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BUSINESS Wednesday, 20 February, 2013
Maturities of forward import cover and L/C must coincide: SBP
KARACHI: The central bank Tuesday clarified to the authorized dealers that in all cases the maturity of the forward contract against import should coincide with the maturity of the underlying Letter of Credit (L/C). Referring to F.E. Circular No. 06, which was issued on December 21, 2011, the State Bank of Pakistan said in case of issuance of an L/C, which requires payment to be made after a given number of days of shipment and the shipment date has been determined on or before the L/C expiry date, the forward contract can be rolled over on forward maturity date to coincide with L/C payment date. This, it said, was subject to the condition that the roll over is not for less than one month. The central bank said in case the shipment period was not determined on the L/C expiry date, forward cover cannot be rolled over and has to be closed out at the prevailing exchange rate on the L/C expiry date. “Where L/C payment is due before L/C expiry/forward maturity, forward contract would have to be taken up on the date when the payment is due for delivery to the customer,” it said in a circular issued Tuesday. Even, the regulator said, in cases where partial shipments were allowed, the forward contract against import should coincide with the maturity of the underlying letter of credit. In case of partial payment prior to the L/C expiry date, the forward contract can be taken up to the extent of the partial payment. In case of partial payments after the L/C expiry date please refer to our clarification at S. No.1 above, it said. STAFF REPORT
Poland could provide assistance to Pakistan in power generation through coal of which the country has very huge reserves. – Polish envoy Dr Andrzej Ananicz
Stock market all set to hit 19,500 points despite odds KARACHI
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STAFF REPORT
HOUGH the country’s fragile economy is hit hard by a fresh spate of protest demonstrations in almost all major cities, economic observers expect that the booming stocks market may peak to an all time high of 19,500 points in the months ahead. “The equity market continues its rising trend with another milestone is coming close as Pakistan market is about to touch
18,000 mark,” said the analysts at Topline Research in a report issued Tuesday. On Oct 9 last year, they recalled, when the benchmark Index was at 15,688 points, they in a report on country’s politics had
If a deal with IMF or any arrangement of decent inflow is not arranged, the local currency can fall another five percent by June
targeted the Index to reach the 18,000 mark in the run up to elections by May 2013. “The index has now reached close to 18,000 mark but two months ahead of what we thought,” they said. Many investors, the analysts said, were now curious to know the future direction of market beyond 18,000 mark in light of worsening security conditions and upcoming transfer of power at the domestic political scene. “We maintain our Index target of 19,500 points without re-rating as mentioned in our note titled ‘Pakistan Investment Strategy 2013’ issued on Dec 12, 2012,” they added. The target, they said, was based on 15% discount to last 10 year average PE of 8.2x as this discount made sense considering economic slowdown, security concerns, circular debt and external account vulnerabilities. About the impact of ensuing political developments on the stocks market of the electioneering country, the market observers said: “In case the transfer of power, that is selection of caretaker PM is through consensus and there is no uncertainty, we expect the market to continue to perform well, otherwise some correction expected”. About the fate of rupee,
9th World Safety and Security Exhibition from 26th KARACHI STAFF REPORT
The 9th International Safe and Secure Pakistan Exhibition2013 is set to bring major investment opportunities for local and foreign exhibitors and manufacturers, said Managing Director Pegasus Consultancy, Aamer Khanzada. Khanzada, organizer of the event, said the mega event was being organized first time in Islamabad’s PakChina Convention Centre from February 26-28. Safe Secure Pakistan is the international trade fair, which is a platform through which safety and security equipment and training industry’s stakeholders commence B2B interaction and exchange valuable business prospects. After the 8 years success of the international Safe Secure Exhibition, 2013 event will bring in big opportunities of investment for local and international ex-
hibitors, brand owners and manufacturers. National Disaster Management Authority, Capital Development Authority, Fire Protection Association of Pakistan, Emergency Rescue Services 1122, Rawalpindi Chamber of Commerce and Industry and Islamabad Chamber of Commerce and Industry are supporting the Safe Secure Pakistan 2013 Exhibition. The event will showcase the display of latest technology, innovations and advancements of internal security, firefighting, policing, emergency and rescue as well as transport safety. Over 150 companies are participating in safe secure Pakistan 2013, which will benefit the local and international markets. Exhibitors from Pakistan, Austria, Canada, China, France, Germany, Indonesia, Japan, Netherlands, South Africa, UAE, UK, USA, Turkey, Thailand, Hong Kong, Singapore, Switzerland and Italy will be displaying their brands at the Safe Secure International exhibition.
