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Bring on a balanced rent control act! ISLAMABAD ONLINE
Ikhlaq Abbasi, Prseident, Traders Welfare Association G-9 Markaz visited Islamabad Chamber of Commerce and Industry for a meeting with Zafar Bakhtawari, President of ICCI. Speaking on the occasion, Zafar Bakhtawari, President of ICCI said that traders of Federal Capital were facing many problems which should be solved on priority basis by the Government. He said that a balanced Rent Control Act in Islamabad would greatly reduce and resolve the rental issues of traders of the Federal Capital. He said that in the absence of a balanced Rent Control Act in Islamabad, frequency of disputes was rising day by day and the business community was feeling insecure in such environment. He said Islamabad Chamber has struggled a lot in bringing changes in the Rent Control Act after consultation with the all stakeholders and representatives of the business community. He said that with the efforts of ICCI, document of a balanced rent control act has reached the parliament, Thus Government should execute this law in the larger interest of the traders, he added. During the meeting,Ikhlaq Abbasi, president Traders Welfare Association G-9 Markaz thanked the ICCI’s team for inviting them in Chamber House and said that G-9 Markaz is a great trading center but it has been facing different issues since long. Munawar Mughal, Former President ICCI said that these interactions provided us opportunity to discuss problems being faced by the traders of different sectors and highlighted the same at relevant forums for resolving them.
Bailout package does nada for PSM Government’s Rs14.6bn bailout package not helping Pakistan Steel’s revival g PSM officials say money being released in ‘piece meals’ not serving the purpose g Government issued only Rs3bn against PSM’s Rs25bn demand for raw material g Steel Mill keeps making a monthly loss of Rs 1.5bn g Scarce raw material brought down production from 82pc to 17pc in Dec, 2012 g PSM’s liabilities account for over Rs 85bn g Much of bailout funds to cater inductions of over 5000 employees on political basis g CBA granted Charters of Demand worth billions of rupees g Govt inactive over recovery of embezzled Rs22bn g
KARACHI
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ISMAIL DILAWAR
F officials at the Pakistan Steel Mills (PSM) are to be believed the cash-strapped federal government has not hit the bull’s eye when it comes to the usage of a bailout package of billions to keep the loss-making public sector entity afloat. On July 23 this year, the resource-constrained federal government had declared a bailout package of Rs 14.6 billion to be injected into the Mill in three installments. Whereas so far two installments worth Rs 8.8 billion have been released, Rs 3.8 billion in August and Rs 5 billion in December, to the PSM, the injection of billions seems to have served its purpose not at all. According to well-placed officials at Pakistan Steel, the Mill’s production of steel was persistently depleting and had contracted from 82 percent in July 2008 to 17 percent during the current month, December 2012. Further, the entity is making a loss of Rs 1.5 billion every month. The PSM officials claim that the government’s fresh bailout package would, at the end of the day, go to waste as a major chunk of the public money was being sucked up by the banks on account of interest and liabilities. The PSM’s liabilities, the officials said, amounted to Rs 85 billion which had piled up over the last four years during which the Mill registered a total loss of Rs 80 billion. The government did not take any serious measures turning a profitable entity into a continuous loss maker unit which has gained profit of about Rs 20 billion from 2000 to 2008 and now go to a loss of Rs 80 billion in just four years with Rs 85 billion liabilities. Whereas the economic managers are prioritizing other needs, the supply of raw material, a PSM official said, was the factor that would once again turn the entity into a profitable enterprise. “The monthly loss of Rs 1.5 billion is on account of lower output and increased operational cost. Pakistan Steel facing a serious shortage of raw material from last four years,” said the official adding that the PSM had been plagued by such a worse condition since 2009 when the raw material supply chain had interrupted. While the PSM is hardly managing to import raw materials like iron ore
