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Friday, 22 June, 2012
Euro slips, dollar rises in Asian trade Page 2
WB dives into our reservoirs g
Wapda chairman says that World Bank in absolutely ecstatic with the prospect of providing funds for the 4320MW Dasu project. This was followed by a claim that global financial institutions are in fact queuing up to fund Wapda projects. Err… okay sir if you say so… LAHORE AGENCIES
Following the signing of an agreement with the Government of Pakistan for providing $840 million for 1410 MW-Tarbela 4th Extension Project, the World Bank has also agreed to provide financial assistance for the 4320 MW-Dasu Hydropower Project. It has also been agreed that the project will be constructed in phases after the 4500 MWDiamer Basha Dam Project is initiated and financial plan has been finalised. This was stated by the Pakistan Water and Power Development Authority (WAPDA) Chairman Shakil Durrani while presiding over a meeting here at WAPDA House to discuss the report submitted by the International Panel of Experts. WAPDA Member (Water), Secretary WAPDA and General Managers concerned attended the meeting. Addressing the meeting, the chairman said that the International Financial Institutions were taking keen interest in providing funds for WAPDA projects due to excellent Economic Internal Rate of Returns (EIRR) of these schemes. Dasu Hydropower Project is a part of least-cost energy generation plan, being executed by WAPDA to harness indigenous hydropower resource of the country with a view to improve the ratio of hydel electricity in the national grid. The project is proposed to be constructed on the River Indus, seven kilometer upstream of Dasu village and 74 kilometers downstream of Diamer-Basha Dam Project. Site of the project is situated at Karakoram Highway, about 350 kilometers away from Islamabad.
Shares struggle, commodities down as Fed disappoints SINGAPORE AGENCIES
Asian stocks outside Japan slipped and commodities fell broadly on Thursday after the Federal Reserve ramped up monetary stimulus by expanding "Operation Twist" but disappointed some investors who had been hoping for more aggressive measures. The U.S. central bank, as expected, extended its programme of selling short-term securities and buying longer-dated ones, a move aimed at driving down borrowing costs, but did not signal a third round of quantitative easing. MSCI's broadest index of Asia Pacific shares outside Japan fell 0.8 percent, Brent crude oil slid to an 18-month low and the Australian dollar, sensitive to commodities demand, also lost ground. Sentiment was not improved by closely watched data from China, where HSBC's flash purchasing managers index showed the factory sector contracted for an eighth straight month in June, with export orders and prices at their weakest since early 2009. Japan's Nikkei share average bucked the trend, rising 1 percent after the Fed's decision to restrict itself to extending Operation Twist to the end of the year weakened the yen against the dollar, which should help Japanese exporters.
Ailing economy needs a trip to Kashmir Ex-FPCCI chief wants diversification of manufacturing, agri products in Azad Kashmir, which should ensure that our economy sky rockets to new heights – granted, of course, that we sort out the taxation conundrum g
KARACHI STAFF REPORT
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HE former president of Federation of Pakistan Chamber of Commerce and Industry (FPCCI) Chaudhry Saeed Thursday said there was a pressing need for the diversification of the existing manufacturing sector and of agriculture products in Azad Kashmir, which he believed would boost the ailing economy. Saeed also stressed upon the need for supporting the long-neglected tourism sector in the valley. The former head stated this during a visit to Karachi Press Club. While talking to journalists, he said that most of the manufacturing units in Azad Kashmir had almost shut down because of a higher cost of doing business owing in large part to expensive electricity and multiple taxes. The worst hit, in his opinion, were the textile, ghee producing and other such manufacturing units. Saeed further iterated that tax authorities needed to review the current taxation framework with regards to businesses in Kashmir to forestall the closure of industries. The move, he hoped, would help create an investment-friendly environment in Azad Kashmir. Reiterating his demand for rationalisation of the taxation system, Saeed said that the per capita income was still high in Kashmir as there had been no tax evasion by the businessmen. He pointed out that power tariffs for Kashmir were also higher by nearly to Rs 8 per unit, which also needed a revisit and should be receded. He said Kashmir's agriculture sector had the potential to produce the world's class tea, only if the government were to embark upon an investment-friendly policy to attract foreign investors for farming. He said Kashmir could also grow international standard flow-
