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buSineSS Saturday, 28 September, 2013
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iSMAil DilAWAR
NvESTORS on the stocks market appeared the first to feel the heat as negative fallout of current record depreciation of the rupee has started unfolding. “The hefty fluctuation in USD against PKR yesterday (Thursday) signals towards the possibility of the worst situation at the country's macro-economic level,” warned InvestCap analyst Abdul Azeem. With the central bank denying outright the reports that it had intervened by injecting $50-60 million on the open market, Friday saw the rupee trading at Rs 108 against the greenback in the open market. On interbank market the exchange rate was Rs 105.1266. For Monday, Sept 30th, the State Bank has notified the inert-bank rate at Rs 105.7353. While the analysts are foreseeing the rupee to further nosedive to the historic low of Rs 115 by the end of current fiscal year, there is no one in sight to rescue the rupee at least in near future. “In the currently uncertain situation we continue to expect PKR to remain de-
The majority of men meet with failure because of their lack of persistence in creating new plans to take the place of those which fail. — Napoleon Hill
(WORST RUPEE-DOLLAR PARITY)
SToCkS mArkeT
LOSES BILLIONS
stakeholders, specially the money exchangers. Governor SBP Yasin Anwar is also believed to have been closely monitoring the market situation. Some analysts blame the regulator of being one of the attributing factors for the historic fall of rupee. “Expectation of SBP buying for IMF repayments of $147 million on September 27 and $109 million on October 01,” is one of the causes Azeem cited for the rupee devaluation. Senior analyst AB Shahid also opines that the SBP, through mop up operations, has continuously been intervening in the money market to buy dollars. "This factor is causing a steady slide in the exchange value of the rupee," he told Pakistan Today.
pressed during FY14. Therefore, we have revised upward our forecast of PKR with the likelihood of touching Rs115/USD by the year end,” said Azeem. Zeeshan Afzal, an analyst at Topline Research, said present moment of the rupee, which deprecated by 5.2 percent in FY14 to date, had become another source of concern due to no major effort seen to control its volatility. The State Bank claims to be indifferent in terms of pumping dollars into the volatile currency market. “The statements of Governor and Deputy Governor are on record. The State Bank has not intervened in the rupee market in the face of dollar injection,” said Umar Siddique, SBP’s acting chief spokesman. The banking regulator, the spokesman added, was at work on the regulatory front by holding meetings with different
The analysts believe that factors adding fuel to the fire and leading to “exceptional fluctuation” on the open market included increasing demand for dollar due to oil payments in the absence of SBP’s intervention, increasing demand from local importers due to fear of further rupee depreciation, inflow from exporters also on the lower side as they abstain from floating their dollars in the market awaiting further depreciation of PKR to improve their profits, delay in expected foreign inflow in the country, the demand of USD from intending Haj pilgrims and increased speculation activity. Besides, the government also has to meet the IMF requirement for next tranche as it was to add further 4 347 million in the country’s foreign exchange reserves by the end of December 2013. The investors at the Karachi stock market reacted sharply to the uncertainty hovering over the ailing economy. The benchmark 100-share index fell 393.5 points to close at 22,387.31 points. The market lost Rs 63 billion on the day as the market capital contracted to Rs 5.294 trillion from Rs 5.357 trillion on Thursday. “Stocks fell across the board on economic uncertainty after rupee free fall against dollar amid fears for surge in CPI Inflation in the country,” said Ahsen
The hefty fluctuation in USD against PKR on Thursday signals towards the possibility of the worst situation at the country's macro-economic level
Nawaz exhorts US businessmen to invest in Pakistan NEW YORK APP
