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Wednesday, 31 October, 2012
cement exports blocked by Ntbs Cement dispatches to India decline by 16pc during July-Sep FY13 g APCMA wants Islamabad to pressure New Delhi on removal of non-tariff barriers g Manufacturers say trade ties with India should be on equality basis
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KARACHI
T
STAFF REPORT
HE installed and unutilised capacity of cement industry in Pakistan could be effectively exploited through exports to India that is being granted the status of Most Favored Nation (MFN) provided the non tariff barriers are abolished by the New Delhi. A spokesman of the Association of Pakistan Cement Manufacturers (APCMA) said Islamabad must pursue the case of cement industry which has been facing problems due to non-tariff barriers in India despite increasing demand. He said that cement is one of the industries having potential to help bridging the gap between the volumes of trade between the two countries in which Pakistan’s exports are far less than possible. Hence it will be a win-win situation for the both countries in future if their exports are level and local industries are encouraged to meet the demand of each other’s market through their strong sectors, they added. The spokesman urged that both governments should avail the opportunity and strengthen each other, as Pakistan is best
cement provider to India having lots of demand in the construction sector while its production units are running full capacity. It is an irony that Pakistan liberalized its trade with India last year short-listing few items in the negative list but Indian government, on the other hand, has not fulfilled its promise to withdraw all non-tariff trade barriers, causing hurdles in the free flow of trade between the two countries. According to Chairman APCMA Aizaz Mansoor Sheikh Pakistan’s cement exports to India contracted by 16 percent in the first quarter of current fiscal year to 137,742 tons as against 163,340 tons exported during the corresponding quarter of last year. Sheikh said Pakistan’s cement was preferred by Indians because of high quality and cement sector was expecting a quantum jump of at least 0.5 million tons in last fiscal on easing of NTBs by India, but it did not happen. “Exports to India in fact have been on constant decline ever since the two countries opened their borders for liberal bilateral trade,” he said. The decline is not due to lack of cement demand in India but because of very stringent non tariff barriers erected by our neighbor,” he said adding Pakistan’s cement was preferred by the Indians because of better quality.
Cement exporters having potential to export a big quantity to Indian market are facing a strict resistance by the Indian government as NTB are not removed even after having been specifically mentioned during different rounds of official and unofficial talks between the two countries. The exporters’ issues, including a complex six to seven months process to obtain a certificate from Indian authorities should be resolved on the priority basis because it was committed by the Indian government for having a status of MFN from Pakistan. They mentioned the quality certificate for cement exporters is valid for one year period merely, despite of six to seven months procedural duration. But none of the exporters is allowed to continue their exports after expiry of certificate limit that are needed to get renewal in a brief period. The complicated process of quality certificate holds on cement exports of many companies at a time hence the exports quantity shrinks gradually, they mentioned. The procedures have not been eased by the Indians and the certification cost is very high as the exporters have to bear heavy expenses for the visit and stay over of Indian inspectors. They pointed out that Pakistani and Indian railways could exchange the same number of wagons for transportation of
goods exports however the Pakistani wagon could not carry big cement orders due to restriction by Indian government as a rule of reciprocal. The railways wagons from the Indian side are limited for cement exporters which increases their cost of cement transportation heavily, cement exporters said. The cement manufacturers said Pak-
Debt quagmire gets thicker g
Government’s ‘unfunded debt’ skyrockets by over Rs 100 billion as savers sideline more money KARACHI ISMAIL DILAWAR
