Profit 19th January, 2012 by Profit Epaper

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Raging bulls storm KSE with 242 point gain Page 03

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profit.com.pk

Thursday, 19 January, 2012

Steel price jumps up by Rs5,000 per tonne LAHORE IMRAN ADNAN

VER 70 per cent of steel manufacturing units in Punjab have announced a complete shutdown for one month due to gas curtailment. the forced closure of steel industry has swelled steel products’ prices – including bars, angle and girder – by Rs4,000 to Rs5,000 per tonne. speaking to Profit, Pakistan steel Rerolling Mills association Chairman

Mian tariq Waheed underscored that Punjab steel industry is traversing the most difficult times due to gas and electricity curtailment. steel manufacturers had to close their production units to save fixed monthly electricity charges (MDi) of 325 per kilowatt as steel manufacturing was not economically viable without natural gas supply, he maintained. During the last 30 days, he pointed out that steel prices have risen by Rs4,000 to Rs5,000 per tonne. Graded steel products are being sold at Rs71,000 to

Rs72,000 per tonne, whereas local quality steel bars, angle iron and girder are available at Rs66,000 to Rs67,000 per tonne. Waheed further indicated that steel product prices should not swell during current circumstances as no major development project was underway in the country. But domestic steel manufacturers have to increase steel prices as their cost of production had been increase due to gas curtailment, he further added. He disclosed that due to suspension of gas supply, steel industry had to

Pakistan, ADB sign $ 513 million loan agreements

ISLAMABAD

AMER SIAL

akistan and the asian Development Bank (aDB) on Wednesday signed two loan agreements of $513 million, which will be utilised for the construction of new khanki Barrage on the Chenab River and for improving power transmission network in sindh and Balochistan. the agreements were signed by aDB’s Country Director Pakistan Werner Liepach, secretary Economic affairs Division, abdul Wajid Rana and secretary irrigation Punjab irfan Elahi. Country Director aDB Werner Liepach said the financing is provided for two of the most crucial sectors for Pakistan, the irrigation and energy sector. “it is a good day for Pakistan as it is very rare that the bank sign agreements worth half a billion dollars for project financing in a single day”, he added. Liepach said the total disbursement to Pakistan during the last calendar year was around $550 million but added it will increase this year as the bank changed its strategy and now projects ready for execution will be financed. “the agreements signed today will have tangible benefit for the people”, he said. the soft loan of $ 270 million will be used for replacing the old khanki headworks built in 1892. the deterioration of the headwork was resulting in water leakages of 447 million cubic meters each year due to the barrage’s shutter gates. Liepach said, the new barrage will reduce water leakages and lessen flood risks in an irrigated agriculture area of 1.2

million hectares. secretary irrigation Punjab irfan Elahi said the loan will be utilised for building a new barrage complex on the Chenab River, 275 meters downstream of existing headworks, including main weir and under sluices, gats and hoisting arrangement and operating deck and an access road bridge. the new barrage will connect the Lower Chenab canal with a new head regulator through a lead channel, ensuring reliable flow of water and increasing flood bearing capacity of the structure. the project is expected to be completed by June 30, 2016. the loan repayment period is 25 years with 1.2 per cent interest rate. He said, the loan given for khanki Barrage project is the second tranche of $900 million multi-tranche finance facility of aDB for the Punjab irrigated agriculture investment Programme that has a financing facility of up to $9 billion. He said rehabilitation of three other barrages in Punjab will be carried out in future. Other loan agreement of $243 million was the third tranche under $800 million Power transmission Enhancement investment Programme that includes expanding the grid stations and laying new interprovincial transmission lines to upgrade the national grid system. secretary EaD said the loan will be used for a new 500 kV transmission line of 600 km from Jamshoro Moro Dadu and Rahim Yar khan, a new 500 kV grid station at Moro and expansion of three existing 500 kV grid stations at Jamshoro, Dadu and Rahim Yar khan. While a new 220 kV transmission line of 125 km from Uch ii power plant to 220 kV grid station at sibbi and connection between Uch i and Uch ii power plants will also be carried out. He said the loan was under aDB’s OCR and will be libor based. the project is expected to be completed by December 31, 2015.