Prime Minister Nawaz Sharif has made a strong case for investment opportunities in Pakistan at a gathering of the prominent corporate leaders and senior executives representing various equity and investment companies based in New York. Among those present at the event, held on the sidelines of the UN General Assembly on Thursday, were senior executives from Morgan Stanley, Bank of America Merrill Lynch, Alliance Bernstein, JP Moran, Prudential, US-PBC, Storm Harbor Capital, Boeing and PepsiCo. Speaking on the occasion, the prime minister said Pakistan had one of the most liberal and attractive investment regimes in the developing world with no restrictions on the share and equity ratio held by the foreign companies. Similarly, the liberal foreign exchange regime in the country offered foreign investors the right to exchange the local currency into any other foreign currency and allowed the repatriation of profits, dividends and funds without any hindrance. Nawaz Sharif stressed that the glob-
(EXPO PAKISTAN 2013)
Second day turns out successful for local businessmen: TDAP KARACHI: On the second day of the 8thAnnual Expo Pakistan 2013, the biggest expo in the series so far, extensive meetings were held with the international buyers by Secretary Trade Development Authority of Pakistan (TDAP), Rabia Javeri. These meetings turned out to be very successful where a way forward was discussed with these foreign delegates. A total of 13 delegations were present from across North American and Asian regions. The meetings that were held Friday discussed various subjects such as strategies for the promotion of local exports, pros and cons of conducting business with Pakistan, trade policy issues and how to improve the competitiveness of Pakistani products for international markets qualification. According to Javeri, “These meetings are essential in creating long-term linkages with these international buyers. Also, these meetings help us understand on how to better position our local products in the global markets. We are delighted to see the interest shown by the North American and Australian delegations as this opens up greater business opportunities for Pakistan.” STAFF REPORT
Mehanti, senior equity analyst. The day’s trading turnover shrank to 163 million shares compared to the previous 193 million. The value of the shares traded decreased to Rs 5.633 billion from Rs 7.11 billion. He said 50bps revision in minimum bank deposit rates, major fall in global commodities and rising circular debt in energy sector were other factors to impact the sentiments despite institutional support ahead of quarter end close. “The uncertainty in the local currency is expected to depress the foreigners' interest in the local equity market as their return can be hurt by this situation,” viewed Azeem of InvestCap. However, the rupee depreciation was expected to bode well for the textile, telecom, power generation and ABDUL AZEEM exploration sectors, the INVESTCAP ANALYST analyst said. For the rupee to gain valuel, the analysts propose immediate steps to raise dollars through conducting 3G license auction expected to add USD1.2 billion, receiving from Etisalat $ 800mn, eliminate forward booking for exporters, 1st $362mn CSF installment from the US, curbing illegal flight of USD from the country, strict documentation of dollar on KERB market, materialization of loans from donor agencies, privatization of stateowned companies and fast track work on of LNG import to curb expensive oil import.
(TRANSPARENCY IN 3-G TECH LICENSES AUCTION)
SC seeks report from govt on strategy ISLAMABAD OnlinE
ally recognized important elements for economic growth such as increased urbanization, favourable demographics and growing middle class were all combined in the emerging market of Pakistan. He added that a number of multinational corporations were already making record profits in Pakistan and vast opportunities existed for the potential investors to reap the benefits of a business friendly-environment in the country.
The prime minister emphasized that in addition to the innovative and skilled manpower endowed with great entrepreneurial ability, Pakistan was gifted with its unique geography, providing proximity to the world's largest markets and economic power houses. Such unique combination of conducive and business-friendly elements makes Pakistan as the most profitable market to invest in. The prime minister assured the partic-
ipants that his government was making concerted efforts to overcome the energy shortfalls and improve the security environment so that business ventures could flourish and expand to their full potential. The participants at the event evinced keen interest to explore the opportunities for business and investment in Pakistan. They appreciated the expanding middle class and the potential demographic dividend as great incentives to invest in Pakistan.