SBP, banks playing cat and mouse over heavy-yielding government papers? KARACHI ISMAIL DILAWAR
If participation in the central bank’s open market operations, ranging from mop-up to injection activities, is any criteria the regulator and the commercial banks seem to be playing cat and mouse over huge profits the latter seem to have addicted to through investing billions in the risk-free government securities. Tuesday saw the profit-conscious banks giving a cold shoulder to the State Bank of Pakistan’s (SBP) open market operation under which the regulator wanted to mop up liquidity from the banking system through selling out t-bill of three-day maturity. The State Bank received zero bids from the banks.The lack of interest the banks showed Tuesday is because of, what the banking analysts said, their cautious attitude towards using the SBP’s interest rate corridor that is nowadays under a strong vigil of the regulator. “The SBP now notes the banks which either place or borrow funds from it,” Asfar Bin Shahid told Pakistan Today. The economist said the SBP was now closely watching the banks which were using its interest rate corridor more frequently. The regulator has re-
cently allowed the banks to place or withdraw their surplus liquidity in its interest rate corridor not more than seven times in a fiscal quarter, inclusive of both placements and withdrawals. In its last monetary policy decision the central bank capped its interest rate corridor at 7 percent increasing it from 6.5 percent. The bank also put a 9.5 percent ceiling to the corridor. The measure, as a banker put it, is aimed at some tightening to reduce the widening monetary gaps. Another reason for the banks’ lukewarm response to SBP’s auction on Tuesday the analysts said was the former’s desire for maximum returns on the government papers that the inflation-conscious regulator has slashed significantly in recent months through cutting the discount rate at least by 2.5 percent to 9.5 percent from 12 percent. Further, the analyst said, the profit-crazy banks did not show interest in the mop-up auction because
it was conducted at the open market rates currently ranging between 4 and 4.5 percent. “Tomorrow (today) SBP would call bids for Tbills so the banks did not want to block their funds for three days and lose out on bidding,” said AB Shahid. The State Bank, as per its quarterly auction calendar, would hold its 4th auction of this quarter Wednesday (today) to sell T-bills worth Rs 175 billion with maturity amount standing at Rs 141.313 billion. A banker also seconded this view saying the banks were desperately looking for windows where they could park their liquidity. On the other hand, the banker said, the central bank was going stricter in terms of returns on the government securities. “The State Bank rejected the last two bids for T-bills and PIBs owing to the abovethan-normal rates (quoted by the banks),” said the banker, requesting not to be named.According to the banker, the state bank also seemed determined to reduce the volume of liquidity it has been pumping into the banking system in recent months. “This would be a daunting task (for SBP) given the ever-widening (monetary) deficits and the resultant government’s reliance on budgetary bank credits,” he added. The banker said the banks’ participation in Wednesday’s auction would be huge as each of the big five banks have been quoting heavy maturities of more than Rs 50 billion.
the analysts said, last week the central bank had to take some strict measures to control the falling rupee. However, the fact of the matter was that there were hardly any dollar inflows that could stop the declining foreign exchange reserves. The country’s dollar reserves, in other words the SBP’s reserves, had fallen to 50month low of $8.5 billion causing the dollar to appreciate by 8 percent in last one year and 0.4 percent in last one month against the local currency. “We believe if deal with IMF or any arrangement of decent inflow is not done, the local currency can fall another 5 percent by June 2013,” he warned adding that an abrupt depreciation of local currency was negative for equities. On foreign inflows, they said in line with trend seen in other markets, the foreigners had bought shares worth $ 117 million and sold $ 89 million at the Karachi bourse in six weeks of 2013 so far resulting in net buying of $ 28 million. This love for emerging and frontier markets along with pre-election buying by foreigners would be important determinant of market direction in coming few months. “In case the elections are held on time as per the constitution and there is no major disruption towards the political transition, then the foreign flows would remain decent,” said the analysts.