ers but lamented that Pakistan did not have a significant share in the global trade of horticulture products, particularly flowers – a value that currently stands at $ 1.5 billion. Saeed was concerned that Kashmir received Rs 9 billion during last year under the federal divisible pool against its due share of two percent. He said Rs 30 billion, as per mutual accord, should be given to Kashmir. He said the Kashmir's contribution in the country's dollar reserves stood at $ 2.6 billion of the total $ 13 billion through worker remittances. In reply to a journalist’s question he asserted that Kashmir could not attract foreign tourists to the beautiful valley because of the government’s policy which disallows the international visitors. However, local tourists should be encouraged to visit
Kashmir which would help boost economy of the people. He cited the Indian example where around million of local Indian tour the occupied Kashmir every year, which allow the domestic businesses to grow. He pointed out that after the 9/11 incident, the tourists of Arab World thronged to far eastern countries despite the fact that Pakistan had greater tourism facilities and spots to enthrall the global visitors but failed to attract any of them. About the Halal Food global trade, he said Pakistan again does not place its products on the global market while Thailand had a greater share with improved expertise to export products to the international consumers. The former FPCCI President who is also the Finance Secretary of Pakistan Muslim League (Nawaz)
SBP gives microfinance sector the lollipop With the nourishment and sustenance of the microfinance sector becoming a veritable concern, the SBP has sprung into action, allowing the sector funding from non-bank sources and capital courtesy MCGF. One would be tempted to say SBP saves the day, but wouldn’t that be too cheesy? g
KARACHI STAFF REPORT
The State Bank of Pakistan (SBP) has allowed microfinance providers (MFPs) to mobilise funding from non-bank sources and the capital market under the Microfinance Credit Guarantee Facility (MCGF). Accordingly, revised guidelines on MCGF Thursday were used to all the banks, Development Finance Institutions (DFIs) and the Microfinance Banks (MFBs). The revised guidelines on MCGF stressed upon the MFBs and MFIs to explore other local currency funding opportunities such as raising capital by issuance of redeemable capital from the capital market, thereby increasing funding availability and diversification of sources. The SBP has been encouraging the viable microfinance providers, both the MFBs and Microfinance Institutions (MFIs) to mobilise local currency funding from banks and DFIs for lending to microfinance borrowers to enhance microfinance out-
reach. However, it has been observed that funding requirements of MFBs and MFIs have been partially met by the banks and DFIs. The revised guidelines have been issued with a view to further easing the funding constraints of the microfinance sector. The central bank has advised all banks, DFIs and MFPs to finalise their funding deals under the MCGF and submit their cases to SBP Banking Services Corporation (SBP BSC) for issuance of guarantee as per procedure envisaged in the revised guidelines on MCGF. It may be recalled that the Microfinance Credit Guarantee Facility is a credit enhancement facility to attract long-term and market-based finance for microfinance institutions. MCGF was launched by the State Bank in December 2008, with £10 million funding support from the UK Department for International Development (DFID) under the £50 million Financial Inclusion Programme (FIP) which is being managed by SBP. The facility offers 25% first loss or
40% partial guarantee (pari passu) coverage to the banks. The facility is focused on market development and has significantly helped in reducing the risk-perception of banks towards the microfinance sector, thus introducing poor borrowers to mainstream financial institutions. The facility has successfully overcome some funding constraints of the microfinance providers as 15 guarantees have so far been issued, mobilising private capital of over Rs.4 billion from commercial banks for onward lending to around 200,000 new poor and low-income borrowers. As such the facility is now well positioned to mobilise non-bank financing from capital market and further diversifying sources of financing for micro borrowers. The revised guidelines on MCGF have been issued by SBP through AC&MFD’s Circular No 3 dated; 21st June, 2012. This supersedes all earlier instructions issued in this regard, the circular added.
said his party has already set an economic plan on how to augment the national economy and enhance the productivity, if they come to power. He said the PML-N government will go for diversification of textile, rice, leather, agriculture products and other key existing manufacturing sectors to increase the national products present on the global market and earn huge foreign exchange. He said his party government will ensure the provision of a better business environment for local and international investors to set up their units and businesses through incentives. Among others President KPC Tahir Hassan Khan and Treasurer Muhammad Rizwan Bhatti were present on the occasion. Seed also invited a delegation of KPC to visit Azad Kashmir.
