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Consolidation through intra provincial trade Page 2 Most eligible public transport in town Page 3 What the US loses in its war with Iran Page 5 Pages: 7
profit.com.pk
Friday, 23 December, 2011
DISCO boards ignorant of their powers g
Boards seek guidelines on their powers g Govt says boards fully empowered under companies ordinance 1984 ISLAMABAD AMER SIAL
F
ACeD with rising criticism over the slow pace of power sector reforms the government on Thursday urged the board of directors of the power distribution companies (DiSCOs) to exercise complete powers without any fear to expedite reforms which were holding hostage the national economy. Chairmen of all boards took the plea that they were not fully empowered due to which they were unable to address human resource constraints, financial management issues, reduction in lines losses and improvement in recovery. The government had convened a special meeting with the chairmen of DiSCO boards and Chief executive Officers to assess their performance in the last ten months and review business plans for the current fiscal year. The National electric Power regula-
tory Authority (NePrA) was severely castigated by the board heads on its failure to timely notify monthly fuel adjustment costs and yearly tariff. They complained that NePrA had failed to notify tariff for DiSCOs even though six months of the current fiscal year have elapsed. They demanded immediate restructuring of NePrA to address the woes of DiSCOs. Finance minister Abdul Hafeez Sheikh and minister for Water and Power Naveed Qamar assured complete support to DiSCO boards. However they stressed the boards to take steps to improve governance in the entities for better service delivery to the customers. Addressing the meeting, Deputy Chairman Planning Commission Dr. Nadeem ul Haque said that the losses incurred by the power sector have been a major reason for increasing the fiscal deficit from estimated 4 per cent to over 6 per cent of GDP for the last three fiscal years. He said that the government has incurred
rs1000 billion in costs for providing subsidy during the last three fiscal years. Nearly all the chairmen of boards sought powers to implement decisions to start reformation of their entities. Head of economic reforms Unit of ministry of Finance Dr. Khaqan Najeeb pointed out that the boards needed no extra powers they were empowered under the companies ordinance 1984 to make decisions. However, chairmen of boards said no one informed them that they could make decisions as their management kept looking to the ministry of Water and Power and defunct Pakistan electric Power Company (PePCO) for decisions. Finance minister quipped that if they would keep seeking power then they would never get it. They were fully autonomous and should exercise powers which would establish their authority. A representative of the World Bank said that the government and boards were passing the buck to each other and in reality they
should work as a team to bring the power sector out of the crisis. minister for Water and Power Naveed Qamar asked the boards to take responsibility and ownership of their companies otherwise they would not be able to perform. He said boards will have to take tough decisions. The boards according to him were responsible for policy while the management was responsible for implementation. He asked the boards to fix benchmarks for management to reward or punish them based upon their performance. Chairman ieSCO board mohsin Khalid said that the company was faced with human resource constraints. He said that the company could not reward employees on their performance as under the present rules CeO could not approve any reward for employees. Former mD of SSGCL munawar Basheer Ahmad said without restructuring the service structure and introducing compensation packages
PM directs petroleum ministry to resolve gas supply issues
Country is safe on economic front: Dr Sheikh g
g
ISLAMABAD STAFFREPORT
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Dr Sheikh briefs President Zardari about overall economic situation President appreciates economic progress in FY11 ISLAMABAD
P
STAFF REPORT
reSiDeNT Asif Ali Zardari has been ensured by finance minister Dr Abdul Hafeez Sheikh that the country is safe on the economic front. He was briefed about the overall economic situation of the country along with various aspects of the economy and economic performance during the first five months of the current fiscal year. Dr Hafeez also focused on critical indicators like broadening tax base, fiscal austerity, exports, remittances, imports and inflation. He informed as a result of difficult economic decisions taken by the present government, economy was stable and various indicators were showing encouraging signs. He said efforts to broaden the tax base have registered a significant success. Up till 16th of December, rs712 billion tax had been collected as against rs555 billion collection during the corresponding period, last year. it amounted to an increase of 28 per
cent over the corresponding period and exceeded the target of 25 per cent. On austerity measures, finance minister informed that the various measures adopted by the government have also yielded positive results. He said the budgetary expenditure during first five months of the year, which was envisaged to be 42 per cent, was brought down to 38 per cent, indicating that the budgetary control measures were successful. Despite worldwide slump in demand, Pakistani exports during first five months of the current fiscal year have registered an increase of 12 per cent over that of the corresponding period last year. On remittance side, an increase of 18 per cent was witnessed with $5.2 billion remittances for the first five months of the current year, said
Sheikh. Finance minister also informed that by the end of December, the government would have provided a total of rs100 billion for developmental projects. This amount, he said, would be spent on mega projects in energy, communications and water sector thereby, creating jobs and building infrastructure. The energy projects included Bhasha Dam and Chashma Power Projects, he informed the President. The President was also informed that the imports during the first five months of the current fiscal year have registered an increase of 20 per cent over the corresponding period of last year indicating that the economic activity was gradually picking up and was on steady course. mr Zardari was briefed that inflation has also come down during the first five months of the
Consumer Price Index (CPI), which was 14 per cent in November, last year was 10.2 per cent in November, this year
the efficiency of the employees of DiSCOs would not improve. Proposing a solution, former mD PePCO Tahir Basharat Cheema said that the boards were fully empowered and they should de-link from the national pay scales and notify their own pay scales that would resolve the problem. Dr. Nadeem ul Haque supported his proposal and said that under companies ordinance 1984, boards were empowered to notify new pay scales and hire new staff. Chairmen of all boards complained about political interference in transfers and postings by the ministry of Water and Power and PePCO. However, the ministers said that they should not make lame excuses as it was under their power to stop outside interference and take steps to block interference. They said they were full empowered, like any corporate sector entity to make and implement decisions as the board was responsible for the performance of the company.
current fiscal year. Consumer Price index (CPi), which was 14 per cent in November, last year was 10.2 per cent in November, this year. Similarly, Sensitive Price index (SPi) was also witnessing continuously downward trend during past five weeks. The President inquired about the steps taken for extending social safety net to the poorest of the poor. it was informed that rs20 billion would be provided for BiSP by the end of December which would benefit tens of thousands of poor families living below poverty line. He remarked the improvements in economic indicators were encouraging however, efforts should continue to keep up the pace and momentums of economic turn around. He also said gas and power shortages continue to haunt people and we need to step up our efforts to meet these challenges. ‘The prevailing international economic situation is not very healthy and efforts must continue to further stabilise the economy and to fight economic challenges facing the country,’ he added.
rime minister Syed Yusuf raza Gilani on Thursday directed the ministry of petroleum to take immediate steps to resolve gas supply issues of both domestic and industrial sectors. He gave these directions while chairing a meeting on LNG and gas imports. Secretary petroleum briefed the meeting that 100 mmcfd gas from Hyderabad gas field would be available within a month. ‘This gas would be put into the national system to ease pressure of gas outages on domestic and industrial consumers,’ the secretary said. He said Khyber Pakhtunkhwa would get 15 mmcfd gas from Kohat gas field immediately, which would be put into the national system. He said negotiations with CNG association were underway to rationalise the supply of gas to CNG stations. He also said priority would be given to domestic consumers in these negotiations and terms would be negotiated with the industrial sector to ensure uninterrupted supply of gas to households. Secretary said the government had taken emergency measures to address gas shortage in rawalpindi and islamabad, and was able to resolve it to the extent of 80 per cent. He informed steering committee of eCC had approved financial consultancy for iran-Pakistan gas pipeline, which was a major step forward as far as the project was concerned. He apprised the meeting that 750 mmcfd more gas would be flowing into the system by November 2014, which would be sufficient to meet 40 per cent of country’s gas deficiency. The meeting was attended by minister for finance, minister for petroleum, secretaries of finance, water and power, petroleum, and cabinet; chairman NePrA, FBr, OGrA, and Port Qasim authority and mD private power and infrastructure board.
