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Bears return with venom, index down 98pts Page 03
profit.com.pk
Wednesday, 14 March, 2012
Bumper wheat crop may fetch $500mn extra in exports during FY12 Analysts see no instant knee-jerks in external accounts g Cumulative C/A deficit to reach $ 2.8bn during 8MFY12 g More serious consequences ahead on inflation side during FY13 g
KARACHI
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ISMAIL DILAWAR
he analysts see the country’s trade imbalance taking a breather during the month of February (2012) as Pakistan Bureau of Statistics (PBS) data shows the gap declining by 15.8 percent month-on-month (MoM). “This was reinforced by four percent MoM increase in exports and five percent decline in import balances,” said Farhan Bashir Khan of InvestCap. During 7MFY12, country’s oil bill surged by 35 percent YoY, while its contribution in total imports remained bounded to 35 percent compared to 31 percent same period last year. Although the oil prices rallied during the month of Feb-12 (+5 percent MoM), the impact on import bill as per PBS figures appear muted. “Nevertheless, we expect impact of higher oil prices to be reflected in coming months,” said Khan. On the other hand, the analyst said, with bumper wheat crop expected this season, estimated wheat export of two million tons could yield additional $ 500 million for the country’s exports during FY12. While it remains to be seen how trade performance would eventually be reflected in country’s balance of payment during Feb-12, the current account deficit is expected to land in the vicinity of $ 200 million, accounting for 1.3 percent of GDP, for the month, further supported by improved remittances that increased by 4 percent MoM). In this manner, we expect cumulative current account deficit to reach $ 2.8 billion during 8MFY12, two percent of GDP on annualized basis.
“We further expect full year deficit to stay in the same range relative to GDP,” Khan said. So far, the central bank has managed to keep exchange rate from slipping further (0.8 percent depreciation against USD CY12TD, compared to 5 percent Jul-Dec11) while also keeping the currency market stable (PKR/USD movements 42 percent less volatile during CY12TD compared to 1hFY12). “however, the same comes at a price,” he said. Average injection under OMOs has
crossed Rs 300 billion in recent sessions indicating the drying domestic liquidity at the cost of intervention at the currency counter. Although such injections might be necessary to keep markets liquid, it remains to be seen how any excess liquidity would be reflected in the system (depending upon the quantum of mopups) once foreign exchange reserve dwindle to a point where a free floating regime becomes inevitable. As per latest figures, reserves with SBP have fallen below $ 12 billion, down
15 percent since Jun-11, although banks are seemingly more liquid with $ 4.4 billion, up 29 percent since Jun-11. “We deem it is only a matter of time before liquidity at foreign counter dries up (current and more recently even financial accounts have been running in deficits) and eventually see more serious consequences, specifically on inflation during FY13,” said the analyst. As far as currency is concerned, we see recent spell of stability would eventually fade away, assuming no significant change in the flow of foreign funds.
Regulations governing system audit of KSE brokers revamped ISLAMABAD: To enhance transparency and reinforce investor confidence in the capital market, the Securities and exchange Commission of Pakistan (SeCP) has revamped regulations governing system audit of the brokers of the Karachi Stock exchange (KSe). The revised regulations aim to strengthen monitoring and compliance of market intermediaries with the applicable regulatory provisions and improve enforcement power of the regulators. The scope of the audit has been broadened to include broker’s regulatory compliance with various applicable laws, rules and regulations. This includes compliance with the requirement of formulating and implementing effective know your customer and customer due diligence internal policies at broker level and frameworks that reinforce requirements of the Anti-Money Laundering Act. Under these regulations, brokers if found non-compliant with any regulatory requirements in an audit exercise will be subject to limited scope audit by the exchange in the following six months to check rectification of noncompliances highlighted in the audit report. For effective deterrence of non-compliances, the limit of fines has been increased - along with empowering the exchange to have the broker audited/inspected at any time, in addition to the routine audits. It is expected that the revised regulations will facilitate in achieving the objectives of market integrity and investor protection while putting in place effective checks and balances to deter, detect and rectify instances of market abuse. Meanwhile, the SeCP has also advised the exchange to initiate work on developing its capacity and capabilities to conduct in-house audits of its brokers to ensure improved compliance and effective monitoring in line with best international practices. STAFF REPORT
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Wednesday, 14 March, 2012
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SNGPL’s leakage surveys reduce UFG to 11pc LAHORE
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STAFF REPORT
