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Tuesday, 18 December, 2012
Developed economies to grow by 1.6% in 2013: Lagarde SANTIAGO: IMF chief Christine Lagarde upwardly revised the Fund’s estimate of economic growth among developed nations, which she said would increase by 1.6 percent next year, up from an earlier estimated 1.5 percent. She told Chile’s La Tercera newspaper that developing countries should grow by 5.6 percent, while the global economy is expected to expand by 3.6 percent. “So 2013 will be a little better than 2012,” the Chilean daily quotes her as saying. Lagarde was in Chile Thursday and Friday for a visit that included a meeting with Chile’s President Sebastian Pinera. She also took part in a meeting of the Community of Latin American and Caribbean States. AGENCIES
Bears leave their mark on the capital ISLAMABAD: The Islamabad Stock Exchange witnessed a bearish trend on Monday as the ISE-10 index was down by 18.81 points to close at 3220.56. A total of 270,000 shares were traded, which were up by 266,500 shares as compared to previous day’s trading of 3,500 shares. Out of 144 companies, share prices of 64 companies recorded increase and those of 80 registered decrease. No company remained stable. The share price of Unilever Pakistan increased by Rs 80.00, while that of Murree Brewery decreased by Rs 7.75. K.E.S.C, NIB Bank and Fauji Cement remained the top trading companies with 125,000, 125,000 and 10,000 shares respectively. APP
Crude up in Asia on China demand hopes SINGAPORE: Oil was up in Asia Monday on trader expectations of a hike in Chinese crude demand after a key survey showed its manufacturing activity hitting a 14-month high in December, analysts said. New York’s main contract, light sweet crude for delivery in January rose 23 cents to $86.98 a barrel and Brent North Sea crude for February delivery advanced five cents to $108.23. “Oil prices rose... on expectations for improved demand in China after data showed the manufacturing sector in the world number two oil consumer expanded in December at its fastest pace in more than a year,” Phillip Futures said in a report. Banking giant HSBC in its preliminary purchasing managers’ index (PMI) released Friday recorded China’s manufacturing activity at 50.9 in December, the highest the index has reached in 14 months. AGENCIES
RUPEE-DOLLAR PARITY
Smugglers, forward bookers to feel the heat as govt wakes up to falling dollar Millions of dollars being smuggled to UAE unchecked g SBP mulling to ban forward booking of dollar at zero margins g Finance minister says ‘few serious measures’ due to stop dollar’s slide g UAE govt to be contacted on dollar smuggling g State Bank to issue travelers permission letter for carrying $10,000 g
KARACHI
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ISMAIL DILAWAR
AvING long been indifferent to a record depreciation of the rupee against the dollar, the federal government has finally decided to take remedial measures to what State Minister for Finance and Investment Saleem H Mandviwalla said reverse the upward spiral of the greenback. Monday saw the rupee trading at 99.25 against the greenback in the open market, the highest ever devaluation the Pakistani currency had ever seen in the country’s decades-old history. Whereas the regulators tend to assign the foreign exchange reserves-related attributable factors to the historic rupee-dollar imparity, the market sources point at irregularities like the smuggling as well as forward booking of the US currency by the importers at a zero margin. The sources said ongoing appreciation in the value of dollar was due to the gap in the supply and demand of the dollar created on the local currency market by huge sums illegally being smuggled to foreign countries, particularly the United Arab Emirates (UAE). Sensing gravity of the situation, State Minister for Finance Mandviwalla called and chaired a meeting of the stakeholders here at the State Bank of Pakistan (SBP) Monday afternoon. “The meeting would discuss the one-point agenda of looking ways to reverse this process,” the minister told Pakistan Today at a launch ceremony of two British brands here at a city shopping mall. Mandviwalla confirmed as sources privy to the meeting told Pakistan Today that the federal government, represented in the meeting by the State Minister for Finance and the central bank officials, decided to take “few serious measures” to control depreciation of the rupee. The sources said the money exchangers in the meeting told the government side that inter-bank was the market which needed to be regulated by the central bank. The currency dealers proposed that the regulator must prevent the banks from forward booking the greenback at a zero rate. Also the exchangers drew the government towards millions of dollars draining out of the country as a result of smuggling to the UAE countries like Dubai. When contacted Malik Bostan, chairman Forex Association of Pakistan (FAP), confirmed that the government side had decided to look into the money exchangers’ suggestions. “The forward booking should not be free, instead should be at 100 percent margins,” he said adding the State Bank should ban the opening of LCs at a zero rate for the advance booking of the dollar, as the practice leaves the market short of the greenback. About the smuggling, Bostan said the State Minis-
ter vowed to contact the UAE government asking it not to allow the travelers from Pakistan carry dollars in access of $ 10,000 if they failed to produce a permission letter issued by the SBP. “The State Bank would issue permission letters to those want to carry dollars,” he said. Bostan said the volume of dollar in the country’s currency market was fast reducing due to smuggling. “A couple of months ago we used to have a $ 10-15 million daily turnover which now has reduced to $ 5-7 million,” the dealer said. The SBP would develop an online mechanism to regulate the movement of the dollar, Bostan quoted Mandviwalla as telling the meeting. “Well, few serious measures will be taken to stop dollar slide,” the state minister for finance told Pakistan Today.
