was facing difficulties in dealing with banks, the gas load shedding was crushing them, they added. STAFF REPORT
KARACHI
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STAFF REPORT
LAHORE
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MAll and Medium enterprises Development Authority (SMeDA) has urged the international donor organisations to extend their cooperation in implementation of SMe facilitation projects to be developed by SMeDA. Khurram Khan, General Manager Central Support SMeDA, at a meeting with a delegation of Assessment and Strengthening Programme (ASP), observed that Pakistan’s SMe sector re-
quired broad-based intervention for growth, which had not been possible by SMeDA in the full swing due to scarcity of funds. The funding gap can be bridged with assistance of international and local donor organisations. he informed that three important programmes had recently been launched by SMeDA by the funding of international donor agencies, that include “early Recovery and Restoration of Flood Affected Communities Programme” and” legal empowerment Programme for Marginalised Businesses in Pakistan” funded by UNDP
and “economic Revival of KP and FATA” project funded by World Bank. GM SMeDA observed that there was a huge demand in the private sector for capacity building and training needs. he called upon ASP to persuade the donor agencies for joining hands with SMeDA to fill this gap in Pakistan. earlier, in a presentation regarding SMeDA, ASP delegation was informed that there were 26 approved PSDP projects for Rs3. 2 billion under implementation as the common facility centres for SMes across the country.
PTCL inaugurates Islamabad One-Stop Shop
ISLAMABAD: Pakistan Telecommunication Company limited (PTCl) has inaugurated a revamped and remodeled PTCl islamabad F-7/2 One Stop Shop (OSS), as part of its new “Customer First” campaign, which focuses on building an enhanced customer care experience. The inauguration ceremony was attended by PTCl’s senior executives as well as the OSS staff. “At PTCl, our customers always come first,” said Senior executive Vice President Commercial, Naveed Saeed, while addressing the inauguration ceremony. PRESS RELEASE
LG’s new Magic Remote Control adds innovative functions LAHORE: lG electronics (lG) unveiled a new remote control for its CiNeMA 3D Smart TVs, the magic remote. The new remote control maximises user convenience with a new set of additional functions, namely voice recognition, wheel, magic gesture and pointing. “lG has been striving to constantly improve the comfort and convenience with which our customers use the CiNeMA 3D Smart TVs,” said havis Kwon, President and CeO of lG home entertainment Company. PRESS RELEASE
kARACHI: Ms Talat Rahim, Secretary General English Speaking union of Pakistan, hosted a lunch at her residence in honour of Barrister Shahida Jamil, President English Speaking union of Pakistan. Picture shows Begum Tehmina Habibullah, with hostess and chief guest. PRESS RELEASE
kARACHI: Mr Ahmed Shuja kidwai (COO of Al Baraka Bank) with Mr Ayub Butt (CEO of ZRG). Mr Shafqaat Ahmed, CEO of Al Baraka Bank can also been seen the picture. PRESS RELEASE
kARACHI: Mr Ali A Jamali, senior GM marketing division exchanging agreement with Mr Irfan Qureshi, head of car financing, Bank Alfalah. PRESS RELEASE
SMEDA urges international donors to extend cooperation STAFF REPORT
CORPORATE CORNER
iqbal Ahmad Raja, Provincial Director ASP, while exchanging his views regarding SMeDA’s contributions towards SMe development, said SMeDA was amongst a few government institutions which had a very good reputation among international donor agencies. he assured of his fullest cooperation to bring ASP related donor agencies on board with SMeDA for co-developing SMe facilitation projects, especially in capacity building and training areas.
LAHORE: Pictures shows CEO Zahid Hussain Zafar Abbas, Naveed and Tony at LH Borjan shoes outlet opening. PRESS RELEASE
LAHORE: Picture shows winners and participants of Jazz Inami Hungama held in Islamabad. PRESS RELEASE
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EDITORIAL
Two pronged European predicament
The UAEPAP initiative
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T a time of increasing international financial isolation for islamabad, the UAe Pakistan Assistance Program continues to provide crucial and appreciated assistance from a time-tested, all-weather friend. Already with the coalition support fund caught in official logjam, the iMF program abandoned and other multi- and bi-lateral donors shying away because they take cue from the Fund, Pakistan’s fiscal position has come under immense strain. And considering our troubles with natural and manmade disasters over the last few years, the financial choke could not have come at a worse time for the government of Pakistan. The UAePAP is all the more appreciated because in addition to helping contain negative fallout of the mammoth human catastrophe created in the wake of the floods, the program caters to social and infrastructure projects with significant positive spillover. education and health projects in some of the areas where they are most needed will not only empower a new gener-
ation entering the competitive job market in the future, they will also slowly but effectively negate influences of extremism so rampant in the periphery. But of far greater immediate intrinsic value are projects pertaining to the water sector and social overhead capital – roads, buildings, etc. The good thing about the latter is that while more roads, bridges and purification plants are always welcome, their initiation creates valuable job opportunities and stimulate consumerism, two of the most basic features of any coordinated attempt to snap out of persistent stagflation. islamabad would do well to emulate the UAe model when undertaking targeted fiscal expansion of its own. interestingly, while foreign grants are known to be politically motivated and sector specific, the one in question clearly addresses the people of Pakistan – from displaced sufferers ravaged by hellish floods to innocent, deprived children growing up in extremist, merciless surroundings to the army of unemployed, unable to subsist. A friend in need is indeed a friend in deed.
