Profit 27th December, 2011 by Profit Epaper

PDF Profit_Layout 1 12/27/2011 12:28 AM Page 1

Instability of the Korean Peninsula brings China, Japan closer Page 5 Zong and Manchester Unite(d) Page 3 MFN, a promising dream Page 2 Pages: 7

profit.com.pk

Tuesday, 27 December, 2011

Political apathy hampers WB tax programme ISLAMABAD

JALALUDDIN RUMI

ack of political commitment proved to be one of the major factors affecting implementation on the World Bank (WB) funded Tax administration Reform Project (TaRP) which is going to expire on December 31, 2011; WB observed in its recent report. Federal Board of Revenue (FBR) chairman Salman Siddique while talking to Profit; on a question of implementation status on TaRP programme said, “It is true that FBR could not implement the TaRP programme fully due to various reasons but I can definitely say that, TaRP programme is implemented 53 per cent on the IT side and 83 per cent on the infrastructure side.” Former chairman FBR and member Tax advisory committee Federal Tax Ombudsman Pakistan abdullah Yousaf, on a question about reasons that lead to partial implementation on TaRP programme, said maximum systemisation of TaRP programme needed full commitment at the top level and support from FBR team that was unfortunately not there when needed. He said overall, problems that have negatively affected TaRP implementation are: lack of effective political commitment,

insufficient tax policy reforms to expand tax bases and simplify the tax system, lack of follow-up on the measures agreed to be implemented, lack of co-ordination among different areas, lack of management conviction to implement key measures, high turnover of top managers, lack of accountability, leadership and ownership on the project; weak implementation capacity and a rigid and inappropriate legal framework. abdullah Yousaf further said there are three stakeholders to the tax system, government, taxpayer and tax collector. There should be a win-win situation for all three. He said the tax payee should be given the due facilitation that FBR owes to him while salaries of tax employees especially tax collectors should also be raised to ensure more efficiency and transparency into the tax machinery. chairman Tax committee Islamabad chamber of commerce and Industry (IccI) and Tax Lawyer Mian Ramzan said ineffective co-ordination among the operations (now Inland Revenue - IR), Enforcement, audit Wings, PRaL and RTOs/LTUs seriously undermined the effective implementation of instructions from HQ to field formations resulting in ineffective operations and non-achievement of TaRP objectives.

He said TaRP project mainly helped FBR in constructing buildings, purchasing cars and computers, but the objective of automation for broadening the tax base did not materialise, so to say TaRP as successful project do not seem feasible. WB report said high turnover of top authorities severely affected the project. a situation of permanent instability has also been aggravated by vested interests both within FBR and the business community, undermining support of the project and its ability to fully meet the development objectives. The main tax policy envisaged in TaRP did not lead to the introduction of a modern VaT, combined with an effective excise tax system. also, removal of exemptions and zero rates in sales tax were below expectations. Zero rates for non-exporters and special regimes (for example, retailers) remain intact. WB observed that lack of leadership and accountability was also a critical feature of TaRP implementation. TaRP was cut down its size to over $78 million from first allocated amount of $123 million. TaRP has been implemented under three ministers of finance, four chairmen of FBR and a number of FBR Board members. TaRP that would expire on December 31 has

remained a problematic project for the WB during the last few years as this project was initially conceived and signed during the tenure of Musharraf-aziz regime, but failed to utilise its allocated amount of $123 million till December 2009. During the PPP regime, World Bank Executive Board

Govt releases Rs6 billion for fuel oil purchase

Provinces demand autonomy

Petroleum Policy approval delayed

ISLAMABAD AMER SIAL

Pakistan’s indigenous oil and gas production meet around 53 per cent of its total energy requirements ISLAMABAD

AMER SIAL

pproval of Petroleum Policy 2011 has hit snags as Khyber Pakhtunkhwa and Balochistan have sought complete control over management of the natural resources in their jurisdiction and complete autonomy over determination of royalty. An official source said that a specially called meeting on the issue failed last week to resolve the issues as both the provincial governments were of the opinion that management of the natural resources in their jurisdiction fell under their domain after devolution and the federal government could not force a policy on them. Provincial governments were of the opinion that it was their prerogative to draft policy for exploration of fossil fuels and hydrocarbon reserves in their jurisdiction and only they were eligible to get royalty. Federal government on the other hand was of the opinion that after devolution the centre would be regulating the sector while it would be sharing 50 per cent royalty with the respective provinces, the source added. The source said, till the issue was resolved, the planned auction of new oil and gas exploration blocks would remain on hold and there would be no new investment in the sector. Government

wanted to expedite indigenous oil and gas exploration to overcome the massive energy crisis that was resulting in decreasing the GDP growth by three per cent for the last few years. Government has reconvened a meeting with provinces this week to settle the issue. However, the source said federal government would face a tough time in developing a consensus on federal regulation instead of provincial oversight and sharing of royalty with the provinces. The draft of Petroleum Exploration and Production Policy 2011 was made public in October 2011. Feedback and comments from stakeholders were invited to finalise the policy and implement it before the close of current calendar year. The source said the ministry was advised to keep following the 2009 policy instead of opting for a new policy as there were minor differences between both polices no tangible target of the previous policy was achieved. He said the policy was made with a long term goal and it should be implemented at least for a decade. This government has given two policies in four years even though the last policy was announced only in 2007. However, the source said the new policy was not likely to be implemented during current fiscal year even if issues with provinces were resolved as the standard petroleum concessions agreements and production sharing agreements were not likely to

granted extension of two years till December 2011 and cut down its size to over $78 million, including the grant amount of DFID. FBR authorities would also be reviewing the decision to make a formal request to WB for a new programme in a visit of WB Team into Pakistan in January 2012.

be finalised. The new policy was drafted to accelerate exploration and production to achieve maximum self sufficiency in energy by increasing oil and gas production. The new policy focuses on promoting investment in the upstream sector and in onshore frontier areas by providing globally competitive incentives. As around 27 per cent of the country’s energy needs are currently being met through imports. Pakistan’s average daily production of crude oil and gas in 2009-10 was 65,000 barrels and four billion cubic feet, respectively. The country’s indigenous oil and gas production meet around 53 per cent of its total energy requirements while other indigenous sources provide 19 per cent. The new policy ends the system of zones and offers a price of $6 per mmBTU for new discoveries instead of previous prices of $4.38 to $5.03 mmBTU. While shallow discovery will be offered price of $7 mmBTU, deep $8 mmBTU and ultra deep $ 9 mmBTU, while first three off shore discoveries will get a premium of $ 1 per mmBTU. In 1991, government introduced the first petroleum policy. This was followed by policies of 1993, 1994, 1997, 2001 and 2007 and 2009. Whenever previous policies were superseded by a subsequent policy document, the existing rights granted under licences, Petroleum Concession Agreements, Production Sharing Agreements were not affected.

OVERnMEnT has released Rs6 billion to enable the generation companies to make timely payment to fuel oil suppliers to overcome the forced power outage of 3800 MW of hydel power output due to canal closure period. an official source said Ministry of Water and Power (MOWP) had sought a release of Rs10 billion to maintain uninterrupted power supply during the last week of December till January end. While it has estimated another Rs10 billion for fuel oil supplies in February. Since the release got delayed during the last few days hydel power generation declined significantly that resulted in massive load shedding. Finance ministry has assured the provision of additional amount in next weeks. MOWP had earlier informed government that power shortage would suddenly increase in end of December with the implementation of canal closure for annual de-silting operations. Government was informed that 3800 MW hydel generation output would not be available during January and it would remain low in the subsequent month of February. The major worry for government is expensive power generation, the impact of which would be completely passed on to consumers, which the source said could create some political convulsions. Fuel oil prices have increased over Rs70,000 per tonne as compared to Rs34,000 per tonne a year back. Government estimates a loss of Rs71 billion during the JulyDecember period of current fiscal year due to the non passing of impact in fuel oil prices to consumers. Distribution companies (DIScOs) managed to collect Rs5 billion in fuel price adjustment as compared to the estimated target of Rs22 billion for the month of June and July.