PSM delegation leaves for Iran to discuss iron ore import KARACHI: A four-member delegation of Pakistan Steel Mills (PSM) Saturday flew to Iran on a four-day visit that would see the PSM chief explore the ways and possibilities to procure iron ore for Pakistan Steel. According to a PSM spokesman, Major Gen (Rtd) Mohammad Javed, Chief Executive Officer of the PSM is leading the delegation that includes member board of director and conveynor Price Committee Engr. Abdul Jabbar, Member board of Pakistan Steel Nayyar Hussain Bukhari and General Manager Bulk Material Department Pakistan Steel Captain(R) Shamsi Hasan. He said the main purpose of the visit was to finding possibilities for supply chain restoration of iron ore to Pakistan Steel, from Iran. He added that PSM is facing difficulties from importing iron ore from Australia, Canada, Brazil etc as it takes about 50-60 days long journey, expensive freight rates than a 10-12 day cost effective journey from a neighboring country. He said that PSM delegation will meet 5 Iranian companies in this visit and also discuss a way out option through a barter deal for Iranian iron ore with metallurgical coke which is produced by Pakistan Steel. STAFF REPORT and coal the government was releasing the bailout money in what the officials described it “piece meals”. Recently, a ship carrying 55,000 metric tons of Australian coal arrived at the Steel Mill jetty of the Port Qasim with the Mill declaring to have started finalizing tenders for the import of over 0.1 million MT ofimported iron ore. “But, for raw material the PSM just got
only about Rs 3 billion which is the main need of the Mill to revive and survive,” said the official adding “Other amount was taken away by the banks against the interest and liabilities”. Other secondary category raw materials like dolomite, limestone are, however, available in the PSM stock. For an uninterrupted supply of raw material, the officials said, the PSM needed at least Rs 25 billion and that too
in a single installment. “We are for last three years demanding Rs 25 billion, but the government is providing money in piece meals that could never produce proper results due to operational expenses and break in the next installment for purchasing raw materials,” they said. The officials also complained of misappropriation of the taxpayers’ money by the current PSM management in the face of politically-motivated inductions and the grant of Charters of Demand to appease the People’s Workers Union-led CBA. Such cost-intensive measures, they said, were adding billions to the loss-making Mill’s operational cost. Unable to estimate the volume of PSM’s current operational expenditures, the officials said despite huge losses the PSM management and its Board of Directors on a “political pressure” had hired some 5000 employees as well approved two Charters of Demand to the CBA. “The same demands cost the Mill around Rs 3 billion in 2008 and Rs 2 billion in 2010,” recalled the officials. Moreover, the officials said the government had also been unable to swiftly respond to the Supreme Court’s suo moto notice and the consequent verdict on the Mill’s corruption cases. “There is still no good progress on the Supreme Court’s suo moto action against the PSM corruption cases,” they lamented. The apex court’s action, the officials said, was widely seen as a hope for the recovery of a huge amount embezzled by the past managements. The looted money, they said, amounted to Rs 22 billion. When contacted a PSM spokesman refrained from commenting on the above statements. He, however, said the prevailing international market conditions for steel were very favorable for Pakistan. He said once the supply chain of raw material was restored the PSM would take not more than 18 months to come back on tract. “The market condition is so good for the PSM that once raw material supply chain is restored the PSM would reach to profit line within next 18 months, God willing,” the spokesman said. He, however, said international hurdles like the US sanctions on Iran, one of Pakistan Steel’s hottest picks for the import of iron ore, were creating difficulties for the PSM management to procure cost and time effective raw material.