Abundant natural resources This is with regards to the article, “Copper politics and state of economy”, published on 11/01/12. it does not need any new evidence that we have abundant natural resources in our country, but we have tried little to exploit them properly to get rid of our economic woes. The only exception was our self-sufficiency in natural gas, but thanks to our planners that millions of new connections to gain political mileage by successive governments, especially during Musharraf’s regime, criminally uncalculated distribution of CNG station permits and conversion of industries to gas for power generation due to government imposed exorbitant cost of diesel and furnace oil that today gas has become a rare commodity. The nation starved itself for the country’s nuclear programme, but it has only helped us become equipped with nuclear weapons and there are no chances that the nuclear technology can be used by our scientist for peaceful means, especially for power generation. Our celebrated nuclear scientists are not even capable to overhaul the ailing Chashma and KANUPP plants to solve the energy crisis. Trillions of rupees of the poor nation were spent over years on the nuclear and missile programmes with no audit requirement. however, the country’s nuclear assets instead of making it invincible have made it more vulnerable.
Azeem Haye
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he european debt crisis has donned the garb of that vicious circle that continues to tantalise and torment the thinking heads around the globe, simultaneously. Gulping Portugal, then Greece and the latest one to take a plunge; italy – the problem has showed no signs of easing up. The year 2011 was being touted as the year when the european hierarchy got their act together, and came up with the solution to the recent to fix – as time told so cruelly for the europeans; that wasn’t to be. The Greek tragedy evolved into a south european crisis, which then went on to became a pan-european dilemma. And at the tail end of 2011, the economic picture was unmistakably gloomy. And to those who flaunt the ‘inevitability’ of the chain of events, should take into account the blatant failure on the part of european leaders to curtail a couple of vicious spirals – which eventually culminated in the aforementioned vicious circle. The first spiral traces its origin to the public debt to the banks and back; which also gave birth to doubts over the ability of the governments to service these debts, and this in turn absolutely pulverised any inkling of confidence that europe’s banks might have had. The banks weren’t able to lend for obvious reasons, which resulted in the weakening of the respective economies and eventually the bond prices further fell – to pour more misery over the damaged european banks. The european Central Bank seems to have controlled the spiral some what via guaranteed liquidity for three years, but the doubting Thomas still believes that eCB’s actual agenda is alluring banks into buying the troubled countries’ bonds. Considering the fact that eCB’s provision of unlimited liquidity doesn’t actually solve the targeted debt problem, one senses the ration-
European financial dilemma is a two way quagmire, and a collective endeavour is the need of the hour
LONE RANGER
ale behind the claims that eCB’s maneuvers are intended to cater to banking problems instead of the debt issue. Spiral number two covers fiscal consolidation and pedestrian growth. Tax augmentation and truncating public spending are still very much needed. There would come a point, inevitably, when recession and unemployment might instigate a political reaction, and of course uncertainty about the future governments wouldn’t exactly be a reassuring tonic. To counter this second spiral, growth is the segment that should be earmarked and worked upon, even though the external environment is not exactly favourable. So what exactly is the way forward for the europeans? enhancing growth would require a twopronged approach – one that caters to both supply and demand. Now, considering that SMes (Small and Medium-size enterprises) are the driving force behind the creation of job opportunities, eCB’s endeavour to restore liquidity to the banking system becomes absolutely pivotal. The governments as well, would have to do more than just chipping in to ensure that the supply-side measures are taken care of. There is a dire need of countering the interest groups that are becoming a major hindrance in the path of individual and collective recovery of the europeans and covering this particular base would allow economic growth to finally take center stage in this european drama. And of course, satisfying all stake holders would be a herculean task; and while many a hercules have performed this task in european history, it would take an unprecedented – at least in the recent times – level of understanding on the part of individual units if europe wants to drag itself out of this fiscal fix. For this task europe’s social model can become an archetype. All the stakeholders must be brought on a common platform, and the one that loses out must be given its due compensation; and building on from this mutual understanding, the goals – that seems improbable as this piece is being scribed – might finally become tangible realities. Another important façade worth considering is the fact, that merely cutting interest rates wouldn’t make things fall into place. Upping asset prices and lowering euro’s exchange rates will result in eCB buying bonds on secondary market. To cut to the chase, the matter would then require quantitative easing. europe can come out of its predicament if all the individual nations and the respective stakeholders do their jobs properly; keeping in mind the greater good of the entire continent and not only nurture the vested interests. The writer is King’s College London graduate and currently employed as a financial consultant at Privitisation Commission, Pakistan.