PDF Profit_Layout 1 12/27/2011 12:28 AM Page 2

Tuesday, 27 December, 2011

debate

MFN, a promising dream P

FArAkh ShAhzAD

akISTanI cabinet’s decision of granting the Most Favoured nation (MFn) status to India is the most talked-about issue in the corridors of trade and commerce. It can be called the most important chapter in the history of both the countries because it has been a social and political taboo on both sides of the Indo-Pak border since many decades. Tonnes of conciliatory and contradictory material have been printed over the economic issue that has been dragged into the realm of politics. Responding to a massive campaign against the pact on the Pakistani side of Indo-Pak borders, Pakistan government has linked the implementation of the pact to more agreements as an exercise to ensure level playing field to protect the interests of Pakistani traders who are threatened by the export potentials of a huge economy like India.

one to another in . The term means the country which is the recipient of this treatment must, nominally, receive equal trade advantages as the “most favoured nation” by the country granting such treatment. Trade advantages, among other things, include low or high. In effect, a country that has been accorded MFn status may not be treated less advantageously than any other country with MFn status by the promising country. There is a debate in legal circles whether MFn clauses include only substantive rules or also procedural protections. The members of the World Trade Organization (WTO) agree to accord MFn status to each other. Exceptions allow for preferential treatment of developing countries, regional free trade areas and customs unions. Together with the principle of national treatment, MFn is one of the cornerstones of WTO.

PRojected Gains Pakistan is losing $300 million to $700 million annually due to the application of positive list. currently, the balance of trade is in favour of India as Pakistan’s exports to new Delhi are $264 million against imports of $1.7 billion. at present many products are coming to Pakistan from India via Dubai with different brand names. This cost addition amount of $300 million to $700 million annually. Direct import of such raw materials and machinery from India would reduce its cost for the local industries. However, the trade balance would remain in favour of India. Before announcing to phase out negative list the government should take input from those industries that would be immediately exposed to competition.

GoveRnMent’s stance ReciPRocal in natuRe It is to be remembered that back in 1996 India gave Pakistan the MFn status and since then it has remained a subject of immense debate. as per WTO rules, Pakistan was obliged to reciprocate the Indian move and grant status to India but it declined to do so since 1996.

GeneRal benefits Generally speaking, trade experts consider MFn clauses to have the following benefits: n a country that grants MFn on imports will have its imports provided by the most efficient supplier. This may not be the case if tariffs differ by country. n MFn allows smaller countries, in particular, to participate in the advantages that larger countries often grant to each other, whereas on their own, smaller countries would often not be powerful enough to negotiate such advantages by themselves. n Granting MFn has domestic benefits: having one set of for all countries simplifies the rules and makes them more transparent. It also lessens the frustrating problem of having to establish to determine which country a product (that may contain parts from all over the world) must be attributed to for customs purposes. n MFn restrains domestic special interests from obtaining measures. For example, butter producers in country a may not be able to lobby for high tariffs on butter to prevent cheap imports from developing country B, because, as the higher tariffs would apply to every country, the interests of a’s principal ally c might get impaired.

sPiRit of Mfn as a general rule, MFn clauses promote non-discrimination among countries. Therefore, they also aim to promote the objective of free trade in general. In international economic relations and international politics MFn is a status or level of treatment accorded by

Briefing the Senate Standing committee on commerce about the MFn status to India commerce Secretary Zafar Mahmood took the parliamentarians into confidence for the first time since the government’s decision. He was unequivocal that Pakistan would not implement the free trade regime without ensuring level playing field for its exporters. Islamabad has proposed three agreements be signed with new Delhi. The first is the customs cooperation agreement to address Pakistani exporters’ complaints of Indians charging high taxes, Mutual Recognition agreement for standardisation of quality standards and Grievances agreements to address consumer protection issues, said Mahmood. It is learnt that the demand was made after exporters complained about Indian non-Tariff Barriers (nTBs) which could hinder trade.

ntbs Generally speaking, non Tariff Barriers refer to a range of actions, other than tariffs, that governments apply to restrict imported goods. Often bureaucratic in nature, the intention of non-Tarriff Barriers is to raise the prices of imported products to make them less attractive to consumers, or to restrict their availability in favour of domestically produced versions of the same goods. although most non-tariff barriers violate World Trade Organisation rules, their use is increasing. Pakistan’s trade and industry sources repeatedly criticise the deliberate impediments enforced by the Indian authorities in the name of formalities. They call it nTBs that included inordinate delays in customs clearance of Pakistani goods, frequent dispute over valuation of goods for determination of duties, strictly applying Indian standardisation laws and charging composite tariffs on textile and hardships in issuing visas to Pakistani traders. In September this year Pakistan decided to replace tradeable list, known as positive list currently comprising 1,958 items, with non-trade-able list, known as negative list by February 2012. Pakistani traders have proposed to add 600 items to the negative list.

tRust deficit Pakistani officials have openly admitted that trust deficit within Pakistan is ten times more than trust deficit between India and Pakistan. They suggest that a full fledge campaign must be launched soon to abreast local industries of the challenges and opportunities in the post-MFn trade regime with India.

equal level PlayinG Pakistani traders have suggested ministry of commerce to probe the issue of state subsidy to Indian exporters. They are afraid that this could hurt the interest of local industries. They also pointed out that cost of production in Pakistan was much higher than that of India. It is also anticipated that giving MFn status to India would lead to flooding of local markets with Indian goods. But the supporters of MFn say that trade and economic activities with the neighboring country would benefit public by providing them with cheaper Indian products. They are positive that it would create a competitive environment for the industry and cheaper Indian products would be a relief for people. The industrialists, concerned about the dismal situation of power, fuel and poor infrastructure of industrial sector in the country, feared that giving incentives to India under the MFn would further damage economy of the country. They see it from another angle, taking it as a disadvantage. They argue that Pakistan need to protect its industry as international forces are facilitating India to capture the market of afghanistan. although giving MFn status to India has prohibited discrimination in trade, but still Pakistan needs to be careful as India may try to transit items to afghanistan.

Mixed oPinions Ordinary consumers think that the opponents are inefficient businessmen; lacking drive to compete and would resist MFn status to India. They plead that MFn status would take the country towards liberali-

sation and hoped that both countries would get benefits form it. agriculture, pharmaceuticals and auto sectors are likely to bear the burnt of MFn because Indian products in these sectors are much cheaper. But the plus point is that it will definitely benefit consumers and give them a choice and a sense of cost-quality scrutiny. a narrow slice of wise consumers believe that industrial development in Pakistan has only benefited the producers and these benefits of infrastructure development have not channeled to the grassroots of the society. They think that there must be a holistic approach to study the cons of MFn. It is because there are only two quarters who are against the promotion of trade with India. Firstly, the traders who are worried of losing their profits and secondly the hawks who never tolerate any sort of reconciliation with India. If we look at the recent statistics of volume of trade with Iran, India, china, Japan, EU countries, USa and Japan, it is evident that the balance of trade is in favour of all these countries except, america. Therefore, it will not be surprising if India gains in the deal. all that we need is that Pakistani authorities have to strike a balance while finalising the positive and negative lists. It is true that Pakistani traders must be protected from the giant companies of India, but it is equally true that Pakistani consumers also need protection against monopoly like situation in the domestic market.

chaRteR of Peace Renowned new York Times columnist and writer of a famous book, “The World is flat”, Mr Thomas Friedman gave the ‘no War Theory’ in his bestseller in 2005 and called it “The Dell Theory of conflict Prevention”. The theory stipulated that, “no two countries that are both part of a major global supply chain, like Dell, will ever fight a war against each other, as long as they both are part of the same global supply chain.” Friedman supported his theory by citing china and Taiwan, two hostile neighbours, who gradually became economically integrated by virtue of shared supply chains thus, limiting the likelihood of territorial wars. keeping in view the ideas of Friedman, it is positively presumed that MFn will prove to be a charter of peace between the two countries who have had disharmonious relationship in the past.

the last woRd It is appropriate to quote here, chairman of the Institute of Public Policy, former Federal Finance Minister and ex-VP of World Bank, Shahid Javed Burki who said, “MFn status to India would bring greater benefits to Pakistan, a smaller economy compared with India, as Pakistan would emerge as the greatest beneficiary out of MFn status to India.” Former finance minister said that the trade between the two countries could double from current level of $2.7 billion a year, simply by rerouting of goods currently sent via Dubai or through some other channels. He, however, cautioned that roadblocks such as stringent visa rules, non-tariff barriers and other likes still need to be dismantled for full benefits to be realised.