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Friday, 23 December, 2011
debate
Breaking away from the begging bowl
Consolidation through intra provincial trade There is a difference between letting others exploit your resources and utilising your own resources according to your own demands nAghMAnA ShAhID
W
iTH the deteriorating macro-economic indicators, the value of Pakistani rupee has fallen drastically, almost like the infamous “ London bridge”. even the most optimistic would give up the hope that this cloud of devaluation has a silver lining. Taking this into consideration, the first question we need to answer, collectively as a nation is “How could a nation survive with no or less buying capacity?” What other options do we have, if we are not carrying money in our bags. Some would suggest that we exchange things in “barter” as nations and people have over the years done. And once again we plunge down to the level of mockery, looking to revert back to medieval practices, like barter. is it prevalent these days? exchanging things, do we have valuables that can be considered as exchangeable commodities? Somebody was talking about ‘martin Luther’ that day. i would say we need a ‘marx’ rather than Luther, a man, who could tell us in simple words how to pay heed to the theory of surplus value. To convince our educated, decent, enlightened government that they should make an effort to implement, the concurrent list; as provided by the constitution of Pakistan, which caters for ideas like ‘surplus value’ of commodities and “intra provincial trade” in Pakistan. We must follow the materialistic interpretation of history, which Karl marx had already started, back in the 19th century. “With marx socialism became international or cosmopolitan in scope“. We need to evaluate, who gets the credit and how? This can happen with honest trade between Baluchistan and Punjab or the other provinces; if they have any commodities to trade upon. The revenue generated from trade between provinces must be allocated to improve infrastructural facilities for the people of the province in question. moreover, when and if they get their due “profit” as surplus they would cooperate more since it serves their own benefit. There is an urgent need to tap indigenous resources from Balochistan in a way that ensure that the locals are able to benefit from the resources as well.
Improved distribution of wealth The citizens of Pakistan need to contribute more towards national consolidation. With a better share in the economy they will be motivated to take active part in the civil government. improved distribution of wealth will inevitably gain popularity as it aims at providing solution to the ills of the “body politic” of Pakistan, in effect curing the widespread disease of discontent in our country.
Feelings of brotherhood amongst all four provinces of Pakistan This way we can promise a more cordial and stronger relationship between provinces of Pakistan. They will get to know each other well with internal trade. They will foster a feeling of belonging which might result in concrete national consolidation, as we rise again as a nation.
Advantages of intra – provincial trade in Pakistan Trade amongst provinces shall bring about positive change in the body politic of Pakistan. Following are a few merits of intra-provincial trade: n n n n n
Better use of natural resources Benefits for deprived provinces Provincial autonomy Uniformity of policy improved distribution of wealth
Better use of natural resources When there is regular trade between all four provinces of Pakistan; our natural resources will be better utilised, as every province will take keen interest, in improving their personal products. Punjab must think about increasing the productivity of it’s crops and fruits. Balochistan on their part should think about creating modernised infra structure, like construction of schools, roads, bridges and catering to geological surveys on mineral extraction. This way their input and out put will be more utilitarian. Converting wealth and resources into utility will prevent our wealth from further devaluation, as we would be focusing more on resource and asset building rather than money. A refined, preserved resource has more economic value than money.
Benefits for deprived provinces So far we have not been able to do justice to our provinces, as far as provincial rights are con-
In a nut shell cerned. if we give them a chance to have their own trade with other provinces of Pakistan, they will feel more confident and work harder, in order to get their products approved in the national market. This can enable the traders to develop their products in accordance with international standards and thus prepare them for entering the export markets abroad.
Provincial autonomy independent trade between provinces will pave way for better performance and individual enterprise by provincial government; especially in the field of commerce and trade. This independence will further diminish their feeling of deprivation. Therefore; there will be an overall efficient outlook amongst provincial government.
Uniformity of policy Provision of equal opportunity for every province without any provincial bias is the need of the hour. There should be no bias as all four provinces have equal status according to the constitution of Pakistan.
The new international economic disorder MohAMeD A eL-erIAn
A
new economic order is taking shape before our eyes, and it is one that includes accelerated convergence between the old Western powers and the emerging world’s major new players. But the forces driving this convergence have little to do with what generations of economists envisaged when they pointed out the inadequacy of the old order; and these forces’ implications may be equally unsettling. For decades, many people lamented the extent to which the West dominated the global economic system. From the governance of multilateral organizations to the design of financial services, the global infra-
structure was seen as favoring Western interests. While there was much talk of reform, Western countries repeatedly countered serious efforts that would result in meaningful erosion of their entitlements. On the few occasions that such resistance was seemingly overcome, the outcome was gradual and timid change. Consequently, many emerging-market economies lost confidence in the “pooled insurance” that the global system supposedly put at their disposal, especially at times of great need. This change in sentiment was catalyzed by the financial crises in Asia, eastern europe, and Latin America in the late 1990’s and early 2000’s, and by what many in these regions regarded as the West’s inad-
No one can deny the importance of trade in a country, within or outside its boundaries. No country can exist without expanding trade. We are a diverse nation with four different provinces. Having varied cultures and resources.Yet, there is a difference between letting others exploit your resources and utilising your own resources according to your own demands. exploiting your own resources for one’s own collective benefit gives one the feeling of self determination and self empowerment. Along with a proud feeling of possession that you have resources and are smart enough to utilise them according to your needs. it leads to healthy competition and we tend to perform well when we ourselves are the legal beneficiary of our legal rights. This feeling of autonomy gives us a sense of integrity. By doing so, we in effect break away from the begging bowl and strive for a stronger economy; based on self reliance. We also learn to avoid extravagant living and make an honest effort to curtail our expenditures; within our limits. if a nation is not economically strong; it would not survive as an independent sovereign state. it was rightly proclaimed by marx, “All history is economic history”.
equate and poorly designed responses. With their trust in bilateral assistance and multilateral institutions such as the international monetary Fund shaken, emergingmarket economies – led by those in Asia – embarked on a sustained drive toward greater financial self-reliance. Once they succeeded in overcoming a painful crisis-management phase, many of these countries accumulated previously unthinkable levels of international reserves as precautionary cushions. They extinguished billions in external indebtedness by generating and sustaining large current-account surpluses. And they increased the scale and scope of domestic financial intermediation in order to reduce their vulnerability to external storms.
These developments stood in stark contrast to what was happening in the West. There, unprecedented leverage, massive debt creation, and a seemingly infinite sense of credit entitlement prevailed. Financial excesses become the rule rather than the exception, facilitated by financial innovation and the erosion of lending standards and prudential regulation. Suddenly, the world turned upside down: “rich” countries were running large deficits and, in some cases, tipping from net creditor status to net indebtedness, while “poor” countries were running surpluses and accumulating large stocks of external assets, including financial claims on Western economies. At first blush, this unusual convergence between Western and emerging countries seems to reflect what advocates of a new international economic order had in mind. But appearances can be misleading, and, in this case, they are misleading in a significant
The writer is a freelance contributor. For comments and queries: naghmanashahid@yahoo.com way. Advocates envisaged an orderly process in which economic convergence accompanied and facilitated global economic growth. They foresaw a collaborative process guided by enlightened policymaking. But what is occurring is far different and more unpredictable. rather than exhibiting enlightened leadership, Western policymakers have consistently lagged realities on the ground, with a bewildering mixture of denial, misdiagnosis, and bickering undermining their responses. rather than proceeding in an orderly manner, today’s global changes are being driven by the disorderly forces of deleveraging emanating from a europe in deep financial crisis and an America seemingly unable to restore sustained high rates of GDP growth and job creation. A version of this article was first published in Project Syndicate
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Friday, 23 December, 2011
Shari’a MaTTerS
EDITORIAL
Islamic Investment Funds
Human capital, liabilities and GDP
T
HOUGH, for obvious reasons, the government’s newfound liking for ‘capitalising on human capital’ cannot be taken at face value, it touches upon a central feature of the new international economic order developing in the wake of the great recession. Countries like malaysia and Australia weathered the storm better than most in the Asia-Pacific region because of their prior focus on ‘capitalising on human capital’. embarking on medium-to-long-term overhaul while much of the region experimented with the doomed monetarist free-enterprise trickle-down, it turned out their focus on human resource development helped bolster the economy much more successfully than those relying on hot money advances to record GDP growth. The present environment of low growth and high unemployment in much of the economic north has triggered a fresh rush towards human resource diversification. Foreseeing a dramatically changed market environment in the near future, individuals
are acquiring skills that will cater to expanding real-sectors of economies, where processes will involve intrinsic production as opposed to financial wizardry that creates wealth from nothing. in this preemption novelty lies an important lesson for Pakistan. The economy stands at a stagnating low that needs steroid shots of fiscal injections for even a modest revival. And our repeated experiences with aid and borrowing are enough proof that the money must be generated, not borrowed. Which means both taxation and trade must grow. Therefore, it behooves the government to build a human resource base equipped with the capacity to enhance industrial production, and subsequently exports. The new world requires this proactive shift. if the government is serious about making people the country’s most precious asset, then there is still hope. Otherwise, considering mounting liabilities, not to mention international isolation and political paralysis, each with its own negative spillover, the breakdown point will come sooner rather than later.