LAHORE
Marketing waste
Ali Rizvi
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Y mentor and good friend, Nadeem Chawhan an organisational story teller, once said, “if you’re smart and know how to market a product, you can sell anything even if its crap, packaged and presented in the right manner.” i looked at him, and thought, how on face value it seems to dwell a lot about the abilities of a marketer but can it really be true? Can waste really have any economic value for any-
body? And as it is with all things ‘Chawhan’, it did turn out to be true. For only a few days back i came across a very interesting article titled ‘Waste Not: in Ghana, fecal sludge could be black gold’. Ghana, it turns out, does not have a proper sewerage system, with households relying on dumping companies to empty their latrines. Sometimes, when people can’t pay for the dumping trucks, the toilets are shut down and people have to rely on other places to defecate. The sludge collected is then dumped in the sea, with disastrous environmental consequences. What really struck me about the article was, that instead of treating it as a problem this social entrepreneur treated the problem as an opportunity. The plan, Murray introduced was simple. instead of people having to pay for their tanks and latrines to be emptied, he plans to pay them for the waste – or take it for free and use it to convert it
into a product that sells. What’s his idea? Along with their research and funding partners which include Columbia University, the Gates Foundation, and the Swiss Federal institute of Aquatic Science and Technology, they will turn human waste into industrial fuel that can potentially run industries, and build the world’s first fecal-sludgeto-biodiesel plant funded by Bill and Melinda Gates Foundation. enter 1986. The first PC virus ever made was a job done at Chahmiran, near the lahore Railway Station. This virus was made by two brothers, Amjad Farooq Alvi, 26 at that time and Basit Farooq Alvi, 19 who were self taught programmers. in a shop called Brain Computer Services, expensive software was sold cheaply for as little as $1.50 each. This made it a very good bargain for foreigners thronging lahore as well, and when they went back with copies of the softwares little did they know that
SHAHAB JAFRy Business Editor
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If you’re smart and know how to market a product, you can sell anything even if it’s crap
those copies were infected with the Brain virus. The fact that two self taught managed to shake the world, sitting in the small part of inner lahore is nothing less than pure genius. Want to know where the two brothers went? Well they opened their own company called Brain Net, pioneers in the field of the internet services industry. Why have i cited the two stories together, because this is exactly what Pakistan needs. We need creativity, we need ingenuity and companies and organisations owe us a responsibility to nurture these talented individuals of Pakistan. Telecom companies in Pakistan have taken a lead by identifying areas that need support and ensuring that communities, individuals and villages are facilitated. Such steps are surely very encouraging
and one hopes that other companies will follow suit. Telenor for instance has sponsored training labs for disabled people, while Mobilink and Ufone have also launched a plethora of similar campaigns. At the end of the day, what really makes a difference is investing in social enterprise, in projects that convert a problem into an opportunity. People like the Alvi brothers are spread across Pakistan and their talents merely need to be tapped in, to find creative solutions to seemingly difficult problems that plague the country. All we need to do is market our products the right way and find out of the box solutions to our dilemmas. Writer is News Editor, Profit. Comments and queries at ali.rizvi7957@gmail.com
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We were the first international bank in Pakistan to get an Islamic banking license. In Islamic banking we have increased our customer base
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CEO Standard Chartered Pakistan, Mohsin Nathani
Prospects Islamic ba Shari’a, Banking and Revolution HuMAyON DAR he suggestion of using islamic banking and finance as a tool for social reform has added relevance to the countries in the Middle east, which are facing political turmoil and the collapse of many well-established regimes. in countries such as Pakistan, which faces the humongous task of a war on terror and a potential revolution in making, islamic banking and finance can be used to promote moderation in social behaviour and the modernisation of financial relations. ISLAMIc fInAncIAL pRODuctS: in the last three decades, a number of new islamic financial products have been developed primarily by applying islamic nominate contracts in new ways to achieve the economic profiles of conventional products, so as to allow Muslims to have access to financial services in ways that are not contradictory with their belief. This was indeed a mammoth effort in which different stakeholders, including governments, international regulatory bodies, law firms, Shari’a scholars, accountants and many more played instrumental roles. Consequently, there is now a wide range of islamic financial products available, which offer the economic benefits of conventional products in a Shari’a compliant way. This process may be termed as conversion of conventional products into islamic. Some industry experts such as Professor Volker Neinhaus of Germany, however, argue that this is at the same time conventionalisation of islamic banking and finance as well, because this process of conversion of conventional products brings the economic profiles of conventional products into islamic banking. This is perhaps a valid argument. pRODuct DEvELOpMEnt: The question that arises is whether islamic banking and finance should continue with this kind of product development or attempt to develop a new system comprising institutions and products, which are distinctly different from conventional financial institutions and the products they offer. in other words: what kind of innovation is required to develop a financial model for Muslims (and possibly for others who may share the underpinning values of that model/system), which offers real benefits to the communities and not mere financial sophistication. Many industry observers and proponents of islamic banking and finance
