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Mobile banking can increase GDP by 3pc Page 7 Global economy: fighting for fiscal future Page 2 Reinventing economic policies Page 3 Pages: 7
profit.com.pk
Tuesday, 03 January, 2012
Auditors unveil irregularities in KPT affairs Over Rs8.24m spent on account of ‘irregular’ allowances to officers g Naval officers given millions during ‘unauthorised stay’ g Personnel on deputation absorbed without approval of ministry, navy g Violation of regional quota, grant of special house rent allowance also noted g
KARACHI
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ISMAIL DILAWAR
ederal auditors have found what they observed “unjustifiable” irregularities in administrative and financial affairs of the Karachi Port Trust (KPT) while examining the port operator’s past five years records, Profit has reliably learnt. auditors, appointed by federal government to audit KPT’s financial accounts under Section 68 of KPT act 1886 for a period ranging from 2007 to 2011, have grilled the country’s largest port operator on expenditure of over rs8.24 million on account of “irregular” pay and allowances to KPT officers of different designations. rear admiral azhar Hayat, general manager operations, Bashir ahmed, manager legal affairs, Captain Izhar Baig, dredging engineer, rashid Yahya Usmani, manager marine pollution control department, lt Cdr (rtd) M.a rehman, deputy manager enquiry cell, Faisal Masood, atif Iftikhar Naik and rashid Ikram Baig are the KPT officials who, the auditors believed, got either unauthorised pay and allowances or were appointed or promoted unduly. auditors made the KPT accountable for absorbing the naval officers on deputation without seeking approval of ministry of ports and shipping
and a no-objection certificate (NOC) from their parent department, Pakistan Navy. rear admiral azhar Hayat, GM operations, was one of the officers in uniform who, the auditors observed, were absorbed by KPT without advertising the post as a violation of relevant
rules. according to auditors, the official had received over rs0.282 million during his “unauthorized stay” at KPT after expiry of his deputation. auditors also named Captain Izhar Baig as a naval officer who was appointed by KPT as a dredging engineer at “TSHd aBUl” with-
out an NOC from naval headquarters. KPT in its reply, however, contradicted auditors’ claim regarding Hayat’s absorption and referred to Para 2 (b) of JSI4/85 and its board resolution number 629. The port operator also came
under fire for the reappointment of its retired officials and the “irregular” extension of the contractual ones sans the approval of federal government. also, auditors observed that KPT had paid “unauthorized” allowances worth rs201,000 to armed forces personnel. KPT
was also blasted for permanently absorbing Faisal Masood, atif Iftikhar Naik and rashid Ikram Baig “without open merit and without advertisement of the posts”. Further, according to auditors, KPT had promoted rashid Yahya Usmani, manager Marine Pollution Control department, to BPS-20 in violation of government order. “The government disapproved the case however the officer was promoted by transfer of post,” they claimed. Other irregularities, federal auditors said KPT had committed during the last five years include violation regional quota, the grant of “unjustified” monthly special house rent allowance of rs1000 in addition to hiring facility allowances to employees/officers, irregular appointments due to incomplete specification of terms and conditions in advertisement, appointment of resident Medical Officer without conducting a written test, payment of advance increments, etc. In response to auditors’ observations, KPT contends that the trust was a self accounting entity spending out of its own revenues and not from that of the government funds. “The expenditure mentioned in subject cases are in accordance with rules and regulations and duly approved by the ministry of ports and shipping,” KPT said.
situatiONeR
Pressure on reserve position, external balance to persist in ’12
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SHAHAb JAfRy
CONOMIC experts believe the country’s reserve position and external balance will be key determining factors going into ’12 as fiscal and monetary policies failed to stimulate the economy out of stagflation in the outgoing year. “Considering the rate of rupee decline, we expect a further 6-7 per cent depreciation in ’12, closing the year around the 95-96 level against the dollar,” according to Syed Sayem ali, country economist for Pakistan and Middle east at Standard Chartered Bank. That, combined with the $4.5 billion debt repayment due this year, will pressure the reserve position, he adds.
iNflatiONaRy teNdeNcies a weakening rupee will feed into inflation. and even though CPI has just surprised market watchers by sneaking under 10 per cent presently, the decline will be temporary at best if the rupee fall is not controlled. another critical factor is energy reliance on imported oil. “If oil prices rise, reserves will come under
overwhelming pressure,” says Sayem. Sakina Husain, research analyst at Pakistan credit rating agency (pacra) and financial journalist, expects oil prices to remain stable. “Global demand is slow, and even the US was a net exporter last season, so I don’t expect price fluctuations,” she says. Weak recovery in the US, sovereign debt drama in europe and slowdown in China are likely to keep oil price muted. But with increasing Iranspecific tension around the Straits of Hormuz, the possibility of an erratic oil price movement cannot be ruled out, even if it has not yet been priced in by currency and commodity markets. There is a notable element with regard to food inflation, though, notes Sakina. “Wheat shortage will push up prices to an extent, but otherwise the outlook seems stable enough”.