Oil hits 18-month low near $90 on weak data, high supply NEW YORK AGENCIES
A technical breakdown in crude futures prices on both sides of the Atlantic spurred further selling, with no bottom yet in sight, analysts said. Brent has fallen almost $38 a barrel since hitting $128.40 in early March, as increased production from Saudi Arabia has led to a rise in stockpiles. In London, Brent futures for August delivery were down $1.92 at $90.77 a barrel by 11:45 a.m. EDT. They slipped earlier to $90.30, the lowest level since December 2010. U.S. August crude was down $1.70 at $79.75 a barrel, after hitting an eightmonth low of $79.25. "Supply is outstripping demand and whatever other data you see out there won't change that," said Dominick Chrichella, senior partner at the Energy Management Institute in New York. "People who are long on oil are just biting the bullet and heading home." China's factory sector shrank for an eighth straight month in June as export order sentiment hit its weakest since early 2009, according to a survey indicating the country's economic trough may extend well into the third quarter. U.S. jobs data added to the gloom with news that the number of Americans filing new unemployment claims changed little last week.
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Friday, 22 June, 2012
SC OPENED THIS HONEY JAR!
Bears queue up amid PM nomination rumours Bears, politically aware as always, really want to know who the next prime minister of Pakistan would be. KSE had to ‘bear’ the brunt resulting in a 67-point tumble g
KARACHI STAFF REPORT
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ARACHI Stock Exchange (KSE) benchmark 100-share index on Thursday fell by 0.49 percent as the stocks closed bearish amid political concerns. Investors remained cautious ahead of the nomination of the new PM, dealers said. The benchmark KSE 100-share Index declined by 66.58 points, or 0.49 percent, to 13,600.60 points. The index moved both sides of the fence by 159.86 points, making an intra-day high of 13,697.08 points and a low of 13,537.22 points. “Uncertain global stocks and commodities on concerns for global economic slowdown, limited foreign interest affected the sentiments,” said Ahsan Mehanti, Director at Arif Habib Investments Limited. The KSE 30-share index dropped 88.92 points, or 0.75 percent, to
LCCI informs govt that they’re in low cotton LAHORE: The Lahore Chamber of Commerce and Industry Thursday urged the government to announce a special package for ailing cottage industry to offset the financial losses it has suffered because of unprecedented and unscheduled power cuts and highest-ever electricity tariff. The LCCI Acting President Kashif Younis Meher was talking to a 25-member delegation of cottage industry belonging to Daroghawala, Bund Road, Dawood Colony and Baghbanpra and headed by Chairman All Pakistan Cottage Industry and Small Traders Ghulam Sarwar Malik. Haji Sultan Mehmood, Haji Barkat Munir, Mohammad Umer and Mian Mohammad Nasrullah were prominent among the delegates. Kashif Younis Meher said that the package for Cottage Industry must include one-slab low electricity tariff, power supply for at least 8 to10 hours at a stretch and its employees limit should be raised to 20 persons instead of existing five persons. The LCCI Acting President said that the high rates of electricity being charged from them and longer hours power cuts have totally destroyed the small businesses therefore the government should come up with a package of incentives in shape of cut in electricity tariff and power outages duration. PRESS RELEASE
11,746.51 points. Stocks that played a major role in driving the benchmark index down were Hub Power Company, DG Khan Cement, Lucky Cement, Nishat Chun Power, Engro Corporation, Pakistan Telecommunication Company Limited (PTCL), Fauji Fertilizer Company, Quice Food SPOT, Jahangir Siddiqui Company and Adamjee Insurance. Mehanti observed that power shortfall for industrial units and gas shutdown for fertiliser plants played the catalyst’s role in bearish activity at KSE. A total of 157 companies’ stocks closed under selling pressure out of total 346 companies’ active on the board. However, stocks of 93 companies managed to close in the positive direction while 96 companies’ stocks closed unchanged. Moreover, about half a dozen stocks closed with over four percent decline in their share prices in the session. These included UniLever Food, Mithchells Fruit and Indus Motors. Turnover improved by three percent
to 57.159 million shares from 47.417 million shares traded in the previous session. Turnover in futures market surged to 5.674 million shares from 4.973 million shares traded a day earlier. Market capitalisation declined by Rs18 billion to Rs3.470 trillion. Pakistan Telecommunication Company Limited (PTCL) was the turnover leader with 5.142 million shares and it closed at Rs14.00. It was followed by Hub Power Company with turnover 3.995 million shares and it closed at Rs 41.93. DG Khan Cement with turnover 3.621 million shares and it closed at Rs39.0. Jahangir Siddiqui Company was on the fourth position with 3.035 million shares turnover and it closed at Rs13.12. UniLever Pakistan and Siemens Pakistan, up Rs 67.43 and Rs 30.63, led highest price gainers while, UniLever Food and Mithchells Fruit, down Rs 58.50and Rs 14.15 respectively, led the losers.