switch to coal, but black rock prices were also witnessing a jump of Rs3,000 to Rs7,000 per tonne and settled at Rs15,000 to Rs20,000 per tonne. However, even after price jump coal was not easily available in the markets. Pakistan Rerolling Mills association former Chairman asmat Pervaiz Malik added that steel manufacturers had to put in extra efforts in arranging huge quantities of coal. He indicated that an average sized steel furnace requires some 4-5 tonnes of black rock daily, but no vendor

in the city could meet the increasing demand of steel industry. Responding to a question, Malik said furnace oil was another alternate but its prices has gone beyond Rs80,000 per tonne, while the same commodity was being sold at Rs52,000 to Rs54,000 per tonne. He further revealed that some small furnaces were using already used tyres with coal for melting process. However, prices for used tyres are continuing to escalate and have reached Rs500 to Rs750 per 40-kg.

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Thursday, 19 January, 2012

news

700 containers of Indian onion face delay in clearance Increasing demand of commodity causes over 40pc jump in prices

KARACHI

STAFF REPORT

ROUnD 700 onion containers imported from india are facing acute delay in clearance at karachi Port due to the newly introduced checking system causing shortage of the commodity in the local market. shortage of onions in the country, after the damage of crops during the heavy rains and floods mainly in sindh last year, has pushed the price of the highly consumed vegetable up by almost 40 per cent. as onion demand in the country, especially in karachi, is largely being met through imports from the neighbouring country, the delayed clearance and

strict checking system at ports have augmented the domestic price of the vegetable, sources told Profit. it is worth mentioning here that both exports and imports were being cleared through the indigenously developed automated customs clearance system - Web Based One Custom (WeBOC) – at various ports of the country; including Port Qasim, karachi and karachi Port. Earlier, the fruit and vegetable exporters of the country had faced the same delays in clearance of their assignments besides braving the damages made to their products during the process. Besides the jump in demand, the dependence on import from india has also caused the increase in price of the item multiplying the woes of already crisis and inflation hit masses. to meet the escalating onion demand, importers are likely to continue importing the item during next couple of months as the domestic crop in Balochistan would be ready by april this month. although, according sources at the city’s main vegetable wholesale market, onion was available at Rs25 to Rs30 per kilogram the same item was

SBP enhances scope of financing facility KARACHI STAFF REPORT

tatE Bank of Pakistan has enhanced the scope of financing facility for establishment of new power projects using renewable energy with a view to promoting the use of renewable energy and meeting the growing electricity demand of the country. it has now been decided that banks and DFis can also consider financing requests of the sponsors for setting up power projects up-to a maximum capacity of 20MW in cases where only biomass is used as renewable energy source, keeping in view the terms and conditions of the scheme for financing power plants using renewable energy, said a state Bank of Pakistan circular issued on Wednesday. it may be recalled that earlier under the scheme, which was announced by the central bank vide sMEFD Circular no 19 on December 01, 2009, the financing facility was allowed for establishment of new power projects using renewable energy with a capacity of up-to 10 megawatts.

DAP prices to settle between $680 & 690/t KARACHI STAFF REPORT

being sold at retail market at Rs45 to Rs50 per kg with 40 to 50 per cent increase. Earlier onions at retail market, was available at Rs28 to Rs30 per kg. the shortage became more menacing after the damage of the onion crop after devastative monsoon rains last year in many parts of sindh including Matiari, Hyderabad, Hala, Mirpurkhas, Badin, tandoallayar, nasrpur, etc. sindh is a big producer of onions, which not only

provides the vegetable to the whole of Punjab, but also exports the good quality produce. the province also provides onions to other provinces from October to March. However, according to sources, in spite of the floods, sufficient onion stocks were available in the country but due to the lack of storage facility and negligence on the part of concerned authorities in government, there is onion shortage in the country.