PDF Profit_Layout 1 12/27/2011 12:28 AM Page 3

Tuesday, 27 December, 2011

EDITORIAL

The year that was

Revenue mobilisation aLF way through the fiscal, it is clear that revenue mobilisation is a more political than economic/financial process. The world bank is right in noting the government’s restricted fiscal space with concern, yet it misses the point by indulging endlessly in complexities of possible structural revisions in the tax machinery. There is ample productive capacity in the economy, and in leveraging it the government would only honour promises made at budget time. But Islamabad seems without necessary political will at present. consider the following. One, while targeted taxation optimises revenue generation and subsequent fiscal expansion, the FBR need not indulge in revising different heads till the simple matter of expanding the overall tax net is settled. The government has complete records of the biggest tax evaders. It just needs to take meaningful action against the top few to get resource mobilisation underway. and, despite promises, there is little progress. Two, Dr Sheikh promised blocking the Rs400 billion annual PSE leak. Yet the initiative has given way to political considerations, and the

government is fine with settling with reforms instead, even at the sake of its political reputation. Three, weakening currency has not stimulated exports, which required a proactive shift in the official posture. There was little, if any, effort to stimulate manufacturing and industry, or incorporate value addition in the export mix. With last year’s commodity price hike in the international market fizzling out, the trade deficit is set to expand. Four, safeguarding the PSDP is mission critical in economic downturns. It provides essential fiscal expansion to help employment in addition to social subsidy for the most compromised. and as always, the development budget presents little hope when the government borrows heavily just to fund non-development expenditure. It’s not that the economy is without a potential framework to ease Islamabad’s imminent insolvency. It’s just that the political will to get the economic engine rolling is just not to be found presently. Yet Islamabad ignores the economy, for political concerns, at its peril. The election is not very far, and a mobilising, disgruntled electorate is not happy with the financial sector.

Education crisis

MFN status to India

This is with regards to the feature, “Who knows, who knows not” published yesterday. It is indeed a pity to note that Pakistan is ranked at the 145th spot on the Human Development Index. However, the fact that we are languishing at the 160th position out of 182 countries is what perturbs me the most personally. Without education, there is absolutely nothing that we can do to improve ourselves. We are crying for democracy, we are clamouring for change, but without ameliorating ourselves on the education front, all this noise is pointless. The lack of education is the biggest problem in Pakistan, and we need to address it very soon.

This is with regards to the interview titled, “Pakistan to benefit by granting MFn status to India: Dr Manzoor ahmad”. I think one would have to agree with Dr Manzoor on this because by increasing diversification and in turn enhancing competition, one can ensure that the quality of goods in our neck of the woods improve. We have been importing goods from India via a third country and that obviously adds additional burden on the exchequer. I think most antagonistic voices are just afraid of competition, and it’s about time they realise that healthy competition leads to overall improved performance. The world knows this, and so should we.

Shehroz IrFAn

WALI AWAn

SARGODHA

Amjad Riaz HE economies around the world faced some indomitable challenges during the year 2011. The international economy had not yet recovered from the 2008 crisis of the US economy when the eurozone calamity struck this year. The domino effect was visibly there when the governments in Greece and later in Italy experienced changes in political governance. The European central bank decided to put some stringent fiscal measures for the individual economies to be careful in their public spending. Things at home also passed through turmoil of economic issues that would have required some close attention and handling. We can partly explain the inflation factor due to problems in the international economy. But closure of train services and other utilities is totally unexplainable, grossly speaking of mismanagement at a massive scale. It is surprising that no effort was launched to streamline management. In these days of availability of valuable advice, it should be not be difficult to remedy the ills when things take a turn for the worse. I believe the time is still ripe for taking appropriate steps to setting the rail system in order. In these days of energy shortages it is the most convenient and affordable way of providing transport for passengers and carrying goods from and to the seaports. The growth figure for the economy being just above two per cent was not very encouraging. Though non-developmental expenditure was somewhat controlled but management of the public sector required some adroit handling. There was never a strong point on our part for taking care of public-related institutions as they ought to be handled. Unfortunately mismanagement has taken root so strongly that it has become a cause of worry for the long-term goals of economic development. Socio-economic priorities are always pushed to the bottom to take care of immediate expe-

I believe the time is still ripe for taking appropriate steps to setting the rail system in order

diencies. That is not how businesses of the state or for that matter, private enterprises managed. The matter of tackling issues of international trade and that of climate change remained mired in international negotiations. no further progress was made in the Doha round of trade talks or at the Durban summit on climate issues. Indigenously the matter of seeking to earn some extra foreign earnings from exports to Europe got linked up with granting MFn status to our neighbourly country. This was probably done in haste as no detailed study of extensive non-tariff barriers likely to be imposed by India was made before such a move. Textiles, pharmaceuticals and other exports by Pakistan to its neighbour are likely to face some formidable challenges before it can break in to that market. all steps must be taken to pursue the goal of achieving greater integration of the economies of the SaaRc region but this must be done through careful negotiations by the respective partners. It is important for Pakistan to seek greater economic cooperation with the fast changing asian economies. along with that other regions in the world must not be ignored. The sub-Saharan africa is fast rising from its slumber and is expected to make some valuable progress in harnessing the abundant natural resources the countries of the region are endowed with. In a decade or so these economies shall be significant players in the african scene. It is important that our entrepreneurs be encouraged and facilitated to further enhance economic linkages not only in trade but also in establishing business houses and activity there. as another year is coming to a close we can say and reflect it was indeed a microcosm of all the efforts that were made to tackle economic and historical developments during the last hundred years or so. It was a year that posed challenges to the international economy to save the important gains made by the world economy during the last century. nearly most of the socio-economic progress is being jeopardised at least in the short term. The developed economies are desperately trying to deal with the rapidly deteriorating situation in the employment sector, maintaining sustainability of social benefits or provision of health and other similar benefits. The world economy is adjusting itself to new parameters that are being defined in this fast changing scenario of international economic activity. as the year 2012 is approaching we must ensure better governance in the future and awareness of the importance of socioeconomic issues. The writer has served as consultant to the United Nations on the issues of trade and development. He can be reached at amjadriazzz@yahoo.com

LAHORE

Zong and Manchester Unite(d)

Kunwar Khuldune Shahid OnG has pulled a rabbit, a rhinoceros and an illustrious elephant out of the proverbial hat owing to its collaboration with Manchester United and the launch of the ‘SIM of champions’. To round off this groundbreaking deal, the telecom company has recently launched an electronic advertisement, which is reminiscent of the Pepsi ads of the days of Inzi and Wasim bhai. Street cricket is replaced by street football, and you have

a bunch of bullies overpowering the underdogs before the heroes come and save the day. The setting has been made to resemble a Pakistani street, with a Jalaibi stall, ‘Rehmat Bakers and café’ et al; however, the yellow cab parked in front of Rehmat Bakery doesn’t border on any of the taxis from our neck of the woods. and then you have some Spanish music in the background for some bizarrely inexplicable reason as well. Quite stereotypical, full of clichés and yet the project is undoubtedly destined to gatecrash into a goldmine. Ever since ESPn and Star Sports started their coverage of English football in the 90s, the popularity of the sport and indeed the English Premier League has been on perpetual escalation in the subcontinent. From the days of cantona, Bergkamp, McManaman to the era of Beckham, Henry and Zola, and recently the likes of Ronaldo, Rooney, Gerrard and Lam-

pard; English Premier League stars have become household names, and one regularly sees youngsters donning the jerseys of their favourite EPL teams in Pakistan. and again, since Manchester United have the biggest fan base in Pakistan – much like most parts of the world – Zong’s customer base is set to skyrocket. Zong’s SIM of champions – with the 311 number series – includes offers like “Follow the Star” where one gets updates regarding one’s favourite player, and then you have goal updates, scores, interviews, videos and what not! There are also ring tones that have the voice of your preferred players, one gets the chance to ask questions from personnel associated with the club from Old Trafford among many other exciting offers. I mean, if I were one of the Red Devil brigade I would be hankering after the chance of getting my hands on this little chip

shahab jafRy Business Editor

KunwaR Khuldune shahid Sub-Editor

babuR saGhiR Creative Head

ali RiZvi News Editor

Maheen syed Sub-Editor

haMMad RaZa Layout Designer

Global union with a desi ‘tarka’

sent from the footballing gods. and considering the fact that football buffs nowadays are willing to throw just about any amount of their parents’ hard earned money in their never ending collection of goods related to their club – from washroom accessories to just about every part of clothing, and anything and everything in between – brace yourself for an upsurge of Zong connections in Pakistan. all the same, in a classic case of Victorian irony, Zong’s lunge into the ‘Theatre of Dreams’ has coincided with one of the darkest hours for the club in recent memory. Zong’s announcement of the deal in October was almost immediately followed by the ‘Six and the city’ episode and a week before the advertisement came on air, Manchester United were dumped out of the champions League! So, if you believe in omens, Zong hasn’t exactly been