MONey PRiNtiNg The government has drawn considerable criticism due to unprecedented borrowing from central and scheduled banks. “One of the few bright spots in ’11 was an initial declining trend in government
borrowing. It actually retired some borrowing to the central bank, hence the slight drop in inflation,” says Sayem. But it seems the borrowing binge is on again. according to middec data, central bank presses printed another rs220 billion, risking subsequent rise in inflation. There is also news of political motivation to reduce the policy rate by another 100bps. “With foreign investment absent, government borrowing will put pressure on domestic liquidity,” according to Sakina.
sector dilemma. Banks, for their part, have had few problems with risk-free advances to the government. “energy tariffs have increased more than 100 per cent in the fours years of the present government,” says Sayem, adding that the government’s projection of additional 30 per cent tariffs will mean reduced growth and output, lower exports, higher unemployment and declining real wages.
eNeRgy cRisis
While the security situation improved in the last year – fewer terrorist attacks and bomb blasts – rollback in military aid means security expenses will remain a big drain on the national exchequer. and considering intense pressure on the reserve situation, observers expect the government to revisit dynamics of the army operation in the tribal area. “There is a big question mark on continued military presence in the north,” notes Sayem. realistically speaking, there are few viable alternatives. The government will need to keep spending, especially on social uplift and development
The energy sector is actually plagued by a financial crisis in the supply chain. The problem owes more to financial resources than energy availability. But with the government’s fiscal space constrained, there is little likelihood of sorting out the energy problem in ’12. energy shortfall is blamed for lacklusture private sector performance in ’11. Yet with heavy government borrowing consistently crowding out the private sector from credit markets, chronic energy shortage only intensified the private
secuRity situatiON
projects in conflict zones like Swat, to keep violence from erupting again in future, he adds. This means the practice of diverting development funds to nondevelopment heads will continue.
lOw eaRNiNg/fiscal stORy The government’s fiscal position will almost definitely remain unenviable. Tax reforms have not materialised, foreign aid has receded, the debt burden is mounting and rs300-400 billion in annual PSe loss is going nowhere in election year. In absence of meaningful tax revenue generation, the other main earner, exports, is not much to write home about either. “International cotton price is at its lowest in two years. With more than 50 per cent of the export basked comprising cotton and related products, export competitiveness is sure to suffer in ’12,” says Sakina. Failing a game-changer, the ’12 narrative is unlikely to be much different from the preceding year. With earning low and expenditure rising, even minus exogenous shocks, swelling deficits will occupy minds of policy-makers and observers alike.
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Tuesday, 03 January, 2012
debate
Global economy: fighting for fiscal
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fARAKH SHAHzAd
He marginalisation of world economies, euro zone crisis, global food inflation, increase in poverty, poor governance, confused fiscal priorities, sharp slowdowns, growing fuel prices, environmental hazards, fracturing of social safety nets, destabilising effects of unemployment, painful consequences of armed conflicts, surging crimes, natural disasters and pandemics have collectively pushed the once flourishing states to ask their subjects to tighten their belts. But this sort of forced austerity and spending cuts breed more serious difficulties, intensifying the problems rather than finding a solution. This is a tantamount to promoting poverty among the already vulnerable communities wherein, those living in abject poverty are the first causality. It is politically and morally unacceptable that more than 1 billion people on the planet still have to survive on less than one euro per day. That figure may well rise as the world’s population grows. The world economy faces exceptional – perhaps, even unprecedented uncertainty.