CONCESSIONAL LENDING
IMF extends zero interest rates on poorer-country loans ISLAMABAD ONLINE
International Monetary Fund (IMF)has approved a two-year extension to the zero interest rates charged on loans to low-income countries. The extension is part of a wider strategy to support concessional lending to poorer countries as they combat the effects of the global economic crisis. Following further weakening of global growth and lowincome countries’ declining ability to weather the crisis, the IMF approved a second extension to the exceptional interest waiver on loans under its Poverty Reduction and Growth
Trust (PRGT). The move, approved by the IMF Executive Board December 21, extends the waiver through 2014. In addition, the IMF announced a postponement by one year, to end 2014, of the next review of PRGT interest rates. “The Executive Board decision to keep interest rates at zero for all concessional loans for a further two years is testament to the Fund’s continued support for low-income countries since the global economic crisis hit in 2009,” said IMF Managing Director Christine Lagarde. The zero interest-rate extension follows other recent steps by the IMF to bolster lending to poorer countries that include increased resources, higher borrowing limits, and more
flexible terms. These moves stem from the major overhaul of the Fund’s support programs for low-income countries in mid-2009, which created a new framework for loans to the world’s poorest nations and initially set zero interest rates on concessional loans through 2011. This is the second extension of the zero interest rates. After the first bi-annual review under the PRGT interest rate mechanism in December 2011, the IMF decided that the significant downside risks to the global economic outlook required a one year extension, through 2012, of zero interest rates on concessional facilities. After the global financial crisis first erupted in 2008, the IMF stepped up its lending to low-income countries to
combat the impact of the ensuing recession. Initially, poorer countries succeeded in adjusting policies to offset the worst effects of the crisis. But this success was partially reversed in 2011, with many low-income countries having limited fiscal space and running current account deficits that were higher than pre-crisis levels. Low-income countries face the slow pace of the global recovery and increased volatility in food and fuel prices. A recent review of low-income countries facilities noted a strong and continuous demand for fund support. Furthermore, empirical evidence shows that over the long term, IMF backed programs help raise growth, reduce poverty, and boost resilience to shocks in low-income economies
Sunday, 23 December, 2012
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Business 02 MCB installs ATMs at LHC premises LAHORE STAFF REPORT
MCB Bank has installed new ATMs at two different locations on Lahore High Court (LHC) premises to facilitate its customers and legal fraternity in cash withdrawals, utility bill payments, mobile topups, mini statements and balance inquiries. This move has further strengthened MCB ATM Network which already have approximately 700 ATMs which makes it one of the largest ATM network spread across the nation. This installation is in line with MCB’s strategic direction of facilitating their customers using digital payment mediums and alternate delivery channels. “The strategy included continued innovation in payment products, expansion of digital payment options for customers which include expanding: MCB’s ATM network, mobile enabled customer base, and internet banking portfolio,” said Ali Mubashir Kazmi, SEVP Group Head at MCB Bank . “All these initiatives are meant to drive a behavior change in consumers bringing more and more payments / transactions on the digital grid subsequently facilitating the customers and digitizing Pakistan’s economy,” he added. MCB Bank has a history of many payment innovations and achieving many firsts in Pakistan’s banking industry including nation’s first globally awarded mobile banking service, which has over 300,000 active customers and holds approximately 65% market share in Pakistan. MCB Bank also launched Pakistan’s first chip enabled VISA Debit Card and first secure mobile enabled VISA Debit Card securing customer’s transactions using the latest industry standards.
WALL StrEEt WEEk AhEAD
A lump of coal for ‘Fiscal Cliff-mas’ g
Wall Street traders are going to have to pack their tablets and work computers in their holiday luggage after all NEW YORK
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traditionally quiet week could become hellish for traders as politicians in Washington are likely to fall short of an agreement to deal with $600 billion in tax hikes and spending cuts due to kick in early next year. Many economists forecast that this “fiscal cliff” will push the economy into recession. Thursday’s debacle in the U.S. House of Representatives, where Speaker John Boehner failed to secure passage of his own bill that was meant to pressure President Obama and Senate Democrats, only added to worry that the protracted budget talks will stretch into 2013. Still, the market remains resilient. Friday’s decline on Wall Street, triggered by Boehner’s fiasco, was not enough to prevent the S&P 500 from posting its best week in four. “The markets have been sort of taking this in stride,” said Sandy Lincoln, chief market strategist at BMO Asset Management U.S. in Chicago, which has about $38 billion in assets under management.