Dr Asim serves Rs 1b notice on Ghiyas Paracha
ISLAMABAD: Adviser to the Prime Minister on Petroleum Dr Asim Hussain has served Ghiyas Abdullah Paracha, Chairman Supreme Council APCNGA with a legal notice demanding Rs one billion as compensation for his views appeared in press criticising policies and massive corruption in the petroleum ministry. Legal notice served under Section 8 of the Defamation Ordinance, 2002 issued by Mansoor Ahmed Khan and Co, Karachi says that Dr. Asim is a truthful and honest person dedicated to providing services to the general public, according to APCNGA press release.It adds that certain news published in various newspapers by Paracha has demeaned his image and defamed his good name. The adviser has demanded of Paracha to publish unqualified apology and pay Rs one billion as damages for defamation and compensation for causing embarrassment and loss of reputation. Reacting on the development, Ghiyas Abdullah Paracha said that exposing corruption, criticising policies framed to benefit few influential and resisting designs to ruin CNG sector having Rs 400 billion investments is not a crime. He said that he will continue to counterattack efforts to push millions in the unemployment to benefit few and do his best safeguard rights of 3.7 million consumers of economical fuel. Paracha said that mailed notices and threats cannot hide reality and will not force him to change his just stance. Policies orchestrated in the petroleum ministry to reward nobility on the cost of masses have left country and 180 million people highly insecure which is intolerable, he added. The leader of the CNG sector said that silence over crimes against humanity is itself a crime and there must be institutions and people who will never allow interests of the masses to be compromised. He said that not a single move of Dr. Asim has been endorsed by independent oil and gas experts, despite tall claims since years, he has failed to complete even a single project and he continues to underutilise national hydrocarbon resources and impede exploration to justify imports of costly fuel. The adviser has the honour to get four secretaries changed in a short span which if probed will result in eye-opening revelations, he informed. He said that APCNGA will continue its struggle and protests unless the politicians stop preferring personal interests over national interests. ONLINE
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Dr Asim Hussain should demonstrate courage to admit his failures and stop blaming others as a time buying effort. — IWCCI President Farida Rashid Upfront tariff for wind power projects in Sindh extended by one year
BUSINESS B
Wednesday, 20 February, 2013
Polish envoy calls for improving Pak-Poland EnERGY CooPERAtion ISLAMABAD
ISLAMABAD: Prime Minister Raja Pervez Ashraf has decided to extend the existing upfront tariff for Wind Power Projects in Sind, which expired on December 31, 2012, by another year. The Prime Minister was presiding over a high level meeting of the Sindh Board of Investment at the PM’s Secretariat on Tuesday. The meeting discussed in detail the progress made so far in setting up of thermal power plants with Thar Coal specification and utilization of wind corridor in Sindh for production of electricity. The Prime Minister said that the energy policy of the government aims at attracting potential investors in this sector to generate electricity so that gap between supply and demand can be reduced. He said that regulators should facilitate the investors so that they are encouraged to invest in this sector. Investors, he said are being offered attractive incentives by various countries and we have to compete with these countries to convince the investors to invest in Pakistan, he added. The Prime Minister said that government will have to adjust its policies to keep pace with dynamic changes to attract foreign investment in the country. The meeting was attended by Minister for Water and Power, Chaudhry Ahmed Mukhtar, Minister for Defence, Syed Naveed Qamar, Advisor to the Prime Minister on Petroleum and Natural Resources, Minister of State for Finance/Chairman BOI, Mr. Slaeem Mandviwala, Provincial Minister for Finance Sindh Mr. Murad Ali Shah and relevant officials of the Federal government and government of Sindh. INP