‘APTMA stands for free market mechanism’ LAHORE STAFF REPORT

HaiRMan all Pakistan textile Mills association (aPtMa) Mohsin aziz said Wednesday that aPtMa has always stood for the Free Market Mechanism in the larger interest of country's economy and it has neither proposed ban on export of cotton or any imposition of export duty on it. Reacting to Pakistan Cotton Ginners association (PCGa) criticism, aziz dispelled the wrong impression being spread by the PCGa through media and further assured that aPtMa would never be involved in arm twisting of its business partners. according to him, aPtMa has always advocated for a free market mechanism even when cotton prices were abnormally high to the extent that it was becoming extremely hard to afford by the spinners. But still he said, they stood for the market dynamics and never

supported imposition of any embargo on exports, he added. He further said the spinners suffered again heavily with heavy fall in cotton prices last year but the aPtMa members maintained their inventories throughout the year until fresh crop arrived to the market. He said certain elements among the ginners and hoarders remained overstocked with the idea of making huge profits out of expected shortage of cotton crop due to floods. according to him, the same lobby was now pursuing the government for intervention in the name of farmers. they are stuck up with abundant stocks on the presumption that prices would go up due to floods, he added. He said the aPtMa had established its stance with relevant facts and figures that any incentive in the name of farmers would actually benefit a few ginners and a group of hoarders. therefore, the tCP intervention in the case was not suitable to the interest of neither the farmer

nor the country, he said. Mohsin said aPtMa appreciates government for understanding its stance and realising that intervention of any sort at this stage would be benefiting a few individuals. He said the export market was open to every stakeholder and a total of 610,000 bales have already been exported this year and sizeable orders are already pending which would be exported in the preceding months. also, he added, the new York Future is on the rise and export of cotton is always possible if local buyers do not buy at the prevailing international prices. therefore, there is no justification in making false hue and cry, he asserted. He said aPtMa would strongly oppose any proposal or consideration contrary to business ethics, leading to ban on exports of cotton or imposition of duty on exports. He said aPtMa would always be supportive to a fair price to the farm partners in the larger interest of the country and its economy

EsPitE prolonged winter gas curtailment, declining international DaP margins and recent impact of feed stock prices, FFBL is trading at 2012 dividend yield of 15 per cent. Moreover, the analysts at topline securities expect, despite higher gas curtailment in 4Q2011, 4Q2011, earnings to be around Rs3.1 per share which would lead to 2011 full year EPs to Rs10.8. Further, they said final cash dividend of Rs2.5-3 per share taking full year dividend to around Rs9-9.5 per share was also being expected. “though international DaP prices (Us region) are trading around $580-600 per tonne (cfr), but, regional DaP prices (arabian Gulf) are still higher at $650-670 per tonne,” said Farhan Mahmood. Moreover, the analyst said, with lower DaP inventory in local market due to gas curtailment, recent DaP contract prices are being settled at $680-690 per tonne (Fob). However, once DaP production resumes, we might see local DaP prices following the international trend and thus DaP prices are likely to fall to $630-640 per tonne later in 2012. thus we expect DaP margin which is currently around $265 per tonne may fall gradually to $230 per tonne in 2012 compared to average of $298 per tonne in 2011. With ongoing winter gas curtailment, both urea and DaP plants have been shut down for an annual turnaround (ata) for 40 days. Urea plant was shutdown in the last week of December 2011, while DaP plant went off in the second week of January 2012. Last year the plant also witnessed similar ata for 40 days. However, this time we believe, resumption of urea production may get delayed till the first week of March; even so, DaP production is likely to come early by the end of February 2012 as DaP requires lower quantity of gas, it was added. For full year 2012, we expect gas curtailment to FFBL will be around 38-40 per cent, higher than fertiliser plants on Mari network but lower than sui fed fertiliser plants. the analyst said FFBL was expected to post full year 2011 EPs of Rs10.8 (4Q2011 EPs of Rs3.1) compared to profit of Rs7 per share in 2011 (4Q2010 EPs Rs3.9), up by massive 54 per cent. “We have assumed 8-18 per cent lower sales in December compared to sales in the month of november as gas curtailment remained on the higher side,” he said.