United’s lucky charm. While Thursday night Europa League workouts might not be the most lucrative of starts for the Zong-United combo, the popularity of Manchester United the club, and the brand doesn’t look like dipping any time soon. Maybe other telecom companies should take a cue from Zong and target other famous English or European clubs. Showcasing ashley Young’s picturesque chest control, Darren Fletcher’s goal celebration, an uncharacteristically unanimated Dimitar Berbatov and an overexcited Rio Ferdinand would work wonders for Zong’s sales; their rivals could do with a Van Persie volley or a Luis Suarez nutmeg of their own. The writer is Sub-Editor, Profit. He can be reached at khulduneshahid@gmail.com

For comments, queries and contributions, write to: Muneeb ejaZ Layout Designer

email: profit@pakistantoday.com.pk Ph: 042-36298305-10 fax: 042-36298302 website: www.pakistantoday.com.pk

PDF Profit_Layout 1 12/27/2011 12:29 AM Page 4

Tuesday, 27 December, 2011

news

Advertising today is not just about design for young energetic individuals, but it gives them the chance to exercise their creative skills in a 360 radius i.e. in all areas of eﬀective contact and communication with masses

airwaves Media Pvt ltd ceo, seema taher Khan

third party inspectors assigned to check cnG cylinders

Pakistan gets invitation to Sri Lanka Expo 2011 kArAChI

STAFF REPORT

akISTan and Sri Lanka enjoy extremely cordial relations and these ties should be developed further. These views were expressed by Sri Lankan consul General Mr D Jinadasa at a meeting held to give details about Sri Lanka Expo 2012. Mr Jinadasa said the Sri Lanka Expo 2012, is a mega International Trade Exhibition to be

held in colombo from March 28th to 30th, 2012. He said the exhibition will showcase a wide range of Sri Lankan products to overseas buyers ranging from agricultural products to industrial products including apparel, rubber and rubber based products, spices, tea, coconut and coconut based products, fruits and vegetables, fish and fishery products, ceramics and porcelain, boats, electrical and electronic products, printing and stationary, confectionary items, gems

and jewellery and IcT/BPO/kP. Speaking about Pakistan, Sri Lanka trade relations, the Sri Lankan envoy said Pakistan is the second largest trading partner of Sri Lanka in the SaaRc region after India. a substantial growth in bilateral trade has been observed in both directions especially after the Free Trade agreement was implemented in 2005. The value of total trade between the two countries has increased from $158 million in 2005 to over $350 million in 2010 covering a wide range of

LCCI urges govt to sign Preferential Trade Agreement LAhore STAFF REPORT

aHORE chamber of commerce and Industry (LccI) on Monday urged the government to sign Preferential Trade agreement (PTa) with Bosnia Herzegovina without any further delay. This was stated by LccI President Irfan Qaiser Sheikh, while talking to ambassador of Bosnia Herzegovina armin Limo, at the LccI. LccI Senior Vice President kashif Younis Meher, Vice President Saeeda nazar and former LccI President Shahid Hassan Sheikh, also spoke on the occasion as to how bilateral trade between the two countries could be enhanced. LccI President said the delay in signing of the much-needed PTa with a country that is a gateway to Europe, is badly hitting the bilateral trade and economic relations therefore, concrete measures are needed to remove impediments in way of PTa. Irfan Qaiser Sheikh said there exist vast opportunities of investment in Pakistan and the businessmen have the ability and capacity to launch joint ventures with Bosnia in various sectors, including dairy farming. He also said economic relations

Pakistan can send its products to bosnia directly. currently, Pakistani made-ups are reaching (bosnia) through other countries that results in increased prices between the two countries did not reflect their close fraternal ties and there was a need to cement trade and economic relations. He stressed upon the business community to establish their warehouses in Bosnia because European Union was an excellent market for Pakistani products. ‘LccI would also participate in Sarajevo Business Forum (SBF) scheduled for april 2012 in Bosnia,’ he added. Irfan Qaiser Sheikh further stated that solid measures should be taken to enhance trade volumes between the two countries, adding that exchange trade delegations and holding joint trade exhibitions, would pave way for enhancing the bilateral trade volume. Speaking on the occasion, Bosnian ambassador armin Limo said bilateral trade between Pakistan and Bosnia can be increased five times from the current two million

Euros per annum, as Bosnia can help Pakistan in areas of energy and defence production, for having expertise in these two sectors. “Bosnia possessed expertise in the construction of mega dams, transmission lines and grid stations and Pakistan could utilise its experience to overcome its energy crisis.” “Pakistan can send its products to Bosnia directly. currently, Pakistani made-ups are reaching our homeland through other countries that results in increased prices,” the ambassador said. He said five independent states that had been part of former Yugoslavia, now possessed population of over 20 million and Pakistan could boost trade ties with them by enhancing its exports of textile, rice and surgical and sports goods. He further added that good relations of the two countries needed to be translated into enhanced economic cooperation.

products including new products, which indicates the potential that exists for expansion of bilateral trade. He said the Sri Lanka Expo 2012 will be a good platform for the business communities of the two countries to explore new business opportunities, in trade and in vestments. This will be a unique opportunity for Pakistani business community, investors and representatives in the tourism industry to meet with the Sri Lankan partners and establish business contacts.

Pso receivables increase to Rs180b Islamabad Online

RDInaRY citizens will have to put up with hours long load shedding, if the government fails to pay outstanding dues to Pakistan State Oil (PSO) which have increased to more than Rs180 billion. non payment of dues has pushed the company into a tight corner since it has to pay Rs172 billion rupees of national and international companies. a senior official said that on Monday total receivables and payables of PSO have reached Rs352 billion out of which Rs180 billion are receivables and Rs172 billion are payables. The PSO receivables include Rs 39 billion from Water and Power Development authority (WaPDa) Rs79 billion from Hub Power company (HUBcO), Rs35 billion from kot addu power company (kaPcO), Rs3,379 million from Pakistan International airline (PIa), Rs242 million from Oil and Gas Development company (OGDcL), Rs4 billion from kESc and Rs1,196 million from Pakistan Railway.

ISLAMABAD: The department of explosives and ministry of industries have decided to hire third party inspectors and technical experts to check cylinders for safety purposes. The department of explosives devised a comprehensive plan for checking the safety of compressed natural Gas (cnG) cylinders on Monday. The recent accidents of vehicular cnG cylinders were mainly due to the use of low pressure cylinders by informal sector for cnG storage; designed for low pressure gases like LPG and oxygen, etc. Ministry of industries is also implementing a comprehensive safety plan that includes awareness campaign and training programme in collaboration with United nation Development Programme (UnDP) and provincial governments, to avoid such accidents. Furthermore, it is clarified that the government has not taken any decision to place the department of explosives under administrative control of the ministry of petroleum and natural resources. as per Rules of Business 1973, authority for explosives and safety measures under the Petroleum act 1934, is vested with ministry of industries and is exercised through department of explosives, which is implementing agency since 1884. as per Sections 5 and 6 of Explosives act, 1884; Section 4 and 5 of Petroleum act, 1934 and rules i.e. Petroleum Rules, 1937, Explosives Rules, 2010 and Mineral and Industrial Gases Safety Rules, 2010, framed there under the department of explosives, is exclusively empowered to grant approval of design, specification, standards, import and manufacturing and manners of installation of all sorts of compressed/liquefied gas containers (cylinders and vessels), petroleum storage tanks, compressors, dispensers, piping, fittings, allied equipments, and all kinds of safety devices. Department of explosives is mandated under the law to ensure implementation of safety rules in not only petroleum/cnG sectors, but also across the board in industrial and mining sectors, etc; wherever any industrial gases, hazardous substances and explosives are used. STAFF REPORT

snGPl to stop gas supply to textile industries ISLAMABAD: keeping in view the acute gas shortage and low pressure for domestic consumers, Sui-northern Gas pipeline (SnGPL) is all set to shut down gas supply to the industries of Faisalabad during the next few days. Officials’ privy to the development said that SnGPL has written a letter to the unions of Faisalabad industries in which they have been informed about closure of gas supply to industries. Officials further said that industries are directed to adopt other means of fuel to run their business during the closure of gas. This decision has been taken after increasing complaints about low gas pressure to the domestic consumers. Officials said that due to non-availability of gas protests demonstrations were gaining momentum with every passing day and were creating certain law and order problems. Officials said that this decision has been taken to provide relief to the domestic consumers. On the other hand, experts believe that this decision would badly affect the production of the industries. Experts said gas load shedding is badly affecting the production of export items and textile industry is under sheer pressure. ONLINE

Pia to start night coaches

Karachi Stock Exchange ends flat as volumes sink to new low kArAChI STAFF REPORT

HILE the PTI rally in the port city yesterday was a depiction of passion and enthusiasm, the same could not be said of investor activity at the local bourse as volumes sank to a new low of 17.5 million shares. The saving grace for the index which prevented it from ending in negative territory was the 26 points contribution by the index heavy weight nESTLE, thus kSE-100 index edged up nine points at 11,379. kSE 30 index closed at 10292.58 levels with the loss of 25.83 points, while all Share

index gained 7.46 points to close at 7826.23 levels. Total 92 scrips advanced 102 declined and 110 remain unchanged out of total 304 scrips traded. From a sector perspective, with the exception of DaWH,

big name fertiliser stocks ended in the red zone, while PPL and PSO were able to record marginal gains for oil and gas segment. Overall, the key concern remains the dismal volumes being witnessed in recent trad-

ing sessions and without any notable triggers on the horizon, it appears that dull would be a gracious term to describe the outlook of the local bourse, said ali Hussain, Senior Investment analyst at HMFS.