Ridiculous plan
Welcoming development
This is with regards to the news report, “Govt to extend railway track to China:Bilour” published yesterday. This indeed is ridiculous, since there are reports every day on how our railway system is on the verge of collapse. Trains aren’t running on time, massive corruption scandals surface regularly and what not! rather than planning on improving or actually trying to keep the existing system alive, our magnificent mr Ghulam Ahmad Bilour is planning on extending the railway to China and Afghanistan. i mean there is so much disparity between the noise generated by our hierarchy and their actions that one wonders if there is any hope left whatsoever. Only God can save us.
This is with regards to the news report, “Thai govt to open markets for Pakistani fruits” published yesterday. We are traversing such times that any news that promises to bolster our economy is like a breath of fresh air. By opening markets to Pakistani fruits the Thai government is giving our valuable goods another market to explore and we should make full use of this opportunity. Pakistani fruits are considered to be amongst the highest quality fruits globally and we should advertise them properly. This is a really welcoming development on Thai Pakistan trade and investment promotion. i hope it does not become a victim of typical Pakistani bureaucracy and red-tapism.
SAAD BALoCh
M. ASLAM ChAuDhry
hydERAbAd
bling, interest-based financial services, liquor, pork and adult entertainment); it also includes some other activities deemed undesirable for social responsibility or political correctness (like tobacco and arms). it employs two types of screens: industry screens (as above) and financial screens (to ensure that balance sheets of the companies chosen are in compliance with Shari'a). There is, however, a growing need for a detailed set of rules and regulations to be developed to categorise islamic investment funds into merely Shari'a compliant and purely islamic funds.
Humayon Dar
I
S it about time that islamic investment funds start screening out the companies doing business with the countries that are not friendly towards islam and muslims and other companies supporting causes and movements that have a hostile attitude towards islam? As being part of an over one trillion dollar islamic financial services industry, should islamic investment funds start a new journey of investors activism to promote causes that are in line with islamic civilisation and discourage businesses and activities deemed undesirable from an islamic viewpoint? i have in the past advocated non-political nature and operations of islamic banking and finance, and am indeed considered as a keen advocate for cooperation between islam and the West. While i remain convinced of the benefits that can be derived from the financial alliance between islamic and conventional financial institutions, it is interesting to note that US Socially responsible investing (Sri) funds have for some time screened out the companies that engage in business with Sudan. Although this view may have a humanitarian dimension, it cannot be denied that it has strong political implications as well. According to 2010 report on Socially responsible investing Trends in the United States, issued by Social investment Forum Foundation, "increasing numbers of institutional investors and money managers are addressing the crisis in the Sudan, whether through targeted divestment or active engagement with companies exposed to the risk of doing business in such a volatile, repressive regime. indeed, Sudan-related investment policies have displaced tobacco as the most prevalent eSG (environmental, social and governance) criteria incorporated into investment management, affecting more than $1.3 trillion in institutional assets and nearly $450 billion across all investment vehicles included in the money manager phase of research." in my view it is time for islamic investment funds to start offering some real value addition to investors beyond just Shari'a compliancy. islamic investing so far has by and large been concerned with assurance of Shari'a compliancy by screening out forbidden activities (such as gam-
Is it time for Islamic funds to start screening companies that support movements hostile to Islam?
LAhORE
1.
As a starting point in this direction, a fund may be called a Shari'a compliant fund if:
it does not invest in the companies involved in production, distribution, marketing and sale of Shari'a repugnant goods and services; and 2. it does not get involved in Shari'a repugnant activities to conduct its finances (both in raising and deploying funds). 1.
A fund may be categorised as an Islamic fund if:
it is Shari'a compliant in its product offering and in terms of its finances and operations; and 2. it promotes any or all of the broader objectives of Shari'a, which include promotion of the well-being of all mankind in terms of safeguarding faith, life and self-esteem, intellect and human capital, and posterity and wealth. The term islamic Shari'a funds industry can be used for both Shari'a compliant and islamic funds. While a Shari'a compliant fund may not take a political view on its investments, it is important that an islamic fund ensures that its investment strategy promotes at least one of the objectives of Shari'a. Thus, prohibition of investing in companies that support movements and ideologies like Zionism and aggressions like israeli occupation of Palestine may fall under screening of islamic funds. On a company level, while a stock like that of Starbucks can be included in a Shari'a compliant fund (if it comes out of the chosen Shari'a screens successfully), it must not be included in the portfolio of an islamic fund, because Starbucks publically supports israel, who are blameworthy for the killing of innocent people including women and children in the West Bank and Palestine by the israeli army. it is also important for the islamic financial services industry to start taking a view on the islamicity of the fund manager. After all, if an ethical fund manager is not committed to the ethical values, its credibility as an ethical fund manager must be questioned. Similarly, an islamic fund manager must demonstrate its full commitment to the objectives of Shari'a (as outlined above). While the profit motive can still be recognised as a valid reason for offering a Shari'a compliant fund, this must not be the raison d'etre' for offering islamic investment funds. The writer is a Shari’a advisor to a number of banks and financial institutions and can be contacted at humayon@humayondar.com
Most eligible public transport in town
Y
Maheen Syed
eS, you read the title correctly; it is about the most eligible public transport in town and not the most eligible bachelor in town. Therefore, the article does not foster sexual discrimination and caters to both males and females by offering them exciting new and old public transportation facilities. if you're searching all around your city to find your ‘Desired One’; you no longer need to rummage, for i have the definitive list of the town’s most eligible
public transport and their current status. Latest CNG buses: Only for Lahoris? Check. Smoldering good looks? Check. Heart throbbing physique? Check.. Burgeoning blockbuster release? Check. CNG? Uncheck, uncheck and uncheck. Air transport: more specifically, PiA (read: Pakistan international Airlines). As long as you're okay with some flight delays, unexpected mood swings, uncooperative staff, skyrocketing fares, etc; you are free to book your tickets. However, there is a lot more exciting as side liners, so don’t worry if this does not work for you, because we have three new airlines coming up, very soon. railways: it sure has a reputation of being a bit inefficient, but there’s no doubt that there has to be a whole story behind its rotten case study. Hint: a billion-dollar catch *runs to buy tickets of the new private train starting from January, 2012* Local buses: i understand, ‘if we don’t have railways, we can use buses instead,’ but
can we really trust the latter? The disproportionate hike in diesel prices has also further increased the inefficiency of these local buses. rickshaws: i love the feel of travelling on a rickshaw, but it makes me sad when the rickshaw wala demands for more money just because ‘peetrole’ is too expensive and there is a CNG strike for god knows how many days. metro: Don’t mistake it with metro Cash & Carry. This option is not even on the list. Subway: Again, we can only take it on face value and extract good vegetarian or non-vegetarian sandwiches and salad from here. Good news, it will take us on a journey to taste the ‘international food’, without moving a single inch. The definition of public transport here in Pakistan, today, is a misnomer owing to the public institutions’ inefficiency and public’s general impression of the entire concept of public transport. Weighing both the public and public transport dilemma is therefore, of extreme importance. Starting with the former; the public
ShahaB JaFrY Business Editor
Kunwar KhulDune ShahiD Sub-Editor
BaBur SaGhir Creative Head
ali riZvi News Editor
Maheen SYeD Sub-Editor
haMMaD raZa Layout Designer
You no longer need to rummage, for I have the definitive list of the town’s most eligible public transport
dilemma is better analysed as a ‘pseudo facial’ mentality that runs for an attractive private transport, but would disregard the most eligible public transport in town. No, i am not talking about the luxurious buses in town that do not hurt your ‘conscious tag’, but all the rest available at your disposal, in your respective cities. Public needs to change their habits, lifestyles and attitudes; not their cars. Similarly, coming to the public transport dilemma; public transport has not been in such a dire state since the day of its conception, it has taken continuous levels of mismanagement and corruption to bring it to this stage. Putting it correctly, public transport is in serious competition with private transport on a number of fronts. And definitely there are advantages for everyone in developing public transport. For every
extra person who takes up a public transport ceases the possibility of one person travelling from car, hence, less congestion on the roads and less competition for those scarce parking spots. At the end of day, we fail to address the huge responsibility that rests on our shoulders. We need to become the rekindled change agents to bring transformation in the society as a whole, instead of waiting on the system to change. No doubt, the foremost solution is to improve the public transport in order to serve the demand. But then again, change should be on both sides. The public should also realise and inculcate the habit of preferring frequent use of public transport over private. The writer is Sub-Editor, Profit. She can be reached at syedmaheen@hotmail.com
For comments, queries and contributions, write to: MuneeB eJaZ Layout Designer
email: profit@pakistantoday.com.pk Ph: 042-36298305-10 Fax: 042-36298302 website: www.pakistantoday.com.pk
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Friday, 23 December, 2011
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There are logical expansions in the rawmaterial source, but collection of those raw materials is very difficult in Pakistan because the agriculture sector is disorganised