Muhammad Ali Jinnah, the founding father of Pakistan, once stated that: “Thrift as a national asset is going to play an important part in the building up of the state. So save and invest in Pakistan saving certificates”. If first quarter of the current fiscal year is any criteria the Qauid’s countrymen, widely believed to have forgotten many of his precious sayings, are following their founding father’s instruction well. The official data for July-September FY13 reveals that during the period under review the crises-hit Pakistanis managed to save over Rs 154 billion under the government-backed National Savings Scheme (NSS). This amount shows a phenomenal growth of 184 percent or over Rs 100 billion when compared with the corresponding quarter of FY12 when the savings under NSS had been calculated at only Rs 54.298 billion. A month-wise account of the savings reported by the State Bank reveals that during the first month of FY13, July, the NSS attracted a huge amount of Rs 27.284 billion as against Rs 19.200 billion in the same month of FY12. August and September were no exception with savers investing, respectively, R s
64.369 billion and Rs 62.738 billion in various government papers under the head of NSS. Last year during these months the NSS had mobilized only Rs 10.786 billion and Rs 24.310 billion. The analysts believe that this savings-prone trend could be of immense significance for the country’s ailing economy, had the saved amount been used by the cash-strapped government for development purposes. Last fiscal year, FY12, saw the countrymen managing to save over Rs 242 billion despite a persistent backbreaking double-digit inflation. The economists, however, warn that these savings are categorized by the government as an “unfunded debt” that has to be repaid to the savers with noticeable returns. During July-June FY12, the cash-strapped government garnered Rs 242.168 billion through selling its risk-free NSS certificates. This amount showed am increase of 3.0 percent or Rs 7.22 billion when compared with Rs 234.943 billion the government had raised in FY11. According to analysts, the funds-starved federal government would be repaying this Rs 242 billion with a profit of 20 to 40 basis points announced by the Central Directorate of National Savings (CDNS) in March this year. The current rate of return on NSS instruments, reportedly, stands at 11.87 percent on Special Saving Certificates (SSC), 12.12 percent on Regular Income Certificates (RIC), 14.28 percent on Be-
hbood Saving Certificates (BSC) and Pensioners Benefit scheme, 12.33 percent on Defense Saving Certificates (DSC) and 8.40 percent on the NSS savings accounts. The economic observers, though positive towards the current upward trend in national savings, are critical of piling up of the heavily-indebted government’s liabilities for the retirement of which the latter was doing no provisioning. “The money that come to the government through saving schemes is a liability and is called unfunded debts,” views Asfar Bin Shahid, a senior analyst. But, the analyst believes, more worrisome was the fact that the government was using these debts without creating a separate fund that could ensure retirement of the borrowed money. “Spending these unfunded debts without doing provisioning… is a dangerous thing,” A.B Shahid warns. He says setting a sort of collateral for these unfunded debts by the government would also provide the investors with a confidence against his/her money. “It’s a kind of Confidence Building Measure that we are apportioning a certain amount to retire your debt,” says the analyst. The provisioning against the unfunded loans, the analyst suggests, becomes easier when the maturity periods have been set in advance for these credits. About usage of the NSS debts, the analyst said, ideally, every penny of the taxpayers’ money should be spent “optimally” for the development purposes, especially in the socio-physical infrastructure side. “Increase in savings is a positive sign no matter where the money is being preserved or channeled into those sectors where it could generate economic activity,” Shahid opines. A recent history of the government “unfunded” borrowings through NSS instruments shows that the saving certificates had fetched the government over Rs 224.767 billion in FY10, Rs 267.223 billion in FY09, Rs 86.639 billion in FY08, Rs 67.651 billion in FY07 and Rs 6 billion in FY06. The investments in NSSs, which amounted to a meager Rs 6 billion in FY06, surged by over 1000 percent in FY07, over 28 percent in FY08 and over 208 percent in the recession-hit FY09 and then dipped by 15.8 percent in FY10. And, in FY12 a recovering global economy seems to have restored the investors’ confidence who bought saving certificates worth Rs 242 billion. On March 30, the federal government had marginally raised returns on various saving instruments under the NSS with effect from April 1 in line with recent increase in the yields of Pakistan Investment Bonds.
istan should cement trade ties with India on equality basis rather than giving easy access to Indian company in the exchange of nothing in the presence of NTBs. They demanded the government to raise the issues of NTBs before Indian government for immediate solution and allow Pakistani cement makers to explore markets in all potential provinces on priority basis.