he General Manager Sales, Sui Northern Gas Pipelines Limited (SNGPL) answering to a question in the Corporate Briefing Program at LSe stated that the Un-accounted for Gas loss (UFG) or line loss increased in the past due to conversion of distribution of gas from bulk consumers to domestic consumers. SNGPL has started leakage surveys and modern equipment to detect underground leakage has been deployed. All these efforts have reduced UFG to 11.07per cent in December 2011 as compared to 12.4per cent in June 2011 and the Company plans to reduce it further by June 2012, he added. Mr. Rehan Nawaz, General Manager Sales and Mr. Sagheer-ul-hassan, Senior General Manager Audit of SNGPL were addressing the members, investors, analysts & media representatives at the Corporate Briefing Program of the Company organized by the Lahore Stock exchange. Mr. Sagheer-u-hassan
presented a detail overview of the Company’s operations and its financial performance. Speaking on the occasion, Mr. hassan said that the SNGPL is an integrated gas transmission and distribution company which was incorporated in 1963. Now as on September 30, 2011 the Company is serving over 4 million domestic, commercial and industrial consumers with Transmission Pipelines of 7,556 Kilometers and Distribution Mains & Service Lines of 82,988 Kilometers and the number of consumers are expected to register an increase of 278,400 in FY 2011-2012. The overall gas consumption has increased to 581.71BCF over a period of 10 years with major increase in CNG sector to 14.8per cent in 2010-2011 as compared to 0.4per cent in 19992000. Further, the consumption by Captive Power has increased to 8.43per cent, he added. Answering to a question from investors on shortage in supply of gas, Mr. Rehan Nawaz said that during each winter season, the domestic sector consumption increases many folds resulting
in a large gap between demand and supply. Since there is a nominal increase in supply, the gap is met through curtailment of gas supply in various sectors. During the current winter months, gas supply has reduced by 125-150 MMCFD where the consumption has increased by 200 MMCFD and the domestic sector is also facing low pressure conditions, he added. Mr. Aftab Ahmad Chaudhry, Managing Director, Lahore Stock exchange mentioned that in the current scenario where the liquidity is drying up, high profile companies like Sui Northern Gas Pipelines Limited need to establish investor relations department to meet the informational needs of investors. More information sharing translates good liquidity in stock of the company, Mr. Chaudhry added. he further mentioned that the results of Corporate Briefing Programs are far reaching and LSe platform is available for listed companies to share their performance, managerial efficiency and future plans with existing and potential investors. The GM Audit lauded the efforts of the current man-
MoC accepts Dubai Foreign Trade Ministry’s invitation KARACHI
agement & the directors of the exchange in introducing such programs for increasing interaction between the investors and companies. The Corporate Briefing Program is an initiative of the LSe to increase market efficiency by removing information disparity in the marketplace. Market leaders are invited through this program to present their company’s performance and future plans to the investment public. The Lahore Stock exchange considered the innovation leader in the capital market of Pakistan has taken numerous initiatives in the past that have changed the way the capital market now operates in Pakistan. The exchange has in the past too focused on increasing investors’ awareness & education level for the betterment of the market. Awareness roadshows, seminars, briefings to economic journalists, Training Institute are some of the initiatives taken in the past in this regard. The Corporate Briefings Program is another step in this direction which has received much deserved praise from the investment community.
Punjab govt vows to make province economic hub
STAFF REPORT
Aiming to market investment demanding projects of the country abroad, Pakistan has decided to attend the Annual Investment Meeting’s (AIM) Conference 2012 in Dubai in May this year. Accepting the invitation forwarded by Sheikha Lubna Bint Khalid Al Qassimi, the UAe Minister of Foreign Trade, Makhdoom Amin Fahim Commerce Minister has decided to fully participate the international event to invite foreign investment for most important projects of the country. According sources at TDAP, the ministry has started preparation and arrangements for the important 2nd edition of AIM which expected to highlight financing options and emphasize trading possibilities in frontier and emerging markets with a strong focus on high growth sectors. The event which is called a global emerging market-led FDI conference and investment trade fair, initiated in 2011, could also prove a good opportunity to attract foreign investment for accomplishing various projects. Marketing the projects of various sectors abroad could increase the UAe’s FDI in the country, they claimed. During the event to be held from May 1 to 3, 2012, the representatives of participating countries would introduce case studies from private sectors executives and government delegates covering developmental initiatives, real-time investment opportunities, foreign trade policies, financing options and FDI statistics of their respective countries. In the event, Business to Business meeting and round table conferences and exhibitions were also planned to be held in various sectors including agribusiness ,health sector ,education ,telecommunication, commodities & exchange, property development, food & beverage industry ,military offsets, foreign trade ,economy ,finance ,planning etc. It is claimed that during the AIM 2011 representatives from at least 80 countries had attended the event while finalizing agreements/MoUs worth $ 10 billion.