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argue that it must have distinct social objectives for it to survive and sustain in otherwise fiercely competitive financial markets. So far the real value proposition of islamic banking and finance is in terms of Shari’a compliancy. it is now time to start thinking about topping up its value proposition in terms of its contribution to social responsibility and commitment to the communities it attempts to serve. SOcIAL OBjEctIvES: islamic banking and finance must have social objectives, which must attempt to bring social reforms by way of promoting good economic agents. it should come up with a notion of a good economic agent and allow only such agents (individuals and institutions) to be part of the islamic banking and finance practice and movement. One way of defining good economic agents is in terms of efficiency, ethics, responsibility, and charity. Thus, an economic agent is good if it is efficient (e.g., does things well and quickly), ethical (e.g., honest, transparent and just), socially responsible, and charitable. A certain threshold level of efficiency, ethics, social responsibility and charitable giving must be set for accepting an economic agent in the islamic financial services industry, as a user or as a provider of such services, including the service providers to the suppliers. This is something very different from the current practice of islamic banking and finance. RHEtORIc RAtHER tHAn REALIty: islamic finance at present emphasises upon rhetoric more than its current reality. The current reality is that islamic banking and finance is competing with its conventional counterpart and has yet to develop its own niche. This is reflected by a huge emphasis in islamic banking and finance on the maintenance of profit equalisation reserves and investment risk reserves, and the relevance of what is known as a commercial displacement risk. All of these concepts and practices are used to ensure that islamic banking and finance remains as close to conventional banking as possible. in fact, in the countries where islamic banking and finance is being provided a level-playing field, treatment of islamic banking products is exactly the same as their conventional counterparts for the purpose of tax neutrality. While measures such as tax neutrality are helpful for the practice of islamic banking and finance, these are documented proofs that islamic financial
products are indeed no different from their conventional counterparts in terms of their economic effects. it must be emphasised here that the author is not arguing that the current islamic financial products are not Shari’a compliant; he is just referring to the fact that they offer similar economic benefits to conventional products. This is indeed the time for islamic banking and finance to pause and think for a while what future path it would like to take. Many industry observers believe that islamic banking and finance must find its niche, which according to them is not in the mainstream. Once it has identified its niche, it must also identify what type of islamic banking and finance its potential users would like to see developing. MARkEt fOR ISLAMIc fInAncE: Admittedly, the market for islamic banking & finance is limited. Only about 1/4 of Muslims are interested in islamic banking & finance. This means that out of an estimated global population of 1.6 billion Muslims, 400 million are interested in islamic banking and finance. Although per capita income ranges from less than $500 per annum to over $50,000 per annum in the countries where islamic banking and finance exists, the incidence of islamic banking is biased in favour of higher per capita environments. if we choose $1,000 per capita as a conservative estimate of the annual income of those who are interested in islamic banking and finance, then an additional annual $400 billion is available for islamic banks and financial institutions to draw their business from. ExpAnDIng HORIzOnS: however to go from the present size of $1.14 trillion (as reported in the Global islamic Finance Report 2011) to the forecasted $1.6 trillion (as projected by the islamic Financial Services Board for 2012), will be difficult if Western and local conventional financial institutions do not inject their money into islamic banking & finance. One way of doing so is for Muslim governments and political parties (e.g., Pakistan Tehrik-e-insaf and Pakistan Muslim league (N)) to adopt islamic banking as a tool for social reform, which could serve as an important part of the revolution brewing in the Muslim world in general and Pakistan in particular. The writer is a Shari’a advisor to a number of banks and financial institutions and can be contacted at
PRO_Layout 1 1/13/2012 6:54 AM Page 5
Friday, 13 January, 2012
news
ts of the banking industry Javed Mehmood talks to Afaq Khan, Head of Islamic Banking Standard Chartered Bank of Pakistan, discussing various aspects of Islamic banking and the role of Standard Chartered Bank in promoting it
A: Standard Chartered Saadiq offers current and savings accounts, term deposits, Shariah compliant credit card, takaful, home financing and SMe trade and finance facilities. The enhanced Saadiq suite includes new products such as the Saadiq platinum and PiA co- branded platinum debit cards; Saadiq platinum and PiA co-branded platinum credit cards; and Saadiq saver plus monthly savings account. We also offer comprehensive employee banking products. SCBPl is the first and only bank in Pakistan that has launched Shariah-compliant credit card, Saadiq with the aim to promote islamic Banking in the country.
Q: What is the customers’ response to Saadiq credit card in pakistan? A: Saadiq credit card is the only Shariah compliant card in the market. This unique offering is in line with our vision to promote islamic Banking in the country through continuously offering a diverse suite of products to meet customer needs in a Shariah compliant way. Response has been very positive and we have recently expanded our credit card suite to offer platinum and co-branded platinum cards as well.
Q: What is the branch network for Islamic Banking? A: Customers can avail islamic banking products and services from 143 Standard Chartered Bank branches with over 500 relationship managers spread across 32 cities.
Q: Does Standard chartered offer priority banking for its Islamic Banking customers? A: Absolutely. We are proud to offer the perfect blend of exceptional service, unique benefits and expert solutions tailored to help islamic Banking customers achieve their priorities. Priority banking also offers a dedicated call centre exclusively for priority banking customers. The proposition includes dedicated relationship managers and exclusive priority banking experience in dedicated state of the art priority centers. No matter what the customers’ priorities are, they can count on us to recognise their priority status and provide the banking services they deserve - not only in Pakistan, but also around the world.
in My view
In my view, it was not a good idea to convert the existing branches into Islamic mode BILAL MuSTAFA Managing Director Bank of khyber,
islaMiC alternatives
JAvED MAHMOOD Q: What products and services does Standard chartered Saadiq offer in pakistan for its consumer banking and SME customers?