ENERGY CONSERVATION –NEED OF THE HOUR According to energy experts the electricity demand is rising by 8-10 per cent per annum

RuBAB MAHBOOB akistan is facing the worst energy crisis that has affected all segments of society. the gap between electricity demand and supply is widening with every passing day. Electricity demand touched the record of 20058 MW in last august in the country whereas total installed capacity for power generation is 21021 MW out of which 18987 MW is dependable capacity. But presently dependable capacity is about 13920 due to lack of water releases by iRsa to dams owing to canal closure. Pakistan Electric Power Company

(PEPCO)/ntDCL has the responsibility of electricity distribution to a total of 19.3 million consumers across the country. Ministry of Water and Power and PEPCO/ntDCL has chalked out a strategy to launch power generation projects with local and foreign collaboration to meet electricity demand. Hydel, apart from nuclear, Coal, solar Energy, thermal and iPPs are the major sources of power generation in Pakistan. Presently, Hydel power plays an important part in load management. thermal and other renewable energy sources are generating electricity in sufficient quantity but due to different reasons like non-availability of gas and furnace oil, canal closure

and technical problems the supply and demand gap has widened which has resulted in 10-12 hours of load management in rural and urban areas of the country. according to energy experts the electricity demand is rising by 8-10 percent per annum. if this tendency continues, the electricity demand would rise phenomenally to 36,000 MW by the year 2015, 54,000 MW by 2020 and 119,000 MW by the year 2030. Hence, it is the need of the hour to take pragmatic measures not only by increasing power generation capacity but also reduction of demand through energy conservation. the change of attitudes and a change of life styles is needed at the national level to conserve electricity which will help in reducing the present run-way demand. Energy conservation is the only short term measure which can fill the gap between demand and supply. We can save a lot of electricity through energy conser-

vation which must be taken immediately to cope with the shortage of electricity a. all unnecessary lights need to be switched off and especially while leaving the house. b. Don’t use electricity unnecessarily during peak hours and make maximum usage of sunlight. c. Don’t put electronic appliances on standby mode once not required. d. install UPs of good quality which, will help to save 20-30 per cent electricity. e. Washing Machines, Microwaves, iron, Heater and Geysers should not be used during 6 pm to 9 pm. (Peak hours) f. Replace all incandescent bulbs and tube lights with energy savers (CFLs). g. Replace all insufficient irrigation/ water supply motors and pumps with efficient equipment.

h. Use good quality copper wire in houses, shops, offices and factories etc it wills stop leakages and wastage of electricity. i. Public awareness campaigns need to be run through electronic and print media to educate the masses. Reduction of lights up to 50 per cent in President and Prime Minister`s secretariat and houses of federal ministers, governors, chief ministers, all provincial ministers and government offices will be of great help in the programme of energy conservation. the Govt needs to take strict measures to enforce energy conservation steps in true letter and spirit so that the energy discipline is enhanced among the consumers through awareness campaigns. as the energy experts say, “a mega watt saved is always better than a megawatt produced”.

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Thursday, 19 January, 2012

news Punjab establishes 150 childhood education centers

State Life achieves record premium business KARACHI

Lahore Staff Report

itH the collaboration of Un agencies, Government of Punjab has established 150 Childhood Education Centers and rehabilitated 1468 partially effected schools in flood affected area of Punjab. this was disclosed by Director General Provincial Disaster Management authority, khalid sherdil while presiding over a meeting in which rehabilitation efforts of Un agencies were viewed in details. khalid sherdil while addressing a meeting said that 1243 tonnes high Energy Biscuits have been distributed for better growth of children in 1000 schools of Muzaffargarh and Rajanpur. He said that with coordinated efforts 234 child protection centers have been established in flood affected area, in which 1,24,896 children have been enrolled. DG PDMa told that 4089 teachers and 6782 members of school management committee have been served in flood affected area so that better education and training to be given to children. He said that Punjab government and Un agencies have rehabilitated 89 water schemes and installed 50 tube wells whereas 675 save drinking water storage tanks and 3074 hand pumps installed there. He also told that 13050 latrines have been constructed and 624 villages declared open defection free and 963843 people provided sanitation free.

Punjab govt posts lucrative numbers LAHORE STAFF REPORT

spokesman of Punjab government has said that financial condition of Punjab government is sound. Government released development funds to the tune of Rs125 billion in six months of current fiscal year. the spokesman further stated that Punjab government has been opening each month with a large credit balance. Overdraft is accessed within legal limits due to late release of federal transfers but the same is returned during each month. He further said no new loan has been taken from state Bank by Punjab government during last two years. Further, the earlier loan is being repaid according to agreement signed with state Bank of Pakistan, he concluded.