Euro slips, dollar rises in Asian trade
TOKYO AGENCIES
The euro slipped in Asian trade Thursday on concerns Spain's troubled banks may need a bigger bailout, while the greenback had a slight boost after moves by the US Federal Reserve to power the economy. The euro dipped to $1.2664 and 100.83 yen in Tokyo morning trade from $1.2702 and 100.97 yen in New York late Wednesday. The dollar edged up to 79.60 yen against 79.49 yen in US trading. Markets are growing increasingly wor-
Business 2 Major Gainers COMPANY
OPEN
HIGH
LOW
CLOSE
CHANGE TURNOVER
UniLever Pak Siemens Pakistan Nestle Pakistan Ltd. Ismail Industr Mari Gas ComSPOT
7300.00 688.06 4079.57 95.07 94.65
7400.00 722.45 4100.00 98.99 99.00
7200.01 699.00 4070.00 91.01 93.25
7367.43 718.69 4085.41 98.99 98.14
67.43 30.63 5.84 3.92 3.49
90 5,607 13 4,109 670,982
Major Losers Unilever Food Mithchells Fruit Indus Motor Com Philip Morris Pak. Linde Pakistan Ltd
2772.50 285.79 262.68 181.61 118.97
2772.50 281.00 274.50 190.00 115.06
2634.00 271.51 249.55 172.53 115.00
2714.00 271.64 249.56 172.79 115.04
-58.50 -14.15 -13.12 -8.82 -3.93
59 1,554 81,155 6,525 1,000
Volume Leaders P.T.C.L.A 14.68 Hub Power Com 41.80 D.G.K.Cement 40.03 Jah.Sidd. Co. 13.32 Nishat Chun Power 15.18
14.60 42.00 40.15 13.49 15.25
13.90 41.60 38.53 13.01 15.03
14.00 41.93 39.08 13.12 15.05
-0.68 0.13 -0.95 -0.20 -0.13
5,142,862 3,995,756 3,621,558 3,035,373 3,016,290
Interbank Rates US Dollar UK Pound Japanese Yen Euro
94.3071 148.1942 1.1808 119.5343
Dollar East US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
ried that an audit of Spanish lenders will show a recent multi-billion dollar loan to shore up the nation's troubled banks may not be enough, said a senior dealer at a major Japanese bank. "Our bank's internal research shows Spanish banks have a huge amount of bad mortgage loans and real estate, so it's possible that the audit will negatively surprise the market," he told Dow Jones Newswires. Earlier this month, Spain's eurozone partners agreed to lend up to 100 billion euros to save a bank sector laden with bad loans extended during a real estate bubble that imploded in 2008. On Wednesday, the US central bank extended a bond-swapping programme by six months, aimed at pushing down longer-term borrowing costs and stimulating the world's biggest economy. But the Fed provided no hint of further quantitative easing steps while saying it stood ready to do more to help the US economic recovery. Any further upside for the dollar from the Fed's move was limited, the bank dealer said. Madrid is expected to transmit an official request for the bank aid.
BUY
SELL
95.10 118.74 147.57 1.1752 91.83 12.10 25.80 25.29 94.84
95.80 119.72 148.75 1.1845 93.08 12.24 25.98 25.44 97.06
Oil prices down in Asia as stockpiles rise SINGAPORE AGENCIES
Oil prices fell in Asian trade Thursday on rising US crude stockpiles while traders were also disappointed by muted stimulus measures from the Federal Reserve, analysts said. New York's main contract, light sweet crude for August delivery, shed $1.09 to $80.36 a barrel in the afternoon of its first trading day and Brent North Sea crude for delivery in August retreated 47 cents to $92.22. "The lack of fresh Fed stimulus, the downgrade to the US outlook and an unexpected rise in US inventories took their toll on the price," IG Markets said in a report. The Fed on Wednesday announced that it was extending a programme designed to push down interest rates on long-term bonds, encouraging investors to move money into more neglected securities and lowering costs for borrowers. But traders had been hoping for a third round of asset purchases, or quantitative easing, to boost growth in the world's largest oil consumer.