05
Q: Standard chartered Islamic Banking has made its mark in a very short period; do you think it has grown enough to be an alternative to conventional banking? A: Growth of islamic Banking has been due to an alternative being available whereby consumers can get the same services as conventional banking without having to compromise on their beliefs. islamic banking is growing and with the passage of time, as more and more products and services are offered, it will be on par with conventional banking as an alternative available to consumers in line with their values and beliefs.
Q: What prompted ScBpL to initiate and expand Islamic Banking in pakistan? A: Pakistan offers immense potential for islamic Banking and depicts an optimistic outlook for the growth prospects of the islamic Banking industry. Our goal as a bank is to be able to offer consumers, islamic banking services, which are comparable in terms of diversity and convenience, to suit the needs of customers in parallel with our conventional offering and then let them choose. Our key to success is our customers who have confidence in the Standard Chartered brand name. islamic Banking is our way of recognising the needs of our customers and offering financial solutions in line with their values and beliefs. We strive to offer the same commercial convenience as conventional banking in terms of a diverse suite of products, ease of access to our network and availability of islamic Banking products and services through all Standard Chartered Bank branches.
Q: What would be the strategy of ScBpL to maximise Islamic Banking in pakistan? A: A: Our strategy is very clear – we want to offer a diverse suite of products to meet customer needs and offer the same ease, convenience and accessibility to islamic Banking products and services that are being offered in conventional banking.
We have strived to make Islamic alternatives for all conventional products that serve genuine needs of business so that our segment of population embracing Islamic Banking can be fully benefited JuNAID AHMED CEO Dubai Islamic Bank Pakistan
Cash reCoveries
So far, we have net NPLs of about Rs45 billion and we have so far made cash recoveries of Rs21 billion which is the highest figure in the industry NAEEMuDDIN kHAN President Bank of Punjab
Mobile banking
PROFILE OF AFAQ KHAN Afaq Khan is the CeO of Standard Chartered Saadiq - the international islamic banking business of Standard Chartered Bank. Afaq joined Standard Chartered Bank in 2003 with the mandate to launch the islamic business division for the Bank. Since then, Afaq has been responsible for the strategic build up of the international islamic banking business covering retail, corporate and investment banking, across geographies with a wide suite of product capabilities and award winning solutions. Afaq has been individually awarded the prestigious euromoney award for “Outstanding Contribution to islamic Finance” in 2010 and also named the “2010 islamic Banker of the Year” in the london Sukuk Summit. Afaq holds an MBA from the University of Western illinois and was born in 1962. Prior to joining Standard Chartered, he was the Global head of Asset Finance and Advisory at hSBC Amanah, and before that with Citibank for 13 years in various functions.
Mobile-banking can be an important tool to access the unbanked as compared to approximately 28m bank accounts there are almost 60 million unique cell-phone users ZAkIR MAHMOOD HBL President
PRO_Layout 1 1/13/2012 6:55 AM Page 6
Friday, 13 January, 2012
06 Markets top 10 sectors
39% 04% 24% 06% 02%
Chemicals
01% 10% 01% 08% 04%
Food Producers
Construction & Materials Electricity Banks
Fixed Line Telecommunication
Oil & Gas
Financial Services
Personal Goods
Support Services
top 5 perForMers sector wise SyMBOL
OPEN
HIGH
LOW CuRRENT
CHANGE
vOLuME
414.00 108.25 24.99 6.85 86.15
412.00 106.73 23.50 6.73 85.15
412.47 107.66 23.50 6.79 85.51
-0.49 0.29 -1.00 -0.01 -0.36
1,744 295,757 1,002 100,878 10,847
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
Oil and Gas Attock Petroleum Attock Refinery Burshane LPG Byco Petroleum Mari Gas Co.
STOCK MARKET HIGHLIGHTS Index 10909.12 2861.9 2352.15
KSE-100 LSE-25 ISE-10
Change -21.37 -15.18 -1.09
Volume 17,597,148 678,249 28,200
Agritech Limited Agritech(PREF)(R) Arif Habib Co SD Clariant Pakistan Dawood Hercules
Open 2844.22 163.00 86.07 72.40 158.98
High 2900.00 168.00 90.37 75.00 161.49
Low 2815.45 167.50 86.07 72.40 157.70
Close 2861.60 167.96 90.37 74.83 160.71
Change 17.38 4.96 4.30 2.43 1.73
Turnover 26 200 1,641 1,050 1,712,371
Major Losers Bata (Pak) Ltd. AL-Ghazi TractorsXD Millat Tractors Ltd. National Refinery Salfi Textile
775.00 179.10 368.41 223.94 39.21
736.25 182.50 386.00 224.00 40.95
736.25 170.25 363.00 221.01 37.25
736.25 170.64 364.50 221.86 37.25
-38.75 -8.46 -3.91 -2.08 -1.96
37 177 9,359 22,950 806
Volume Leaders Fauji Fert National Bank Fatima Fert.Co. Fauji Fertilizer K.E.S.C.