eMPty POcket syNdROMe let us see the inevitable impact of the global crisis on the life of developed nations. On this Christmas, plenty of americans had to hold back as the lure of flashy ads, tempting bargains and family expectations, clashed with realities of the economy under an empty pocket syndrome which has hit even the affluent sections of society. experts in consumer behavior say that situation can strain the brain. There was none of the traditional holiday bustle at the dozens of stalls selling low-cost trinkets. Many retailers extended opening hours and provided heavy discounts, but of no use. In Italy, the high-end stores like Prada, Gucci, armani, Bulgari, louis Vuitton, Valentino and Ferragamo remained dilapidated in a sense that salespeople kept standing idly by the door. There has been a yawning emptiness in these shops at Christmas. as Italians look ahead, they see the specter of a deep recession. The government has already imposed new taxes, businesses are closing, and in this holiday season, the prospect of austerity measures worth, $40 billion, has created a mood of fear and insecurity. CeO of a reputed chain said, “This looks like a postwar economy as this Christmas season was the worst in 50 years. even my rich clients this year are not spending as they are scared,” he added.
leaving a prevailing mood of pessimism in many emerging markets as well as in europe. The looming uncertainty over the global economy has turned consumers into more value-conscious, mobile, experience-hungry, social sharing and green enthusiasts. add a touch of convenience for a , and this paints a picture of the new global consumer. euromonitor International, a global market research organization, reviewed the key consumer and industry trends that defined 2011, and offers the difficult prospects for 2012.
Retail MaRket The analysts say that economic woes will see more consumers looking up to new non-monetary forms of status like altruism, connectivity, eco-credentials and acquired skills. The survey says that less will be more in 2012, as the companies will be helping their customers to consume less of their products. The retail industry is told that in 2012, opportunities to cater to millions of low-income urban consumers will be the biggest ever. The positive side of the retail story is that best case scenario will see retailing be worth $13.2 trillion, by the end of 2012. However, macro-economic issues will remain a concern. Cross-border sales through internet stores are likely to put bricks-and-mortar retailers in all countries under pressure in the short term. Grocery retailers are set to enjoy faster growth than their non-grocery peers. Taking a greater share of their competitors’ sales will likely aid grocery retailers during the year. retailers are going to be increasingly aware of M-commerce (mobile commerce) in 2012. With more mouths to feed, retail volume will continue to outpace retail value sales.
cONsciOus cONsuMPtiON It is also anticipating that crowd sourced problem-solving will trigger innovation – especially if participation is made simpler. (Crowd sourcing is the act of sourcing tasks traditionally performed by specific individuals to a group of people or community (crowd) through an open call). emphasis will be on conscious consumption in 2012 as consumers continue their search for a more meaningful life. economizing on luxuries is a logical answer to address the scarcity of resources.
cOst cuttiNg cONfideNce leVel Business confidence in the global economy has evaporated amid the escalating eurozone crisis,
another vital prediction is that collaborative consumption, renting goods instead of buying them, will be big in 2012. This is a disposable way of fulfilling one’s needs by paying as little as
possible. renting expensive ceremonial costumes for wedding parties is the best example of collaborative consumption. The richest 10 per cent of households in 24 major economies account for more than 1/3 of their country’s income. The incomes of the richest 10 per cent in the USa are 37 times higher than those of the poorest. This situation is likely to rationalise the ongoing Occupy Wall Street movement which is gaining a fresh momentum with every passing day. Unemployment, particularly youth unemployment, will plague advanced economies in the New Year. For instance, more than half of the people aged, 15-24, are without work in Spain and the figures may grow further in future. Underlining the growing divide globally in terms of spending power, jewelers is expected to be the fastest growing channel in 2012, boosted by emerging markets. asia Pacific is expected to overtake Western europe as the biggest regional packaged food market in the coming years.
uNceRtaiNty The world economy faces exceptional – perhaps, even unprecedented uncertainty. a growing prevalence of convenience and snacking will make eating on-the-go, the new “normal” as it enters 2012. The rebound in output among developed countries has proven feeble, yet fiscal austerity, especially in the eurozone. The collective austerity of developed economies will likely bring on one of the most severe fiscal contractions in many years. These effects will be partly offset by developing countries, although growth is moderating as global financial conditions deteriorate.
glObal PeRsPectiVe euromonitor International has forecasted a turbulent period ahead. It wrote, “World growth will slow down in 2012 amid ongoing sovereign risk and austerity programme. The by 3.8 per cent in real terms in 2012, down from 3.9 per cent in 2011 and 5.2 per cent in 2010. The slowdown might be attributed to financial instability and fears of sovereign risk, which threaten to spread beyond a few european economies. In other developed countries (such as the USa), policy indecision exacerbates uncertainty. as a result, stimulus programmes launched in 2010-2011 are being replaced by austerity measures.” euromonitor expects developed countries to grow by 1.6 per cent in 2012 in real terms. Such an outcome would be below historical trends and several economies are likely to experience sharp slowdowns, notably in the eurozone, where sovereign risk is high. Collec-
tively, advanced economies will slip into a synchronised slowdown as the loss in confidence spreads to consumers, bankers and investors.