CORPORATE CORNER Next wave of Ultrabook devices, RAK Free Trade Zone visits Pakistan laptops and all-in-one PCs LAHORE: Following the success of the Karachi ISLAMABAD: The next wave of ultra sleek Ultrabook™ systems, inspired by Intel is now available. Powered by 3rd generation Intel® Core™ processors, made with the world’s most advanced 22nm 3-D trigate transistors, these new Ultrabook devices are responsive and more secure to better protect personal information. The new chips also offer increased media and graphics performance, long battery life and more choice in stylish designs. This wave of Ultrabook devices brings Intel Corporation one step closer to delivering on the industry wide, multi-year endeavor to deliver a no-compromise, must-have computing experience. The innovation will continue in the coming years as Intel and the industry aim to raise the bar for personal computing experiences, evolving to more natural and intuitive interactions. “Similar to the introduction of Intel® Centrino® nearly a decade ago, this is a time of revolutionary change in personal computing,” said Naveed Siraj, Country Manager, Intel Pakistan. “We’ve forecasted over five times more Ultrabooks to be introduced in the next 12 months as compared with the previous. This also includes new business, touch, and convertible designs. At the same time, we’ve continuously improved on security and responsiveness. With these new 3rd generation Intel Core-based Ultrabook devices, mobile computing as we know it today will suddenly seem old fashioned.”
road show, Ras Al Khaimah Free Trade Zone (RAK FTZ) is all set to conduct a road show in Lahore from 26 to 27 June. RAK FTZ is currently visiting Pakistan with an agenda to attract Pakistani businessmen to Ras Al Khaimah. Pakistan is the third biggest market for RAK FTZ, and the free zone is looking to improve and succeed even more by demonstrating complete dedication to the region. To achieve this, RAK FTZ is conducting a series of road shows and seminars in Pakistan. Judging by the success of the first show in Karachi, the organisation is expecting its second show in Lahore to be even more successful. The purpose of these road shows is to showcase RAK FTZ as the ‘home of Pakistani businesses in the Middle East’, where one can invest and benefit from its various business set-up packages that offer residence visa, eligibility for a bank account in the UAE, 100% business ownership, and 100% tax-free income, as well as a business climate that provides security, stability and abundant room for growth and success. Commenting on RAK FTZ’s activities in Pakistan, RAK FTZ Marketing Representative Omar Ul Haq stated, “RAK FTZ has planned a series of activities in Pakistan, and RAK FTZ is certainly worth a closer look for a majority of start-ups and existing Pakistani businesses. Pakistan already holds a considerable percentage of the market in Ras Al Khaimah as well as the UAE, and the positive response that we re-
ceived during our road show in Karachi has further convinced us that Pakistani businesses are eager to join us at RAK FTZ. Through these road shows and seminars, we hope to establish a strong business relationship with Pakistani entrepreneurs and companies, and we aim to continue such activities to maintain our contact with the Pakistani market.”
Ur Rehman, Vice Chancellor Prof. Dr. Syed Ather Abbas Zaidi, Registrar Ms. ShaistaShafiq, Controller of Examination Mr. Malik Taimur Ali, Treasurer Mr. Zafar Mohsin organized the meeting.
Iqra University 2nd BOG held MUZAFFARABAD: Former Prime Minister of Pakistan Mian Muhammad Nawaz Sharif was warmly received by Mr. Aamir Kazi, General Manager Pearl Continental Hotel Muzaffarabad. PESHAWAR: Second meeting of the Board of Governors of Iqra National University held at the Board Room of the University on June 21, 2012. The Chancellor Mr. Obaid Ur Rehman chaired the meeting. The meeting was widely attended by the eminent scholars and academicians from different fields of Specializations. The BoG reviewed Curriculum, Academic Policies, Human Resource Policies thoroughly and shown their satisfaction with the quality standards set by the University. The Vice Chancellor presented Annual Report giving achievements and accomplishments of the University during 2011-12 that was highly appreciated by the participants. The Chancellor Mr. Obaid
ISLAMABAD: ICI Pakistan Chief Executive Waqar Malik receives ACCA WWF 2011 ‘Best Sustainability Report’ award from Dr. Ishrat Hussain.