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BUSINESS Friday, 26 April, 2013
Pakistan faces great economic challenges, immediate steps needed for stability
Bilateral trade between Pakistan and Egypt should be increased up to $1billion in the coming years. — ICCI President Zafar Bakhtawari
Gas shortage to fertilizer sector may cost $450m to exchequer FMPAC WARNS OF UREA IMPORT IF GAS IS NOT RESTORED TO FERTILIZER PLANTS KARACHI
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WASHINGTON: International Monetary Fund (IMF) said Pakistan faces difficult economic challenges and the authorities need to begin taking necessary actions to stabilize the economy and lay groundwork for future growth. Responding to a question, IMF Mission Chief Jeffrey Franks said on Wednesday that the IMF had had fruitful discussions with the Pakistan delegation led by Finance Adviser to the prime minister Dr Shahid Amjad Chaudhry and State Bank of Pakisrab (SBP) Governor Yaseen Anwar during their recent IMF and World Bank ‘spring meetings’. Jeffrey however said IMF has not received a formal request from Pakistan for a programme to extend loan to the country. INP
PM gives policy guidelines for budget preparation
STAFF REPORT
ERTIlISER Manufacturers Pakistan Advisory Council (FMPAC) has warned that if uninterrupted gas supply to all domestic fertilizer plants; especially the SNGPlbased four plants that faced more than 300 days of gas curtailment in 2012, is not restored, the country would have to import around one million tonnes of urea in 2013 which can cost the national exchequer $ 450 million dollars in addition to a subsidy of Rs 21 billion to equalise the imported urea price to domestic prices. Massive losses in urea production due to excessive gas curtailment in the past 3 years has resulted in the government spending precious foreign exchange worth $ 1.5 billion and granting a subsidy of around Rs 80 billion on imports of 3.4 million tonnes. Pakistan is self-sufficient in urea production and with consistent gas supply to production plants, the government can ensure timely availability of this key input to farmers at economical rates and would also reduce the government’s fiscal deficits and subsidy expenditures. FMPAC Executive Director Shahab Khawaja said given the deplorable fiscal state of the economy, Pakistan cannot afford to spend hundreds of millions of dol-
lars on a commodity that it is fully selfsufficient in to the point it can even export surplus production to earn the much needed foreign exchange for the country. He said SNGPl dependant fertilizer plants, that include Pakarab, DH Fertilizers, Agritech and Engro’s massive new plant, faced around 90% gas curtailment in 2012 that significantly brought down urea production- to 4.2 million tonnes against 4.8 million tonnes produced in 2011. Pakistan currently has the capacity to produce 6.9 million tonnes of urea. He said SNGPl-based fertilizer plants were completely shut for 4 months. He said it was hoped that following winters, gas sup-
ply would be restored but currently only 2 of these plants are operating at 75% capacity with two days a week supply only. He said the fertilizer sector is not merely burning gas to run plants but offers maximum value addition by converting raw gas into precious urea grains that are vital to Pakistan’s agricultural sector. He said by not producing urea locally we are hurting the interests of poor farmers, who ensure food security to 190 million people of the country. He added that this also implies that Pakistan has to import urea which is the most expensive form of energy on an MMBTU basis, costing around $23 per MMBTU, whereas RFO and
lNG would cost 30 to 50% less than urea on an MMBTU basis. He said that for the economy of Pakistan to prosper, it is important for agricultural yields to go up which is only possible through use of fertilizers in the right quantity and at the right time. The decline in urea production poses a severe threat to the crop yield, which will result in the country missing its yield and export targets, he said further. Khwaja added that all these factors can aggravate inflation in the country which is already higher as compared to other regional countries and also poses a threat the food security of over 190 million people.
KARACHI STAFF REPORT
The Oil and Gas Development Company (OGDC) posted a profit of Rs 75.7 billion (EPS Rs17.6) in the first nine months of the fiscal year 2013 (9MFY13), which shows a growth of 9 percent from Rs 69.2 billion (EPS Rs16.1) compared to the same period last year. “The profit fell well short of market consensus,” said Nauman Khan of Topline Research. The corporate result is also accompanied by an interim cash dividend of Rs1.7 per share, while the company has already announced a cash dividend of Rs 3.75 per share, the analyst said. “The growth in earnings primarily stems from 19 percent improvement in the company’s topline to Rs 169 billion while healthy increase of 58 percent in other income to Rs 10.7 billion also supported the bottomline,” he viewed. Khan said higher oil and gas production was the major propeller of the topline, while 8 percent average rupee depreciation also affected it. However, the rise was partially diluted by 3-folds increase in exploration cost to Rs 8.9 billion in 9MFY13. In 3QFY13, the company posted an earning of Rs 6.15 per share which is up 12 percent from preceding quarter but is down 4 percent from Rs 6.43 in the same quarter last year. Compared to 3QFY12, the company’s topline rose by 10 percent but a 4 times increase in exploration cost proved to be a drag on the company’s bottomline.