news
engro Foods CeO, afnan ahsan
Concerns over crude handling capacity persist KArAChI
S
WAqAR hAMzA
Ome crude handling capacity may become unavailable during 2013 to 2015 due to scheduled maintenance at Karachi Port Trust’s Oil Pier number 1. moreover, increase in POL product demand and refining capacity in the future is likely to exert stress on the existing cargo handling infrastructure. Currently, the combined cargo handling capacity for POL products at ports is 33.0 million mT (24.0 million mT at Keamari and 9.0 million at
FOTCO). However, handling capacity for crude is significantly lower (6.9 million mT at Keamari; 0.6 million mT at FOTCO). This was stated in Annual report 2010-11 by State Bank of Pakistan. The report further stated that to improve cargo handling capacity for crude imports, enhancement in infrastructure is urgently needed. Specifically, introducing night time navigation and increasing the draft of FOTCO can immediately improve cargo- handling capacity. The options that need to be explored are: Single-Buoy mooring4t (SUm) at HUB connecting the Byco
refineries for crude imports; whiteoil pipeline link between KPT and FOTCO for effective utilisation of KPT’s three modem oil piers, to provide KPT access to PAPCO’t product terminal, and reduce ship demurrages; second berth at FOTCO to handle rising P0 demand for power generation. it is to be noted that Pakistan meets majority of its crude oil imports from middle east, and the main suppliers include Saudi Arabia, UAe and iran. Pakistan National Shipping Corporation (PNSC) maintains 3-4 dedicated tankers capable of delivering 600,000 mT of crude on average
CNG experts advise cylinder standard check LAhore NAuMAN TASLEEM
i
F your vehicle was converted to CNG more than five years ago then you must check the standard of cylinder or else your vehicle and life could be at risk, CNG sector experts told Profit on Thursday. They said though the life of cylinder is more than 10 years but to be on the safer side, it is necessary that consumers should check the standard of cylinder. The country has witnessed a number of cylinder blasts in public transport due to substandard cylinders and around six people lost their lives in these incidents. According to Oil and Gas regulatory Authority (OGrA) standards for CNG cylinders, the minimum pressure for CNG cylinder is 200 bars or 2,900 PSi and any cylinder, which is manufactured below this standard, is dangerous for filling CNG. Unfortunately, there has been no check by the authorities concerned to regulate CNG cylinders. People associated with CNG sector said consumers should check the quality of cylinders to avoid any untoward incident. Similarly, any cylinder whose age is more than five years should be checked for quality. “i am not saying that every cylinder more than five years is dangerous but at least the consumers
around the globe not even a single incident of CnG cylinder blast is witnessed but regulatory authority in Pakistan is not checking standard of cylinders should check its quality,” said a CNG station owner muhammad Siddique adding its not hard task to check the quality of cylinder. “The consumer just visit any CNG station and check the quality by paying a nominal amount rs300-500,” he added. All Pakistan CNG Association Senior Vice Chairman Central executive Committee raja muhammad Anwer said if consumers follow the standard then there is no danger in using CNG cylinder or kit. He said around the globe not even a single incident of CNG cylinder blast is witnessed but unfortunately regulatory authority in Pakistan is not checking standard of cylinders.“ every Tom, Dick and Harry is manufacturing substandard cylinders and nobody is keeping any eye on such elements,” he said, adding that illiterate people don’t know specifications of cylinders and just try to install low-priced cylinders. “it was great astonishing that in many
cases, oxygen gas cylinders were used for CNG filling,” he said adding CNG cylinder standard is 200 bars while oxygen gas cylinder is 20 bars. “One can easily imagine that what would be the result,” he said adding that the consumers should keep an eye on the leakage so that they could repair it. “There is nothing wrong in using CNG and some section of the media is trying to terrify people,” he lamented. He said according to government rules only CNG stations having licenses are authorised to install CNG kit but no one is implementing this rule and resolutely lives of people are at risk. “Why OGrA is not taking action against people who don’t have the licenses but even then installing kits,” he said adding public transport is using sub-standard cylinders and there is no check on such vehicles. “it is the responsibility of transport authority to check the public transport and issue or cancel the licenses of such vehicles,” he added.
every month. At present, crude oil and product imports can only be handled at two terminals: Keamari and FOTCO (Port Qasim). Both pods are located in Karachi and connected via 25 km pipeline (capacity 2.0 million mT per month). The pipeline is primarily used for upcountry movement of imported POL products (particularly diesel), through linked pipelines at FOTCi. majority stake in the pipeline is held by Pak-Arab Pipelines (51 per cent) while PSO, Shell and Chevron hold the remaining shares. PArCO, PrL and NrL are linked with this pipeline.
Pakistan decides to offer technology neutral spectrum ISLAMABAD AMER SIAL
i
N a major development, government has decided to offer new telecom licenses which will be neutral and licensees will be able to deploy any technology of their choice including 3G, 4G, LTe or any other upcoming technologies. An official source said the decision has been made to address concerns of local telecom operators which had concerns that deployment of 3G technology, was not a wise option, in the presence of 4G, LTe and other emerging technologies. Telecom regulator, Pakistan Telecommunication Authority (PTA) is preparing information memorandum for the auction of frequency spectrum under the policy directive issued by ministry of information Technology (moiT). Government also plans to hold investors conferences and international road shows to apprise investors about the telecom potential of investment in the country. Pakistan had initially planned to auction three licenses for 3G service in 2007 but the process got delayed due to the signing of sale purchase agreement of PTCL with the UAe owned etisalat that had a condition that government would not issue any new licenses for long distance international (LDi) category till march 2012.
Pressure on rupee limits market gains KArAChI STAFF REPORT
KARACHI: State Bank of Pakistan (SBP) has directed all commercial banks and field offices of SBP Banking Services Corporation (BSC) operating throughout the country to exchange the existing rs5 banknote with banknotes and coins of all denominations before 31st December, 2012. it may be pointed out that this directive allows only the exchange of rs5 banknote from banks and SBP-BSC field offices to facilitate the general public who are in possession of such notes. However, the said banknote will stand demonetised, and shall not be a legal tender from 1st January, 2012. Over 10,000 branches of commercial banks and 16 field offices of SBP BSC will exchange these banknotes of rs5 denomination. This exchange facility will be available to the general public till 31st December, 2012. STAFF REPORT
uBl shows stellar performance in 3rd Quarter KARACHI: United Bank Limited (UBL) reported strong earnings of rs4.2 billion in third quarter of this calendar year with earning per share of rs3.47, up 24 per cent Quarter-onQuarter basis; taking cumulative 9m profits to rs11 with earning per share of rs8.95, up by an impressive 36 per cent, year-on-year basis. The notable 24 per cent Q-on-Q jump in profitability came on the back of Nim expansion of 30bps QoQ to 7.3 per cent and a six per cent QoQ growth in the nonfunded income. On the balance sheet front, bank’s deposit base witnessed a slight decline of six per cent on QoQ basis to rs557 billion. Similarly, earning assets (investments plus advances) too declined by two per cent QoQ. Post this impressive result, we have revised up our 2011 earnings estimates to rs11.9 from rs10.7 per share previously and maintain our ‘Buy’ call on the stock. JAVEd MAhMOOd
CnG stations in Sindh and hub to remain closed for 24 hours KARACHI: in view of the continuing gas shortage due to the increased winter load and in accordance with the recent eCC decision, it has been decided to cut gas supply to CNG stations in Sindh and Hub for 24 hours from 9 am on Friday, 23rd December till 9 am on Saturday, 24th December, 2011. The decision to discontinue gas to CNG stations on a periodic basis follows an extraordinarily low pressure situation that has badly affected overall gas supply in Sindh and Balochistan. SSGC realises that while the customers are faced with an adverse situation, the company is taking all actions to ensure uninterrupted gas supply and a stable pressure. in this regard, the management has requested all stakeholders to fully support the company in handling low pressure situation more effectively. STAFF REPORT
SMeDa inks Mou with iPO to facilitate SMes LAHORE: Small and medium enterprises Development Authority (SmeDA) and intellectual Property Organisation (iPO), Pakistan have entered into a memorandum of Understanding (moU) to facilitate Smes in respective ambit of their service. mr Yousaf Naseem Khokhar, CeO SmeDA and mr Hameed Ullah Jan Afridi, Chairman; iPO-Pakistan signed the moU on behalf of their organisations. From SmeDA, mr Khurram Khan, Gm Central Support, Syed iqbal Kidwai, Gm-Outreach, mr Alamgir Chaudhry, Gm-Policy and Planning, mr Sultan Tiwana, Gm-B&SDS accompanied CeO SmeDA; whereas, from iPO, mr Sajjad Ahmad Bhutta, DG, iPO-Pakistan along with other officials attended the ceremony. Later, CeOs of both the organisations inaugurated the help desk jointly set up at SmeDA head office to facilitate Smes in the field of intellectual property rights. STAFF REPORT
Telecom sector faces decline
T
He trading band clearly suggests a lack of investor participation. rumours of CGT thrown out, but the windfall gain of 200 plus points provided some hope to investors. Today’s volumes were well below the average year to date volumes of 80 million shares. KSe 100 index closed at 11306.10 with a gain of 37.55 points, while total volume stood at 27,645,652 along with the total value of 1,688,021,685. KSe 30 index closed at 10360.69 levels to gain 52.60 points and All Share index closed at 7824.42 levels after gaining 27.21 points. Total 119 scrips advanced 72 declined and 98
SBP directs banks to exchange rs5 banknote before Dec 31
remain unchanged out of total 289 scrips traded. The index heavy oil sector was largely tilted towards the negative territory with OGDC losing a rupee followed by PSO and POL. The rs100 per bag hike in urea
prices pushed fertiliser stocks upwards with engro benefiting the most. engro appreciated about rs4.60 but is still trading below the rs100 psychological barrier. Stocks with index weight and low free float including Ulever and
Nestle price appreciated and provided positive support to the index. With merely six trading days left before the year end, we are not expecting any miracles which may change the investor behaviour, said Bilal Asif at HmFS.