STAFF REPORT

tatE life insurance Corporation (sLiC) of Pakistan’s first year premium business in the year 2011 reached Rs12.01 billion, up from Rs9.629 Billion in 2010, showing an increase of 25.46 per cent. also, the renewal premium has increased from Rs19.710 billion in 2010 to Rs24.730 billion in 2011. thus, altogether (Pakistan and Gulf Zone included) the total premium has increased from Rs29.339 billion in 2010 to Rs36.731 billion in 2011 showing a total increase of 25.2 per cent. this was stated by shahid aziz siddiqui, chairman state Life insurance Corporation of Pakistan, today during a press briefing at principal office of the corporation. sharing details of firm investment portfolio of sLiC; he said, investment income during the preceding year stood at Rs27.459 billion which

has increased to Rs30.282 billion in 2011, showing an increase of 10.28 per cent. He further stated that the life fund of state Life has increased from Rs230.42 billion in 2010 to Rs269 Billion in 2011. the number of individual life policy holders has increased from 3,317,192 in 2010 to 3,700,000 in 2011. in the group and pension sector, the number of lives covered has increased from 3.83 million to 5.93 million in 2011 resulting in an increase of income from Rs3.940 billion to Rs4.97l billion in 2011; registering an enhancement of 26.17 per cent. Chairman sLiC also said that state Life was the emblem of vigour and trustworthiness; “it is visible that the PaCRa has maintained the ‘aaa’ rating of sLiC for the last three years”, he further added. By highlighting the future plans of sLiC, he stated that recently state Life has launched the new policy by the name of ‘Committee Policy’. this

new policy is for the benefits of common people, touted as being with very attractive returns. talking about the business in Gulf region, the chairman said the corporation was not only targeting Pakistanis in various countries of the region but the foreigners were also being catered to. sLiC has also agreed terms with United Bank Limited for introducing the Bank insurance package. the corporation has also ensured the beneficiaries of Benazir income support Programme (BisP) who would be given the insurance of at Rs100,000 each. He further said state Life was also introducing health insurance for which the ministry of finance has already released Rs35 million. the chairman informed that sLiC was expecting almost Rs1 billion revenue generations through use of 100 per cent of the available space of its buildings as there were at least 16 per cent of the spaces that were unused.

AUTO PARTS ASSOCIATION HAILS GST CUT LAHORE: Chairman of auto Parts Manufacturers Exporters association tahir Javaid Malik has welcomed the decision to cut General sales tax on tractors from 16 per cent to five per cent and said it would give relief to tractor manufacturers, vendors and thousands of people attached with this industry. it would also give much-needed boost to the agriculture sector, he added. in a press statement issued here Wednesday, tahir Javed Malik said reduction in general sales tax of tractors would remove difficulties being faced by tractor manufacturers and vendors while employment of thousands workers would also be secured. He said government has taken a step in right direction as it would give boost to the moral of tractor manufacturers, vendors and other allied industries. He said that availability of tractors at cheaper prices would also help increase the production of agriculture in the country. STAFF REPORT

CORPORATE CORNER Organisation theory center launched at UMT LAHORE: the University of Management and technology, UMt, Lahore, invited educationists, researchers and organisational theory experts to participate in the launching ceremony of the Organization theory Center (OtC) at its campus. the OtC seeks the creation of contextualised knowledge, its integration and unity with other organizational fields of knowledge. the event was organized by Rana Zamin abbas, assistant Prof and Editor, Organization theory Review (OtR). Farah naz, assistant Prof, school of Professional advancement, hosted the ceremony which was attended by a large number of students, faculty members and organizational theory professionals. PRESS RELEASE

Zonal Managers conference of Utility Stores held IsLAmAbAd: Zonal Managers Conference of Utility stores Corporation of Pakistan was held in islamabad which continued for two days. senior management of corporation participated in the conference in addition to 10 zonal managers and Managing Director of Corporation Maj. Gen. (R) Malik Muhammad Farooq presided over the conference. its objective was to examine the overall performance of corporation and take concrete steps to further enhance its business and profit ability. PRESS RELEASE