KArAchI: The national airline has decided to start night coaches from January 1st for karachi, Lahore and Islamabad, with 20 tonne high yield cargo facility. But the market share of high yield cargo for PIa is very limited and therefore this facility would surely result in heavy losses, sources informed Profit, adding that there is no volume of any cargo from Islamabad to karachi. Sources further said that if PIa includes all stakeholders the volume of high yield cargo for Lahore is not more than 8 tonnes, while only 2 to 3 tonnes high yield cargo is available for Islamabad. From karachi to Lahore the total volume of the said cargo is around 6 tonnes, so the left over volume of the said cargo in the market is very low for the national carrier, thus this night coach plan is of no use, sources added. In addition, TcS on daily basis runs its freighter 737200 on karachi-Lahore-karachi route for its 15 tonnes high yield and general cargo including couriers and Shaheen air also carry 3 tonnes of cargo on the same route daily, sources added. It is to be noted that the decision was to be taken in the meeting of the board of directors on Monday. The fare for night coaches is Rs6, 666, and the schedule of the flights is: 12:05am from karachi to Islamabad; 12:20 am from karachi to Lahore; 5am from Islamabad to karachi; and 4:15am from Lahore to karachi. WAqAR HAMzA

PDF Profit_Layout 1 12/27/2011 12:29 AM Page 5

Tuesday, 27 December, 2011

Clients have realised the need to give back to the community we live in and proactively get involved in CSR schemes rather than just giving donations

news

bond advertising ceo, seema jaffer

Instability of the Korean Peninsula brings China, Japan closer A momentous chapter in Sino-Japanese relations is on the verge of being written in Beijing

kunWAr khuLDune ShAhID S the Japanese Premier Yoshihiko noda arrived in Beijing on Sunday it was clear what the hottest topic on the discussion table was going to be. after north korean leadership changed hands in the aftermath of kim Jong-Il’s death, the repercussions of the instability of the korean Peninsula were obviously going to encompass Japan and china as well. Both sides have been vying to ameliorate their

diplomatic ties off-late, as the 40th anniversary of the resumption of their ties is on the horizon – a landmark moment in the relationship. and now with the situation in the two koreas bordering on volatility, the two asian giants have another raison d'être to draw closer. Owing mostly to the legacies passed on by various regimes at the helm, and partly to the maritime animosity, china and Japan have had a streak of unceremonious bondage. noda is a relative newbee in the asian game, having only

joined the office in September, but he has been making positive noise about improving the Sino-Japanese bond. Only recently Japan expounded its intent of making a ‘symbolic’ purchase of $10 billion dollars in chinese bonds. This, coupled with Japan sending the ‘kirisame’ destroyer to the chinese port Qingdao on a five-day good will visit, should set the ball rolling towards mutual amicability. china’s contribution after Japan was struck by the triple disaster in March this year is also worth its fair share of approbation. Japan was hit by a massive earthquake, measuring 9.0 on the Richter Scale, which resulted in another catastrophic tsunami that in turn lead to a major meltdown in Fukushima Daiichi nuclear power plant. china provided emergency relief amidst the trio of back-toback calamities, in addition to ma-

terial support; and its media also openly praised the Japanese nation’s resilience and lawfulness under extreme conditions. The year 2011 was a positive one for the china-Japan relationship, and now with events in north korea having the potential to throw in another sizzling ingredient in the asian cauldron, another significant chapter in asian – and indeed global – diplomacy is on the verge of being written in Beijing. after north korea pulled out of the six-party talks in april 2009 the negotiations stalled as a result and the primary intent of Yoshihiko noda would be to make a step towards the resumption of the talks now that Pyongyang is bracing itself for ‘heir apparent’. The resumption of the aforementioned talks is in the benefit of both Beijing and Tokyo and apprehensions regarding the developments in DPRk would continue to exist till steadiness is reached at the north korean helm. The long term security of northeast asia hinges on smooth transition of power in Pyongyang. Unlike the previous regimes, the current Japanese regime has taken a more prudently open approach towards Beijing and is vying to pacify all the matters that have resulted in a strained relationship between the two sides. chinese Prime Minister Wen Jiabao has also echoed the Japanese intent that would be a positive step towards regional prosperity and security. If the talks go according to plan, 2012 can safely be prognosticated as a year of SinoJapanese cooperation, as the two collectively endeavour to enhance themselves in the realm of trade and be the flagbearers of peace and tranquility in the historically capricious northeast asia. The writer is Sub-Editor, Profit. He can be reached at khulduneshahid@gmail.com

turkey, azerbaijan Brazil overtakes UK sign pipeline deal as sixth-largest economy B T AnkArA

RaZIL has overtaken the Uk to become the world's sixth-largest economy, according to a team of economists. The banking crash of 2008 and the subsequent recession has relegated the Uk to seventh place in 2011, behind South america's largest economy, which has boomed on the back of exports to china and the far east. Russia and India are expected to benefit from a surge in growth over the next 10 years and push the Uk into eighth place. Like most economies, India is struggling with high inflation and slowing growth, but its highly educated workforce and skills in growth areas from IT and services to engineering will push the economy into fifth place. after a decade of selling oil and gas to Europe and other parts of asia, Russia will be at number four. The only compensation for ministers concerned by Britain's relative fall is that France will fall at a faster pace. nicolas Sarkozy can still boast that France is the fifthlargest economy behind the US at number one, china, Japan and Germany, but by 2020, the centre for Econom-

ics and business Research (cEBR) forecasts it will fall past the Uk into ninth spot. Germany will also slip to seventh place in 2020. cEBR chief executive Douglas McWilliams said: "Brazil has beaten the European countries at soccer for a long time, but beating them at economics is a new phenomenon. Our world economic league table shows how the economic map is changing, with asian countries and commodityproducing economies climbing up the league while we in Europe fall back." Europe is expected to suffer a "lost decade" of low growth following a credit binge over the past 20 years. Paying back debts over a short timescale will restrict growth and prevent many countries, including the Uk, from clawing back output lost in the banking crash for many years. The European Union, recently described by one chinese official as "a worn-out welfare society", will remain the world's largest collective trading bloc, though a recession next year is expected to hit global growth. The latest forecasts by the cEBR show world growth falling to 2.5 per cent in 2012, a downward re-

vision from the forecast made in September. However, the cEBR warned a scenario involving "one or more countries leaving the euro, sovereign defaults and banks going bust and needing to be bailed out" would reduce global growth in 2012 to 1.1 per cent. The European growth slowdown is forecast to be even more marked, with a fall in GDP by 0.6 per cent and a possible fall of 2 per cent if the euro currency club breaks up. The US forecast is better, with growth of 1.8 per cent. Emerging economies, which have seen their stock markets dive in recent months as investors assess the fallout from the euro crisis, would regain their momentum, said the cEBR. china is forecast to grow by 7.6 per cent and India by 6per cent. But other recent star economies with closer links to the EU or commodity prices are likely to face an economic slowdown with Turkish growth slowing to 2.5 per cent from 7.1 per cent this year, Saudi arabia at 4per cent after 6.1 per cent this year, Russia 2.8 per cent after 3.8 per cent this year, and Brazil 2.5 per cent after 2.8 per cent this year. GUARDIAN

APP

URkEY and azerbaijan on Monday signed an agreement to establish a consortium that would build a pipeline to transport 16 billion cubic meters (565 billion cubic feet) per year of azeri gas to Turkey and Europe. The two countries' energy ministers signed a memorandum of understanding for a consortium between azerbaijan's state energy company SOcaR, Turkey's state-run pipeline company BOTaS, and the Turkish petroleum company TPaO. The deal allows other oil and gas companies to join the consortium. The projected pipeline, the Trans anadolu, would carry gas from azerbaijan's Shah Deniz II field, across Turkey. The deal comes at a time when officials are dithering over plans for the construction of the European Unionbacked nabucco pipeline project aimed at reducing the bloc's deliveries from Russia. The project is slated to ship gas from the caspian region through southern Europe to austria, but its viability has been called into question amid doubts that enough suppliers can be found to fill the pipeline. Turkey's Energy Minister Taner Yildiz said the Trans anadolu could eventually be connected to nabucco. azerbaijan's Industry and Energy Minister natiq aliev said the Trans anadolu pipeline would initially carry 16 billion cubic meters (565 billion cubic feet) per year of gas but the capacity could, in time, increase to 24 billion cubic meters (847 billion cubic feet) per year.

