PRO 25-01-2013_Layout 1 1/24/2013 11:52 PM Page 1
Friday, 25 January, 2013
Alarming 7% monetary growth in first half of FY13 KARACHI
T
ISMAIL DILAWAR
HE backbreaking inflation in the country might have eased to a single digit figure in terms of Consumer Price Index (CPI), but the current alarming growth in monetary expansion is posing a visible threat to macroeconomic stability in the fragile economy. According to central bank data, broad money, which is indicative of the supply of money in the economy and is also called M2, grew by seven percent or Rs 535.232 billion during the period ranging from July 1 and January 11 of the current fiscal year. This shows a growth of 2.72 percent or Rs 248.38 billion when compared with 4.28 percent, or in monetary terms, Rs 286.851 billion of the corresponding pe-
Cement; a commodity dearer for locals
riod of the previous year. Whereas the period under review saw the cash-strapped federal and provincial governments’ inflationary borrowings from the central bank contracting to a positive zone, the currency in circulation ballooned by an alarming 57 percent or by Rs 101 billion to a massive Rs 278 billion. The months in review last year had seen currency worth Rs 177 billion circulating in the local money market. This increased supply of money may cause the currently-subdued inflationary pressure to bounce back. Though most economic observers do not buy it, government claims to have reduced its reliance on the State Bank to cater to its ever-burgeoning budgetary needs. The SBP figures for the review period show that the funds-starved government still maintains a credit balance of Rs 165 billion with the central bank. Discarding any conspiracy
Rs 794 billion as against Rs 603 billion in FY12. The Rs 794 billion raised this year shows an upsurge of over Rs 191 billion over the same period last year. Wednesday also saw the government auctioning the Market Treasury Bills (MTBs) to the tune of Rs 313 billion to primary dealers, most of them being scheduled banks. The risk-averse banks offered Rs 470 billion to the government which, however, accepted bids of the above worth. This excessive investment in the riskfree government securities has reflected positively on the banks’ Net Domestic Assets (NDAs) that, according to SBP, swelled beyond Rs 535 billion compared to last year’s Rs 459 billion. To the contrary, the Net Foreign Assets (NFAs) of the banks depleted to negative Rs 323 million against negative Rs 173 billion in FY12. The official data reveal that the govern-
SBP says 25 guarantees worth over Rs7b issued under MCGF KARACHI STAFF REPORT
ISLAMABAD: National Assembly was informed on Thursday that cement export is exempted from excise duty and GST but both taxes are applicable to cement being sold in the local market. Parliamentary Secretary Industries Pir Haider Ali Shah told the House that if the Parliament desired to provide relief to cement consumers, it can decide to withdraw excise duty and GST for cement used within the country. “This will definitely bring down cement prices,” he said. He said different factors like increase in power and gas tariff, inflation and dollar exchange rate resulted in increase of cement prices. The government also receives 16% GST on cement and Rs 400 excise duty per tone, he said, adding that the government had convened a meeting of cement producers for January 31 which the members can also participate in. Members Abdul Majeed Khan, Shakir Bashir Awan, Nighat Parveen Mir, Nisar Tanveer and Shireen Arshad Khan had drawn the attention of the Minister for Industries towards increase in cement prices by Rs 50 per bag. The members questioned as to what steps the government will take to stop smuggling of cement to Afghanistan, announce subsidy on the commodity and check its hoarding and black marketing especially in small cities and towns where it is being sold at a much higher price. APP
theories, this is a very encouraging scenario compared to last year when the same period had seen the resource-constrained government borrow over Rs 173.6 billion. But analysts smell something bad in these numbers saying the democraticallyelected government, which is going for balloting in a few weeks’ time, was indirectly borrowing from the State Bank. The critics suspect the government tends to neutralize inflationary impact of its huge bank borrowings by raising money from the scheduled banks who in return receive the credited billions from the central bank in the face of weekly injections of billions of rupees liquid cash in the system. The SBP data on the scheduled banks’ budgetary lending to the government put enough weight behind this perception. During July-Jan, the government borrowed over