IMF’s bInoculars
No change in global financial structure ISLAMABAD ONLINE
The International Monetary Fund(IMF)has said that change in the global financial structure is not visible yet, in part because policymakers and bankers have delayed implementation of reforms in some places. In a speech to the Canadian International Council International Monetary Fund Managing Director Christine Lagarde said the world’s financial system remains weak and policies in the major advanced economies have not been sufficient to rebuild confidence. In setting out the challenges facing policymakers and bankers, Lagarde said banks are still weak in many countries. As a result, many borrowers still face very tight borrowing conditions. This creates a feedback loop of tight credit that stifles investment and growth. At its recent Annual Meetings in Tokyo, the IMF released its latest Global Financial Stability Report, which said risks to financial stability have increased and financial markets remain volatile as the crisis in Europe continues.Lagarde urged action on the financial reform agenda given the high price the crisis has taken on economic growth. “The financial sector the source of this crisis is holding down the recovery in key parts of the global economy,” said Lagarde. “Considering the staggering economic and human costs over the past six years, we must do whatever it takes to make sure this does not happen again.” The IMF recently assessed reform progress as part of the Financial Stability Report, and found that reforms are heading in the right direction, but they have not yet delivered a safer financial system. Also, IMF staff recently conducted a study on the costs of regulatory reform and found that the likely long-term increase in borrowing costs would be about one quarter of one percentage point in the United States, and lower elsewhere. Lagarde said Canada has one of the strongest financial sectors in the world. While it faces its own challenges, there are important lessons the country can teach the rest of the world about how to build a stronger, safer financial system.
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Low food, oil prices restrict inflation at 7pc KARACH
Bears take over LSE, ISE ends flat LAHORE/ISLAMABAD
STAFF REPORT
The central bank is expected to keep easing the monetary policy stance as the analysts foresee inflation to stand slightly above than 7 percent during the month of October, official figures for which are yet to be revealed. This contraction in the price hike is mainly attributed to a decline in the prices of oil and some food items during the month in review that, the analysts at InvestCap Research estimate, would see the Consumer Prices Index (CPI) to clock in at 7.13 percent. “We expect food index to post decline of 1.01 percent MoM, due to the decline in the prices of fresh fruits by 20 percent MoM (weight 1.9 percent) coupled with falling prices of edible and vegetable oil,” said a InvestCap Research in its inflation report issued Tuesday. In addition, the report said, minor contraction witnessed in petroleum product prices on monthly basis by 1 percent, diesel and petrol both, was another major factor supporting the above forecast of the aforementioned decline in CPI during Oct-12. “The CPI has been on continuous decline since Aug-12, we foresee this trend in CPI to keep its pace and to bring down CPI to 8.75-9.0 percent for FY13, on the moving average basis, owing to high base impact coupled with weak aggregate demand,” said the report. In the next monetary policy that is expected to be held during the first week of December, the SBP is expected to continue its monetary easing stance. “We estimate further 50-100bps cut in the policy rate in the mentioned monetary policy,” the report said. Pressure on Pak rupee worth against the greenback is expected to be exerted by the heavy upcoming payments of USD2.3bn to the IMF. Furthermore, any upward movement in international oil prices will result in increase of oil import bill. Additional burden is seen to be provided by the low cotton output in the form of lower exports, combination of both is highly likely to increase the trade deficit of the country. Additionally, current account deficit is also estimated to be between 2-2.25bn USD (GDP 0.9-1.0 percent), depressing the forex reserves of the country.
APP
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EARISH trend prevailed in Lahore Stock Exchange on Tuesday as it shed 52.42 points, following the LSE-25 index opened with 3972.51 and closed at 3920.09 points. The market’s overall situation, however, corresponded to an upward trend as it remained at 2.149 million shares to close against previous turnover of 1.658 million shares, showing an upward move of 491,200 shares. While, out of the total 96 active scrips 21 moved up, 15 shed values and 60 remined equal. Attoock Refinery Limited, Pakistan Reinsurance Company and Nishat (Chunian) Limited were major gainer of the day by recording increase in their per share value by Rs 2.00, Rs 1.02 and Re 0.55 respectively. Pakistan Petroleum Limited, Engro Corporation Limited and Arif Habib Corporation Limited lost their per share value by Rs 2.85, Rs 1.51 and Rs 1.15 respectively. The volume leader of the day included Askari Bank Limited with
445,000 shares, Fauji Cement Company Limited with 263,000 shares and Engro Foods Limited with 212,000 shares. Meanwhile Islamabad Stock Exchange (ISE-10) here witnessed bearish trend as the index was down by 4.91 points to close at 3092.62 as compared to previous day’s trading. Talking to APP, Stock Analyst M.M Hassan said that the profit-taking caused the bearish trend in the local stock market. Despite this, the investors has also taken the positions in the low-priced shares whenever the index touched the low, he added. He said that the buying was seen in Banking and Cement sector resulting a rise in the turnover of the market. Total shares traded were 18,500, which was up by 16,000 shares when compared it with a day earlier’s closing. Out of 133 companies’s shares traded, the price of 64 was increased while the price of 69 decreased. The price of top gainer Siemens Pakistan Engineering was increased by Rs 32.00 while the price of top loser Murree Brewery decreased by Rs 8.62. Maple Leaf Cement, PTCL and Silk Bank remained volume leaders with volume of 10,000, 6,000 and 2,000 shares respectively.