CORPORATE CORNER iba reveals results of first GeM Pakistan study KArAchI: The results of the first Global Entrepreneurship Monitor (GEM) Pakistan Study were revealed at a ceremony at Institute of Business administration (IBa), karachi. The ceremony was organised by the center for Entrepreneurial Development at IBa and was attended by a number of international and local delegates who received a keen insight into the existing entrepreneurial culture of Pakistan. Sindh Minister, Mr Murad ali Shah was the chief Guest on the occasion. GEM is an international research effort to promote entrepreneurship. PRESS RELEASE

sajid Mahmood to lead Zong as chief commercial oﬃcer LAhOrE: Mr Sajid Mahmood, previously, chief Information Officer of Zong china Mobile Pakistan, will now be leading the company in the capacity of chief commercial Officer. He is already heading IT, corporate sales, legal, regulatory and OaS functions of the company. In effect, with these changes, marketing, sales and distribution and customer services, will also be reporting to him. Zong’s cEO Mr Fan Yunjun said, “Sajid Mahmood is an enthusiastic and hardworking person with flare for novelty and meticulousness. PRESS RELEASE

Mr Kamran shehzad inaugurates boK's corporate branch LAhOrE: Mr Muhammad kamran Shehzad, Deputy Governor, State Bank of Pakistan, inaugurated a new corporate branch of Bank of khyber (Bok) in karachi. He stressed upon banks to focus on improving their service standards and serve the people and their customers in an efficient and professional manner. Mr kamran said that Bok is continuing its journey of healthy growth in assets during the last few years. ‘It is actually one of the few middle tier banks which has improved their performance despite tough operating conditions. PRESS RELEASE

al Meezan announces interim dividend KArAchI: al Meezan Investment Management Limited is pleased to announce another interim dividend payout for Meezan Sovereign Fund (MSF) @ Rs1.30 per unit and Meezan cash Fund (McF) @ Rs0.40 per unit. The payouts are in the form of Bonus Units to the Growth Unit holders and cash Dividend to the Income Unit holders. a Growth Unit holder having 100 units of McF as at December 21, 2011 will get 0.7998 additional units at the ex-div. naV of Rs50.01, while an Income Unit holder will get cash Dividend of Rs0.40 per unit. a Growth Unit holder having 100 units of MSF as at December 21, 2011 will get 2.5910 additional units at the ex-div. naV of Rs50.17, while an Income Unit holder will get cash Dividend of Rs1.30 per unit. PRESS RELEASE

abf donates funds for flood aﬀected areas

LAhOrE: american Business Forum (aBF) has donated funds to Pak Pur Foundation for construction activities in flood affected areas. acting President aBF Mr Ibrahim Qureshi along with Honorary Secretary General Mrs ayesha Hamid and chairman Flood Relief Fund committee Mr Osman khalid Waheed presented cheque to the Pak Pur, in a ceremony. chairman Pak PUR Foundation Mr Haroon khawaja and chief Executive Mr Mahmood amer Saeed received the donation on behalf of the foundation. The Flood Relief committee of the forum agreed to disburse the funds through Pak PUR Foundation, a local nGO, working for construction of 2.25MaRLa houses for flood affected people in northern areas. aBF donated funds for construction of three houses for flood affected people in Mirpur khas. PRESS RELEASE

PDF Profit_Layout 1 12/27/2011 12:30 AM Page 6

Tuesday, 27 December, 2011

06 Markets top 10 sectors

24% 09% 35% 10% 08%

Chemicals

01% 07% 02% 03% 01%

General Industrials

Construction & Materials Electricity Banks

Fixed Line Telecommunication

Oil & Gas

Financial Services

Personal Goods

Equity Investment Instruments

STOCK MARKET HIGHLIGHTS Index 11310.35 2834.09 2565.93

KSE-100 LSE-25 ISE-10

Change +9.26 -6.7 -0.53

Volume 13,838,162 836,990 42,675

Market Value 578,286,938 10,806,120 321,831

top 5 perForMers sector wise

Major Gainers Company Nestle PakistanXD Siemens Pak AL-Ghazi TractorsXD Millat Tractors Ltd. Service Industries

Open 2831.25 888.89 169.73 362.09 192.77

High 2972.81 933.33 178.21 366.00 195.89

Low 2831.25 884.99 163.00 362.01 191.52

Close 2969.91 932.53 176.55 365.22 194.99

Change 138.66 43.64 6.82 3.13 2.22

Turnover 222 194 1,558 2,980 868

1700.00 781.90 5524.17 114.68 62.86

1670.00 813.98 5600.00 116.50 65.50

1670.00 742.81 5500.00 111.11 61.10

1670.00 760.39 5502.82 112.00 61.23

-30.00 -21.51 -21.35 -2.68 -1.63

54 1,079 71 238,081 842

Volume Leaders Fatima Fert.Co. NIB Bank Ltd Jah.Sidd. Co. Engro Corp D.G.K.Cement

23.16 1.49 4.08 98.41 18.90

23.36 1.53 4.16 99.46 19.00

22.98 1.44 4.03 98.01 18.70

23.12 1.49 4.12 98.29 18.82

-0.04 0.00 0.04 -0.12 -0.08

3,381,478 1,634,481 1,198,470 1,079,863 649,024

Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)

Per Tola (PKR) 53,845.00 51,608.00 977.00 1025.00

Per 10 Gm (PKR) 46,212.00 44,245.00 838.00 880.00

Per Ounce US$ 1,607.00 – 35.05 –

hiGh

low cuRRent

424.00 110.69 24.20 6.85 85.00

417.50 109.01 21.90 6.70 83.00

chanGe

voluMe

Oil and Gas Attock Petroleum Attock Refinery Burshane LPG Byco Petroleum Mari Gas Co.

418.76 110.08 23.05 6.80 84.51

Agritech Limited Agritech(PREF)(R) Arif Habib Co SD Clariant Pakistan Dawood Hercules

15.55 0.01 28.07 149.62 34.36

1.27 -0.88 -0.53 -0.05 -0.84

14,421 413,994 1,418 108,427 43,221

18.97 1.20 9.00 31.09 9.90

15.55 1.00 28.15 156.50 36.07

15.55 0.01 27.70 150.80 34.40

15.55 0.01 27.82 152.13 36.07

0.00 0.00 -0.25 2.51 1.71

1 1 156,319 17,944 204,450

2.25 51.97 6.97 19.00 1.41

18.88 1.25 9.00 32.00 10.24

18.50 1.12 8.10 30.25 9.86

18.78 1.25 8.24 32.00 10.24

-0.19 0.05 -0.76 0.91 0.34

5,670 10,506 3,400 8,057 6,000

27.83 4.04 40.00 19.35 79.00

Ados Pakistan AL-Ghazi TractSPOT Hinopak Motor K.S.B.Pumps Millat Tractors Ltd.

89.4102 139.7929 1.1460 116.7787

4.56 189.77 70.05 25.25 378.21

2.29 52.69 7.15 19.24 1.89

2.25 51.50 6.72 18.40 1.41

2.25 52.01 6.80 18.78 1.41

0.00 0.04 -0.17 -0.22 0.00

25,600 42,526 1,017 1,405,226 2

US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar

International Oil Price WTI Crude Oil

$99.86

Sell 89.80 117.55 140.51 1.1471 89.28 11.58 24.47 23.95 92.57

Brent Crude Oil

$107.97

Atlas Battery Ltd. Atlas Engineering Atlas Honda Ltd. Dewan Motors Exide (PAK)

166.15 58.00 121.50 1.91 159.96

27.83 3.89 41.49 19.35 80.90

27.00 3.82 40.00 18.35 79.00

27.00 3.86 40.05 19.35 79.00

-0.83 -0.18 0.05 0.00 0.00

8,000 13,500 835 35 257

voluMe

Abdullah Shah Adam Sugar AL-Noor Suger Mills Bawany Sugar Colony Sugar Mills

5.60 16.70 55.20 11.10 1.75

5.00 16.95 57.95 11.10 1.70

5.00 196.00 70.05 23.99 379.50

4.56 189.77 67.00 23.99 373.01

164.10 58.00 126.00 2.25 159.90

160.00 58.00 125.51 1.89 158.00

110.49 111.43 150.02 150.00

Diamond Ind. Hala Enterprise Pak Elektron Ltd. Singer Pakistan Tariq Glass Ind.