KARACHI: Telecommunication sector has faced a massive decline in foreign direct investment, as opportunities are limited in the said sector due to stiff competition and lack of technological moderation. Therefore, State Bank of Pakistan in its annual report for the year 2010-11 anticipated that in the absence of increase in network coverage the growth in telecom sector is likely to decelerate further. The sector is bent upon expanding the range of services for improving revenues and this strategy has resulted in tough competition, leading to very high marketing costs and declining operating margins of service providers. A continuation of this trend is likely to increase market saturation and further weakening of profitability, the report said, adding that in 2010-11 FDi in iT and telecom stood at minus $34.1million. STAFF REPORT
PRO 23-12-2011_Layout 1 12/23/2011 12:30 AM Page 5
Friday, 23 December, 2011
Along with improving our footprints, we are committed to undertake new initiatives in order to provide our customers with the best products
news
Bank alfalah CeO, atif Bajwa
05
What the US loses in its war with Iran Evidently, the menace of a nuclear armed Iran is more daunting for Washington than oil market pandemonium
g
KunwAr KhuLDune ShAhID
V
YiNG to become the godfather of just about every fragment of the globe has its own tribulations. more often than not you are faced with a multitude of options, and sometimes the options manage to tick both the ‘Do’ and ‘Do not’ column almost simultaneously; leaving you staring poker faced down the barrel of indecisiveness. To complete the global hegemony US has so many bases to cover that it has been bombarded with a blitzkrieg of choices – a blitzkrieg that has the White House hankering after political permutation formulas. With so many tradeoffs hinging on Washington’s sanctions on Tehran, US’s century old ‘Heads i win, tails you lose’ coin doesn’t look like working on the iranian front. Congress’ approval of new sanctions on iran last week was a statement of intent that US is eyeing to mash iran’s economy. The sanctions would mean that Tehran would find it hard to sell its oil, and of course nothing would hurt iran’s fiscal scheme of things more than a slash in its oil revenue. A plunge in revenue would in turn mean that the
iranian wallet would not be thick enough to furnish its nuclear programme – the butt of US theatrics. However, the situation is a blatantly double-edged sword, if there ever was one! For, US might manage to goad iran’s nuclear intent, but the fact that iran is a major oil supplier would mean that eliminating iranian oil from the global market would lead to precipitous escalation in oil prices. As things stand, and have stood for a while now, oil demand has become a bottomless bit, and subtracting one of the chief supply sources would further exacerbate the demand-supply disparity. While this demand-supply equation would’ve been at the forefront of the aforementioned permutation formulas, US Congress’ approval of the sanctions means that the menace of a nuclear armed iran is more daunting for Washington than oil market pandemonium. While last week the US Congress had to mull over tradeoffs regarding oil, the coming potential sanction engulfs a tradeoff pertaining to another lucrative energy source – natural gas. in this moment in time europe depends on russia for the major bulk of its gas supply; and hence, russians have quite often used
gas as a political tool to influence matters in europe – most notably in Ukraine, that suffered a gas cutoff in January 2009. experts opine that russian aim has been to reshape the post-Soviet sculpt of europe and its natural gas source is a telling instrument that is quite often used to influence matters. Therefore, europeans have long yearned for an alternate supply of natural gas to counter the russian hegemony and they have had the US backing regarding the matter as well. One such source has been located in Shah Deniz field in Azerbaijan, and european leaders have been eyeing the construction of a pipeline that would bypass russian pipelines and bring gas straight to europe. Nonetheless, the twist in the tale is
courtesy the presence of Naftrian intertrade Co. (NiCO) – owned by the iranian government – in the Shah Deniz consortium. This little problem means that the catch-22 ensnaring the US hierarchy is that it has to choose between sanctions on foreign joint ventures involving the iranian government and allowing russian impediment in european politics owing to its supremacy over gas supply to the continent. Sanctions over Shah Deniz would also counter the historical US policy of sponsoring gas from Central Asia to europe as an alternative option. All the same, another pivotal façade worth considering is that iranian stake in Shah Deniz is considerably less – NiCO has merely a 10 per cent ownership – than iranian prominence in the oil game. Cou-
ple this with the fact that europe is in dire need of a gas alternative, and one gets the feeling that US might opt out of this sanction, even though it would increase european dependence on iran. The nuisance that iran has become for the US has given Washington a continuum of sleepless nights for ages. The current vicious circle for the US on the iranian front has witnessed historical US policies and vested interests on a collision course. Strategies are knocking the daylight out of each other on the Washington drawing board; let’s see which one is the last one standing. The writer is Sub-Editor, Profit. He can be reached at khulduneshahid@gmail.com
CORPORATE CORNER Silkbank joins hands with Dawood Family Takaful
KARACHI: Silkbank Limited and Dawood Family Takaful Limited have entered into a strategic partnership whereby Silkbank shall sell Shariah compliant family Takaful products through its branch network under "Bancatakaful Agreement". A ceremony was held at head office of Silkbank, Karachi to sign the agreement. The agreement was signed by Talha Saeed, Group Head retail Banking, Silkbank and rizwan Ahmed Farid, Chief executive Officer, Dawood Family Takaful. Dawood Family Takaful is amongst the pioneers in the field of Family Takaful business in Pakistan, providing high quality islamic financial protection services. PRESS RELEASE
Microsoft launches Customer immersion experience programme KARACHI: microsoft is empowering local firms with a host of business productivity solutions through its recently launched Customer immersion experience (Cie) programme. Kamal Ahmed, Country General manager, microsoft Pakistan explained, “The programme offers the opportunity for users to experience first-hand of
