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BUSINESS Friday, 20 September, 2013
rupee devaluation not linked with imf
The man who will use his skill and constructive imagination to see how much he can give for a dollar, instead of how little he can give for a dollar, is bound to succeed. — Henry Ford
(DEPRECIATION OF RUPEE)
SBP moPPing uP dollarS from oPen market KARACHI
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LAHORE: State Bank Governor Yaseen Anwar has dispelled impressed that rupee devaluation had anything to do with agreement reached with the IMF. Talking to media here on Thursday, he said the government had received first tranche of loan from the IMF, and situation at stock market would be stabilised soon. He further said the government had nothing to do with the devaluation of Rupee against Dollar. online
PtCl, moit ink mou
Staff RepoRt
HE economic observers see the central bank mopping up dollars for the cash-strapped government from the open market where the rupee is touching its lowest ebb against the greenback. The analysts believe that the State Bank by raising dollars from the free market wanted to increase the spread between interbank and open market rates for the US currency. The present situation, they said, had been raising increasing concerns as PKR slid drastically against the USD giving rise to the possibility of a notorious challenge emerging for the economy. According to analysts at InvestCap Research, the increased volatility in PKR against the greenback had made USD an attractive investment thus magnetising considerable investor interest. "This along with repayment of IMF loans due is expected to exert further pressure on PKR," viewed InvestCap analyst Abdul Azeem. He said the massive fall in PKR had been largely led by the repayments of the IMF loans due.
The above mentioned payments were initiated in Jun-12 since the said period PKR had shed its worth by an alarming 10.7 percent up till now. The SBP’s forex reserves have also reduced by 52 percent (USD5.6bn) in the said period. Thursday, the central bank reported that by Sept 13 the country's dollar reserves stood at $10.374 billion of which over $5.256 billion belonged to the commercial banks. Moreover, post the new loan arrangement with the IMF, strong pressure had been witnessed to have built up in the local currency as it touched an all time high level of Rs105.85/USD and Rs106/USD on interbank and open market respectively. During the month (Sep-
13) the country has inked an agreement with the IMF for an Extended Fund Facility of USD 6.6 billion to support balance of payment situation. Out of total amount approved, Pakistan has received only USD5 44mn, where receipt of the remaining amount is dependent upon the fulfilment of the terms and condition set by the Fund. During the remaining period of FY14, the country is liable to repay an amount of USD 2.4 billion to the IMF. However, during FY15 and FY16 USD1.3 billion and USD60 billion respectively is due to be accrued. To Azeem, another growing concern surfacing was that investment in USD was becoming an increasingly lucrative avenue for the investors. "However, the same presents only short-term gain opportunities for individuals playing its due role in attracting speculators willing to grasp the opportunity
(INVESTMENT ROADSHOW) ISLAMABAD: The Ministry of Information Technology (MoIT) and the Pakistan Telecommunication Company Limited (PTCL) have signed an MoU that will enable the MoIT to host e-governance software applications at PTCL data center. The MoU for data center hosting facility was signed by Minister of State for IT and Telecom Anusha Rahman and PTCL President Waleed Irshad. This MoU will provide free of cost services to the ministry for a period of 15 months. It is important to mention that PSDP project titled “Federal Government Data Center and Internet” was approved through executive committee of the National Economic Council (ECNEC) in July, 2004. However, Electronic Government Directorate (EGD) has remained unable to deploy data center to date. online
EXPLORING INVESTMENT OPPORTUNITIES IN KP AND FATA KARACHI Staff RepoRt
Project Management Units of the Government of Khyber Pakhtunkhwa (KP) and Federally Administered Tribal Areas (FATA) Secretariat along with the Multi Donor Trust Fund (MDTF) administered by the World Bank organised the investment Roadshow (IRS) here on Thursday. Theme of the event was ‘Exploring the investment Friendly Environment in KPK & FATA ‘under the Economic Revitalisation of KP and FATA (ERKF) Project. The KP and Fata delegation was led by Minister for Industries, Commerce and Technical Education, KP,
Bakht Baidar, who was the keynote speaker. The minister highlighted the major initiatives planned by the new provincial regime and benefits of it. He assured his government’s full support for investors and welcomed them to explore the untapped resources of the province. Arshad Majeed Mohmmand, Secretary FATA Investment Facilitation Authority, briefed about the objectives and rationale of the ERKF Project. He said the IRS meant to act as a curtain raiser to the prevailing policy regime and the plethora of investment opportunities in the region. Muhammad Humayun, Manger Minerals, FATA Development Authority, presented an overview of the minerals sector in FATA. A panel discus-
sion with leading experts on “Scope and Opportunities Forum for Investment in KP and FATA” ended the road show with questions and answers session. Selected investment opportunities and projects were also presented and were appraised of the high return and growth potential in various sectors including power, mines and minerals and industries. The IRS also featured an exhibition, showcasing the products from KP and FATA with high export potential. The road show provided the attendees an unprecedented opportunity to interact with leading corporations that have invested and are operating in the region and gain from their insights and experience.