SECP ordered to probe Al Abbass Sugar Mills affairs KARACHI STAFF REPORT
The Sindh High Court has directed the Securities and Exchange Commission of Pakistan (SECP) to conduct a thorough investigation into the affairs of Al Abbass Sugar Mills Ltd. The court also directed the SECP to “submit a preliminary report within four weeks from the date of receipt of the order.” The court ordered this “in light of the allegations of fraud and mismanagement which appears to be a major grievance of the minor shareholders through the plaintiff.” The SHC judge directed the SECP to use its powers under Section 263 of the Companies Ordinance 1984 read in conjunction with Section 29 of the Securities and Exchange Commission of Pakistan Act which provides for the” Superintendence and control of corporate entities” and “protection of investors and creditors.” The plaintiff, who is a director on the board of Al Abbass Sugar Mills Ltd alleged in his complaint to the court that
the CEO of the company Shunaid Qureshi “has fraudulently siphoned off Rs 600 million belonging to the company.” The plaintiff also submitted evidence to prove that along with the CEO of Al Abbass, a director by the name of Haji Ghani along with his wife and business Ghani Usman Securities (Pvt) Ltd had fraudulently siphoned off the funds of the company by diverting the same to their personal accounts through multiple sham/bogus transactions including through banking channels, under invoicing etc.” The plaintiff also pointed out that Haji Ghani “being a broker could not directly or indirectly interfere in the management or the affairs of the company including the attendance of the board meetings and/or operation of the bank accounts of the company”.While a
final decision on the suit is still awaited on multiple prayers such as the removal of the CEO, appointment of a receiver to manage the affairs of the company, the court did rule that Al Abbass Sugar Mills is “restrained” from investing any funds in Javedan Corporation Limited formerly Javedan Cement Limited. Javedan Corporation, the developer of residential scheme Naya Nazimabad has recently been in the news due to controversy surrounding cancer causing Asbestos pollution in the area Naya Nazimabad is being built. There are also concerns that its land allocation/leases and planning approval were done illegally during the last government tenure and hence Naya Nazimabad may be an illegal development. Inside sources claimed that Al Abbass Sugar Mills was being manipulated to invest in JCL as Shunaid Qureshi and Haji Ghani also had significant share holdings in JCL.
The Supreme Court (SC) has directed the federal government to present report before it till October 14 on the machination evolved to ensure transparency in respect of 3-G technology licenses auction. A 3member bench of SC presided over by the Chief Justice of Pakistan (CJP) Iftikhar Muhammad Chaudhry took up the case of 3-G Technology licenses auction for hearing on Friday. Deputy Attorney General (DAG) Imran-ul-Haq appeared in the court and he told that the government was activating the PTA and three members had also been appointed. Among these three members, Syed Ismail Shah has been appointed as member technical and the remaining two members are Tariq Sultan and Muhammad Raza Khan., he further told. Syed Ismail Shah had also been appointed as acting chairman PTA, he informed. The court inquired from the DAG: “What are you doing to ensure transparency in 3-G Technology licenses auction? What has been done in this connection so far?” The DAG told the court: “Auction process is underway and all the legal formalities will be met on this count.” The court adjourned the hearing of the case till October, 14.
PIA board of directors nominated KARACHI STAFF REPORT
The federal government has announced new members of the board of directors of the Pakistan International Airline (PIA). The nominated members of the board include Syed Yawar Ali, Azam Sehgal, Atif Bajwa, Ghiasud-Din Ahmed, Miftah Ismail and Naeem Bajwa. This brings the total number of board members to 10 including the two elected members, Malik Nazir Ahmed and Waqar Yousuf, and also federal secretary finance and federal secretary aviation.