deVelOPiNg cOuNtRies The economic review anticipated better prospects for the developing nations. “The outlook is brighter for developing countries. external demand is weakening, but in most emerging economies, domestic demand should propel growth until the world economy becomes healthier. However, the outlook for developing countries is not risk-free. a few countries with especially open economies and dependence on demand in developed markets could struggle. Policy makers in developing countries generally have more flexibility than is available in the advanced world, meaning that the possibility of a soft landing is more likely than a hard one”. In emerging and developing economies, aggregate real growth will be 5.9 per cent in 2012 compared with 6.3 per cent in 2011. The slowdown can be partly attributed to the fact that many of these economies depend on exports to the developed world. Nevertheless, gains of income along with the rising middle class and growing trade between developing countries will ensure that most of these countries see solid gains in 2012. developing countries will account for the bulk of world growth. a few emerging economies such as Belarus, egypt, Iran, Pakistan, Venezuela and Vietnam could experience some overheating, but the underlying reasons will be country-specific rather than global change.
PakistaN With rise in crude oil prices and recent depreciation in rupee and keeping in view the fact that gas and electricity prices have already been hiked, the central bank is to adopt a cautious approach to control the rising level of inflation especially, the food inflation. World Bank recent report titled, ‘Pakistan Country Partnership Strategy FY20102013’, has warned that Pakistan is expected to pay a price for leaving the International Monetary Fund (IMF) programme. It pointed out that in the presence of IMF programme, the GdP growth was expected at 4.5 per cent and in the absence of this programme, GdP growth is likely to decline to 3.5 per cent to 3.6 per cent for ongoing fiscal year 2011-12. In this context, a continued improvement in the macroeconomic situation will remain a challenge. apart from its domestic problems, Pakistan is likely to have a double impact in a sense that global trade is projected to remain depressed and unemployment high for coming years in a large part of the world.
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Tuesday, 03 Januar y, 2012
EDITORIAL
The good and the bad HIle there’s little surprise in the government’s failure to enhance tax earnings in the year just ended, there is still reason to rejoice – the 10 per cent year-on-year rise in exports in the last five months. Optimism must still be greeted with caution, since the economy stood devastated by floods at the same time last year, and a quantum jump in the corresponding period, while appreciated, might not be as intrinsic as portrayed by the numbers. There are good and bad points in both findings. The tax debate lay at the centre of the decision to abandon the IMF standby agreement. Unable to build consensus on tax reforms the Fund dubbed crucial for sustaining the arrangement, the government wrongly banked on macroeconomic stability to stimulate growth. Now, with the IMF gone, and US aid held hostage to political/security developments, other multi- and bi-lateral donors have also backed off from providing fiscal support to Pakistan’s economy. and with tax reforms nowhere in sight,
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and the rs300-400 PSe drain going nowhere in election-time, exports must strengthen to relieve the intense fiscal choke hold on the centre. This is where the country’s finance machinery should concentrate most of its energies, while not foregoing tax initiatives, of course. The trade development authority is visibly posturing towards diversifying target markets, which is central to a proactive export strategy in a fast-changing international environment. Our traditional export markets are severely compromised, and european and other cross-atlantic sales will not provide sustainable momentum going forward. The key lies in regional expansion, followed by a more diverse modification. It is also essential to reinvent our export base. The current mix is insufficient, especially with the cotton price jump in the international market no longer present. If the good news of the 10 per cent increase in earning is not followed by better regional penetration and incorporation of value addition, it too will fizzle out sooner rather than later.