LAHORE STAFF REPORT
Punjab government is making all out efforts to turn province into a hub of economic activities. It is not only the energy shortage but Infrastructure; education, health and Transportation sectors are also being given equal importance and focus to put economy back on rails. This was stated by Advisor to Chief Minister Punjab on Trade Affairs Mohammad Ali Mian while speaking at the Lahore Chamber of Commerce and Industry on Tuesday. LCCI President Irfan Qaiser Sheikh, Senior Vice President Kashif Younis Meher, former Senior Vice Presidents Sohail Lashari, Sheikh Mohammad Arshad, former Vice President Aftab Ahmad Vohra and a large number of executive Committee Members also spoke on the issues being faced by the trade and industry in Punjab. Mohammad Ali Mian said that the Chief Minister Mian Shahbaz Sharif was well aware of the discrimination in supply of gas being done with the industry in Punjab and has taken up the issue with the authorities at Federal level.
Branchless banking expands by 16pc in 2QFY12: SBP KARACHI STAFF REPORT
The branchless banking network in country expanded by 16 percent during the second quarter, October-December 2011, of the current fiscal year (FY2011-12) to reach 22,512 agents covering the entire length and breadth of the country, said the central banks’ Branchless Banking Newsletter’ released Tuesday. According to the publication, the number of Branchless Banking accounts increased by 40 percent to 929,184 in October- December, 2011 period as compared to the previous quarter. The total Branchless Banking deposits jumped by 169 percent to Rs 503 million in the quarter under review as compared to the previous quarter, it said, adding that the number of Branchless Banking transactions during the second quarter surged by 30 percent to 20.6 million while the value of transactions showed a growth of 35 percent to reach Rs. 79,410 million. The average size of branchless banking transaction was Rs. 3,855 while the average number of daily transactions was 228,855. This shows that mobile phone technology and agent-based banking are helping access to financial services by the hitherto unbanked poor, the Newsletter said, adding that by the end of December 2011, more than 929,000 customers have been registered as m-wallet users. The Newsletter said that innovative branchless banking models have been penetrating in all areas of payments such as utility bills, Government-to-Persons (G2P), Persons-to-Persons (P2P) payments while scaling up other services relating to deposits and loans. Bills payment and top-ups remained the dominating activity in the quarter under review with 53 percent share in total numbers, followed by fund transfers and deposits with share of 39 percent and 8 percent respectively, it said and added that the P2P payments remained the most popular mechanism with 74% share in the total funds transfer. Initial high concentration in P2P transactions suggests that the industry needs to develop a viable valueproposition for registration and activation of mobile accounts, it added.
Sugarcane prices go up to over Rs200/mon KARACHI GHULAM ABBAS
Sugar price may jump further in next few months Commodity smuggled to Afghanistan, Iran during last couple of months Though the farmers growing Sugarcane in the country are crying for low prices of their products, the jump in its price to over Rs200 per 40 kilogram may cause further increase in the rate of the highly consumed commodity during next few months. As the production of sugarcane this year has been reported at around 4.7 million tons against the expected figure of 5 million tones, the growers have increased the price of agricultural product to over Rs 200/mon or Rs 5/kg as compared to previous rates Rs 3-4/kg, a sugar miller who did not want to be named claimed. Besides, a good quantity of sugar, he claimed, has been smuggled to Afghanistan and Iranthe two neighboring countries during the last couple of months due to the huge difference in prices of the commodity. The commodity, which was available at Rs 45 to Rs 48/kg in Pakistan was being sold at retail prices of Rs 100/kg to 105/kg in the two neighboring countries technically forcing the traders here to sale
the commodity abroad through the smuggling or illegal means, he said adding that currently some quantity of sugar was being sent to Tehran through the barter system. “The Iranian demand of 0.2 mil-
lion tones of sugar from Pakistan made recently also proves that the commodity, because of its price differential, has a high demand in the foreign country,” he claimed.
