PRO 20-11-2012_Layout 1 11/19/2012 11:49 PM Page 1
Tuesday, 20 November, 2012
AshrAf OPENs fOUr-DAY TrADE EXhIBITION
PM for early removal of NTBs for D-8 states ISLAMABAD
P
TAYYAB HUSSAIN
RIME Minister Raja Pervez Ashraf on Monday called for an early removal of non-tariff barriers for the Developing Eight (D-8) countries so that they could benefit from the full potential of intra-trade between the D-8 nations. The prime minister expressed these views while opening a four-day trade exhibition being held on the margins of the D-8 Summit here at the Pak-China Friendship Centre. All D-8 countries including Turkey, Iran, Bangladesh, Nigeria, Malaysia, Indonesia, Egypt and the host country Pakistan have put their products on display at their designated pavilions. The D-8 countries’ share in global trade has already increased from $67 billion in 2008 to $130 billion last year, which is almost double and in this event a strategy will be chalked out to increase their share by 15 per cent. The event was attended by exhibitors and business delegates and the representatives of trade bodies. The prime minister was accompanied by foreign minister Hina Rabbani Khar, commerce minister Amin Fahim and minister of state for foreign affairs Malik Ammad Khan later went around the exhibition and visited stalls of the participat-
Crude up in Asia amid Middle East conflict
ing countries. Over 100 stalls have been setup by different companies from abroad while around 40 Pakistani companies have also put their products on display. Addressing the audience, the prime minister urged the D-8 states to establish “enduring trade partnerships” for the prosperity of their peoples. He said that the D-8 countries had a huge market of close to a billion people, stressing that intra-trade was the way to improve their economic indicators.
“Promotion of business-to-business linkages among the member countries lies at the core of D-8’s strategy to promote economic welfare of our peoples,” he said, hoping that with consistency, the D-8countries could achieve the intra-D-8 trade target of US$ 500 billion by 2018, and may even surpass it. He sought an early removal of nontariff barriers to benefit from the full potential of intra D-8 trade. He also proposed promotion of trade in services
which would immensely benefit D-8 countries. Raja Ashraf said that Pakistan was keen to expand business and trade relations with the D-8 member countries. He mentioned that Pakistan had ratified all three key agreements including the one on preferential trade and was convinced that implementation of tariff concessions under this agreement would lead the D-8 community towards greater economic integration. He said Pakistan, on the eve of the D-8 Summit, had also taken the initiative of hosting the first-ever meeting of the heads of trade promotion organizations (TPOs). He said the initiative was intended to institutionalize trade relations among D-8 members and added that the TPOs could play a critical role in catalyzing the private sector and identifying avenues of cooperation in trade promotion. Expressing satisfaction over the fifteen-year journey of the D-8 governments that had taken many practical steps to facilitate promotion of trade, the Prime Minister expressed satisfaction and said that in this regard, important framework agreements such as preferential trade agreement, agreement on visa facilitation and cooperation on customs matters. He said efforts were underway to promote institutional linkages among the business community.
Monetary easing pushes banks towards core business
SINGAPORE
KARACHI
AGENCIES
STAFF REPORT
Crude prices were up in Asia Monday on supply concerns amid the escalating Israel-Palestine conflict and following an explosion on a Gulf of Mexico oil rig, analysts said. New York’s main contract, light sweet crude for delivery in January, added 62 cents to $87.54 a barrel and Brent North Sea crude for January delivery gained 51 cents to $109.46. “Crude futures rose as a fire on a Gulf of Mexico platform and the escalating conflict between Israel and Palestinians stoked supply concerns,” Phillip Futures said in a report. In the oil-rich Middle East, the Gaza Strip came under renewed bombardment Sunday as Israeli air strikes killed 31 Palestinians in the bloodiest day of its campaign so far. Despite intensified diplomatic efforts to broker a truce, there was no let-up in the bloodshed in the Hamas-run Gaza Strip. A blast rocked a rig operated by Houston-based Black Elk Energy in the Gulf of Mexico on Friday but did not cause a major spill, the US coastguard said. Divers found one body late Saturday. Two workers had been missing since the accident but coastguard spokesman Carlos Vega would not say if the body found was that of one of those two people.