Rupee falls to yet another historic low, crosses 98 to a dollar mark KARACHI: The beleaguered rupee fell to yet another record low on Monday amid consistent demand for the US dollar both in the interbank and kerb currency markets. Dealers said that in the interbank market the rupee eased by 30 paisas to 98.10 to a dollar during the intra-day trading. Moreover, in the open or kerb market the rupee declined by 40 paisas to 99.20 to a dollar. The rupee has been under consistent pressure amid declining foreign exchange reserves after Islamabad began repayments of loans earlier this year obtained from the International Monetary Fund under the Stanby Arrangement. NNI Mandviwala said “yes” when asked if his side had decided to focus on curbing the smuggling and forward booking of the US currency to check its shortage on local market.
PIAF urges commerce minister to finalise Trade Policy document LAHORE NNI
Pakistan Industrial and Traders Associations Front (PIAF) has urged the Federal Commerce Minister to finalise Trade Policy document in the light of business community suggestions and proposals to make it more meaningful and acceptable to the stakeholders. In a statement issued here Monday, the PIAF Chairman Engineer Sohail Lashari said that the new policy should be framed in a way that it is not only acceptable to all the stakeholders but it has certain achievable targets and realistic objectives as well. As all the times policies are made and announced without the due consultation of stakeholders and thus hardly any targets are achieved. The PIAF Chairman said that the industrial production would remain sluggish and all the targets of Trade Policy would remain unfulfilled unless and until measures are not taken to expedite the industrial wheel by availability of cheaper electricity and continuous supply of gas to the industry. He said that the government should concentrate on electricity production through hydel means as thermal electricity is not only very costly but also
adding up to the import bill. He said that thermal power units could be a stop-gap arrangement and their adoption for a longer term would hit the economy hard. While stressing the need for construction of Kalabagh Dam, he said that a lot of money had already been spent on the project and it is quite feasible but for unknown reasons, the present government is reluctant to start work on it. He said that the upcoming trade policy must focus on promoting exports of non-traditional items as concentration on a few items and on few countries is also hitting the country’s economy hard. Sohail Lashari said that auto-parts, handicrafts, precious stones, herbal medicines and fruits have huge potential in South East Asia, Far East and African region. He said that textile sector makes more than 65 percent of total export earnings despite the fact that Pakistan produces excellent quality fruit & vegetables, Halal meat, auto-parts, confectionary items, sports goods and medical equipment etc. He said that the business community was ready to supplement all government efforts aimed at enhancing the exports but without due consultation of real stakeholders even the easiest targets become harder to achieve.
CY2012 saw Pakistan equities gain 48% KARACHI STAFF REPORT
In spite of economic issues, power shortages and security related concerns, the country’s equity market remained one of the best performing in Asia during the calendar year 2012. The benchmark KSE-100 Index gained 48% in local currency and 37% in US$ terms in the outgoing 2012 with only 9 trading sessions remaining, observed analysts at Topline Research in a report issued Monday. “Major boost to Pakistan equities was provided by declining interest rates that sharply came down by 450bps in last 18 months (250bps in 2012). Resolution of Capital Gain Tax related issues, improved foreign flows in equities, rising consumerism, better corporate earnings and relative calmness on political scenario also supported the share
prices,” they said. The market worth of Karachi bourse is now Rs4.2tn, up 43% in calendar year 2012. However in US dollar terms the market cap is still down 42% from its peak of US$75bn seen in April 18, 2012. Sharp decline in Pak Rupee since 2008, absence of large listings and decent dividend payouts have restricted the growth in the overall market valuation. As a result, Pakistan’s market cap to GDP ratio of 20% of Pakistan is one of the lowest in the region. Average daily traded value remained Rs4.7bn in 2012 compared to Rs3.5bn in 2011, an improvement of 35%. In terms of shares, volumes have jumped substantially by 121% in 2012 to 175mn shares a day mainly due to investors’ interest in low price shares. In the absence of vibrant derivatives market and lack of new listings, in spite of bull run the volumes are still lower than average daily of
Rs30bn witnessed in the period 2005-07 Though Pakistan stock market has posted a handsome gain in 2012, the trend of equity public offerings at Karachi bourse remained depressed. Pakistan equity market saw only 3 IPO’s in the outgoing calendar year 2012 compared to 4 in 2011.