‘PTCL awards its Top Agent of Lahore Contact Center’ LAHORE: in recognition of his outstanding efforts for provision of customer care and outreach services by Pakistan telecommunications Company Limited (PtCL), Mr. Waqas azeem (right) was given the “Best Performer of Lahore Contact Center award” at the annual Gala Function and awards Ceremony held at the PtCL Contact Center Lahore. PtCL advisory team Member Etisalat, Mahmoud al Marzouqi (second left); EVP Contact Centers, Junaid azim (center) and other officials graced the occasion to recognise the best performers of the Lahore Contact Center. as part of PtCL incentive Plan, this event is held annually in PtCL Contact Centers karachi, Lahore and Rawalpindi to reward and recognize employees’ efforts to provide customer care. PtCL Contact Center Lahore reaches out to customers spread all over Pakistan, and has been awarded with isO 9001:2008 certification. PRESS RELEASE

Philips Avent organising workshop KARAcHI: Philips avent, the leading manufacturer of baby and mother care products is organising an entertaining, learning and fun-filled work shop. this event will take place in the leading schools of the city. the objective behind this workshop is to create awareness regarding child’s health related problems and help to understand child’s psyche. syed arif Ul Hasan, Business Leader, Consumer Lifestyle, Philips Pakistan and Mohd imran, sole distributor of Philips avent Pakistan (a i international), made an appearance, spent time with the kids and took great interest in the ongoing activities at the st Peter’s High school. PRESS RELEASE

Raging bulls storm KSE with 242 point gain

KARACHI STAFF REPORT

LaRitY on the political front and possible settlement of political dispute between army and Judiciary boosted investor confidence. Finally investors realised the preceding year’s benchmark underperformance with a corporate earnings growth of 22 per cent which made majority of the stocks trading at a discount to their intrinsic valuation.

ksE-100 continued its upward trend during the new year and closed up 2.1 per cent with volumes of 83 million. investors continued their value buying as political noise in the country settled down. this was further helped by net foreign inflow seen in the past few days. OGDC was again the star performer as it closed the day on its upper circuit on the rumours of local as well as foreign buying interest in the script.

FFBL also closed on its upper circuit as expectations of high cash payout with the final result continued in the market. in the coming days, market will take its cue from the outcome of the prime minister’s visit to the supreme court and new flow regarding the CGt issue. Hopefully after tomorrow’s appearance by the prime minister in the supreme court may settle a number of political issues. the furious bull gripped the benchmark as bullish

sentiment blew up the index heavy stocks especially OGDC. improvement in volume depicts investor confidence while earning season full of dividends can be considered as a justifiable reason behind the uprising index. surprisingly the current account turned into a surplus during December providing a ray of hope when the rupee continues to depreciate based on expected external account deficit. “We believe tomorrow’s actions of the supreme court when the prime minister appears in front of judges may drive the investor sentiment,” said Bilal asif at HMFs. ksE-100 index closed at 11547.71 levels with a gain of 242.55 points, while ksE gained 211.78 points to close at 10541.23 levels. all share index closed at 7998.08 levels after gaining 162.10 points. total 158 scrips advanced 69 declined and 116 remain unchanged out of total 343 scrips traded.

kARAchI: A meeting of Board of Directors of Sindh Bank Ltd. was held at the head Office on January 18, 2012 in which Institute of corporate Governance gave a presentation for the orientation of Directors. L to R: Mr. Shamsuddin khan, company Secretary, Mr. M. Shahid Murtaza, Director, Mr. Muhammad Bilal Sheikh, President & cEO, Mr. Raja Muhammad Abbas, chairman, Mr. Wazir Ali khoja, Director and Mr. Naveed kamran Baloch, Director. PRESS RELEASE

kARAchI: Pak Suzuki held a lucky draw for its motorcycle customers called, ‘Sawari Jeet ki’. On this occasion Managing Director Pak Suzuki hirofumi Nagao announced the names of the winning customers. Dealers of Pak Suzuki Motors also took part in this ceremony. PRESS RELEASE