“The markets still basically believe that something will be done,” he said. If something happens next week, it will come in a short time frame. Markets will be open for a half-day on Christmas Eve, when Congress will not be in session, and will close on Tuesday for Christmas. Wall Street will resume regular stock trading on Wednesday, but volume is expected to be light throughout the rest of the week with scores of market participants away on a holiday break. For the week, the three major U.S. stock indexes posted gains, with the Dow Jones industrial average .DJI up 0.4 percent, the S&P 500 .SPX up 1.2 percent and the Nasdaq Composite Index .IXIC up 1.7 percent. Stocks also have booked solid gains for the year so far, with just five trading sessions left in 2012: The Dow has advanced 8 percent, while the S&P 500 has climbed 13.7 percent and the Nasdaq has jumped 16 percent. IT COULD GET A LITTLE CRAZY: Equity volumes are expected to fall sharply next week. Last year, daily volume on each of the last five trading days dropped on average by about 49 percent, compared with the rest of 2011 - to just over 4 billion shares a day exchanging
hands on the New York Stock Exchange, the Nasdaq and NYSE MKT in the final five sessions of the year from a 2011 daily average of 7.9 billion. If the trend repeats, low volumes could generate a spike in volatility as traders keep track of any advance in the cliff talks in Washington. “I’m guessing it’s going to be a low volume week. There’s not a whole lot other than the fiscal cliff that is going to continue to take the headlines,” said Joe Bell, senior equity analyst at Schaeffer’s Investment Research, in Cincinnati. “A lot of people already have a foot out the door, and with the possibility of some market-moving news, you get the possibility of increased volatility.” Economic data would have to be way off the mark to move markets next week. But if the recent trend of better-than-expected economic data holds, stocks will have strong fundamental support that could prevent selling from getting overextended even as the fiscal cliff negotiations grind along. Small and mid-cap stocks have outperformed their larger peers in the last couple of months, indicating a shift in investor sentiment toward the U.S. economy. The S&P MidCap 400 Index .MID
overcame a technical level by confirming its close above 1,000 for a second week. “We view the outperformance of the mid-caps and the break of that level as a strong sign for the overall market,” Schaeffer’s Bell said. “Whenever you have flight to risk, it shows investors are beginning to have more of a risk appetite.” Evidence of that shift could be a spike in shares in the defense sector, expected to take a hit as defense spending is a key component of the budget talks. The PHLX defense sector index .DFX hit a historic high on Thursday, and far outperformed the market on Friday with a dip of just 0.26 percent, while the three major U.S. stock indexes finished the day down about 1 percent. Following a half-day on Wall Street on Monday ahead of the Christmas holiday, Wednesday will bring the S&P/Case-Shiller Home Price Index. It is expected to show a ninth-straight month of gains. U.S. jobless claims on Thursday are seen roughly in line with the previous week’s level, with the forecast at 360,000 new filings for unemployment insurance, compared with the previous week’s 361,000.
Iran to finance $300m power supply project in Pakistan AZERBAIJAN ONLINE
Iran will finance a power supply project in Pakistan, valued at $300 million, ISNA quoted Iranian deputy energy minister Mohammad Behzad as saying.
A joint committee has been formed to study the feasibility of exporting 6,000MW of electricity to Pakistan, he added. The two governments have signed an MOU in this regard, he noted. The project would cost $451 million, of which $300 million will be en-
sured by Iran, he said.Meanwhile IRNA reported that Iranian Energy Minister Majid Namjou had said that Iranian experts will construct a power plant soon on Iranian border with Pakistan to export electricity to Pakistan and India He said the plan is under negotiations between the
two countries’ officials, and will be implemented upon a request made by the Pakistani President to his Iranian counterpart. He said Pakistan has also asked Iran to construct small power plants which will be built by MAPNA company once a consensus is reached.