Reinventing economic policies
Asad Hussain Here has to be a greater emphasis on the supply side of the economy. Knowledge, innovation, productivity are key drivers of the supply side economy. Unfortunately, Pakistan is falling behind in all three areas which have choked growth and slowed the innovation process. In the absence of effective competitive environment, Pakistani firms seem uninterested to invest in r & d and business sophistication to improve productivity gains and earn dividends thereafter. Thus domestic markets and consumers are faced with the inefficient goods market syndrome. Protections, subsides and other concessions provided by the government have put both private firms and public sector enterprises lazy, and inefficient. Knowledge refers to the pool of educated/skilled workforce and technological readiness which can be effectively put to use to improve the business sophistication and productivity. It is said that Pakistan’s economy must continue to grow at a rate of 6-8 per cent if GdP is to be doubled in the next 10 years. The stop-go economic performance has suffocated the process of alleviating poverty and improving the standard of living of Pakistanis and as a consequence, the atmosphere of uncertainty runs deep across the economy. Now the question is what should we do to take the economy out of reverse gear and run it on its smooth path of recovery? Well, building knowledge economy which is driven by technology and innovation should be the broader objective of all the stakeholders. Creative, intelligent and wise minds can improve the efficiency and efficacy of the supply side of the economy without putting extra strain on the resource market. Hence knowledge creation is the key driver in pulling the economy out of slow growth rut. To meet this end and improve the labour market efficiency, a strong nexus of industry and academics is seriously needed as the technologically advanced countries have already successfully demonstrated it.
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Tax revenue
Real investment, the key driver for creating new employment, has fallen for the third Advertising via jinglesconsecutive year in FY 11
This is with regards to the news report titled, “Govt fails in enhancing tax revenue”, published yesterday. Something needs to be done in this regard. If the political leadership is under the illusion that economy will improve at its own, they may think again. The taxation system requires a major overhaul, but the problem is those who have the power to do it get hurt. So we are stuck. IMF package for Pakistan was a policy suggestion and still there is some time left to follow it. Pakistan is part of the global economy and it cannot act at its own; given the resource limitations.
This is with regards to the article, “The jingle bells of creativity”, published yesterday. The writer has done a great job. Jingles play an important role in an advertisement’s recall. I can recall quite a number of famous jingles up till now, that keep popping into my mind. The one very popular advertisement that I can never forget all my life is of Waves and their catchy slogan, “naam he kaafi hai”. The slogan was effective indeed because advertising is one of the most visible aspects of business and one that can make a crucial difference to the achievement of any organisation's aims.
MAx
TEHREEM TARIQ
ISLAMAbAD
LAhoRe
To speak about productivity, Pakistan’s economic growth largely comes from the agriculture, manufacturing and services sectors. Services sector contributes around 50 per cent to the GdP now. To drive these sectors in top gear, educated and skilled human resource is a must. Unfortunately, the total factor productivity of the above sectors is painfully low when compared with other regional countries. among others, low levels of literacy, use of obsolete technology and unskilled labour force are perhaps the leading challenges. On the demand front, macro drivers are consumption, investment, government purchases and next exports. To improve the supply side determinants, key drivers, as stated above, must grow faster than the supply side determinants so that besides producers, investors also can reap the benefits in real terms. Unfortunately, as per the Household Integrated Survey, food expenditure constitutes close to half of total expenditure of a majority of Pakistanis. It is also learnt that a large size of potential consumer’s market is believed to be living on dis-savings. Nonetheless, remittances from overseas Pakistanis have risen sharply recently which has stabilised the consumption indicator to some extent yet it is not enough to plow consumption. In real terms, the indictor operates well below its potential capacity. real investment, the key driver of creating new employment opportunities has fallen for the third consecutive year in FY 11, according to the SBP. also savings which feed into investment have remained low as compared to world averages. The third component is government spending or purchases, in particular, the Public Sector development Program (PSdP). Ironically, this has already been cut so badly that it has hit the socio-economic indicators and the poor perversely. exports on the other hand have done remarkably well despite of having an energy crisis and deteriorating security situation in the country yet the sector has immense potential to grow. To conclude the above discussion, high growth and a competitive domestic market are pre-requisites to alleviate poverty and standard of living of Pakistanis. There can be substantial transformation in goods and labour market if growth is sustained for a longer period of time and the private sector welcomes the competitive environment including foreign competition. local firms must learn to compete domestically before they start looking outward. as millions of fresh graduates join the labour force every year it becomes increasingly important for Pakistan to sustain high economic growth for a long period of time and create jobs for the youth. If political will exists then the task of achieving high sustainable growth can become easy. The writer is director Szabist, Islamabad. He can be reached at asad.syedd@yahoo.com.au
A vista of opportunities
Amjad Riaz He year 2011 and its events had put up numerous pointers or signals showing effects of an economy not properly governed. Nevertheless the year has in its wake the potential and the strength to brighten the economic outlook for 2012 in many ways. This is possible only if we are prepared to think outside the box to solve troubling issues of the economy by building a balanced opinion on the real state of the union situation. In the year 2011 there was a phe-
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nomenal increase in home remittances that helped the local economy to meet its trade requirements. In a decade home remittances enhanced from about one billion US dollars to more than 11 billion US dollars in the last year. The inflow helped bridge the trade deficit but this also generated a debate on this aspect of the economy. There is a point of view that due to inflationary factors in the indigenous economy the remittances registered an upward trend. But there is also a point of view that though remittances helped the local economy but they also resulted in producing an inflationary trend. The truth is obviously somewhere in the middle of these two opposite views. There has been some uncertainty in many international economies as well and this factor in many ways helped to balance the negative effect. But let us remember that this opportunity must make us ponder and plan better for the future.