43.37 42.88 22.83 158.98 1.88
43.55 42.50 23.00 161.49 1.95
42.80 41.30 22.52 157.70 1.70
43.29 41.81 22.96 160.71 1.76
-0.08 -1.07 0.13 1.73 -0.12
2,666,177 1,966,137 1,909,950 1,712,371 1,276,960
Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)
Per Tola (PKR) 55,946.00 51,608.00 1,032.00 1025.00
Per 10 Gm (PKR) 48,016.00 44,245.00 886.00 880.00
Per Ounce US$ 1,657.00 – 35.05 –
Al-Abbas Cement Attock Cement Bal.Glass Berger Paints Cherat Cement
2.60 51.25 1.70 13.90 8.60
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
26.02 3.60 40.10 7.99 78.17
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
203 6,398 1,500 98 12,003
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
4.51 18.74 86.06 50.63 39.00
4.51 18.65 89.99 50.63 39.00
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
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
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
5.30 179.10 5.50 0.61 6.58
1,000 5 45 20 1,136
55.50 58.00 120.00 26.12 1.85
-0.77 0.00 0.00 0.00 0.05
963 1,917 41 100 28,336
109.00 111.18 145.05 145.58
0.69 -4.44
1,170 203
Beverages 110.49 111.43 150.02 150.00
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
27.22 108.02 19.69 96.11 42.15
AHCL-JAN ATRL-JAN DGKC-JAN ENGRO-JAN FFBL-JAN
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
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
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
100.99 73.62 65.31 15.30 138.00
Fixed Line Telecommunication -0.20 0.00 0.00 0.00 0.18
55.50 58.00 119.00 26.00 1.80
AL-Abid Silk Mills Diamond Ind. Pak Elektron Ltd. Singer Pakistan Tariq Glass Ind.
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
Pharma and Bio Tech
Industrial Engineering Ados Pakistan AL-Ghazi TractorsXD AL-Khair Gadoon Dewan Auto Engg Ghandhara Ind.
Abdullah Shah Adam Sugar AL-Abbas Sugur AL-Noor Suger Mills Baba Farid
Future Contracts
General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass Ltd MACPAC Films Packages Limited
vOLuME
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
12.11 35.55 32.99 11.50 7.99 70.00 1.11 64.20 23.89 3.00 3.45 8.01 22.50 25.37 52.41 29.30 498.12 1.91 15.46 18.51 13.83 72.00 60.00 21.47 1.27 8.31
12.80 35.95 32.99 12.00 8.99 70.48 1.20 64.75 23.89 3.00 3.61 8.09 22.58 25.37 52.41 29.39 524.33 1.99 15.75 18.55 13.83 72.01 60.00 22.17 1.30 8.40
-0.26 -0.05 0.00 0.00 0.00 -0.21 0.05 0.20 0.00 0.00 0.03 -0.03 -0.42 0.00 0.00 1.13 0.00 0.00 -0.15 -0.24 0.00 0.00 0.00 -0.43 0.00 0.03
9,876 1,100 1 202 141 11,621 717,364 1,030 2 4 52,038 5,610 1,301 50 200 975 2 204 13,254 3,291 10 100 500 524 118,684 71,219
Miscellaneous Century Paper Security Paper Pakistan Cables P.N.S.C. Pak IntCon(Pre) Pak.Int.Con. SD TRG Pakistan Ltd. Murree Brewery AL-Abid Silk Mills Hussain Industries Pak Elektron Ltd. Tariq Glass Ind. Grays of Cambridge Khyber Tobacco Pak Tobacco Co. Shifa Int.Hospitals Dreamworld P.I.A.C.(A) Sui North Gas Sui South Gas American Life EFU Life Assur Jubilee Life In AKD Capital Ltd. Pace (Pak) Ltd. Netsol Technologies
13.06 36.00 32.99 12.00 8.99 70.69 1.15 64.55 23.89 3.00 3.58 8.12 23.00 25.37 52.41 28.26 524.33 1.99 15.90 18.79 13.83 72.01 60.00 22.60 1.30 8.37
13.00 35.99 34.00 12.50 8.99 70.99 1.23 64.85 25.08 4.00 3.68 8.25 22.60 26.61 54.48 29.40 550.54 2.00 15.90 18.89 14.00 72.01 60.00 23.73 1.40 8.55
Mutual Funds Buy 91.00 114.64 138.10 1.1712 88.45 11.53 24.68 24.18 92.74
International Oil Price WTI Crude Oil
$102.15
18.99 1.18 8.49 32.09 10.80
Construction and Materials
Murree Brewery Co. Shezan Int’l
90.2474 138.3944 1.1730 114.9481
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
19.01 1.15 8.16 31.37 10.13
CHANGE
Personal Goods
Industrial metals and Mining Crescent Steel Dost Steels Ltd. Huffaz Seamless Pipe Int. Ind.Ltd. Inter.Steel Ltd.