Business 02 Major Gainers COMPANY Siemens Pakistan Indus DyeingXD Island TextileXD National FoodsXD Sapphire TextileXD
OPEN 713.00 486.75 347.28 334.05 160.00
HIGH 745.00 511.08 364.64 347.00 165.00
LOW 745.00 480.00 364.64 327.00 165.00
CLOSE 745.00 504.43 364.64 342.82 165.00
CHANGE 32.00 17.68 17.36 8.77 5.00
TURNOVER 50 1,200 500 19,300 200
4800.00 450.00 180.05 220.00 78.05
4750.00 427.50 171.05 210.00 77.85
4800.00 427.50 171.43 211.41 77.85
-200.00 -22.49 -8.62 -6.08 -4.09
80 200 5,700 112,800 3,000
6.80 17.20 6.24 10.35 52.40
6.31 16.62 5.68 9.38 51.60
6.38 16.72 5.78 9.68 51.87
-0.13 -0.85 -0.32 -0.70 0.14
9,803,500 9,616,500 6,222,500 5,470,500 4,936,000
Major Losers Nestle Pakistan Ltd. 5000.00 Shezan Inter.XDXB 449.99 Murree BreweryXDXB 180.05 National RefinXD 217.49 Clover PakistanXD 81.94
Volume Leaders Fauji Cement P.T.C.L.A K.E.S.C. Quice Food D.G.K.CementXD
6.51 17.57 6.10 10.38 51.73
Interbank Rates US Dollar UK Pound Japanese Yen Euro
95.8649 153.8632 1.2071 123.9629
Dollar East BUY US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
95.10 122.31 151.69 1.1810 94.09 12.07 25.75 25.15 97.38
SELL 95.70 124.17 153.97 1.1986 96.00 12.31 26.11 25.47 100.30
show some flexibility! g
SCCI demands flexible regime for Pak-Indo trade and relations LAHORE APP
The SAARC Chamber of Commerce and Industry,an apex body of chambers in the region,Tuesday demanded flexible regime to augment Pak-Indo relations for remarkable improvement in economic co-operation between the two major economies. It was stated today by President SCCI,Vikramjit Singh Sahney by telephone from New Delhi while talking to VP SCCI,Pak chapter and veteran trade leader Iftikhar Ali Malik.He said that free movement of business community will not only help improve the
business environment but also positively affect the entire region of South Asia. He said that Pakistan and India,with the support of their private sector,have taken historic steps to normalize bilateral trade relations.South Asia is the fastest growing region in the world but also one of the least integrated while the region’s trade with the rest of the world is growing rapidly, intra-regional trade is merely 5 per cent of its total trade. Vikramjit said that despite being natural trade and investment partners,the volume of trade between Pakistan and India, the two largest
economies of the region,has been extremely low.He said that for instance,total trade between Brazil and Argentina amount to US$33 billion in 2010,almost 15 time more than the current Pak-Indo trade of little over US$2 billion. He said that it is worth mentioning that Argentina and Brazil too have had similar turbulent past of war and fierce rivalry. He said that bilateral trade between Pak-Indo a couple of years ago stood at an estimated US$1.83 billion.India accounts for nearly 1.2 per cent of Pakistan,s global exports, while Pakistan accounts for less than 0.9 percent of India’s global exports.