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The secret of business is to know something that nobody else knows. — Aristotle Onassis
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CASh-STrAPPeD govT oFFerS 50-60b more To bAnkIng lenDerS would lead to crowding out of the private sector, KARACHI the real engine of growth. Wearisome, however, is iSMAil DilAWAR the fact that unlike its predecessors, the Nawaz The central bank by increasing the discount rate to government is relying more on the State Bank for 9.5 percent has increased the cost of borrowings its budgetary financing. Given the central bank's past statements that it for the cash-strapped government. While the previous PPP-led coalition govern- caters the government's budgetary needs through ment had borrowed about Rs 8 trillion to be mostly printing fresh currency notes, one may aptly foreused for running the government during its five- cast an upward trend in backbreaking inflationary year reign, the present PML-N government is also pressures in the months ahead. According to SBP, during the period under readding billions to the national debt through extenview the government borrowed over Rs 786 billion sive budgetary bank borrowings. Official figures suggest that during two and from the central bank compared to corresponding period of FY13 when it still had a credit limit half months of FY14 the government has borof Rs 136 billion. rowed over Rs 341.5 billion from the On the other hand, the governbanking system. The borrowed ment still maintains a credit balamount depicts a whopping 85 Official figures ance of Rs 444.6 billion with percent increase over Rs 184.5 the scheduled banks combillion the previous governsuggest that during pared to last year when the ment had raised from the PPP regime had borrowed banking system from July 1 two and half months of over Rs 321 billion. Given to Sept 14 in FY13. FY14 the government the government's SBP-cenWednesday was no exhas borrowed over Rs tric borrowing approach one ception as the State Bank of may surmise that the ecoPakistan (SBP) raised over 341.5 billion from the nomic managers may be tendRs 15 billion for the governbanking system. ing to push the risk-averse ment through auctioning the banks towards the private sector Pakistan Investment Bonds to stimulate economic growth in the (PIBs) of 3 to 20-year maturity pedebt-laden country. riod. The analysts noticed a 50bps to 60 This, however, would be at the expense of pubbasis points hike in the cost of borrowing for the lic support as depending heavily on the State funds-starved government. "PIB auction: Yields up 50-60bps," said Mo- Bank's fiscal loan would increase inflation. Incorhammad Sohail, senior equity analyst and chief ex- porating the price trends of the weekly Sensitive Price Index (SPI) data, the analysts at Shajar Reecutive of Topline Securities. The central bank Wednesday reported that search anticipate that inflation for the month of coupon rates for PIBs auction were 11.25, 11.50, Sep’13, measured by Consumer Price Index, may 12.00, and 13.00 percent for 3, 5, 10 and 20 years range between 7.6 and 7.9pc. The price hike in Aumaturity, respectively. The total interest the loan gust had clocked in at 8.5 percent. Sensing this uncertainty on economic front, the accrued amounted around to Rs 356 million, said the SBP. The analyst agrees that recent 50pc hike investors at Karachi stocks market Wednesday rein policy rate had made the budgetary borrowings acted cautiously, thus, putting the KSE 100-share dearer for the government which has little or no index in the red zone. The benchmark index slid by option to finance the still huge fiscal deficit. Also, 27.5 points to close at 23,060.90 points. "The stocks he said, returns on the national savings would in- closed bearish amid concerns for rising economic uncertainty," said Ahsen Mehanti, a director at Arif crease for the resource-constrained government. "Yes" he replied when asked if the 50-60bps Habib Corporation. He said falling global comraise in PIBs auction rates would entice the profit- modities, rising CPI inflation after record surge in conscious banks to rush for the risk-free govern- government borrowing data and concerns for ment papers. Sohail was positive when asked if this higher the SBP policy rate impacted the sentiments.
Pakistan may explore FTA with India ISLAMABAD OnlinE
Pakistan has indicated that it can explore the possibility of having a free trade agreement (FTA) with India on the lines of the one it signed with Indonesia recently, but both sides have to grab the golden opportunity of ensuring peace and friendship sentiment and not let it slip away under pressure from nonstate actors. Pakistan’s Minister of State for Commerce and Privatisation, Engineer Dastgir Khurram Khan told a group of visiting Indian journalists that the democratically-elected Nawaz Sharif government had been strongly pitching for peace with India and it was probably for the first time that general elections in Pakistan were not fought on anti-India sentiment or propaganda. “We should not let this golden opportunity slip away. Both sides should work to promote economic and trade activity and we could, after a period of consolidation, explore the possibility of having an FTA with India. We recently signed a preferential trade agreement with Indonesia and I see no reason why the same cannot be concluded with India. We should not allow third countries to tap the huge trade potential that both India and Pakistan have and move forward politically and economically for the benefit of people of both nations,” he was quoted as saying by The Indian Express Newspaper.