LOW CuRRENT
Household Goods
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
Chemicals
Market Value 936,810,845 18,349,643 948,665
Major Gainers Company Nestle PakistanXD Tri-Pack Films Mithchells Fruit Ismail Industr Fauji Fertilizer
412.96 107.37 24.50 6.80 85.87
OPEN
SyMBOL
Sell 92.00 116.52 140.02 1.1838 90.92 11.79 24.92 24.39 95.55
Brent Crude Oil
$112.24
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_Layout 1 1/13/2012 6:56 AM Page 7
Friday, 13 January, 2012
07
The coming era will mark the age of abundance of knowledge. Machines will continue to get smarter than humans, and in addition to education, mobile technology will take over all financial, information transfer and communication services
news
Wateen Telecom CEO, Naeem Zamindar
MINISTRIES DEvOLuTION
Provincial burden to rise by Rs75 billion KARACHI
T
ISMAIL DILAWAR
he phased devolution of at least 17 ministries to the provinces under the 18th Constitutional Amendment has increased, what the central bank says, the annual financial burden of the federating units to the tune of around Rs75 billion. What is alarming is the fact that this “resulting increase” in the provincial current expenditures, on account of higher wage bills, pension liabilities, operations and maintenance costs, etc, might leave as the state bank describes, “fewer resources” for the development projects at least in the short run. On the other hand, the cash-strapped federal government, whose average annual expenditure on these ministries during last four fiscal years was recorded at Rs65 billion against the budgeted Rs78 billion, would be provided with a fiscal space of around Rs75 billion for the current budgetary year, 2011-12 terms. According to official figures, the federal government spent Rs67.4 billion in FY08, Rs63.5 billion in FY09, Rs70.1 billion in FY10 and Rs59.4 billion in FY11 against a budget allocation
of Rs70.6 billion, Rs82.9 billion, Rs91.4 billion and Rs66.6 billion, respectively, on these ministries. This is sans expenses the federal government incurred on account of the higher education Commission (heC). The federal government, which is bracing for a fiscal deficit of over five per cent of the GDP thanks to its ever-increasing current expenditures, is left with 31 ministries to take care of, after the devolution. “Financial burden on the provinces is expected to increase with the abolition of the concurrent list,” State Bank of Pakistan (SBP) observed in one of its latest reports on state of the country’s economy. The four provinces are already spending huge sums on account of current expenditures. According to ministry of finance, during FY11 the current expenditures of Punjab, Sindh, Khyber Pakhtunkwah and Balochistan stood, respectively, at Rs375.5 billion, Rs248 billion, Rs121.7 billion and Rs85.9 billion. The preceding year, FY10, saw them spending Rs303.2 billion, Rs184.6 billion, Rs102.3 billion and Rs56.1 billion. The financial balance of the provinces, especially Punjab and Sindh, usually remains in the red zone as FY10 witnessed Punjab facing a fiscal deficit of Rs33.8 billion and Sindh Rs10.5 billion. The year in review saw the two provinces
collecting revenues of Rs401.7 billion and Rs241 billion against an expenditure of Rs435.5 billion and Rs251.5 billion. last year, however, the four provinces’ financial balance set in the green zone with Punjab marking a surplus of Rs48.1 billion, Sindh Rs20.5 billion, KPK Rs50.3 billion and Balochistan Rs15.6 billion. But, at the same time the landmark constitutional change has opened new windows of revenue generation for the provinces in the face of, what the State Bank said, GST on services, federal excise duty on well-heads of oil and gas, state lotteries, duties on property, taxes on capital value of immovable property and “any fees” the provincial governments levy on the devolved areas. it is worthy to be mentioned here that Sindh government claims to have collected Rs11.5 bilion during 1hFY12 under the head of GST on services. however, if the provinces failed to tap this potential they would find themselves in hot waters. With the abolition of federal concurrent legislative list under 18th Amendment, the provincial governments have been devolved some 17 federal ministries in three different phases. The ministries devolved in the first phase include the local government and rural development, population and welfare, special initiatives, youth affairs and zakat and ushr.
Cement manufacturers in south increase prices KARACHI
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STAFF REPORT
eMeNT manufacturers in the southern region have increased cement prices by Rs50 to 100 per tonne, effective from today. Thatta Cement and Al-Abbas Cement have increased their cement prices by Rs100 per tonne to Rs7,100 per tonne. Whereas, lucky Cement and Attock Cement have increased their cement prices by Rs50 per tonne to Rs7,550 and Rs7,650, respectively. Domestic cement prices have remained resilient around Rs400 per bag, despite an oversupply of around 12.8mn tonnes after Fauji Cement brought its 7,200 tonnes per day plant online. international coal prices on the other hand, have been tracing a declining trajectory, losing more than 10 per cent since the start of 2QFY12. Coal prices have averaged around $109 per tonne (RB fob) in 2QFY12 compared to $118 per tonne in 1QFY12, cooling off by 7 per cent QoQ. ‘We believe, this opposite movement in cement and coal prices is expected to widen the gross margins of the domestic cement manufacturers, hinting at a healthy profitability growth during 2QFY12,’ said Syed Abid Ali at Ahl. According to the latest figures issued by All Pakistan Cement Manufacturing Association (APCMA), cement manufacturers sold 15.4mn tonnes of cement in 1hFY12; a 4 per cent YoY improvement, when compared with 14.8mn tonnes in 1hFY11. Total dispatches in December 2011 jumped by 19 per cent MoM to 2.7mn tonnes as compared to 2.3mn tonnes sold in November 2011. This was mainly on account of 24 per cent MoM improvement in domestic sales coupled with a 5 per cent MoM improvement in exports.