ISLAMABAD: Prime Minister (PM) Mir Hazar Khan Khoso conveyed important guidelines to the Ministry of Finance relating to preparation of the budget for the next financial year. In his directives, he asked the Ministry of Finance to exercise extreme care in preparation of the next budget and ensure it does not surpass reasonable limits. The PM asked the ministry to refrain from an over-sized budget, rooting-out extravagant, lavish and wasteful expenditures. Khoso further directed that the welfare of the masses be given priority and the general public not be subjected to undue burden in the budget. The premier has asked for a judicious utilisation of public money. NNI
GOLD IMPORTS INCREASE BY 33.49% ISLAMABAD APP
Gold imports during the first nine months of the current fiscal year surged by 33.49 percent as against the same period last year. According to data revealed by Pakistan Bureau of Statistics (PBS), during the period under review, 2,942 kilogrammes (kg) of the yellow metal worth $159.172 million was imported as compared to imports of 2,236 kg valuing $119.239 million during same period of last year (2011-12). On a month-on-month basis, gold imports in March 2013 registered a decrease of 30.42 percent and 23.24 percent, com-
pared to imports in March 2012 and February 2013 respectively. Gold imports in March 2013 stood at $15.531 million against imports of $22.322 million in March 2012 and $20.251 million in February 2013 respectively. The overall imports of metal group registered an increase of 18.11 percent during July-March (2012-13) against the same period last year. Metal imports during the period under review were recorded at $2.402 billion against imports of $2.033 billion during the same period last year. On a month-on-month basis, the metal group imports in March 2013 surged by 52.26 percent and 25.35 percent, compared
to imports in March, 2012 and February, 2013 respectively. Imports of metals increased from $210.85 in March, 2012 and $256.112 in February, 2013 to $321.046 in March, 2013. Imports of iron and steel scrap registered a growth of 19.65 percent during July-March (2012-13) as compared to the imports during July-March (2011-12). Iron and steel scrap imports into the country were recorded at $494.276 million during the first nine months of the current fiscal year against imports of $413.11 million the corresponding period last year. Imports of iron and steel edged up by 13.72 percent, growing from $986.096 million to $1.121 billion while imports of alu-
minium, wrought and worked, also increased by 71.97 percent, going up from $93.299 million to $160.449 million. Imports of all other metal and articles were recorded at $466.802 million during the period under review against the imports of $422.13 million last year, posting a growth of 10.58 percent.
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Pakistan most viable economic corridor of South Asia. —Ghalib Iqbal, Pakistan’s ambassador to France
SECP to promote CSR awareness in partnership with stakeholders KARACHI
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STAFF REPORT
HE Securities and Exchange Commission of Pakistan (SECP) organised a meeting with key stakeholders to take forth the corporate social responsibility (CSR) agenda at the SECP head office in Islamabad. In his opening remarks, SECP Commissioner Tahir Mahmood stressed the need for a national agenda on corporate responsibility and social investment and said the regulator would encourage a national, multi-stakeholder effort to boost competitiveness through ethical conduct. Pakistan Institute of Corporate Governance CEO Fuad Hashmi volunteered to take the lead in partnership with Responsible Business Institute (RBI) for creating awareness regarding CSR in Pakistan. Other participants expressed agreed to the proposal. The participants were also of the view that the framework for CSR reporting and standards for assurance should be developed by ICAP. Besides Tahir Mahmood and Zafar Abdullah, Commissioners of SECP, eminent professionals present in the meeting included Institute of Business Administration (IBA) Dean & Di-
rector Dr Ishrat Hussain, Founder and Director of Responsible Business Initiative (RBI) Ambreen Waheed, Institute of Chartered Accountants of Pakistan (ICAP) President Ahmed Saeed, Pakistan Poverty Alleviation Fund CEO Qazi Azmat Isa and Pakistan Business Council CEO Kamran Y Mirza. The participants appreciated efforts of SECP to encourage companies to adopt responsible business practices. CSR Voluntary Guidelines, 2013 were also lauded as a step in the right direction. The participants stressed that the concept and understanding of CSR is still infant in Pakistan. While companies are endeavouring to incorporate meaningful social responsibility initiatives in their business practices, there is a need to create awareness about the benefits of CSR. Strategy for creating awareness will include seminars and campaign drives using media and other channels of communication. Further, it was suggested that owing to CSR being a voluntary activity in nature, consultative and corroborative approach shall be fruitful in promoting the agenda. Tahir Mahmood appreciated the dedication of the attending experts in ensuring that a key national priority was being addressed through a consultative and mutually enriching collaboration of all key stakeholders.