how microsoft technologies can help them communicate, collaborate, create and manage information more efficiently within their organisations.” During Cie, participants were walked through a set of microsoft solutions which focused on various productivity capabilities that allow people to merge their emails and calendar better; work simultaneously on a single document; make better and faster decisions through self-service business intelligence; and be productive from anywhere using different devices. PRESS RELEASE
emirates becomes a big hit with young cricket fans
the underprivileged – were treated to a great day out. in addition to watching the thrilling action on the pitch, the students were given T-shirts and caps and cheered on the players with emirates scorecards. PRESS RELEASE
Jazz celebrates success of Pakistan cricket team LAHORE: mobilink Jazz extended its congratulations to the Pakistan Cricket Team on its exceptional performances throughout 2011. The team overcame a host of on and off field troubles to succeed across all formats of cricket throughout the year, culminating with the clean sweep of Bangladesh series. The team became the most successful ODi team of the year (2011), having won 24 of its 32 matches in the year, with the highlight being their incredible run of form in the World Cup. moied Javeed, mobilink’s Director marketing (Jazz) highlighted, “Pakistan’s cricket team has performed exceptionally well in 2011, and Jazz takes pride in bringing this cricket to the people of Pakistan. We wish the team all the success in 2012!” PRESS RELEASE
and business leaders. Ashraf Kapadia, Chairman Board, OPeN Karachi welcomed the guests. At the launch ceremony, imran Sayeed explained that OPeN is a non-profit association which was started in USA by six entrepreneurs in Boston in 1998. it now has over 3,000 entrepreneurs in seven chapters across the US in Boston, New York, Silicon Valley, Washington DC, Houston, Chicago and Atlanta. PRESS RELEASE
KARAChI: Picture shows Sindh minister of industries Mr Abdul Rauf Siddiqui and Mr Rizwan Marchant, of qatar Airways and diplomats from Saudi Arabia, Kuwait, qatar and Afghanistan with other prominent guests on the occasion of the anniversary of the National day of qatar. PRESS RELEASE
OPen launches its Karachi chapter KARACHI: emirates became a big hit with young cricket fans when it hosted an event for students from a number of schools at the Quaid-e-Azam Trophy final. The airline reiterated its commitment to the grassroots game in Pakistan by inviting 80 underprivileged children to the National Stadium, Karachi, to watch Zarai Taraqiati Bank Ltd ( ZBTL) and Pakistan international Airlines (PiA) contest on the first day. Pupils from Garage School - which aims to educate street children - and the Health Oriented Preventive education (HOPe) schools – which provide academic as well as vocational training to
KARACHI: imran Sayeed, Chairman, OPeN Global (Organisation of Pakistani entrepreneurs of North America) announced the launch of OPeN Karachi as the first international chapter of OPeN outside the US, in the presence of a large and impressive gathering of Pakistani entrepreneurs
ISLAMAbAd: CEO and President of Shifa dr Manzoor-ulhaq qazi and daughter of dr zaheer Ahmed (late) Samina Kausar, with participants of the ceremony held in remembrance of the Founder and Ex-Chairman of Shifa dr zaheer Ahmad (late). PRESS RELEASE
PRO 23-12-2011_Layout 1 12/23/2011 12:30 AM Page 6
Friday, 23 December, 2011
06 Markets top 10 sectors
49% 09% 10% 04% 04%
Chemicals
01% 03% 01% 02% 17%
Real Estate Investment
Construction & Materials Electricity Banks
Fixed Line Telecommunication
Oil & Gas
Financial Services
Personal Goods
Equity Investment Instruments
STOCK MARKET HIGHLIGHTS Index 11306.10 2856.33 2587.41
KSE-100 LSE-25 ISE-10
Change +37.55 +49.72 -39.77
Volume 27,645,652 708,663 8,800
Market Value 1,688,021,685 17,311,545 468,645
top 5 perForMers sector wise
Major Gainers Company UniLever Pak Ltd. Nestle PakistanXD Siemens Pak Wyeth Pak Limited Engro Corporation
Open 5400.57 2568.03 811.37 747.92 94.21
High 5550.00 2696.43 851.93 785.31 98.89
Low 5302.11 2640.00 780.01 711.00 93.12
Close 5547.50 2696.43 848.60 785.05 98.54
Change 146.93 128.40 37.23 37.13 4.33
Turnover 132 191 138 191 5,152,320
373.78 182.47 234.03 355.99 52.01
373.78 174.50 235.50 356.99 51.40
363.05 173.35 230.26 353.01 50.00
364.74 173.44 231.21 353.20 50.08
-9.04 -9.03 -2.82 -2.79 -1.93
13,811 2,857 144,161 248,905 28,478
Volume Leaders Engro Corp Fatima Fert.Co. Fauji FertilizerXD Hub Power Co. Fauji Fert BinXD
94.21 22.82 152.43 34.50 47.11
98.89 23.27 155.53 34.75 47.85
93.12 22.80 151.76 34.30 46.60
98.54 23.17 154.35 34.58 47.59
4.33 0.35 1.92 0.08 0.48
5,152,320 3,354,550 2,376,847 2,159,577 1,958,623
Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)
Per Tola (PKR) 54,005.00 51,608.00 986.00 1025.00
Per 10 Gm (PKR) 46,981.00 44,245.00 846.00 880.00
Per Ounce US$ 1,611.00 – 35.05 –
hiGh
lOw CurrenT
427.49 111.89 21.96 6.60 86.50
418.00 109.30 21.96 6.49 84.40
ChanGe
vOluMe
Oil and Gas Attock Petroleum Attock Refinery Burshane LPG Byco Petroleum Mari Gas Co.
423.94 111.52 20.92 6.54 86.02
Arif Habib Co SD Clariant Pakistan Dawood Hercules Descon Chemical Descon Oxychem
27.81 152.00 31.18 1.45 3.89
-4.71 -1.74 1.04 0.02 -1.50
17,758 676,554 1,025 150,330 26,943
19.01 1.19 8.84 28.56 9.99
28.27 153.00 32.73 1.60 4.12
27.56 145.10 31.19 1.40 3.68
27.73 146.77 32.73 1.45 3.99
-0.08 -5.23 1.55 0.00 0.10
826,402 19,380 95,093 302 218,737
2.25 51.97 6.97 19.00 1.41
18.69 1.20 8.90 29.90 9.99
18.69 1.10 8.40 28.00 9.85
18.69 1.20 8.84 29.79 9.87
-0.32 0.01 0.00 1.23 -0.12
1,765 13,148 2 46,509 26,518
27.83 4.04 40.00 19.35 79.00
Ados Pakistan AL-Ghazi TractSPOT Hinopak Motor K.S.B.Pumps Millat Tractors Ltd.
89.6626 140.8869 1.1482 117.4849
4.56 189.77 70.05 25.25 378.21
2.29 52.69 7.15 19.24 1.89
2.25 51.50 6.72 18.40 1.41
2.25 52.01 6.80 18.78 1.41
0.00 0.04 -0.17 -0.22 0.00
25,600 42,526 1,017 1,405,226 2
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
International Oil Price WTI Crude Oil
Sell 90.60 118.07 141.74 1.1496 89.13 11.63 24.57 24.04 92.62
Brent Crude Oil
Atlas Battery Ltd. Atlas Engineering Atlas Honda Ltd. Dewan Motors Exide (PAK)
166.15 58.00 121.50 1.91 159.96
27.83 3.89 41.49 19.35 80.90
27.00 3.82 40.00 18.35 79.00
27.00 3.86 40.05 19.35 79.00
-0.83 -0.18 0.05 0.00 0.00
8,000 13,500 835 35 257
5.00 196.00 70.05 23.99 379.50
4.56 189.77 67.00 23.99 373.01
164.10 58.00 126.00 2.25 159.90
160.00 58.00 125.51 1.89 158.00
110.49 111.43 150.02 150.00
4.56 192.47 70.05 23.99 373.78
$107.71
161.78 58.00 125.98 1.89 158.03
109.00 111.18 145.05 145.58
Abdullah Shah Adam Sugar AL-Noor Suger Mills Bawany Sugar Colony Sugar Mills
5.60 16.70 55.20 11.10 1.75
5.00 16.95 57.95 11.10 1.70
Diamond Ind. Hala Enterprise Pak Elektron Ltd. Singer Pakistan Tariq Glass Ind.