This low level of listing is seen after a gap of 6 years while it also compares unfavorably with last 10-years average of 11 offerings a year. During outgoing 2012, a total of Rs500mn (US$5mn) was offered to general public, HNWI (High-Net-worth Individual) and local & foreign institutions, which is substantially lower than
Rs4.8bn (U$$56mn) offered in 2011. The rally in 2012 was led by mid caps as traditional sectors like Exploration and Banks did not outperformed. Cement stocks were among the top performers as investor re-rated the sector by 152% in 2012, on account of improved earnings. Growing demand and firm prices, kept cement makers’ margin improving. Further, reducing cost pressures due to decline in coal prices and interest rates also helped. Similarly, improving earnings of listed textile firms on account of stable cotton prices, increased regional demand and declining interest rates helped this sector to perform despite lower share in the overall market capitalization. Further, recently approved EU trade package and strong textile export numbers provided further triggers to the performance. Resultantly, textile sector gained 99% in 2012.
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Francis draws ‘growth crazy’ Pakistan towards retail market KARACHI
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STAFF REPORT
F Pakistan is to follow the economic growth of the United Kingdom it would find retail market at the heart of that, British Deputy High Commissioner to Pakistan Francis Campbell told a launch ceremony of two British brands held here at a shopping mall Monday. Monday saw TONI&GUYKarachi and POND’S officially launching their new Flagship Salon and Skin Center here in the presence of Minister of State for Finance and Investment Saleem. H Mandviwalla, Chairman Unilever Pakistan Ehsan Malik, CEO TONI&GUY-Karachi Saeeda Mandviwalla and others. Expressing his delight over having what he said the oldest and youngest British brands joining hands in Karachi, Frances said his country was the second largest foreign direct investor in Pakistan. “very much so,” he replied when asked if he would like more British firms to come for investment in Pakistan. “This truly is a remarkable milestone to see two British brands partnering with each other
ISLAMABAD: Saleem H. Mandviwalla Minster of Finance & Investment inaugurating Flagship Salon and Skin Center at Dolmen City Mall. CEO TONY & GUY Ms. Saeeda Mandviwalla, Chairman Unilever Ahsan Malik, Francis Campbell British Deput High Commissioner are also seen in the picture. in a highly lucrative market like Pakistan,” he said adding “This unique business expansion not only brings creativity and continuity to the hairstyling and beauty care industry, but is determined steps towards strengthening the bi-lateral trade relationship between the UK and Pakistan.” Speaking about the growing overseas business investments in Pakistan, the “emotionally charged” Saleem H. Mandviwalla said: “It is our job to promote international investment in the country and I am
very pleased that Unilever’s brand POND’S and TONI&GUY-Karachi have decided to expand their operations further.” He said Pakistan had a huge investment potential where over 700 multinational companies were operational and making profits in double digits. Unilever, he said, was one of the 100 British MNCs that were functional in the country. “Pakistan is a land of opportunities with low business setup costs, high quality skilled labour and a very strong middle class-
support system. We encourage further collaboration between international and local brands to create a market synergy which promotes healthy competition.” Chairman Unilever Pakistan Ehsan Malik said this unique synergy between POND’S and TONI&GUY-Karachi would only raise the bar higher for the local personal care industry. “The people of Karachi are highly beauty-conscious and this flagship salon will cater to their every need. POND’S is a world famous skincare brand which has been in Pakistan for a long time and this collaboration will only help us grow with a much younger clientele that TONI&GUY-Karachi is renowned for,” he said. CEO TONI&GUY-Karachi Saeeda Mandviwalla said the flagship salon and skincare center would provide state-of-the-art hair, nail and skin services to its clientele under one roof. The luxurious TONI&GUY-Karachi and POND’S Skin Center – the state-of-the-art salon and skin center is the first of its kind in the world, where two international brands have joined hands to bring to the Pakistani consumer, the best skin and hair care services.