every year a large percentage of professionals like engineers, doctors and others migrate for education or jobs abroad. along with efforts to boost exports it is important the planning for provision of higher education must take precedence. No economy in the world can be run without a system of thought rooted in the real lifetime authenticities of its existence. In all likelihood, we are heading towards an electioneering regime and we are never really prepared for this. every few years and in any political system people go to polls to elect a government. Unfortunately even after more than six decades of experiencing many major upheavals in our development in historic and economic terms we do not seem to have learnt much in the way of conducting our political economy and the way we do our politicking. We should be quite clear in our mind that the whole idea of conducting an election is to help develop political economy
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
No economy in the world can be run without a system of thought rooted in the real lifetime authenticities of its existence
of the state. There is no reason for the arguments or the debate to be bursting at the seams. election time is a great opportunity for the nation to streamline its ideas about the political economy of the state. Just as in any private enterprise an annual general meeting is always an opportunity for the stakeholders to refresh its thinking and improve upon the way the enterprise does its business. The business of the state is spread over a large canvass where it needs to steer the economy and work on managing relations with other countries of the world for the maximum benefit of the people living in the country. For all practical purposes the electioneering time can in fact help the economy to
improve if we are only prepared to think the political and economic links in terms of workings of a modern state. In these fast changing times it is imperative we pull up ourselves to discuss socio-economic and political issues in the spirit of a nation that can learn to live decently with a variety of thought. The year 2012 is indeed opening a vista of opportunities for an economy to steer itself out of its trouble by following rational planning and taking politicking in its true spirit. The writer has served as consultant to the United Nations and other developing economies on the issues of trade and development. He can be reached at amjadriazzz@yahoo.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
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Tuesday, 03 January, 2012
04
Economic cycles, locally and globally do come about, but that does not mean that you leave your customers
news
standard chartered ceO, Mohsin Nathani
Govt to introduce Private Public Partnerships law ISLAMAbAd
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STAFF RePoRT
O expedite projects on Public Private Partnership (PPP) basis, the government will be introducing the Federal Private Public Partnerships law to establish function of the federal government and responsibilities of the implementing agencies. This information was provided at a meeting chaired by the Minister for Finance dr abdul Hafeez Shaikh, on the projects in the pipeline under PPP policy being pursued by Infrastructure Project development facility (IdPF). The law would provide legal protection to all stakeholders, and develop clear legal framework for private sector involvement in PPP
projects consistent, with existing national and international regulatory projects. Sindh has already enacted PPP law and Punjab has also passed it under the realm of planning and development. The minister stressed to enhance the institutional arrangements in the realm of PPP collaboration, and develop spontaneous and long-lasting relationship with all the line ministries and departments involved in the development of physical infra-structure in the country. He also instructed IPdF to develop close collaboration with the Planning Commission for the identification of the projects to be undertaken for infrastructure development and devise preliminary business plan for future programme. The meeting was informed that the projects under IPdF and PPP include in total rs335 billion proj-
ects, including M-9 Karachi Hyderabad, NHa Habibabad flyover, railways track access, Karachi circular railway, 500 MW lower spat gah hydropower project, revival of Sindh engineering, Karachi CNG bus, PHdeC-NTC cool chain, Caa fuel farm and hydrant refueling, PIMS dentistry and liver transplant, Comsats student’s hostel, lahore Southern bypass, energy efficient street lights for Islamabad and Faisalabad solid waste management, and integrated slaughter house and hit prime movers manufacturing. Most of the project’s financial and commercial feasibility was completed, IPdF told. The meeting was briefed in detail of the project pipeline development which centered on proactive marketing to agencies, organisations and institutions responsible for de-