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OLAND is interested in further expanding economic and trade relations with Pakistan in all fields including energy generation which would give a new boost to Pakistan-Poland bilateral relations. The Ambassador of Poland in Pakistan, Dr Andrzej Ananicz has stated this during a meeting with Zafar Bakhtawari, President Islamabad Chamber of Commerce & Industry (ICCI) here on Tuesday. He said that Pakistan and Poland need to work together in order to identify possible fields of cooperation and to provide proper information to business communities of both the sides. Anna Chakori, Head of Economic section of Polish mission in Islamabad was also present on the occasion. Dr Andrzej said that Poland has welldeveloped and diversified economy as its driving force is small and medium scale businesses, adding that Poland is currently one of the fastest growing country within the European Union (EU). He said that Poland has advantage of using coal as the primary raw material in production of their energy and three largest Polish coal mining firms extract around 100 million tonnes of coal annually. “Therefore, Poland could provide assistance to Pakistan in power generation through coal of
which the country has very huge reserves as Poland has great expertise in generating energy through coal”, he maintained. Dr Andrzej said that a Polish Oil & Gas Company exploited natural gas in District of Dadu in Sindh and gas production will be started in May 2013 which would help Pakistan to meet its energy needs. The Polish Ambassador said that bilateral agreements and MoUs have become instruments of strengthening relations between the two nations and said that Polish Embassy in Pakistan would do its best to meet challenges and support any proposals and ideas, which would help achieve common goals. In his welcome address, Zafar Bakhtawari, President ICCI said that deep friendly ties exist between Pakistan and Poland, however, these relations need to be changed into trade and economic cooperation. The ICCI President said that Pakistan always attaches great importance to its relations with Poland which is an important country in Europe and also the member of EU as Poland has supported Pakistan at GSP plus status and to create market access for Pakistani goods in European markets. Regarding the issue of ban on Pakistan’s fisheries products, Bakhtawari said the export which was discontinued in 2008 should also be resumed which would further enhance the current volume of trade between Pakistan and Poland.
Major Gainers COMPANY Rafhan Maize Prod. Sunrays Textile Engro Corporation Packages Ltd. Shell Pakistan Ltd.
OPEN 3650.00 164.30 99.16 181.01 138.42
HIGH 3750.00 172.51 104.11 189.90 144.00
LOW 3700.00 172.51 101.30 178.00 138.50
CLOSE CHANGE 3750.00 100.00 172.51 8.21 103.43 4.27 185.23 4.22 141.34 2.92
TURNOVER 100 500 18,172,900 125,500 101,700
4800.01 485.00 10452.00 478.00 177.10
4800.00 468.86 10315.00 468.46 166.82
4800.01 468.86 10382.50 470.28 169.35
-154.99 -24.67 -17.50 -7.08 -6.24
60 2,900 400 186,700 9,900
22.85 8.23 18.49 104.11 5.70
21.64 7.78 17.95 101.30 4.86
21.89 7.84 18.31 103.43 5.15
-0.88 -0.21 0.30 4.27 -0.41
33,010,500 29,303,000 21,435,000 18,172,900 16,088,000
Major Losers Nestle Pakistan Ltd. Indus Dyeing SPOT UniLever Pak Pak Oilfields Philip Morris Pak.
4955.00 493.53 10400.00 477.36 175.59
Volume Leaders P.T.C.L.A Fauji Cement Jah.Sidd. Co. Engro Corporation Telecard Limited
22.77 8.05 18.01 99.16 5.56
Interbank Rates USD GBP JPY EURO
PKR 98.2110 PKR 152.1387 PKR 1.0494 PKR 131.1117
Forex US Dollar Australian Dollar Canadian Dollar UK Pound Sterling Euro Japanese Yen Saudi Riyal China Yuan UAE Dirham
BUY
SELL
99.2 102 97.7 154.3 132.2 1.055 26.4 13.5 26.95
99.5 103 98 155 132.7 1.11 26.7 14 27.2
KOREAN INVESTORS TO VISIT PAKISTAN IN LAST WEEK OF FEB ISLAMABAD APP
Representatives of about twenty (20) Korean investment companies are scheduled to visit Pakistan from February 27 to March 2 to explore investment opportunities in various projects of the country. During the visit the delegate representatives of these companies are scheduled to hold meetings with the concerned quar-
ters of the projects, sources of Board of Investment (BOI) said. According to details, the companies include Samsung Constructions and Trading Corporation that will hold meetings for investment in LNG offshore receiving terminal project, CNG bus project through PPP mode and power projects. The company has also been requested to invest Karachi-Hyderabad expressway and Karachi-Port Qasim elevated expressway, the sources added.