The central bank on Thursday said so far 25 guarantees of over Rs 7 billion had been issued under the Microfinance Credit Guarantee Facility (MCGF) which was launched in 2008 to match the massive scarcity of funding to the majority of the local microfinance market. The said guarantees had been issued for five leading microfinance (MF) providers enabling micro-credit access to around 350,000 new borrowers. “The facility, due to its risk sharing structure has achieved a leverage of 3 times, mobilising an additional Rs 5 billion from private capital markets, establishing that microfinance may not be that as risky as a business proposition, and most of all, the facility has engaged 16 commercial banks and recently retail investors in funding the microfinance providers,” said Governor State Bank of Pakistan (SBP)Yaseen Anwar while addressing the closure ceremony of Term Finance (Sarmaya) Certificate (TFC) of Tameer Microfinance Bank. Declaring that the central bank was pursuing a multi-pronged approach to tackle the challenge of high financial exclusion in the country, Anwar said the MCGF of UK £ 15 million had been instrumental in relaxing funding constraints of the microfinance sector in Pakistan. He said MCGF had helped build links between micro borrowers and banks/DFIs. The familiarisation of the banks/DFIs with the client will eventually lead to mainstreaming and graduation of the micro borrower, he said. The SBP Governor said the facility has introduced microfinance business to banks/DFIs as banks have to evaluate the microfinance providers which must have
helped them develop their own sense of the risks involved in microfinance. As a result, banks are now more willing to invest in micro banking. Anwar said the dacility had also helped microfinance providers to offer small ticket sizes for retail investors. This had offered small retail investors an alternate channel for investing their savings and earning relatively higher returns, encouraging the concept of micro-savings. Anwar said the SBP had launched the facility with the help of UK’s DFID in
2008. “Prior to the launching of this facility, and apart from one-off funding deals between the few MF providers and commercial banks, the commercial funding market was nonexistent for microfinance providers and the microfinance industry was severely handicapped and highly donor dependent for its funding needs,” he added. The SBP Governor said the scope of the facility had recently been enhanced to allow microfinance providers to mobilise non-bank financing from capital markets, further diversifying sources of financing for micro borrowers, adding that
it is heartening to see that a number of microfinance providers, including Tameer Microfinance Bank, while benefiting from the MCGF, have helped the facility attain its objective. “In particular, SBP is aiming to develop an efficient and sustainable market-based financial structure meeting the financial needs of the marginalised population of the country including women and young people,” he said. He said that the issuance of this TFC will go a long way in diversifying funding for the microfinance sector. “I strongly encourage all financial market players to develop a long term vision for making the financial sector in Pakistan more inclusive,” Anwar said. Anwar observed that the estimated microfinance market of 25-30 million clients may not necessarily just need credit services. “It is of utmost importance that the industry should aim to provide holistic and appropriate financial services, including deposit, credit, insurance and remittance services,” he said, adding that the SBP is well aware of the fact that the industry is faced with a number of challenges in the way of achieving this objective. “SBP is actively engaged with all stakeholders to address the sector specific challenges in a sustainable manner,” he said. He noted that the financial sector in Pakistan remained restricted in its outreach both in terms of its depth and breadth. According to the Access to Finance Study of 2008, hardly 12% of the population has access to formal banking services and another 32% is informally served whereas 56% of the adult population is totally excluded, he said adding that similarly in Pakistan, the estimated size of the microfinance market is in the range of 25-30 million clients which indicates that the current level of microfinance access at 2.4 million clients is only 10% of the potential market.
ment, through the central bank, would be borrowing over a trillion rupees from banks during the ongoing third fiscal quarter, Janmarch FY13. Secured in whatever form, the government’s budgetary borrowings have a heavy bearing on the country’s ailing economy that reflects in one way or the other. Even the country’s stocks market, which is booming these days on the back of earnings announcement season, saw some investors concerned over the adverse affects of government borrowings. “Rising local cement prices, higher textile sector exports, easing political uncertainty and renewed foreign interest played a catalyst’s role in the positive close in stocks at KSE ahead of major earning announcements due this week amid concerns for higher government borrowings,” said Ashen Mehanti, a senior equity analyst from Arif Habib Securities.