Lack of data availability hampers gas exploration KARACHI GhULAM AbbAS
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aCK of data, aerial surveys and data processing system is hampering the exploration of gas in the country where the existing volume of gas is decreasing with every passing day. CNG association in the country has become a mafia and they are blackmailing both the government and people to safeguard their own interests, this was expressed by dr asim Hussain, federal minister of petroleum and natural resources during a press conference here at the head office of Sui Southern Gas Company (SSGC) on Monday. He said absence of aerial survey of gas rich lands, especially in Balochistan and Sindh due to security reasons, was one of the major reasons of gas shortage in the country as no exploration carried out despite increasing demand of gas in the country. There was no data processing unit despite spending around $1
million on the project in the past. Oil and Gas development Company limited (OGdCl) has not bought a single drilling rig since 1995 to start work on explorations, he said. However, the minister claimed, 12 engineers were being sent abroad to get training besides the required machinery were also being purchased to start the work on new gas reserves. Talking about current gas crisis, dr asim said there was 4.2 BCFd gas in the country against the demand of over 6 BCFd. Shortage of fuel would continue to haunt the people in January with the forecasted shortage of up to 2.5 billion cubic feet. “I had earlier said that this winter could be worse than the prevailing power shortfall, requiring major conservation measures,” he said. Out of the existing capacity of 4.2 BCFd the CNG sector, power companies and captive power plants were being supplied 310 MMCFd, 647 MMCFd and 294 MMCFd respectively while at
least 307 MMCFd were being lost under UFG, the minister added. Production of Balochistan, Sindh, Khyber Pakhtoonkhwa, and Punjab were estimated 17 per cent, 69 per cent, 10 per cent and five per cent respectively with the consumption of seven per cent, 41 percent, seven per cent and 45 per cent respectively. Talking about the protest of CNG sector, he said, the illiterate interest groups were holding the CNG outlets and they were continuously blackmailing both the government and people, especially the transporters, to save their own interest. replying to a query, dr asim pointed out that people in CNG business were making huge profits as according to him they were selling gas at 50 per cent higher price as compared to the purchasing rate. He admitted that conversion of vehicles into CNG power was a wrong decision of the government and the commitments made to different sectors for supplying required gas were also unjustified.
veloping infrastructure projects at all level and projects identified by relevant agencies, organisations and institutions. The presentation also contained some snapshots of future projects which are NHa – Multan Northern bypass, NHa – construction of link road Tarnol to new Benazir Bhutto International airport, small hydel projects, railways station development for Pakistan railways, widening of Islamabad highway, widening of IJP road, bus rapid transit system MrT for twin cities, Islamabad airport cargo village and Commercial development and Theme parks (PBIT). The meeting was attended by deputy Chairman Planning Commission, Secretary Finance, Secretary railways, former Governor State Bank, dr Shamshad akhtar, Chief executive of IPdF and other senior officials.
aPtMa to hold series of protests against gas supply suspension LAHORE STAFF RePoRT
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ll Pakistan Textile Mills association (aPTMa) management will hold series of protests against gas supply suspension to textile mills by Sui Northern Gas Pipelines limited (SNGPl) starting Wednesday, 4th January, 2012. Thousands of textile workers will join hands with the mill management to protest against gas supply suspension to textile mills in Punjab at the Manga-raiwind road, said aPTMa spokesman. He further added that top aPTMa leadership is also likely to attend the protest against gas supply suspension for indefinite period by SNGPl. It may be noted that gas supply to textile industry has been suspended since december 25 and SNGPl management has informed that it is unlikely that gas supply would be restored in January. aPTMa spokesman said it is impossible for the industry to continue with production plans due to severe energy crisis, providing job to about 10 million textile workers of Punjab.