Cement dispatches down by 9 percent in April KARACHI: Cement dispatches declined by 9 percent on a month-on-month (MoM) basis to 2.32 million tonnes in April, 2013 as suggested by extrapolated figures of up till 22nd April henceforth referred to as April-13 dispatches. Despite the decline, dispatches registered in April-13, were still above the monthly average of 2.04million tonnes in the first nine months of the fiscal year 2013 (9MFY13). “The monthly decline in local dispatches is attributable to seasonal variation as has been witnessed in the past,” said the analysts at InvestCap Research. The exports have contributed 24% to total dispatches, posting a decline of 7% MoM, leveling at 713,000 tonnes. Total dispatches during 10MFY13 reached 27.6 million tonnes, registering a modest growth of 3% year-on-year (YoY). Whereas, in the north region, the total dispatches stepped up by 6% YoY to 16.92 million tonnes. Dispatches in the south improved by 2%, YoY, to 3.77million tonnes. STAFF REPORT
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BUSINESS B Friday, 26 April, 2013
Halal market offers $1.3tr export potential: minister
Major Gainers COMPANY Nestle Pak. XD Unilever Food XD Rafhan Maize Bata (Pak) XD Wyeth Pak Ltd XD
OPEN 6200.00 4830.00 3850.00 1890.00 1346.00
HIGH 6510.00 5000.00 4000.00 1984.50 1413.30
LOW 6200.00 4900.00 4000.00 1984.00 1353.00
CLOSE CHANGE 6510.00 310.00 5000.00 170.00 4000.00 150.00 1984.50 94.50 1413.30 67.30
TURNOVER 3,460 220 40 450 2,250
1950.00 603.00 295.90 74.50 89.01
1950.00 600.03 289.00 70.50 89.01
1950.00 602.00 290.03 70.50 89.01
-50.00 -7.00 -4.02 -3.48 -3.43
100 700 8,700 2,500 500
19.68 10.30 8.95 2.41 12.85
18.96 9.36 8.68 2.20 12.38
19.36 10.30 8.82 2.29 12.43
0.51 1.00 0.07 0.11 0.09
26,276,000 25,904,500 13,877,000 10,850,500 10,168,500
Major Losers Colgate Palmolive Siemens Pakistan Clariant PaK. Clover Pakistan Jubile Life Ins.XD
KARACHI
2000.00 609.00 294.05 73.98 92.44
Volume Leaders
PRESS RELEASE
Halal export market offers $1.3 billion potential and EPZA should submit a detailed proposal on priority basis for setting up of halal export processing zones in Pakistan. “It is ironic to note that most of the halal product demand is fulfilled by non-Muslim countries, whereas Muslim countries have a meager share in this very fast growing market,” Federal Minister Industries and Production Shahzada Ahsan Ashraf Shaikh said during a meeting with Export Processing Zone Authority Chairman Saadat S Cheema. The minister said that the demand of halal products in the western countries is mainly fulfilled by USA, Brazil, Canada, Australia, New Zealand and France. As far as the eastern countries are concerned, Thailand is the biggest supplier of halal certified products followed by Philippines, Malaysia, Indonesia, Singapore and India, he added.