GOVT WANTS BIFURCATION OF DIAMIR-BHASHA DAM IslAmAbAd
“We need to unbundle Diamer-Basha Dam project. The dam and electricity genFederal Minister for Planning and Devel- eration combined will cost US$12 billion. opment Ahsan Iqbal has said the govern- If only the dam is made, it will cost US$5.5 billion only. The ment has plans to bifurcate the electricity generaDiamer-Basha Dam project into tion part will be two separate projects. We need carried out In a statement issued to unbundle through prifrom his office on Thursvate investday, he said the project Diamer-Basha Dam ment,” he would consist of two project. The dam and told the components including particithe dam for water electricity generation pants of storage which will combined will cost the concost around US$5.5 cluding billion, and the elec$12 billion. If only session of tricity generation plant the dam is made, an energy for which private investconference ment will be sought. it will cost organised by $5.5b only the Institute of Policy Studies and themed "Toward an Energy Secure Pakistan: Road to Recovery and Sustainability - Agenda for Action". He said the construction of DiamerBasha Dam was critical for the country as it was the only dam site on which national AHSAN IQBAL consensus existed and it was the only soFederal Minister lution for the looming water crisis that
welcomingly," he said. The SBP's stance to increase interest rates is expected to curb the fluctuation in USD for an investment prospective, the analyst said. "The recent turn of events lead us to believe in the possibility of SBP mopping up dollars from the open market," Azeem said. He expected such an act to increase the spread between interbank and open market rates for the greenback. In the absence of any sizeable inflow of USD, expectation of PKR depreciation during FY14 remained high. Moreover, poor law and order situation coupled with energy crisis can both be classified as major contributors forcing foreign flows to evaporate and affect the country's exports. However, given the present situation, the balance of payment situation can be supported by privatization of state-owned companies, FDI, 3G Auction, payments from Etisalat, remittances and last but not the least loans from donor agencies. "Though all these options have their due pros and cons, we continue to expect PKR to remain depressed during FY14 with the likelihood of touching Rs110/USD by the year end," said the analyst.
atlas, denSo sign up for $7.2m joint venture KARACHI Staff RepoRt
Pakistan Atlas Hitec (Private) Limited held its plant inauguration ceremony on Thursday marking the official start of its commercial production. The new company is a Joint Venture (JV) between Atlas Group and Denso Corporation, Japan, in which Atlas Group and Denso Corporation hold 74 percent and 26 percent ownership, respectively. Both Atlas and DENSO are renowned names in the manufacturing and marketing of auto products. Akira Ouchi, Consul General of Japan inaugurated the plant. Haruya Maruyama and Michio Adachi - Executive Managing Directors from Denso Corporation and Saquib H. Shirazi - CEO and Hisao Kobayashi - Director from Atlas Honda attended the inauguration ceremony. Atlas Hitec (Private) Limited was incorporated on September 13, 2012. With an initial combined equity investment of $ 7.2 million, the company will produce motor cycle products that meet the market need in Pakistan by utilising Atlas Group’s abundant business expertise in the country and DENSO’s technologies for motorcycle parts. The advanced manufacturing plant will utilise the latest technology available in the production process and, at the same time, meet the highest environmental requirements for producing Honda motorcycles. Initially, the company will employ up to 300 employees.
Country facing 2b cubic feet gas shortage: na told could be worse than the energy crisis in the years to come. He said it was criminal on the part of previous regime to ignore this crucial project and waste five precious years out of the nine years that were required to built this dam. He said an integrated approach was needed to improve energy governance of the country. “In 1998, we had a plan to add 2800MW in the national grid by 2010 and we were working towards it but the 1999 coup obstructed that planning. The country was run on ad-hoc basis in the last 14 years and it is our biggest challenge to
fix the wrongs committed during that period”, he stated. The government cannot provide subsidies endlessly if the cost of generation remains increasing hence the tariff needs to be raised. However, all efforts must be made to reduce the power generation cost, he said further. “Drastic reforms needed to revamp the system of governance. The first two years of the present government will be tough, however, I am sure that these testing times will bear fruit and the nation will reap the benefits of good governance and economic reforms”, he claimed.
ISLAMABAD: The National Assembly was informed on Thursday that the country was facing two billion cubic feet gas shortage. Minister of State for Petroleum and Natural Resources Jam Kamal Khan told the House during question hour that there was no plan to decrease the import of crude oil because the country was already running short of gas. He said private sector refineries imported the crude oil and the government could not slash down their imports. He informed the House that over 1.4 million domestic applications of new gas connections were pending with Sui Northern and 33,000 with the Sui Southern Gas Company. online