8.20 6.01 4.06 14.07 8.30
9.18 6.90 4.38 15.06 8.50
(Colony) Thal AL-Qadir Textile Amtex Limited Artistic Denim Mills Azam Textile
1.40 12.50 1.18 21.50 1.11
1.10 13.00 1.25 21.50 1.60
AHCL-DEC ANL-DEC ATRL-DEC DGKC-DEC ENGRO-DEC
27.96 3.40 111.88 19.09 97.03
28.25 3.46 112.00 19.25 96.40
Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. Highnoon (Lab) IBL HealthCare
99.00 74.62 65.27 29.23 13.61
100.00 75.00 65.99 30.00 13.50
0.00 2.70 0.00 -1.26 -4.43
103 3,220 67 24,995 5,431
-4.37 0.00 4.48 -0.02 -1.93
2,981 5,017 300 1,008 1,130
0.69 -4.44
1,170 203
P.T.C.L.A Pak Datacom Ltd Telecard Limited Wateen Telecom Ltd WorldCall Telecom
10.28 34.38 0.75 1.84 0.81
5.00 16.77 55.99 11.10 1.70
-0.60 0.07 0.79 0.00 -0.05
500 2,642 2,014 50 9,042
9.18 6.90 3.94 13.07 8.31
9.18 6.90 3.94 15.06 8.39
0.98 0.89 -0.12 0.99 0.09
1 50 389,302 501 11,224
1.00 13.00 1.17 21.50 1.11
1.00 13.00 1.20 21.50 1.11
-0.40 0.50 0.02 0.00 0.00
2,000 500 11,407 40 1
27.75 3.26 109.61 18.50 92.21
27.83 3.32 110.19 18.81 94.54
-0.13 -0.08 -1.69 -0.28 -2.49
97,000 140,500 298,000 208,000 1,558,000
99.54 74.62 65.20 29.74 13.44
0.54 0.00 -0.07 0.51 -0.17
426 10 4,216 3,276 1,962
98.50 74.62 64.10 28.51 13.15
10.32 34.50 0.83 1.88 0.94
10.13 34.45 0.75 1.75 0.83
10.17 34.50 0.79 1.75 0.90
-0.11 0.12 0.04 -0.09 0.09
325,684 900 7,497 27,179 1,537,164
0.35 35.52 0.63 1.51 1.60
0.35 35.50 0.65 1.55 1.70
0.34 34.01 0.60 1.50 1.65
0.34 34.50 0.65 1.51 1.65
-0.01 -1.02 0.02 0.00 0.05
10,002 3,884,023 55,204 299,633 501
56.83 10.29 4.81 11.51 28.30
57.99 10.29 4.89 11.55 28.52
56.00 10.00 4.72 11.00 28.18
56.46 10.01 4.78 11.35 28.27
-0.37 -0.28 -0.03 -0.16 -0.03
8,086 156,080 419,199 1,772,293 87,101
Banks Allied Bank Ltd Askari Bank B.O.Punjab Bank Al-Falah Bank AL-Habib
OPen
hiGh
lOw CurrenT
ChanGe
vOluMe
Non Life Insurance 5.00 16.31 52.44 10.30 1.60
Electricity Genertech Hub Power Co. Japan Power K.E.S.C. Kohinoor Power
SYMBOl
Adamjee Ins Atlas Insurance Century Insurance EFU General Ins IGI Insurance Ltd.
42.06 36.00 6.78 35.06 41.94
43.38 36.90 7.23 35.05 43.25
41.38 36.00 6.45 35.00 42.00
42.63 36.00 7.23 35.00 42.65
0.57 0.00 0.45 -0.06 0.71
37,504 65,132 1,500 7,753 600
13.50 1.40 65.53
14.50 1.40 65.53
0.00 0.00 0.00
2 1 157
0.29 13.82 0.65 0.85 2.55
-0.06 -0.61 0.00 0.19 0.00
5,018 32,976 10 1,700 458
Life Insurance American Life East West Life Assur EFU Life Assur
14.50 1.40 65.53
14.50 2.34 68.80
Financial Services AMZ Ventures A Arif Habib Ltd. Dawood Cap.Man XB Dawood Equities F. Nat.Equities
0.35 14.43 0.65 0.66 2.55
0.38 14.89 1.14 0.99 2.55
0.28 13.70 0.65 0.60 2.55
Equity Investment Instruments AL-Noor Modar Allied Rental Mod B.R.R.Guardian Cres. Stand.Mod Elite Cap.Mod
3.50 22.45 2.01 0.48 2.55
4.50 22.45 2.10 0.55 3.00
4.20 21.70 2.01 0.50 2.55
4.50 22.45 2.01 0.54 2.55
1.00 0.00 0.00 0.06 0.00
131,240 25 100 33,349 26
13.30 13.01 64.00 1.13 63.52 4.25 110.07 6.90 3.42 15.59 8.25 22.60 28.58 16.00 7.60 1.75 4.42 28.29 138.65 10.15 0.75 1.75 0.85 15.99
13.38 13.15 64.09 1.15 63.73 4.25 110.07 7.00 3.60 15.94 8.27 23.75 28.58 16.00 7.64 1.77 5.42 28.29 138.65 10.18 0.80 1.79 0.90 16.00
0.13 -0.15 0.00 0.00 0.00 -1.00 0.00 0.00 0.05 0.18 0.07 0.00 0.00 0.00 -0.94 -0.03 0.00 0.00 0.00 0.01 0.01 0.04 0.00 -0.44
6,990 514 302 522,373 82 500 2 200 52,703 503 2,836 30 1 500 5,181 2,188 3 3 2 179,925 109,990 83,042 642,070 6,231
Miscellaneous Century Paper P.N.S.C. Pak.Int.Con. SD TRG Pakistan Ltd. Murree Brewery Shakarganj Food Shezan Inter. Hala Enterprise Pak Elektron Ltd. Singer Pakistan Tariq Glass Ind. Grays of Cambridge Shifa Int.Hospitals Hum Network Ltd. Media Times Ltd P.I.A.C.(A) P.I.A.C.(B) Pak Hotels Pak Services P.T.C.L.A Telecard Limited Wateen Telecom Ltd WorldCall Telecom Sui North Gas
13.25 13.30 64.09 1.15 63.73 5.25 110.07 7.00 3.55 15.76 8.20 23.75 28.58 16.00 8.58 1.80 5.42 28.29 138.65 10.17 0.79 1.75 0.90 16.44
13.40 13.95 66.90 1.15 65.00 4.25 114.41 7.00 3.68 15.94 8.45 23.75 29.50 16.00 9.58 1.94 5.42 29.70 142.00 10.25 0.85 1.89 0.98 16.50
Mutual Funds Fund
$99.05
vOluMe
Fixed Line Telecommunication
Beverages Murree Brewery Co. Shezan Int’l
ChanGe
Pharma and Bio Tech
Automobile and Parts Buy 89.60 116.08 139.50 1.1350 86.38 11.32 24.25 23.76 89.53
lOw CurrenT
Future Contracts
General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass Ltd Merit Pack Packages Limited
hiGh
Personal Goods
Construction and Materials Al-Abbas Cement Attock Cement Cherat Cement D.G.K.Cement Dadabhoy Cement
OPen
Household Goods
Industrial metals and Mining Crescent Steel Dost Steels Ltd. Huffaz Seamless Pipe Int. Ind.Ltd. Inter.Steel Ltd.
SYMBOl
Food Producers 419.23 109.78 21.96 6.56 84.52
Industrial Engineering
Interbank Rates US Dollar UK Pound Japanese Yen Euro
OPen
Chemicals
Major Losers Millat Tractors Ltd. AL-Ghazi TractorsXD P.S.O. Pak Oilfields Ltd. Attock Cement
SYMBOl
Alfalah GHP Cash Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Income Fund Atlas Islamic Income Fund Atlas Money Market Fund Atlas Stock Market Fund Crosby Dragon Fund
Offer 501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800
repurchase 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500
nav 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500
Fund
Offer
repurchase
HBL Money Market Fund HBL Multi Asset Fund HBL Stock Fund IGI Income Fund IGI Stock Fund JS Principal Secure Fund I JS Principal Secure Fund II KASB Cash Fund
100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000
100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000
nav 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087
PRO 23-12-2011_Layout 1 12/23/2011 12:30 AM Page 7
Friday, 23 December, 2011
07
Zong and Manchester United, both are operating in a highly competitive environment. Both share many common traits such as teamwork and commitment to excellence. So one can imagine what their collaboration can bring to the mobile users in Pakistan
news
Zong CeO, Fan Yunjun
iP gas pipeline project
ICBC-HBL consortium appointed financial advisor iP pipeline project to bring gas up to 1.05 bcfd g First gas flow expected in 2014 g use of iP gas to result in average annual savings of $1.2 billion g
ISLAMABAD
e
AMER SIAL
CONOmiC Coordination Committee (eCC) of cabinet’s steering committee on iran-Pakistan (iP) pipeline has finalised a consortium of industrial and Commercial Bank of China (iCBC) and Habib Bank Limited as financial advisor for the project. An official source said the decision was made at the meeting of the steering committee, chaired by Petroleum minister Dr Asim Hussain and attended by Foreign minister Hina rabbani Khar, Chief minister Balochistan Nawab Aslam raisani, Chairman Federal Board of revenue, Chairman Board of investment, Secretary Finance, Acting Chairman OGrA, Chairman eOBi, mD PArCO, representatives of Law Division, Planning Commission,
National Bank of Pakistan and other senior officers. The committee decided to recommend appointment of financial consultant for iP project to eCC for approval. The financial advisor will assist inter State Gas Systems Limited (iSGS) in determining an optimal capital structure and financing plan for the project and for providing political and commercial risk cover. it will be responsible for managing entire transaction upto financial close including help in arranging financing. Pakistan is estimated to face a shortage in natural gas supply which is projected to increase from 1.6 bcfd in 2011-12 to over 2.5 bcfd in 2014-15. iP pipeline project will bring initially 750 mmcfd gas which will be increased to 1.05 bcfd. First gas flow is expected in 2014. The project involves construction of 781 km gas pipeline from iranian border to Nawabshah to inject gas into transmission system of two gas util-
ity companies. estimated cost of the project on the Pakistani side is estimated at $1.2 billion. According to an official statement the steering committee on iP pipeline and Turkmenistan-Afghanistan-Pakistan-indi a (TAPi) pipeline projects, reaffirmed its commitment to go ahead with major gas projects. Secretary Petroleum ijaz Chaudhry briefed the committee on progress made on iP and TAPi projects. managing Director inter State Gas Company Ltd (iSGCL) mobin Saulat gave a detailed presentation on appointment of financial advisor, implementation of iP gas pipeline project, security of iP pipeline during route survey and construction, and signing of TAPi Gas Sale Purchase Agreement (GSPA). The committee agreed in principle to recommend proposals regarding implementation of iP and TAPi gas pipeline projects to eCC and appointment of financial consultant. These proposals include government backed guarantees, model of financial consultancy and gas pricing formula for both pipeline projects. The government has already decided to dedicate imported gas through iP pipeline for the power sector as power shortage is projected to increase over 11,000 mW in next few years. The government is work-