FDI surges by 6 % during July-December 2013 ISLAMABAD: Pakistan during JulyDecember 2012 has attracted a Foreign Direct Investment (FDI) of US $ 562.8 million as against US $ 531.1 million received during the corresponding period last year. “The 6 percent increase in the FDI inflows during the first six months is a manifestation of investor confidence on the prudent economic and investment friendly policies of the present democratic government and would further improve in the days to come,” said Minister of State for Finance and Economic Affairs Saleem H Mandviwalla who is also the Board of Investment (BoI) Chairman, on Thursday. “An improvement in the foreign direct inflows is mainly driven by the investment in the oil and gas exploration and financial sectors by global companies in the country,” he said. APP
AHIL winds up AH Dow Jones SAFE Pakistan KARACHI: The board of directors of Arif Habib Investments Ltd (AHIL) has decided to wind up its investment scheme AH Dow Jones SAFE Pakistan Titans 15 Index from January 24 due to decline in net assets below the statutory requirement of Rs 100 million. According to information sent to Karachi Stock Exchange on Thursday, the management company has a view that the continuity of the scheme is no more commercially “viable”. The trustee has already given its consent on winding up of the scheme. The company said that unit holders, whose names appear in the register of unit holders of the scheme at the close of January 23, will be paid in proportion to their respective interest in the assets of the scheme. The scheme will cease to carry on its activities from January 24, except to the extent necessary for it to be wound up. APP
HBL, CUP launch UnionPay debit cards in Pakistan LCCI to establish Green Productivity Cell KARACHI
LAHORE
STAFF REPORT
STAFF REPORT
Habib Bank Limited (HBL) and China Union Pay (CUP) launched on Thursday the UnionPay debit cards among 140 countries of the world including Pakistan where some 3.4 billion bank customers are using the cards. The HBL, Pakistan’s largest bank, has initiated acquiring of international UnionPay Cards for usage on its ATM network. This was jointly announced by China UnionPay Chairman Su Ning and HBL President and CEO Nauman K Dar at a ceremony held at HBL Plaza. Also present on the occasion were senior executives of both organisations. Speaking on the occasion, Dar said, “As Pakistan’s largest bank HBL continually strives towards providing innovative financial solutions. This alliance ties in with our mission to create strong value for our
The Lahore Chamber of Commerce and Industry will establish Green Productivity Cell that would work in collaboration with EU Switch Asia Programme and SMEDA to increase production efficiency and reduce wastage in targeted sectors including Textile, Food Processing and Pharmaceutical Industry. The decision was made at a meeting between the LCCI President Farooq Iftikhar and Martin Straehle, International Project Coordinator of bfz gGmbH. LCCI Vice President Mian Abuzar Shad and representatives of SMEDA were also present on the occasion. The proposed Green Productivity Cell that would be established at the LCCI premises would also work out a methodology to create awareness among the select SME sectors about international quality and environmental standards. The establishment of Green Productivity Cell
customers.” HBL boasts Pakistan’s largest branch and ATM networks. The bank is on a strong growth trajectory. Last year HBL crossed the milestone figure of PKR 1 trillion in domestic deposits becoming Pakistan’s first bank to record this achievement.
would be a giant leap by all means as it would not only be strengthening the local manufacturing sector but would also be giving a quantum jump to Pakistani exports and the ultimate beneficiary would be the businessmen in this part of the world, said LCCI president.