Lotte Group would explore projects in petrochemical sector while Wisdom will be seeking investment opportunities in agriculture sector by utilizing the strengths of both the countries as Pakistan has rich agriculture and dairy resources while Korea has advanced food processing technology. Similarly, Six-Group Company would be looking projects in LNG and Steel market and is also expected to take part in the tender floated by Sui Southern Gas Company. Ko-
rean Railroad would seek investment potential in supplying unused locomotives to Pakistan in addition to providing simulators and training for locomotives’ drivers through KOICA grant. ECO-One would look investment opportunities in Auto rickshaw market, while Korea Water Resource Corporation (K-Water) is interested in hydro power sector and consortium with Daewoo E&C in Hydropower project and Lower Palos Valley project.
CORPORATE CORNER Warid’s offers free calls for up to 6 weeks
KARACHI: Mark Lowcock, permanent secretary Department for International Development, addresses a seminar on booming global economy. STAFF PHOTO
LAHORE: Warid Telecom, one of Pakistan’s most innovative telecommunications companies, today announced an exciting ‘Muft Hafta’ Offer for its prepaid subscribers. This unique offer is a first in Pakistan, and allows customers to enjoy one free week’s usage per month for the next 6 months. Customers who activate their new SIMs before 10th March, 2013 or have not used their Warid SIM since January 31st, 2013 can benefit from this limited-time promo. With recent changes to the telecom regime, it has become even more important to ensure that mobile users are getting the best possible competitive service and packages. To this end, the company is pleased to announce this latest offer which is open to both existing and new Warid Prepaid and GLOW customers. The ‘Muft Hafta’ offer can be enjoyed by customers after the fourth week; that is, the more the usage, the more Free Minutes customers will receive. For more details customers can call
100 or visit their nearest Warid Business Centre or franchise. PRESS RELEASE
Samsung holding MEnA Forum 2013 in Dubai LAHORE: Samsung Electronics a global leader in consumer electronics will be holding a forum entitled ‘Samsung MENA Forum 2013’. The event will be taking place at a leading hotel in Dubai, UAE on February 18, 2013. Samsung MENA Forum guests will enjoy Samsungs newest 2013 line-ups and have an opportunity to experience a dedicated B2B exhibition area. Attendees will further have the unique opportunity to interact and experience the latest products and services that define Samsungs vision for the consumer electronics industry. Samsungs vision of the future seeks to enable consumers to discover new worlds of possibilities. Through its deep understanding of consumers’ lives and its pursuit of discovery Samsung will reveal its goal of creating a new experience for all. PRESS RELEASE
DYL Motorcycles sign deal with Ehsanullah Afghan Limited KARACHI: DYL Motorcycles, Pakistan and Ehsanullah Afghan, Afghanistan have signed an agreement to establish a motorcycle manufacturing facility in Afghanistan. The agreement will strengthen the already close cooperation between DYL & EAL, as both are engaged since 2009 in motorcycles sales in Afghanistan. The motorcycle industry in Afghanistan expects a strong growth and new TCA agreement will further enhance the business of M/s.EAL in Afghanistan in providing a affordable and high quality motorcycles in Afghanistan. The signing ceremony held at DYL head office in Karachi where Mr Yunus Dawood, the CEO, DYL Motorcycles and Mr.Jalat Khan Achakzai, the CEO, Ehsanuallah Afghan Ltd inked the agreement. DYL group is renowned name in the manufacturing and marketing of motorcycles/lube and parts. EAL has a strong base of marketing channels in Afghanistan, now after this agreement EAL will also establish strong footing in manufacturing side as well. PRESS RELEASE
ISLAMABAD: Mr Attaullah Khan, Chairman Bank of Khyber (BOK) Board of Directors (BOD) & Additional Chief Secretary Government of Khyber Pakhtunkhawa presiding over 118th BOK BOD. (From L-R) Mr. Zahid Sahibzada – Company Secretary, Mr. Asad Muhammad Iqbal – Member BOK BOD, Mr. Bilal Mustafa Managing Director BOK, Mr. Attuallah Khan – Chairman BOK BOD, Sahibzada Saeed Ahmed – Member BOK BOD & Secretary Finance Government of Khyber Pakhtunkhawa, Mr. Sajjad Ahmed – Member BOK BOD & Mir Javed Hashmat Executive Director BOK.