Major Gainers COMPANY Nestle Pak. Wyeth Pak Ltd Indus Dyeing Philip Morris Pak. Sapphire Fiber
OPEN 6000.00 4013.33 901.66 340.00 198.00
HIGH 6200.00 4200.00 923.99 357.00 207.90
LOW 6200.00 4001.00 923.99 357.00 207.90
CLOSE CHANGE 6200.00 200.00 4148.89 135.56 923.99 22.33 357.00 17.00 207.90 9.90
TURNOVER 20 480 50 4,500 1,000
5024.90 901.60 975.00 293.80 189.99
4749.96 901.60 950.00 276.10 177.87
4789.18 901.60 950.51 276.89 178.94
-210.77 -47.45 -38.09 -13.74 -8.28
420 50 1,400 635,200 103,300
12.49 6.79 54.80 27.74 3.55
11.75 6.35 51.27 26.40 3.00
11.83 6.42 51.88 26.68 3.30
-0.47 0.13 -2.08 -0.59 0.35
14,979,500 10,515,500 10,315,000 9,485,000 7,185,000
Major Losers Rafhan MaizeXD Island Textile Siemens Pakistan MCB Bank Ltd.XD ICI Pakistan
4999.95 949.05 988.60 290.63 187.22
Volume Leaders B.O.Punjab Telecard Limited National Bank. P.T.C.L.A Media Times Ltd
12.30 6.29 53.96 27.27 2.95
interbank Rates USD GBP JPY EURO
PKR 105.7353 PKR 170.0118 PKR 1.0725 PKR 142.8379
Forex UK Pound Sterling Euro US Dollar Australian Dollar Canadian Dollar Japanese Yen Saudi Riyal UAE Dirham China Yuan
BUY
SELL
173 145.75 108 101.5 104.85 1.0861 28.85 29.6 17
173.25 146 108.5 101.75 05.1 1.0964 29.1 29.85 7.25
KARACHI: The State Bank of Pakistan (SBP) on Friday instructed all the commercial banks that the minimum profit rate to be paid on all rupee saving deposits would be 50 basis points below the prevailing SBP repo rate (interest rate corridor - floor). The central bank has announced the increase in minimum rate of return on all existing and new saving deposits including term deposits of commercial banks effective from October 1. The SBP circular requires the commercial banks to pay the above minimum rate of profit on all rupee saving deposits on average monthly balances. Previously the commercial banks were required to pay minimum rate of profit of 6.0 percent p.a. on all rupee saving deposits on average monthly balances. “With today’s announcement this would increase to 6.5 percent,” the circular said. The minimum rate would be changed as and when the changes are announced by the SBP repo rate and floor rate of the interest rate corridor. STAFF REPORT
CORPORATE CORNER Zong honoured as fastest PIA’s pre-haj growing cellular network flights from Sialkot begin today KARACHI: China Mobile Pakistan popularly known as Zong has been honored with the ‘Fastest Growing Cellular Network’ Award for the year 2013 by Rawalpindi Chamber of Commerce and Industry (RCCI) at the prestigious 26th Achievement Awards Ceremony held recently. The chief guest on the occasion was the honorable President of Pakistan Mamnoon Hussain. Zong, part of the China Mobile largest Telecom operator in the world, started its operations only a few years back in 2008, has taken a giant leap in the competitive market of telecom services by introducing customer centric services for different segments of mobile phone users. Having earned the image of #1 in customer services, Zong continues to expand its network at exponential rate and is now offering the 2nd widest coverage in the country. The ‘Fastest Growing Cellular Network’ Award is yet another milestone for Zong in addition to the ‘Most Progressive Telecom Company’ Award that it received last year by RCCI. PRESS RElEASE
KARACHI: President Mamnoon Hussain honoured Zong as the ‘Fastest Growing Cellular Network’ at the RCCI Awards 2013. PR