he claimed that the imported sugar in Afghanistan was being reached in Kabul with the landed cost of over $ 750 excluding taxes which makes the wholesale rate of the commodity to at least Pak-
istani Rs 89 to Rs 90/kg. however, the same commodity just outside the border was available at Rs 52 to Rs 59/kg encouraging the smuggling of the highly consumed commodity. Adding weight on his claim expected jump in sugar price from May to September this year, the miller said that as the consumption of the commodity would be increased in summer season, the price of the kitchen item could be around Rs 65 to Rs 70/kg during the season. he, however, said that the farmers who were already reconsidering to grow other crops due to the lower price they obtained by the fresh crop, should be facilitated with more than Rs 250/mon. he feared that the low production next season would also cause prices to rise, and again, which in turn would attract more farmers the following year to grow sugarcane. On the other hand sources claimed that the growers largely were even unable to get the government’s set a price of Rs3.75/kg, from sugar millers. In addition, production costs have risen, which has further squeezed margins for most farmers. It is worth mentioning here that the price of sugar, during the last couple of days have jumped by Rs 7/kg in retail market after a historic decline up to Rs 48/kg.
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Wednesday, 14 March, 2012
news CORPORATE CORNER
ISLAMABAD: A new record achieved: five Villas handed over in one day by Emaar Pakistan at Canyon Views Islamabad PRESS RELEASE
Belgrade in Serbia and the Myanmar capital Yangon. These new routes will be part of an overall expansion during 2012, which will also see the launch of previously announced services to the Rwandan capital Kigali starting March 21; Croatia’s capital city Zagreb starting from May 9; Perth in Australia from July 3; and Mombasa (Kenya) on August 15. The european capital cities of Tbilisi in Georgia and Baku in Azerbaijan were the airline’s first new routes of 2012, which began February 1.
President ABF expresses concern Cathay Pacific releases combined over 41 per cent rise in trade deficit President American Business traffic figures for February 2012 LAHORE: Forum (ABF) Salim Ghauri has expressed KARACHI: Cathay Pacific Airways today released combined Cathay Pacific and Dragonair traffic figures for February 2012 that show the growth in passenger numbers falling short of capacity growth, while cargo and mail tonnage showed a slight increase over the same month last year. Cathay Pacific and Dragonair carried a total of 2,117,621 passengers in February – a year-on-year rise of 4.0 per cent – while the passenger load factor dropped by 2.8 percentage points to 74.5 per cent. Capacity for the month, measured in available seat kilometres (ASKs), was up by 8.8 per cent. For the year to date, passenger numbers are up by 8.1 per cent compared to a capacity increase of 8.8 per cent.
Bank of Punjab announces women entrepreneur financing scheme LAHORE: This March, in celebration of International Women’s day, Bank of Punjab has launched the Women entrepreneur’s Finance Scheme (WeFS) a one of its kind financing scheme. Through this scheme, Rs2 billion has been allocated for the empowerment of women entrepreneurs, enabling them to launch businesses or expand their operations across Punjab. To familiarize and project the merits of this scheme, BOP established a stall at the Women’s day function organised by the Government of Punjab at Al hamra Cultural Complex, Qaddafi Stadium Lahore. Women had a great response to the scheme, and took a keen interest in the merits and conditions of the facility.