PRO 25-01-2013_Layout 1 1/24/2013 11:52 PM Page 2
Business 02
Friday, 25 January, 2013
FWBL to clinch Brand Award for second consecutive year KARACHI: First Women Bank Limited (FWBL) will clinch Brand of the Year Award (2011-2012) for the second consecutive year at an impressive ceremony, also to be graced by Federal Finance Minister Dr Abdul Hafiz Shaikh on Monday. FWBL has been acknowledged for its quality training programs focused on professional empowerment of women bankers through in-house quality training as well as those arranged in collaboration with other organisations. “Our efforts had always been equally focused to enhance professional capacities of women bankers,” said a senior FWBL official. She said the previously clinched Brand Award of the Year was in acknowledgment to FWBL’s contribution towards promotion of women banking in the country. APP
‘Pakistani products must focus on branding in int’l market’
COMPANY
OPEN
HIGH
Unilever Food
3800.00
Bata (Pak)
CLOSE
CHANGE
TURNOVER
3990.00 3850.00
3905.00
105.00
60
1313.95
1355.00 1260.10
1355.00
41.05
250
Colgate Palmolive 1424.00
1450.00 1450.00
1450.00
26.00
50
Nestle Pakistan Ltd. 4776.25
4850.00 4800.00
4800.00
23.75
540
Indus Dyeing
696.00
640.85
696.00
21.43
600
9950.00 316.00 140.00 98.00 275.00
9900.00 316.00 130.00 92.00 269.01
9914.83 316.00 130.08 92.02 270.67
-35.16 -9.00 -4.92 -4.03 -3.68
260 100 15,700 3,000 8,900
7.92 17.86 14.66 16.86 26.60
7.46 17.00 13.90 16.30 25.45
7.80 17.86 14.37 16.53 25.88
0.32 1.00 0.45 0.19 0.08
60,334,000 22,630,000 20,021,000 13,867,000 13,392,500
674.57
LOW
Major Losers UniLever Pak Sanofi-Aventis Pak Murree Brewery J.D.W.Sugar XD Clariant Pak
9949.99 325.00 135.00 96.05 274.35
Volume Leaders
FPCCI urges industrialisation in Sindh KARACHI: Infrastructure in Small and Medium Industries Estate and SITE area must be improved, industries be set up and the President of Pakistan should issue orders for industrialisation in interior Sindh said Federation of Pakistan Chambers of Commerce and Industry (FPCCI) Acting President Iqbal Dawood Pakwalla. Pakwalla asked the government to provide good infrastructure for the development of industries in Sindh to address the issue of growing unemployment. Owing to the poor law and order situation, factories are shutting down because of which our youth is getting involved in criminal activities, which is a dangerous trend, he said. Pakwalla said that the infrastructure in Small and Medium Industries Estate and SITE area in Sukkur, Larkana and Nawabshah should be improved. He said in the Sukkur SITE area, 100 acres of land had been allocated as Export Processing Zone which should be fast-tracked. NNI
Major Gainers
LAHORE
A
STAFF REPORT
seminar on Brand Power was arranged by the LCCI Standing Committee on Education on Thursday. LCCI Senior Vice President Irfan Iqbal Sheikh was the chief guest while Vice President Mian Abuzar Shad, Convener Standing Committee on Education Abrar Ahmad, Deputy Registrar of Copyrights Imtiaz Ali, co-Convener of the LCCI Standing Committee on Education Umer Saleem, Muneeb Dilshad, Beenish Pervaiz, Fauad Bajwa and Rana Sajjad also spoke on the occasion. The main objective of the seminar was to educate the participants about the importance of creating a unique brand identity for Pakistani products. The speakers shed light on various aspects of brand development. They were of the view that a little attention toward this area could do miracles as Pakistani merchandise was top of the
notch in terms of quality. There was a consensus that a brand is essentially a promise of value to customers. Building a strong brand leads to awareness and recognition in the product or service provided, which in turn generates increased sales. They said branding is especially important in export business as it is the one consistent message every potential customer looks at and product branding can make all the difference between failure and success. Therefore, Pakistani entrepreneurs should concentrate on branding as it not only transforms an ordinary product into a special one but also removes all ambiguities from the minds of buyers. A huge amount of foreign exchange could be earned by focusing on branding of Pakistani products, the speakers said. LCCI Senior Vice President said Pakistan had all resources in abundance and quality-wise it could match other countries of the world but it failed to get its due share in the world because of poor branding.