Iftikhar Ali Malik said that the private sector of either country has to play a key role in the prevailingscenario for viable and sustainable better Pak-Indo trade relations for welfare of the people of the region. He said opening of proper trade within the ambit of law between the two countries will help definitely check the billions of dollar irregular and illegal trade (smuggling) through land and sea routes. He stressed the urgent need for holding a series of dialogue between Pak-Indo private sector to thrash out modalities prior to finalize trade promotion agreements without affecting the industry of either country.
CORPORATE CORNER Rohde & Schwarz to participate in IDEAS 2012 KARACHI: For nearly 80 years, Rohde & Schwarz has stood for quality, precision and innovation in all fields of wireless communications. The company will participate in the International Defense Exhibition and Seminar (IDEAS) 2012, which will take place at the Karachi Expo Center from Wednesday, 7 to Sunday, 11 November, 2012. EMBRAER Defense & Security, which has been commissioned by the Brazilian government to build a new military transport aircraft called the KC-390, will also participate in IDEAS 2012 in Karachi. The KC-390, the latest generation of transport aircraft, will be equipped with R&S M3AR airborne transceivers from Rohde & Schwarz. These transceivers are already being used in various other aircraft types such as the A400M, Eurofighter, NH90, TIGER and F16. Customers around the world depend on the R&S M3AR to provide secure and reliable radio communications in the most challenging environments.
coupled with anticipated decline in financial charges of 10%YoY to Rs1.6 billion, due to decline in the interest rates. The topline of the company was estimated to register an increase of 21 percent to reach the level of Rs49.3 billion in 1QFY13. “The rise in the topline is expected to be backed by 26%YoY increase in the fuel prices,” it said adding that the company was currently offering a dividend yield of 13% for FY13 earning estimates.
PTCL awarded 3rd Global Excellence Award ISLAMABAD: Pakistan Telecommunication Company Limited (PTCL) has been honored with the prestigious “3rd Global HR Excellence Awards 2012” for its outstanding achievements and organizational performance in HR. Held at a local hotel in Karachi, the awards are bestowed in recognition of organizations that have achieved excellence in the domain of HR. Winning this award proves to be an acknowledgement of
the pioneering efforts that the PTCL has implemented in transforming its HR policies and practices across the organization. Minister for Oversees Pakistanis Dr. Farooq Sattar was the Chief Guest at the inaugural session of the ceremony while Speaker Sindh Assembly, Nisar Ahmed Khuro presided over the session. PTCL Executive Vice President (EVP) Talent Management & Learning, Shahzad Safdar Khan received the award from Dr. Farooq Sattar, Minister for Oversees Pakistanis and Mr. Raza Harron Minister of IT and Technology Sindh. “This is yet another global recognition of PTCL’s human capital and prowess in a competitive field,” said PTCL Senior Executive Vice President (SEVP) Syed Mazhar Hussain. “My heartiest congratulations and gratitude to all PTCL employees for their hard work and commitment, which continues to bring accolades for our company.” “The 3rd Global HR Excellence Awards 2012” highlights our Company’s talent and fortifies our resolve to take PTCL to new heights,” said PTCL Executive Vice President (EVP) Talent Management & Learning, Shahzad Safdar Khan at the occasion.
HUBC’s profit for 1QFY13 to grow by 77pc KARACHI: Etihad Airways, the national airline of the United Arab Emirates, and the official airline for the 4th Pakistan Fashion Week recently held in Karachi, presented the Etihad Diamond Designer Award to Mr. Deepak Perwani, for his achievements and 20 years contribution to the fashion industry in Pakistan. The picture shows Mr. Amer Khan, Area General Manager for Pakistan, Bangladesh & Nepal presenting the award to Mr. Perwani along with the jury member of the award Ms Ronak Lakhani.
KARACHI: The post-taxation profit of the Hub Power Company (HUBC) is likely to grow by 77 percent Year-on-Year to Rs 2.2 billion during first quarter of the current fiscal year, July-SepFY13. This would translate into an Earning Per Share (EPS) of Rs1.89, , said an InvestCap Research report Tuesday. The bottomline of the company, the report added, was expected to improve due to commencement of operations of Narowal plant
Wednesday, 31 October, 2012