The commercial banks are getting back to what the analysts said their core business of extending advances to the private borrowers masterly on the back of a 4 percent rate-cut by the central bank in its policy rate during the recent months. The official figures reveal that advances of the previously risk-averse scheduled banks are moving northward as economic activities, in the country, are bolstering, tough slowly, with textile sector being the major contributing sector. The State Bank data shows that advances of the banks grew by 6.6 percent during 10MCY12 against the decline of 2.3 percent witnessed during the same period last year. After witnessing a month-onmonth (MoM) appreciation of mere 0.2 percent in September, the banking sector’s advances were grown by 0.9 percent during October. “During the last two to three months, the advances of the banking sector showing some recovery on the back of gradually increasing economic activities specifically on textile front,” viewed Mazhar A. Sabir, ana nalayst at
InvestCap Reserach. During the month, the deposits of the banking sector showed some lackluster behavior and declined by mere 0.2 percent, taking on cumulative basis, the deposits increased by 7.3 percent (CYTD) during 10MCY12. As a result, Advance to Deposits Ratio (ADR) of the banking sector stood at 59.6 percent improved by 62 basis points on monthly basis. On the other hand, during the review period (10MCY12) investments head of the sector experienced colossal growth of 26 percent (CYTD). During the month of October, where the deposits fell by Rs10 billion MoM, investments of the industry were augmented by a massive Rs 98 billion, depicting an impressive 2.7 percent growth. This growth was against a mere 0.2 percent witnessed in the deposits of the sector. The IDR of the banking sector propped up by 2bps to 60 percent during December 2011. “Going
forward, we do expect the trend to somewhat reverse, mainly owing to 400bps cut witnessed in DR during the last one year,” said Sabir adding that “We also do expect this trend to slowly generate pace as the private sector credit demand rises.” On top of that, the analyst said, any further decline in the policy rate going forward, would most certainly force the sector to shift its ways and concentrate more of advances, the core business, rather than investments.
SBP moves to regulate profit, loss distribution of Islamic banks KARACHI STAFF REPORT
The State Bank of Pakistan on Monday issued detailed instructions for profit and loss distribution and pool management in the Islamic Banking Institutions (IBIs). The central bank said the regulatory move was aimed at improving transparency and disclosures and bringing standardization in the Sharia-complaint banks’ profit and loss distribution policies and practices.With the issuance of these instructions that, the State Bank of Pakistan (SBP) said, are applicable with immediate effect Para IV of annexure-II of IBD Circular No. 2 of 2008 stands withdrawn. Further, it said, the provisions of BPRD Circular No. 7 of 2008 regarding minimum rate of return on savings deposits as amended from time to time shall no more be applicable on the IBIs. “Failure to comply with SBP instructions shall invoke penal action under the provisions of Banking Companies Ordinance, 1962,” the SBP said in its IBD Circular No.3 issued to the heads of all Islamic banks and all conventional banks, having Islamic banking branches on Monday. It may be pointed out that the peculiar nature of relationship between the depositors and IBIs, where income earned by the IBIs has a direct impact on depositors’ return, there was a need for Islamic banking industry to have well defined, transparent and standardized policies and practices for profit and loss computation and distribution. As per SBP instructions, each pool of deposit established by IBIs would act like a virtual enterprise having explicitly demarcated sources of funds, ownership of specific assets and income and expenses. The profit earned on the financing and investments made through such pool of deposits will be shared between IBIs and the depositors as per pre-agreed profit sharing ratio. In case of loss, the same will be borne by the depositors in proportion of their investments unless caused by the negligence and misconduct by the IBIs in managing the depositors’ funds. The central bank’s other regulatory changes cover areas like the creation of pools, identification and allocation of pool related income and expenses, investment and financing losses, profit and loss allocation between depositors’ fund and IBI’s equity, profit sharing ratio and weightages, profit smoothening, Investment Risk Reserve (IRR), verification/audit and disclosures.
Turkey intends to enhance bilateral trade up to $2b ISLAMABAD APP
Vice President of the Foreign Affairs Committee, of Turkey, Professor Dr.Muhammad Cetin here on Monday urged the need to increase bilateral trade up to $2 billion for economic prosperity of the two countries. A Turkish delegation led by its Member National Assembly and Vice President of the Foreign Affairs Committee, Prof Dr.Muhammad Cetin visited Islamabad Chamber of Commerce &
Industry (ICCI) to discussed ways and means to explore and create joint venture opportunities between the two countries. He urged upon the Muslim nations to further promote and strengthen economic ties and cooperation for exploiting the existing potential and ensuring maximum possible trade exchange. He said that Pakistan and Turkey are very important countries for the entire Muslim Ummah, having very strong potential to lead their respective regions. Dr.Cetin said that education is the best investment, therefore Pakistan
should invest more in education sector to build human capital for surviving in the knowledge economy. To achieve growth through a well educated and skilful workforce, government should come up with policy reforms in the education sector, he maintained. In his welcome address, Zafar Bakhtawari, President ICCI said that Pakistan and Turkey have historic brotherly relations, thus both the countries should further strengthen the mutual trade relations by promoting business relations. ICCI President expressed that it is the
need of the hour to explore possibility of joint ventures between Turkey and Pakistan.He said that we can strengthen our economy by adopting development and progress of Turkey as a model in numerous sectors especially energy as energy is an important issue for Pakistan’s economic growth. Many Turkish companies made investment in Pakistan in various sectors like energy and chemical and we are looking for others Turkish companies to invest in others fields as score of incentives are being provided by the government to the
investors, he added. He stressed the need for further cooperation by Turkish Air Line to make possible for Pakistan to have direct air link with various countries like Azerbaijan, thus, by making a flight to Islamabad from Istanbul via Baku (Azerbaijan) would create a direct link between Azerbaijan and Pakistan as well. Chairman Pak-Turk education Foundation, Unal Tosur said that people of Turkey consider Pakistan as their second home, adding that promotion of education in Pakistan is our mission and the foundation is actively working for this purpose.