GUJRANWALA: Mr Hae Duck Lee, Head of TV/ AV division, Samsung Electronics along with Mr Hamayun Rasheed, owner of the concept shop and Mr. Ahmed Faazil, CEO- Orient Electronics, at the opening of Samsung Concept shop in Gujranwala. PRESS RELEASE
Qatar Airways rounds up another successful year DOHA: Qatar Airways participated in yet another successful year at ITB Berlin – the world’s largest travel show – by showcasing never-been-seen-before new in-flight products. The airline exhibited its latest suite of amenity kits and its newly-unveiled Boeing 787 Dreamliner Business and economy Class seats, housed in a custom-designed exhibition stand, which was making its debut at ITB. The first of 60 Boeing 787s, of which Qatar Airways is the Middle east launch customer, will join the fleet this summer. With 14 new routes being added to Qatar Airways’ international network during 2012, there was huge interest among visitors keen to learn more about the airline’s global expansion and about the New Doha International Airport, set to open at the end of the year. Qatar Airways Chief executive Officer Akbar Al Baker hosted a press conference on the opening day of the fiveday event, announcing expansion plans with the launch of flights to Kilimanjaro (Tanzania), erbil and Baghdad in Iraq,
concerns over 41per cent increase in trade deficit within first eight months of current fiscal and said the country’s economy would have to pay the price of huge fiscal and trade deficits. Salim said the independent economic mangers fear that the fiscal deficit is likely to touch 8per cent of the GDP by the end of current fiscal against projected 4per cent or around by the government. he said the worst economic situation is being translated into record low growth of Large Scale Manufacturing (LSM) sector, leading to a contraction in the job opportunities.
EVO wireless broadband becomes Pakistan’s widest network ISLAMABAD: Pakistan Telecommunication Company Limited’s (PTCL) eVO wireless broadband has become Pakistan’s widest broadband Internet network covering 90 per cent of the nation’s population in more than 180 cities and towns. eVO customers can now experience onthe-go wireless broadband Internet wherever they roam by connecting to eVDO Rev A speeds of up to 3.1Mbps with eVO, eVO Wi-Fi Cloud, eVO Tab and eVO Droid in more than 180 cities across Pakistan. PTCL has also recently expanded coverage of its fastest Nitro Rev B network to 70 cities. Customers can now cruise with matchless speeds of up to 9.3Mbps with eVO Nitro’s Rev B in more than 70 cities.
First Networking night for MBA 2012 at LUMS LAHORE: The first Networking night for the MBA 2012 took place on the 2nd of March, 2012 at LUMS. It was hosted by the MBA Placement Office, the Corporate Communications division of the Suleman Dawood School of Business (SDSB). esteemed organizations from the FMCG, Groups/Conglomerates, financial Institutions, Consultancy, Agriculture, Development & IT sectors participated in this event.
New Lahore City participates in Build Pakistan 2012 Expo LAHORE: New Lahore City (NLC), a collaborative project of Zaitoon Group and Rafi Group, participated in the Build Pakistan 2012 – The International Construction Materials, Property, Furniture, Stone & Technology exhibition & Conference. The three day expo was held at the expo Centre Lahore from the 10th to the 12th of March. The Build Pakistan expo, which was held from the 10th to the 12th of March, focused on the immense potential of the building and construction industry in Pakistan.
LSM Summer Lawn Collection 2012 LAHORE: Introducing the splendid LSM Summer Lawn Collection 2012; Lakhany understands fashion that ignites your senses and dresses you up in style. With every suit, our customers get extra fabrics with rich embroidered border, laces, piping fabric, intricate designs of the ‘V’ neck pattern, including different prints of sleeves and many other accessories that turn your fashion fantasies into wearing realities; premium quality fabrics at an amazingly affordable price. Collection 2012 features the most comprehensive high quality yarn fabrics in a range of colours, shades, textures, prints and mood combinations.
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Bears return with venom, index down 98pts KARACHI
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STAFF REPORT
he day saw the benchmark 100-share index decreasing by 98.89 points to 13,283.65 points against 13,382.54 points of Monday. The same was absorbed above the defined pivot levels viewed Abdul Azeem, an analyst at InvestCap.The analyst said, ““The KSe-100 index remained above the defined pivot level of 13,350 pts, even though near the closing time it took little selling pressure.”. The turnover of the Index remained healthy assisting the support for the Index to climb more, reviewed Abdul Azeem. The trading volumes at the readycounter came to 313.592 million shares from the previous day’s 576.823 million shares. The trading value also de-
clined and finished at Rs5.263 billion against Rs7.914 billion of the last session. The index hit the intraday high and low of 13,422.70 and 13,274.45 points, respectively. The market capital also slid to Rs3.454 trillion from the previous Rs3.476 trillion. Of the total 373 traded scrip’s, 138 gained, 162 lost and 73 re-
mained unchanged. TRG Pakistan Ltd appeared as a volume leader with 31.300 million of its shares traded at Rs3.96 in the opening and Rs4.36 in closing of the market. The future market also came down in terms of turnover that declined to 12.046 million shares from 15.744 million shares of last session.