Gas Cess to raise urea prices by rs300 KArAChI JAVEd MAhMOOd
A
FTer government’s decision to impose Gas infrastructure Development Cess on different industries, including fertiliser sector, feed stock gas’ price for fertiliser sector would increase from existing rs102 per mmbtu to rs299 per mmbtu, an increase of rs197 per mmbtu which would result in increase of urea price by rs250 to 300 per 50kg bag, sources told Profit. Government has also increased the prices of fuel gas for fertiliser plants by rs15 from current rs433 to rs448 per mmbtu. Cess would be charged from 1st January 2012, said sources. Gas infrastructure Development Cess Bill which has been passed by National Assembly and Senate both for imposing cess on different industries including fertiliser sector is likely to increase feedstock gas prices by 200 per cent. Price hike in feed gas cost would result in increase of urea price by rs250 to 300 per 50kg bag. National Assembly of Pakistan approved two money bills to give free hand to the federal government to fetch around rs38.39 billion every fiscal year by imposing Gas infrastructure Development Cess and Petroleum Levy. rise in feed gas price by 200 per cent will
create cost vacuum of rs250 per bag which has to be filled by a price increase in order to negate the impact. Government says this decision has been taken to meet the hefty expenditures of several projects including iran Pakistan (iP) Pipeline, Turkmenistan Afghanistan Pakistan india (TAPi) Pipeline, LNG import and LPG supply enhancement projects. A major portion of around rs11.10 billion would be gathered from the fertiliser sector, rs1.87 billion from CNG station, rs5.88 billion from independent Power Plants (iPP’s), rs4.62 billion from industrial sector and rs0.460 billion from Pakistan Petroleum Limited (PPL). OGrA has already tabled a proposal to increase the gas price in the country by 15 per cent that would also bring an impact of rs45 in proposed per mmbtu price of feed stock gas for fertiliser sector. Fertiliser plants use 80 per cent of the gas as feed stock while remaining 20 per cent is used as fuel to run the plants. The imposition of the gas cess would make the urea expensive for the farmers who may resort to using lesser urea due to erosion of purchasing power of the farmers. This measure is expected to aggravate food inflation as the rise in cost would be passed on to the end consumers and may lower crop yields due to lesser urea consumption.
ing to start process for setting up new independent Power Producers (iPPs) of 5,000 mW cumulative capacity, so that they should be ready for commissioning by the time natural gas starts flowing from iP pipeline in December 2014. Official estimates based on the current crude oil price project the monthly gas import bill will be in the tune of $200-250 million, which was lowest when juxtaposed with other options, namely HSFO and rLNG. Use of iP gas is estimated to result in an average annual savings of $1.2 billion against using rLNG as alternate fuel at crude price of $ 100 per barrel. The present value of total savings comes to $10.9 billion. Using HSFO as an alternate fuel indicates that iP gas will result in average annual savings of $1.7 billion at crude price of $100 per barrel. The present value of total savings comes to $15.3 billion. The recently imposed levy on natural gas which help generate rs45 billion per annum, which government plans to use to develop the gas infrastructure for the imported Liquefied Natural Gas (LNG), iran Pakistan (iP) gas pipeline and Turkm e n i s t a n , Afghanistan, Pakistan and india (TAPi) gas pipeline projects.
lPG to become most expensive fuel of Pakistan LAhore STAFF REPORT
L
PG prices are expected to touch rs150 per kilogram after an increase of rs14 per kilogram from 1st January, after imposition of the newly legislated petroleum levy on local LPG production, said LPG Association of Pakistan spokesman Belal Jabbar. As recent as two days ago Federal minster for Petroleum Dr Asim Hussain expounded government’s intent of exempting LPG from sales tax in order to reduce its price and bring it nearer to that of CNG. However, the notification of petroleum levy issued on 15th December belies that claim. Petroleum Products (Petroleum levy) (Amendment) Act 2011 was passed by National Assembly on 25th November and received the assent of the President on 13th December. Through the act amendments have been made in the 5th Schedule to impose a levy on LPG amounting to rs11,486 per tonne. The levy which will add 16 per cent to the price being charged by LPG producers and this will ultimately be borne by consumers said Belal. LPG prices are expected to increase by rs150 and rs600 for domestic and commercial cylinders respectively. retail prices could climb as high as rs150 per kilogram, making LPG the most expensive fuel in Pakistan. LPG companies have imported record quantities in the month of December and sold their product based on a weighted average price of local and imported LPG which has helped in keeping prices affordable. However, implementation of the levy which seeks to equalise the price of local product with imported products in order to benefit certain importers will result in a sharp escalation in price. imposition of the levy is pure discrimination against local production which accounts for 80 per cent of the country’s requirements. Additional local production to the tune of 600 tonnes can be brought online within a short period and at a fraction of the cost of imports; yet government is keen to promote imports. Government’s decision to make LPG expensive is at odds with its policy to encourage its use to alleviate shortage of natural gas said Belal.
advances to deposit ratio decline KArAChI
T
He Advances to Deposit ratio (ADr) have drastically dropped to 62 per cent by end of November 2011 compared to 68 per cent at end of CY10. The Advances currently stand at rs3,356 billion compared to rs3,494 billion last year. This declining trend in ADr is primarily due to banks’ reluctance to opt for private sector lending on fear of rising NPLs especially since economic situation is critical and energy crisis is likely to exacerbate. moreover, government’s increased dependence on the banking sector to finance its deficit is crowding out the private sector. This current ADr is the lowest since September 2003 when it was hovering around 60 per cent. During the period, government borrowing from banking sector has risen by 92.7 percent to rs2,430 billion compared to rs1,260 billion in the corresponding month last year. The investment to Deposit ratio has reached 54.7 per cent by
end of November 2011. Before CY11, such a high iDr situation was witnessed in 2003 when it peaked at 46 percent in September 2003. Banking sector deposits by end of November 2011 have reached rs5,415 billion, showing an increase by 5.7 per cent since December 2010. During the same period Advances have witnessed a contraction of 3.9 per cent as the banks continue their preference for government securities. This subsequently has resulted in banks’ investments to rise by 40.9 per cent (since December 2011) by end of November 2011. Advances to Deposit ratio (ADr) has dropped to 62 per cent in Nov-11. On mom basis, the iDr has jumped by 4 per cent. This is primarily attributed to conversion of Power Holding Company TFCs into TBill and PiBs to the tune of rs391 billion. SBP, since July 2011 has aggressively slashed discount rate as it was aiming to boost economic growth and private sector lending, however, trend has depicted no change. Analysts at the Arif Habib Limited (AH) research say that
bank’s investment in treasury bills has jumped by 39.5 per cent since December 2010 from rs1,264 billion to rs1,763 billion by end of October 2011. moreover, sector’s exposure to government PiBs and Sukuk has jumped by 34.5 percent and 63.9 percent since December 2011 to reach rs285 billion and rs196 billion respectively. The current trend of banks’ preference going for safer investment in government securities will in all likelihood continue, even as SBP has cut the policy rate by 200bps to 12 per cent. moreover, with no further cut in policy rate is expected at least till July 2011, contraction in spreads will be limited hence Nims are unlikely to suffer a major decline. Our top pick in the sector is mCB, which is offering 66.7 percent upside to Dec -12. The bank is expected to post net earnings of rs21.5 billion in CY11, a rise of 28 per cent YoY. We expect the bank to pay cash dividend of rs3.0/share and bonus of 10 per cent along with its full year results. JAVEd MAhMOOd