CORPORATE CORNER
Shezan launches Sangam tea whitener
LAHORE: Shezan International Limited launched its tea whitener brand “Sangam” at a recently held ceremony in Lahore. Shezan commonly known as a renowned company for manufacturing of a wide range of food products like jams, jellies, juices, syrups, pickles, ketchups etc. has first time entered the competition in tea whitener marketing mostly across Punjab and Khayber Pakhtoonkhwa provinces. This arrival in the dairy industry will further strengthen Shezan’s sales volume besides giving its customers another option of a quality consumer product. Speaking at the launching ceremony, Mr. Waseem Mahmood - Director Marketing – Shezan International Ltd says, “Shezan believes in producing quality products for their consumers and SANGAM is the continuity of Shezan’s beliefs . Customers will enjoy unique taste of SANGAM”. PR
Freight, cargo train service in private sector to be launched next year KARACHI: The Infrastructure Project Development Facility (IPDF) of Federal Finance Ministry would launch freight and cargo train service in private sector in collaboration with Pakistan Railways
by mid of coming year. In this connection, the IPDF has finalized a plan worth 320 million US Dollars for countrywide logistical movement of oil, coal, cement, container cargo, and automobiles. The participants of the 2 nd International Shipping, Logistics, and, Supply Chain Management Conference & Exhibition-2012 were informed this by Chief Executive of IPDF Adil Anwar. The moot was jointly organized by Publicity Channel and Pakistan International Freight Forwarding Association, held the other day at a local hotel. Other speakers of the conference said that logistics and shipping sectors of the country had been facing several challenges and its growth had been hampered in last 60 years due to numerous factors including apathetic attitude of government authorities, shortage of resources, skilled manpower, and latest technological aides related to the sectors. Speakers of the moot included notables of the transportation and maritime sectors of the country. The chief of IPDF said that under the plan of freight service train, a commodity train service would be launched with a cost of 40 million US Dollars, which would enable Pakistan Railways to earn Rs 7.8 billion on annual basis while Railways’ earning would reach up to Rs 158 billion in 20 years. In this connection, the agreement would be finalized with prospective private sector organizations till next week. In his keynote address being chief guest at inaugural session of the conference, President of Federation of Chambers of Commerce & Industry Haji Fazil Kadir Sherani urged the government authorities to urgently upgrade transportation and road infrastructure of the country and freight-forwarding sector of Pakistan should given status of a national-level industry. PR
KARACHI: Siraj Kassam Teli, Chairman, Businessmen Group and former President of the Karachi Chamber of Commerce & Industry is seen presenting Chamber’s Crest to Mr. Imran Khan, Chairman, Pakistan Tehreek-e-Insaaf (PTI) at the Presentation on Economic Road Map for the Revival of Pakistan’s Economy, at Aiwan-e-Tijarat.
Wateen collaborates with Pakistan Advertisers Society LAHORE: Wateen Telecom, Pakistan’s leading converged communications provider, recently participated in the prestigious Digital Marketing Conference 2012, held in Karachi on 18th December 2012. The DigIt conference was held under the auspices of the Pakistan Advertisers’ Society as a platform to bring together Pakistan’s marketing and advertising communities on the subject of reinventing and reshaping marketing media. The conference, which is EC-Pakistan’s 2nd Digital Marketing Conference, was held under the theme of “Digital Marketing: Today, Tomorrow & Beyond” and was specially designed to keep an eye on present and future digital marketing/social media trends, tools, techniques and approaches. As the country’s leading converged communications provider, Wateen Telecom acted as one of the headline sponsors for the event. Mr Naeem Zamindar, CEO Wateen Telecom, also addressed the conference as a keynote speaker. Mr Zamindar spoke of the increasing importance and role of convergence in Pakistan’s telecommunications technologies during his address on Mobile Marketing. PR
Sunday, 23 December, 2012