Maple Leaf Cement TRG Pakistan Ltd. Fauji Cement NIB Bank Limited Jah.Sidd. Co.XD
18.85 9.30 8.75 2.18 12.34
Interbank Rates USD GBP JPY EURO
PKR 98.4556 PKR 151.8678 PKR 0.9926 PKR 128.5732
Forex UK Pound Sterling Euro Australian Dollar US Dollar Canadian Dollar China Yuan Japanese Yen Saudi Riyal UAE Dirham
BUY
SELL
152 128.85 102.35 99.8 97 15.25 1.003 26.05 27.05
153 129.35 103.15 100.1 98 15.75 1.15 26.35 27.25
Pakistan forex reserves rise slightly to $ 11.938b KARACHI: Pakistan’s overall liquid foreign exchange reserves rose slightly, to $11.938 billion in a week from $11.690 billion last week, the State Bank of Pakistan (SBP) reported on Thursday. In a statement, the central bank said reserves held by the bank stood at $6.817 billion compared with $6.640 billion a week earlier while reserves held by commercial banks stood at $5.121 billion in the week ending April 19, 2013 compared to $5.050 billion a week earlier. NNI
CORPORATE CORNER a high Capacity Battery for up to 6 hours usage and 20 hours standby. PTCL EVO Tabs also offer a wide range of built-in and downloadable applications for an enhanced customer experience. PRESS RELEASE
of Saudi Arabia and is presently working as the Chief Internal Auditor. PRESS RELEASE
Getz Pharma presents latest clinical data on Unipeg
Etihad Airways to invest $379m for stake in Jet Airways LAHORE: Bank of Punjab President Naeemuddin Khan and Food Secretary Azam Suleman sign an agreement on wheat procurement facilitation. STAFF PhOTO
PTCL introduces new EVO Tab KARACHI: Pakistan Telecommunication Company limited (PTCL) has introduced a new EVO Tab with enhanced and upgraded features for a rich user experience. PTCL EVO Tab comes with an upgraded Android 4.0 Ice cream Sandwich operating system and Dual Core 1.2 GHz processor, offering great value for money and enabling customers to get the most out of their multimedia content whilst on the go. Omer Khalid, PTCL Executive Vice President (EVP) Wireless Services, commented at the launch, “At PTCL, we believe in introducing technologically advanced products and services to meet the ever increasing demands of our customers. The new EVO Tab is another first by the company, enhancing the way we create value for our existing customer base and also serves as a platform for reaching out to new audiences.” The new device offers High Definition touch screen, HD quality video playback, 4GB internal memory and dual cameras. The front camera offers high quality video conferencing options through Skype, and rear auto focus 5.0 MP cameras is for still photography and videography. The newly launched Tab also includes 3 months of free unlimited internet. The Tab supports 3GEvDO and Wi-Fi for un-interrupted ‘On-the-Go’ connectivity, CDMA 1X for voice and SMS, and has
KARACHI: Etihad Airways of the United Arab Emirates and Jet Airways of India today announced that the UAE national carrier has agreed to subscribe for 27,263,372 new shares in Jet Airways at a price of INR754.74 per share. The value of this equity investment is US$379 million and will result in Etihad Airways holding 24 per cent of the enlarged share capital of Jet Airways. Etihad Airways’ wider overall commitment to Jet Airways includes the injection of US$220 million to create and strengthen a wide-ranging partnership between the two carriers. As part of this Etihad Airways paid US$70 million to purchase Jet Airways’ three pairs of Heathrow slots through the sale and lease back agreement announced on 27 February 2013. Jet Airways continues to operate flights to London utilising these slots. PRESS RELEASE
LAHORE: Sajjad Hotiana, chief secretary Gilgit Baltistan, and Saleem Ranjha, Joint Secretary PM Secretariat, with Prof Dr Zafarullah Khan, Pro-Rector UCP, during a visit to University of Central Punjab. PR Mr. Medhat Fareed Abbas Tawfik, who are also nominee directors of SFG. Mr. Mojabber has more than 32 years of corporate and retail banking experience and is presently Group Head, Corporate Banking, Samba Financial Group, Kingdom of Saudi Arabia. Mr. Tawfik has more than 22 years of operations, compliance and audit risk review experience with Samba Financial Group, Kingdom
LAHORE: Getz Pharma presented latest clinical data on Unipeg (Pegylated Interferon) at the International Conference on Viral Hepatitis (ICVH) 2013 held recently at New York, USA. This is the first time ever that a Pakistan manufactured biologic product’s clinical trial was accepted and presented at the prestigious ICVH and having the dual distinction of being presented earlier at EASL (European Association of Liver Diseases) conference 2012. The World famous Icahn School of Medicine at Mount Sinai in New York and the International Association of Providers of AIDS Care (IAPAC) jointly sponsored The International Conference on Viral Hepatitis 2013. It was held at the New York Academy of Medicine in New York City from April 24-26, 2013. The conference was co-chaired by Professor Douglas T. Dieterich, MD (Icahn School of Medicine at Mount Sinai, New York, USA) and Professor Mark R. Nelson, MD (Chelsea & Westminster Hospital, London, England). PRESS RELEASE
Samba Bank Ltd appoints new chairman and BoDs KARACHI: The Board of Directors of Samba Bank Limited (SBL), in its recently held meeting, announced the appointment of Dr Shujaat Nadeem as the new Chairman of the Board of SBL. Dr Shujaat Nadeem has been a nominee director of Samba Financial Group (SFG), Kingdom of Saudi Arabia, on the Board of SBL since 2007. Prior to joining SFG in 2003 as General Manager, Group Treasurer, he had served with Citigroup for 10 years and held key positions in London and New York as well. He has completed his Ph.D from Massachusetts Institute of Technology (MIT), USA. In addition, SBL Board has been further strengthened with the appointment of two newly elected directors namely, Mr. Antoine Mojabber and
LAHORE: Purile Oil Chief Executive Officer Mian Naseer Monoo addresses the launch ceremony of Purile Oil on Thursday. STAFF PhOTO