Business 02 Major Gainers CoMPANY oPEN Nestle Pakistan Ltd. 4701.00 Unilever Food 4200.00 UniLever Pak 10020.00 Siemens Pakistan 748.70 Fazal Textile 233.50
HIgH 4850.00 4300.00 10100.00 784.49 245.17
Low 4850.00 4300.00 10060.00 753.90 245.17
CLoSE 4850.00 4300.00 10100.00 774.55 245.17
CHANgE 149.00 100.00 80.00 25.85 11.67
TUrNovEr 40 20 200 15,800 200
148.69 148.50 276.10 130.00 247.00
148.69 147.25 275.00 130.00 245.00
148.69 147.25 275.00 130.00 246.75
-7.82 -7.75 -6.78 -6.66 -6.04
1,000 11,900 5,300 500 1,000
15.35 21.05 17.20 6.74 11.45
14.61 19.95 16.60 6.53 10.99
14.83 21.05 16.70 6.60 11.01
-0.09 1.00 -0.28 -0.04 -0.30
14,750,000 5,164,500 3,597,000 3,522,500 2,800,500
Major Losers Salfi Textile Murree Brewery National Foods Fazal Cloth Mills AL-Ghazi Tractors
156.51 155.00 281.78 136.66 252.79
Volume Leaders Maple Leaf Cement Tariq Glass Ind. Jah.Sidd. Co. Fauji Cement Byco Petroleum
14.92 20.05 16.98 6.64 11.31
Interbank Rates US Dollar UK Pound Japanese Yen Euro
98.1183 158.9320 1.1710 129.0550
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
BUY
SELL
98.60 128.73 158.41 1.1628 99.06 12.50 26.68 26.17 102.68
99.30 130.18 160.17 1.1757 100.67 12.70 26.95 26.39 105.27
CORPORATE CORNER Pepsi commits to building a new student dining facility for IBA
running international banking title is testament to UBL’s strong management, sound business model and prudent risk approach.
NBP, Subh-e-Nau to continue efforts for SCI patients
KARACHI: PepsiCo and IBA signed a multi-year agreement yesterday, according to which PepsiCo will fund IBA’s new dining center. The new dining center will be named the “Pepsi Dining Center” and will be a state of the art facility. This gesture further reinforces PepsiCo’s commitment towards enhancing the state of education and related infrastructural needs in universities. Jahanzeb Khan, General Manager PepsiCo Pakistan and Dr. Ishrat Hussain, ex-Governor State Bank and current Dean and Director IBA signed the agreement in the presence of faculty, staff and the PepsiCo team in a small but impressive ceremony. “IBA remains a hub of consumers, image makers, professionals and policy makers. IBA has produced about 8000 graduates’ to-date, each one being an outstanding professional. Most of the Chief Executives and top management positions in leading listed companies, corporations and banks are held by the alumni of IBA. It is an honor for us to be associated with IBA and I hope this relationship progresses to more areas” commented Jahanzeb Khan.
Etihad Airways named world’s UBL wins ‘Bank of the Year 2012’ Award leading airline for fourth KARACHI: United Bank Limited (UBL) was consecutive year KARACHI: December 17, 2012 – Etihad Airways, the national airline of the United Arab Emirates, has brought home top honours at the World Travel Awards, taking the World’s Leading Airline title for the fourth year in a row. The awards were announced last night at a black-tie gala event at the Oberoi Gurgaon in New Delhi, India. Etihad Airways also received recognition for its Diamond First Class product, named the World’s Leading First Class. The World Travel Awards were established in 1993 to seek out and reward the very best travel organisations in the world, acknowledging the elite organisations in their respective fields through a global industry vote. In 2012, nearly 650,000 votes were cast by travel professionals from 191 countries. The World Travel Awards have achieved top industry status and been named by the Wall Street Journal as the “Oscars of the Travel Industry”. James Hogan, Etihad Airways President and Chief Executive Officer, said: “I am delighted that Etihad Airways has again been named the World’s Leading Airline. Particularly in our region, the competition is strong, so this is a fantastic way to round out what has been an exceptional year for us. “We have received this award for four consecutive years and every year we have sought to raise our standards even higher. We are consistently good, but we are always considering ways to enhance our guest offering even further and provide the best experience in the skies.