BOK’s call centre starts operations kARAcHI: The Bank of Khyber (BOK) is committed to increase the quality of its services to the customers by providing them centralised point of contact across the country; this was stated by Bilal Mustafa Managing Director BOK while formally inaugurating BOK’s dedicated Call Centre this morning at Karachi. The BOK Call Centre inauguration ceremony was also graced by Nadeem elahi Country head & Managing Director TRG Pakistan, Ayub hamid Group head hRD BOK, Asif Masood, head Operations Financial institutions, TRG, Mr. Babar Pervez Business Manager TRG Pakistan, Mr. Masood Wahindna head investment BOK, Syed Ali Nawaz Gilani head Marketing and Tariq Khan Divisional head Financial institutions BOK apart from senior executives of both BOK & TRG Pakistan. Bilal Mustafa said that BOK now with increased net work of branches throughout the country with islamic and conventional mode of financing is aiming to reach to their customers through latest technology which should be secure in use and efficient in response. PRESS RELEASE
LNG investors force govt to provide level playing field ISLAMABAD
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AMER SIAL
he government suffered a major embarrassment on Thursday when it was forced by the intending liquefied Natural Gas (lNG) importers to desist from hurriedly converting the liquefied Petroleum Gas (lPG) import terminal at the Port Qasim without due diligence and providing a guarantee for level playing field. MEEtIng WItH pRIvAtE SEctOR: Top heads of three private sector companies, Global energy infrastructure, engro Vopak and Pakistan Gasport held a meeting with the officials of the Ministry of Petroleum, Oil and Gas Regulatory Authority (OGRA) along with the representatives of the United States Agency for international Development (USAiD). An informed source said that they sought clarification from
the government on its intended lNG import from Qatar, and retrofitting at ProGas lPG import terminal to enable it to handle lNG imports. The terminal was purchased by the state owned SSGC to expedite lPG imports in the public sector. They also expressed grave concern over the demand of $10 million guarantee upfront from OGRA, which they termed unjustified as they were to invest $300 million in lNG import terminal and $1 billion in trade finance. puBLIc SEctOR pARtIcIpAtIOn: They said the entry of public sector in lNG import would negatively affect their business plans as the government was not interested to buy gas from them and had asked them to find third party buyers. They proposed that the government should look into possibility of buying lNG from them if their prices were competitive with the Qatari lNG. They also opposed utilisation of lPG import terminal for
lNG, as they pointed out that the terminal was on the main shipping channel and even a study conducted by Port Qasim Authority had termed construction of any lNG terminal a security risk. They said that even if government went ahead with its plans the international shippers would not enter the channel, as it was against the international standards. Secretary Petroleum, the source said was not aware of these issues and said that he would look into the matter to resolve it. Lng IMpORtS fROM QAtAR: Talking to reporters on Thursday Petroleum Minister Dr Asim hussain said that the government would start lNG imports from Qatar and it would be injected in the national transmission network. he said 1300 mmcfd gas equivalent of lNG would be imported as the channel could not handle a ship carrying 500 mmcfd equivalent lNG. The minister said price of imported lNG will be included in the
weighted average and consumers would have to pay higher price for gas. he said imports will start within next eight months. The current average consumer price for local gas supplies is $3.5 mmBTU as compared to lNG price of 18 mmBTU. This will significantly increase the domestic consumer price. BRIDgIng DEMAnD AnD SuppLy gAp: The minister said he was making efforts to bridge the demand and supply gap in gas supply through imports but OGRA was hindering his efforts. When asked who in OGRA was opposing his moves as all top officials of OGRA were very compliant of ministry’s policy decisions, he said tampering in the policy directives was done by the middle cadre officials who try to implement their own theories. Giving an example he said there was no condition of guarantee for lNG imports but some where from the middle it came up and now the investors were
being forced to give a guarantee of $10 million upfront, even though they had to make complete investment on their own for importing and selling lNG. A statement issued by the ministry said that while chairing a meeting with lNG importers, Secretary Petroleum ejaz Chaudhry dispelled the impression that government was violating the lNG policy and emphasized that the import process would be based on merit and completely transparent. it was decided that a committee will be notified comprising of the representatives of the petroleum ministry, OGRA and representatives of lNG importing companies to look into the detailed process of lNG import and to resolve concerns of the importers. it was clarified that a separate expression of interest (eoi) would be advertised for lNG tolling. Secretary Petroleum chaired the meeting attended by representatives of OGRA, USAiD and lNG importers.