8.20 6.01 4.06 14.07 8.30

9.18 6.90 4.38 15.06 8.50

(Colony) Thal AL-Qadir Textile Amtex Limited Artistic Denim Mills Azam Textile

1.40 12.50 1.18 21.50 1.11

1.10 13.00 1.25 21.50 1.60

AHCL-DEC ANL-DEC ATRL-DEC DGKC-DEC ENGRO-DEC

27.96 3.40 111.88 19.09 97.03

28.25 3.46 112.00 19.25 96.40

4.56 192.47 70.05 23.99 373.78

161.78 58.00 125.98 1.89 158.03

109.00 111.18 145.05 145.58

Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. Highnoon (Lab) IBL HealthCare

99.00 74.62 65.27 29.23 13.61

100.00 75.00 65.99 30.00 13.50

0.00 2.70 0.00 -1.26 -4.43

103 3,220 67 24,995 5,431

-4.37 0.00 4.48 -0.02 -1.93

2,981 5,017 300 1,008 1,130

0.69 -4.44

1,170 203

P.T.C.L.A Pak Datacom Ltd Telecard Limited Wateen Telecom Ltd WorldCall Telecom

10.28 34.38 0.75 1.84 0.81

5.00 16.77 55.99 11.10 1.70

-0.60 0.07 0.79 0.00 -0.05

500 2,642 2,014 50 9,042

9.18 6.90 3.94 13.07 8.31

9.18 6.90 3.94 15.06 8.39

0.98 0.89 -0.12 0.99 0.09

1 50 389,302 501 11,224

1.00 13.00 1.17 21.50 1.11

1.00 13.00 1.20 21.50 1.11

-0.40 0.50 0.02 0.00 0.00

2,000 500 11,407 40 1

27.75 3.26 109.61 18.50 92.21

27.83 3.32 110.19 18.81 94.54

-0.13 -0.08 -1.69 -0.28 -2.49

97,000 140,500 298,000 208,000 1,558,000

99.54 74.62 65.20 29.74 13.44

0.54 0.00 -0.07 0.51 -0.17

426 10 4,216 3,276 1,962

98.50 74.62 64.10 28.51 13.15

10.32 34.50 0.83 1.88 0.94

10.13 34.45 0.75 1.75 0.83

10.17 34.50 0.79 1.75 0.90

-0.11 0.12 0.04 -0.09 0.09

325,684 900 7,497 27,179 1,537,164

0.35 35.52 0.63 1.51 1.60

0.35 35.50 0.65 1.55 1.70

0.34 34.01 0.60 1.50 1.65

0.34 34.50 0.65 1.51 1.65

-0.01 -1.02 0.02 0.00 0.05

10,002 3,884,023 55,204 299,633 501

56.83 10.29 4.81 11.51 28.30

57.99 10.29 4.89 11.55 28.52

56.00 10.00 4.72 11.00 28.18

56.46 10.01 4.78 11.35 28.27

-0.37 -0.28 -0.03 -0.16 -0.03

8,086 156,080 419,199 1,772,293 87,101

Electricity Genertech Hub Power Co. Japan Power K.E.S.C. Kohinoor Power

Banks Allied Bank Ltd Askari Bank B.O.Punjab Bank Al-Falah Bank AL-Habib

syMbol

oPen

hiGh

low cuRRent

chanGe

voluMe

Non Life Insurance 5.00 16.31 52.44 10.30 1.60

Fixed Line Telecommunication

Beverages Murree Brewery Co. Shezan Int’l

chanGe

Pharma and Bio Tech

Automobile and Parts Buy 88.80 115.16 137.99 1.1276 86.26 11.25 24.13 23.65 89.40

low cuRRent

Future Contracts

General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass Ltd Merit Pack Packages Limited

hiGh

Personal Goods

Construction and Materials Al-Abbas Cement Attock Cement Cherat Cement D.G.K.Cement Dadabhoy Cement

oPen

Household Goods

Industrial metals and Mining Crescent Steel Dost Steels Ltd. Huﬀaz Seamless Pipe Int. Ind.Ltd. Inter.Steel Ltd.

syMbol

Food Producers 420.03 109.20 22.52 6.75 83.67

Industrial Engineering

Interbank Rates US Dollar UK Pound Japanese Yen Euro

oPen

Chemicals

Major Losers Unilever Pak Foods Wyeth Pak Limited UniLever Pak Ltd. ICI Pakistan Pak.Int.Con. SD

syMbol

Adamjee Ins Atlas Insurance Century Insurance EFU General Ins IGI Insurance Ltd.

42.06 36.00 6.78 35.06 41.94

43.38 36.90 7.23 35.05 43.25

41.38 36.00 6.45 35.00 42.00

42.63 36.00 7.23 35.00 42.65

0.57 0.00 0.45 -0.06 0.71

37,504 65,132 1,500 7,753 600

13.50 1.40 65.53

14.50 1.40 65.53

0.00 0.00 0.00

2 1 157

0.29 13.82 0.65 0.85 2.55

-0.06 -0.61 0.00 0.19 0.00

5,018 32,976 10 1,700 458

Life Insurance American Life East West Life Assur EFU Life Assur

14.50 1.40 65.53

14.50 2.34 68.80

Financial Services AMZ Ventures A Arif Habib Ltd. Dawood Cap.Man XB Dawood Equities F. Nat.Equities

0.35 14.43 0.65 0.66 2.55

0.38 14.89 1.14 0.99 2.55

0.28 13.70 0.65 0.60 2.55

Equity Investment Instruments AL-Noor Modar Allied Rental Mod B.R.R.Guardian Cres. Stand.Mod Elite Cap.Mod

3.50 22.45 2.01 0.48 2.55

4.50 22.45 2.10 0.55 3.00

4.20 21.70 2.01 0.50 2.55

4.50 22.45 2.01 0.54 2.55

1.00 0.00 0.00 0.06 0.00

131,240 25 100 33,349 26

12.88 13.02 61.10 1.11 63.68 4.50 108.00 23.00 55.50 139.00 28.58 15.99 9.34 1.76 15.80 19.12 69.25 25.01 1.20 9.00 2.18

13.00 13.02 61.23 1.18 64.18 4.50 110.07 23.75 55.50 139.00 28.58 16.00 9.41 1.85 15.98 19.16 72.87 25.01 1.30 9.02 2.18

0.12 0.00 -1.63 0.03 0.50 -0.50 0.00 0.00 0.00 -1.00 0.00 0.00 1.00 0.05 -0.02 -0.40 0.00 0.01 -0.03 0.02 -0.87

4,500 1 842 76,708 685 2,000 71 20 1 1 300 2,000 1,325 3,264 15,305 29,766 51 500 188,662 14,761 10,001

Miscellaneous Century Paper P.N.S.C. Pak.Int.Con. SD TRG Pakistan Ltd. Murree Brewery Shakarganj Food Shezan Inter. Grays of Cambridge Pak Tobacco Co. Philip Morris Pak. Shifa Int.Hospitals Hum Network Ltd. Media Times Ltd P.I.A.C.(A) Sui North Gas Sui South Gas EFU Life Assur AKD Capital Ltd. Pace (Pak) Ltd. Netsol Technologies Pak Telephone

12.88 13.02 62.86 1.15 63.68 5.00 110.07 23.75 55.50 140.00 28.58 16.00 8.41 1.80 16.00 19.56 72.87 25.00 1.33 9.00 3.05

13.00 13.75 65.50 1.20 65.00 4.50 110.07 23.75 58.20 140.00 28.89 16.00 9.41 2.10 16.45 20.09 72.87 25.01 1.45 9.19 3.10

Mutual Funds fund

oﬀer

Repurchase

Alfalah GHP Cash Fund Askari Islamic Asset Allocation Fund Askari Islamic Income Fund Askari Sovereign Cash Fund Atlas Income Fund Atlas Islamic Income Fund Atlas Money Market Fund Atlas Stock Market Fund Crosby Dragon Fund