awarded ‘Bank of the Year 2012 Pakistan’ by the prestigious international publication ‘The Banker’ in a ceremony held at the Intercontinental Hotel, Park Lane, London, on November 28, 2012. UBL won the award for promoting industry-wide excellence in the global banking community – characteristics that The Banker advocates and rewards. On conferring the award, The Banker congratulated UBL on the trust that clients have shown in the Bank through the recent financial crises and mentioned that this will serve the institution well in recovery. They also stated that the recognition of being named ‘Bank of the Year 2012 Pakistan’ by the world’s longest
KARACHI: Hussain Syed, Administrator, KMC presenting the ‘2nd Fire and Safety Excellence Award – 2012’ Award to Fayyaz Merchant, General Manager SSGC.
ISLAMABAD: National Bank of Pakistan has pledged to continue its cooperation with Subh-eNau towards provision of medical support to Spinal Cord Injured (SCI) patients from the 2005 Northern Kashmir earthquake. This was observed in a meeting between National Bank of Pakistan (NBP) and Subh-e-Nau (SN) officials held on December 14th at Islamabad Club. Mr. Tariq Zafar Iqbal, Regional Head NBP Federal Capital Region Islamabad, stated that it was time to double our efforts for the well-being of these patients. He said our society should accept them and give them their rightful status. Ms. Zahida Hamid, General Manager Business NBP, said that there should be recognition for these patients in our society. She stated that we should learn from countries that provide proper status and facilities to elevate their quality of life. Dr. Farrukh Chishtie, Head, Research & Development SN, introduced the services provided by the disability program in Muzaffarabad, and stated that a continuation of such follow-ups and service delivery is needed, as currently these patients are ignored by the society at large. He stressed that change through persistence and dedication is required at all levels and thanked NBP in their unwavering support towards the disability cause in Pakistan.
Plight of PSF Manufacturing in Pakistan ISLAMABAD: Polyester is used in the manufacturing of all kinds of clothes and home furnishings like bedspreads, sheets, pillows, furniture, carpets and even curtains. Discovered in 1941 by British chemists, Polyester Staple Fiber (PSF) manufacturing came to this part of the world in the early eighties. PSF feeds into the spinning industry where the fiber is spun into yarn for the downstream fabric and garment industries and finds consumption both locally and in export markets. For the past 30 years, domestic PSF producers have provided the downstream textile sector, and in particular the spinning industry, quality product at regionally competitive prices to become over time reliable suppliers of their key raw material requirement. This domestic arrangement, in turn, has helped the domestic spinning industry to flourish, and today Pakistan has the third highest spinning capacity in the region. It is unfortunate however, that for the last few years, the domestic producers of PSF have been subjected to unfair trade practices as PSF continues to be dumped into Pakistan. Globally, dump-
ISLAMABAD: Adraino Chiodi Cianfarani, Ambassador of Italy to Pakistan along with the Chief Operating Officer of Hashoo Group of Hotels Mr. Clive Webster attend a ribbon cutting ceremony that honors the opening of Zigolini’s, Pasta and Pizza, An Italian Restaurant at Islamabad Marriott Hotel. ing is considered as “unfair trade” and the WTO rules mandate countries to protect their domestic industry through imposition of Anti-dumping duties after due process of law.
MBM introduces Hitachi products KARACHI: MBM International today announced nationwide product availability of Hitachi home appliances in Pakistan. Hitachi is amongst the Top 50 Fortune 500 companies in the world. It is also one of the largest companies in Japan. Hitachi operates in diverse areas ranging from social infrastructure to home appliances, materials, logistics and services. The event was attended by who is who of consumer electronic industry along with key personnel’s from Media and Corporate fraternity. Live Product demonstration was arranged so audience could experience state of the art technology of Hitachi. Speaking to the audience, Mr. Parkash Issardas, Sales Manager Hitachi Home Electronics Asia commented that “Today, we are proud to announce our tie up with MBM International Pakistan for distribution of Hitachi consumer products nationwide. This association reflects our vision to bring latest technology to developing economies in Asia. And Pakistan being one of the most dynamic markets in South Asia has huge potential for Hitachi products.”
KARACHI: Branch Managers conference of Sind Region was recently held in Sukkur to review the progress of the Region. Featured in the photograph are Mr. M. Bilal Shaikh, CEO/President of Sindh Bank Ltd. (Right), with Mr.Naim Farooqui, COO (Centre) and A s sad Ali Shah, SVP/Regional Head-Sindh (Left).
Tuesday, 18 December, 2012