KARACHI: PIA’s Pre-Haj first flight PK 2337 from Sialkot will leave on Saturday (today) from Sialkot international airport. PIA has so far operated 90 Pre-Haj flights and carried around 36,300 intending Haj pilgrims to Saudi Arabia with on time flight departures and arrivals, a PIA spokesman said on Friday. Pakistan International Airlines on the 19th day of its Pre-Haj operation, operated six Haj flights carrying around 2,300 intending pilgrims to the Holy Land. On Friday, PIA flight from Islamabad PK 2135 carried 501 intending pilgrims, from Peshawar PK 2635 carried 329 intending pilgrims, from Peshawar PK 2037 carried 328 pilgrims, from Multan PK 2335 carried 497, from Quetta PK 2237 carried 324 and another from Quetta PK 2737 carried 328 intending pilgrims to the holy land. PRESS RElEASE
Western Union responds to earthquake in Pakistan DUBAI: The Western Union CompanyNYSE: WU), a leader in global financial services, and The Western Union Foundation today announced support for disaster relief efforts that will help the families and communities affected by the devastating earthquake in Pakistan. The Western Union Foundation is making a grant of US$50,000 to Save the Childrento support the organization’s immediate response activities, which include providing emergency materials, meals and water to disaster victims. In addition to funds being raised, The Western Union
Company will activate a no-fee* money transfer transaction programfrom participating Agent locations in Bahrain, Kuwait, Oman, Qatar, Saudi Arabiaand the United Arab Emirates to Pakistan, through October 13. To encourage and support employee philanthropy, through October 11, 2013, The Western Union Company will match two-for-one employee donations to the Western Union Foundation for disaster relief efforts in Pakistan. Each employee can donate up to US$25,000 per calendar year. PRESS RElEASE
Dhl express employees mark global volunteer Day with mangrove plantation KARACHI: DHL Express Pakistan, part of Deutsche Post DHL, the world’s leading postal and logistics group, partnered with WWF Pakistan to mark its Global Volunteer Day 2013 with employees taking part in Nature Conservation through Mangrove Plantation at the WWF Wetland Center at Sanspit. This initiative was made as part of its global drive to give back to local communities and to inculcate a passion for volunteerism among employees. Sarfaraz Siddiqui, Managing Director, DHL Express Pakistan said, “Global Volunteer Day is a global community-based initiative that demonstrates our firm commitment towards helping local communities and inspires the spirit of volunteerism in our employees. This year, we conducted a mangrove plantation drive in partnership with WWF Pakistan under the Go Green umbrella. Mangroves are an important part of the ecological landscape and help in preventing land erosion. Hence, we decided to join hands with
WWF Pakistan in conserving this precious resource and contribute positively towards the environment we work in.” PRESS RElEASE
YogenFrüz opens its door to bahria Town, lahore! LAHORE: The world’s no.1 frozen yogurt inaugurated its fifth outlet inBahria Town, Lahore marking its launch with a froyo filled yummylicious event. “YogenFrüzprovides delicious and nutritious frozen desserts, just what you need to live a healthy and active lifestyle”, said Farrukh Saigal who is the owner of Franchise for YogenFrüz, Bahria Town, Lahore. The launch of YogenFrüzlaunch was attended by Bahria Town residents & fashion savvy people and many other socialites. Guests were served with different soft serve flavors YogenFrüz, combination of smoothies with 50 toppings. The event and PR was managed by Impulse Events. PRESS RElEASE
KARACHI: Agha Zafar Abbas, CEO Kansai Paint, welcomes members of the Institute of Architects Pakistan at a musical evening with Tina Sani. The event was organised by Kansai Paint and IAP, Karachi Chapter. PR