Fauji Cement Maple Leaf Cement Byco Petroleum Jah.Sidd. Co. Fatima Fertilizer Co
7.48 16.86 13.92 16.34 25.80
Interbank Rates USD GBP JPY EURO
PKR 97.6408 PKR 154.6922 PKR 1.0897 PKR 130.1844
Forex Rates BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal
98.20 129.67 153.31 1.0777 96.68 12.42 26.55 26.05
SELL 98.90 132.12 156.16 1.0970 99.12 12.72 27.00 26.44
CORPORATE CORNER
ISLAMABAD: Dean of Diplomatic Corps, Rodolfo J. Martin Saravia with Chaudhry Faisal Mushtaq and staff during Truck Art Virtual Cultural Carnival organised by Roots Millennium Schools, Wahid Campus, F-10/2, Islamabad. PR
Warid offers ‘Postpaid to Prepaid Balance Transfer’ service LAHORE: Warid Telecom brings another fascinating service for its customers; Postpaid To Prepaid Balance Transfer. This service will allow Warid Telecom’s postpaid customers to share balance with Warid prepaid and Glow customers. Warid Telecom has been leading the way of innovation in Pakistan’s telecom industry and Postpaid To Prepaid Balance Transfer service is yet another industry first by Warid Telecom. Through this service Warid Telecom’s postpaid customers can transfer amounts up to Rs.50, in denominations of Rs.10, with Warid’s prepaid and Glow customers by sending “B<space>Recipient Number<space>Transfer Amount” to 2424. This service reflects Warid Telecom’s commitment towards providing best quality services to its customers by introducing unique and innovative services in the industry. PR
JS Bank hosts ICFJ delegation
KARACHI: A delegation of US-based journalists from International Centre for Journalists (ICFJ) were hosted by Mr. Kalim ur Rahman - CEO, JS Bank at a local hotel. Their visit to Pakistan has been organized as part of the US - Pakistan Professional Partnership
in Journalism Forum to enhance the exchange of views between the two nations and to help formulate a softer opinion of each other in the media of their respective countries. Welcoming the delegation, Mr. Imran Shaikh, Head of Marketing, JS Bank spoke on the occasion to appreciate the efforts of the delegation to strengthen the existing ties between the countries. Kalim ur Rahman - CEO, JS Bank stated that this is a important milestone in the history between United States of America and Pakistan to pave the way to a better understanding of each other’s culture and complexities involved to improve the existing relationship. Pakistan has immense potential and there is a need to ensure that all the positive news should also be highlighted in the right circles around the world. Participants on both sides will have opportunities to report on their experiences in each country, which will help to educate their audiences and dispel myths and misperceptions that people carry in each country about residents of the other. PR
Engro Foods continues stellar growth, announces Rs 2,595m profit KARACHI: The Board of Directors of Engro Foods Limited has announced an extraordinarily brilliant performance and a profit after tax of Rs.2,595 million for the year ended December 31, 2012 as compared to Rs 891 million in 2011. Engro Foods’ revenue for 2012 recorded another year with continuous stellar growth of 35% and stood at Rs. 40.17 billion as compared to Rs. 29.86 billion in the 2011. The Company also announced an EPS of Rs. 3.43 & Rs. 3.40 (basic & diluted respectively) for the year 2012, growth of 181% vs 2011. Focused investment and growth, diversification of the existing product portfolio and effective product mix management along with a strong emphasis on operational excellence through the various business segments remained the key elements in the achievements of our results in 2012. The Company continued its aggressive business strategy of growth and diversification and achieved volume growth of 25% in 2012. Growth in the ambient UHT milk segment was driven by tea creamers where Tarang maintained its leadership While Dairy Omung also contributed to the growth. PR
Qatar prepares for opening of Hamad Int’l Airport in Doha on Apr 1 DOHAR: The State of Qatar is ready to welcome a new chapter in the country’s remarkable aviation industry with preparations well underway for the April