501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800

501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500

nav 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500

fund

oﬀer

Repurchase

HBL Money Market Fund HBL Multi Asset Fund HBL Stock Fund IGI Income Fund IGI Stock Fund JS Principal Secure Fund I JS Principal Secure Fund II KASB Cash Fund

100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000

100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000

nav 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087

PDF Profit_Layout 1 12/27/2011 12:30 AM Page 7

Tuesday, 27 December, 2011

You get a return only when you know what you invest in. If you invest 20 per cent, the eﬀectiveness will be 20 per cent

news

franklincovey, Pakistan ceo, andaleeb abbas

leather garments exports reach $748m ISLAMABAD ONLINE

xPORT of leather garments is showing positive signs as it touched the $404.3 million mark last financial year as compared to $343.3 million two years back. Initiatives, taken through Trade Development authority of Pakistan (TDaP) and Export Development Fund are bearing fruit as the sector has been showing growth and contributing foreign exchange to national kitty through exports, official sources said here Monday. Sources said TDaP has arranged numerous exhibitions to promote the sector and ensure meaningful participation of national and international buyers and sellers. The authority also participated in 12 exhibitions of textiles products including readymade garments in 2011. Furthermore, TDaP intends would participate in 12 exhibitions to be held in africa and china in the coming months. Sources said TDaP organised six trade delegations during this year to visit different countries including Tajikistan, china, Malaysia and Indonesia to promote leather garments.

Pakistan Oilfields Ltd outperforms KSE-100

Rupee depreciates to Rs90 against dollar ISLAMABAD ONLINE

HE pressure on Pakistani rupee is still continuing as it has now depreciated to around Rs90 to a dollar in the open market and interbank which is widening trade deficit. an official in State Bank of Pakistan (SBP) said on Monday that rupee depreciation was widening trade and account deficits. “The SBP’s decision on 21st December to attach conditions to the forward booking could help curb speculation in the currency market and check the increasing demand for dollars,” said the official. Few days ago, governor SBP had said rupee depreciation against dollar is temporary and it would stabilise in the coming days. Experts were of the view that it is important to increase inflows, including export receipts and remittances, to stabilise the local currency, besides ensuring dollar availability during repayment of IMF loan in 2012.

kArAChI

STAFF REPORT

HE Stock of Pakistan Oilfields Limited (POL) has outperformed the benchmark kSE100 Index by 11.7 per cent since the start of FY12. This resilience shown by the stock price is mainly attributable to the strong fundamentals like downward sticky crude oil price, healthy growth in the production flows and prospective discoveries as number of exploratory and appraisal wells are under drilling. We believe that despite this strong out performance, the stock of POL has still more to offer with June-12 target price of Rs450 per share, translating into an upside potential of 28per cent from

yesterday’s closing price of Rs353.2 per share, said Faisal khan at aHL. The company’s earnings are expected to depict a rise of 19.2 per cent to reach Rs13,302 million (EPS: PkR 56.23) in FY12. The stock offers an attractive dividend yield of 11.8 per cent with an expected FY12 payout of Rs40 per share and is trading at P/E of 6.0x. The company pays out dividend with its half yearly and full year results. MAnzALAI XI DIScOvEry IS LIKELy tO cOntrIButE PKr 2.66/ShArE: POL recently announced discovery in development well of Manzalai xI. This field, as per initial estimates, is likely to produce 1,296 bbls of oil (Lockhard and Lumshiwal formation 580bbls and Samanasuk formation 716bbls) and gas of 30mmcdf from both

commodity prices surge by

12 to 126pc in 2011 kArAChI

GHULAM ABBAS

HE poverty stricken consumers of essential commodities in karachi have been overburdened by sky rocketing prices of domestic items during last year owing to surges ranging from 12 to more than 126 per cent. almost 39 selected commodities in karachi have shown escalation in prices ranging from

12 to 126 per cent during the outgoing year 2011. Besides, almost 27 items have shown an average negative growth ranging from 2 to 47 per cent. according to a report prepared by karachi Retailer and Grocer Group (kRGG) prices of various kinds of pulses remained at an all time high as prices of the highly consumed commodity were recorded at an average increase from 5 to 47 per cent during January to December 2011. While the average price

of kably chana, (white-1), kala chana (quality 1 and 2) have shown an average increase of 12 to 47.2 per cent during last 12 months. Various kinds of chilies and masalas have also registered surge in price ranging between 14 to 126 per cent, which made it difficult for the helpless consumers to make their smooth purchasing. a massive surge was also witnessed in the tetra packed milk rates of 1.5 litre, 1 litre and 0.5 litre as they have regis-

formations. This discovery will result in EPS impact of Rs2.66 per share on POL as it has 21.1 per cent working interest in the block. MAKOrI EASt-1 wOuLD furthEr PrOP uP thE EArnIngS frOM 2hfy12: The production flows from Makori East 1, which was discovered in august 2010, is expected to commence from 2HFY12. The Makori East-1 is anticipated to enhance company’s oil and gas production by 3,000bopd and 10mmcfd respectively. This resultantly will increase oil share in company’s revenue mix, hence subsequently leading to higher sensitivity to the crude (arab Light) prices. MOrE trIggErS In thE PIPELInE: Domial-2 drilling has achieved its target depth and is under tered an average increase of 14, 14.25 and 18.42 per cent respectively. Besides, nido Packet of 100 gram and 400 gram has also been soled at 19 to 25 per cent high prices respectively during the 12 months. Every Day 1000g and 400g was also sold with 19.51 per cent and 14.28 per cent higher prices respectively. Interestingly, the price of Olpers has been jumped from Rs98 in January to Rs116 per 1.5 litre in December 2011 in the absence of any check on the part of concerned authorities in the government. Fresh milk prices also went up to Rs60 to Rs70 per kg during the past 12 months. Prices of branded ghee and cooking oil have registered the growth in average prices ranging from 1.05 to 5.2 per cent putting enormous load on buying capacity of majority of consumers in the city. Tea prices also surged sharply during the current year which was attributed by the importers on account of never ending cycle of declining value of our local currency. The increase in tea prices in the international market and upsurge in demand after improvements in border controlling system had also affected prices of the commodity in domestic market. Interestingly, sugar, which was sold in retail markets of karachi at Rs75 per kg in January, was currently being sold at Rs55 with the average decline of a massive 36.36 per cent, as the commodity has a huge stock in the country besides the crushing season that has already started. Various qualities of flour were also reduced by up to 2.94 per cent during the 12 month period as enough stock of the commodity was also available in the country due to the stiff competition

completion. Positive development from this appraisal well could be a potential price trigger for the company. Makori East 2 (appraisal well) and Dhulian Deep-01 (exploratory well) is close to achieving its target drilling depth, any positive news flows from these highly prospective areas could provide potential trigger for Pakistan Oilfields. However, we believe, any productions flows from Makori East-2 will be dependent on completion Makori Gas Processing Facility, he added. Oil Prices in FY12 To-date has averaged at $108.6 per bbl compared to last year’s average of $93.3 per bbl. Since approximately 48 per cent of the revenue is generated from oil, sustainability of crude prices at elevated levels would augment company’s earnings further. outside the country. according to sources price of essential commodities including sugar, cooking oil and ghee, tea, wheat, beef, mutton, chicken, eggs, red chilies, haldi, all kinds of pulses, onion, potato, ginger, sugar, milk, packed milk, fresh and packed yoghurt, dry milk, washing soap, all varieties of washing and bath soaps during the year 2011 increased and in turn had a devastating impact on buying capacity of majority of general consumers. Talking to Profit, Muhammad Fareed Qureshi, kRGG, said jump in commodity prices have affected budgets of the already crisis stricken people who have now have forced to reduce their expenditures while purchasing only the much needed necessity items from the market. Under the lack of any price controlling system and failure of government’s existing set up to have check on commodity prices, the manufactures of packet items specially the tetra packets have increased the price of their products manifolds. The skyrocketing prices of some selected items have also limited impacts of decreased prices of other items on the consumers, he said adding that under the present situation the inflation rate was expected to face further jump next year. He said big manufacturers had again enjoyed benefit of huge price rises this year besides the market forces and mafias were emerged in larger numbers. The price lists issued by local government had also left no more than a piece of paper as the mentioned prices were never implemented in the city. concerned departments were doing a routine job of fixing fortnightly prices of essential items which penetrated into the unrealistic realm.