1 first phase opening of the new Hamad International Airport to be operated by national carrier Qatar Airways. Details of the soft launch opening were unveiled to an audience of more than 100 airport officials and airline executives in Doha today at an event jointly organised by Qatar Airways, the Hamad International Airport’s Operational Readiness and Airport Transition (ORAT) team and Qatar’s Civil Aviation Authority (QCAA). QCAA Chairman H. E. Abdul Aziz Al Noiami, spelled out the plans for the airport’s readiness, in which Qatar Airways will play a pivotal role. The first phase of the US$15.5 billion project involves 12 international passenger airlines becoming the launch carriers of the new facility from April 1. These include low-cost airlines. Qatar Airways will move its entire operations to Hamad International Airport in the second half of the year. Until recently, the airport was known under the project working name New Doha International Airport (NDIA). Qatar Airways will work closely with the first movers to ensure a smooth transition of flights from the current Doha International Airport. With the phased approach, Doha will have a dual airport operation until full operations begin at Hamad International in the second half of 2013. PR
Emirates holds annual awards ceremony
Pantene partners with hair stylist Nina Lotia KARACHI: Pantene, one of the leading beauty shampoo brands in the world, recently announced its partnership with renowned hair stylist Nina Lotia. The announcement was made at an exclusive affair held at a local restaurant, amidst some of Pakistan’s most renowned media personalities. Nina Lotia, who has been a prominent name in the hair industry for over 25 years has joined hands with Pantene Pakistan to promote the new Pantene Shampoo and hair care lineup that has recently been launched in Pakistan. For the first time in many years Pantene has expanded its portfolio in Pakistan by launching special hair therapy treatments including ‘Oil Replacement Hammam’ and ‘Oil Replacement Night. Sharing her views at the occasion, Nina Lotia, Pantene Brand Ambassador said, “As a hair stylist, I have immense knowledge regarding products good for ones hair, and those that are damaging to ones hair. After trying the new Pantene products, I have become a true Pantene believer! It’s unfortunate that there is a lack of education about hair care, which is one of the main reasons I chose to become a part of the Pantene team. This campaign is very special to me because it is providing me with a platform through which I can reach out to women across Pakistan and educate them on how to use Pantene products in a manner that will help them find the best solution for their hair care problems.” PR
UMT achieves SAQS accreditation KARACHI: Emirates SkyCargo, the Cargo Division of Emirates Airline, one of the world’s fastest growing airlines, recently held its annual award ceremony to honour and recognise the most productive cargo agents in Pakistan at a gala event in Karachi. The airline presented awards to the country’s top ten cargo agents in recognition of their performance during 2011-12, in the Cargo Agents Awards Ceremony 2012. The agents were awarded for their outstanding performance throughout the year and contribution to Emirates’ business. In December 2012, Emirates SkyCargo took delivery of its seventh Boeing 777F, increasing its dedicated freighter fleet to 10 aircraft. Scheduled freighters now operate to 39 freighter destinations. PR
LAHORE: It’s a great achievement for University of Management and Technology to become 3rd University in Pakistan with this unique distinction to get SAQS Accreditation (South Asian Quality Assurance System) by AMDISA (Association for Management Development in South Asia).This accreditation is for five years effective from January 2013. SAQS has emerged as a system which provides a quality assurance and accreditation framework based on regional and international experiences and perspectives. It uses a set of criteria developed from business and management schools of high national and international standing. Its policy is determined by a broad based SAQS Council. The process is managed by the SAQS Committee. The major inputs for the quality assurance and accreditation process are generated by the management school found eligible for SAQS, through its Self-Assessment Report. PR