Karachi Stock Exchange loses 65 points on rupee depreciation fears KARACHI STAFF RePoRT
F
rOM the onset of the new calendar year, the benchmark’s performance remained subdued as the index touched a low of 11,194 points. Within a short span of time market recovered the major losses to close at 11,282 points. The major economic concerns overshadowed the attractive valuations. The expected depreciation of PKr versus USd kept the foreign inventors away from the local market. KSe 100 index closed at 11282.01 levels with the loss of 65.65 points, while KSe-30 index gained 16.17 points to
secP enables automatic verification of e-challans ISLAMABAD: Securities and exchange Commission of Pakistan (SeCP) has enabled automatic verification of eChallans for payment of fee. The new procedure shall be implemented with effect from January 3, 2012, i.e. today and is only available for online applications. Previously, at least one day was required in e-Challan verification after payment by the depositor at the bank. Under the new procedure, systems of both SeCP and MCB have been linked online and now payments can be verified automatically within a few hours’ time. as soon as the user makes the payment at the designated bank branch of MCB; the bank branch shall automatically send intimation to SeCP of receipt of payment, for further processing. This new procedure is expected to enhance facilitation to SeCP’s e-services users and substantially improve the turnaround time in disposal of online applications. STAFF RePoRT
lPg industry rejects claims of cNg association LAHORE: lPG association of Pakistan has rejected claims made by Ghayas Paracha of CNG association that shortage of CNG is being created to benefit the lPG sector. Spokesman for lPG association of Pakistan, Belal Jabbar said lPG is the only fuel that has never enjoyed a government subsidy. Its price has remained linked with international benchmark price of Saudi aramco CP since 2007 and continues to remain volatile. CNG sector on the other hand has for years thrived on a subsidized rate of natural gas and has received protection and guaranteed profit margins by having its price fixed at a discount to petrol. lPG has had to compete with petrol and other fuels without the benefit of a guaranteed profit margin or protection. despite efforts by CNG sector to thwart development of lPG as autogas, lPG industry’s relentless efforts to establish autogas stations have become a reality. Four lPG autogas stations are currently operational with licenses issued to 24 more that are in various phases of construction. “There are over 15 million vehicles operating on lPG globally, as opposed to 11 million on CNG. lPG is considered more environment friendly than CNG and is far safer due to its lower operating pressure of 200 psi versus that of CNG at 3600 psi” said Belal. STAFF RePoRT
fbR bans PVc, ld import LAHORE: Federal Board of revenue (FBr) banned import of PVC and ld pushing the stakeholders in trouble and causing million of rupees worth of losses to the importers, Profit learned on Monday. Importers of PVC and ld waste said that FBr did not inform them beforehand and imposed the ban all of a sudden. They said that their orders have been placed and more than 200 containers were on the way or have reached Karachi port, but FBr issued the sudden ban and caused huge problems for them. “I have imported PVC and ld from europe but the custom officials are not releasing the lot due to ban,” said an importer Chaudhry Mubeen adding it is sheer injustice that the importers are not given time and that the ban was imposed haphazardly. He alleged that FBr’s decision is made only to favour a local producer. He said currently around 200 containers are stuck due to the ban. He said that FBr is asking for showing healthcare certificate of import for PVC and ld products. “all these products are imported under waste and scrap material and no one in europe, USa or anywhere in the world issue such certificates,” another importer allah Yar Malik said adding that government collects rs20-25 per kg duty on import of PVC and ld and collects million of rupees through it. He said because of the ban government would miss that revenue. He said if FBr wants to ban these products then at least give some time to the importers so that they don’t place further orders. PVC and ld are used for making plastic pipes, tables, chairs, sanitary goods, etc and it is expected that the prices of these products would go up with the ban. FBr Chairman Salman Siddique while talking to Profit said the banning of these products is not in his knowledge. “I will ask Member Custom to look into the matter and give importers a fair chance,” FBr chairman added. NAUMAN TASLeeM
banks remain closed close at 10195.20 levels. all Share index closed at 7815.14 levels after losing 41.68 points. Total 105 scrips advanced 103 declined and 119 remain unchanged out of total 327 scrips traded. Bilal asif at HMFS believes that the 2nd Half of FY12 would be fairly crucial especially
the current account numbers, trade balance and sustainability of remittances over $12 billion mark, while considering the energy related issues and political jolts may impact the investor sentiment. Fertiliser stocks including Fatima and FFC bounced back
aggressively while engro and FFBl followed the sector leaders. With onset of the result season we may witness better volumes but rising political temperature and economic concerns may continue to overshadow the corporate sector performance, he added.
KARACHI: State Bank of Pakistan and all offices of SBP Banking Services Corporation, inclusive of Public debt Offices, remained closed for public dealing on the 2nd January, 2012, which has been declared as Bank Holiday. all banks/dFIs/MFBs remained closed for public dealing on Monday. However, all officers and staff of SBP, SBPBSC, banks, dFIs and MFBs attended the office as usual. STAFF RePoRT
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Tuesday, 03 January, 2012
The central bank is the backbone of dealing with the enemies’ pressure
news
iran President Mahmoud ahmadinejad
Distrust, diplomacy and defiance The more sanctions Washington pulls out, the stronger is Tehran’s resilience g
KunwAR KHuLdunE SHAHId He US threw another curve ball at their chief nemesis Iran, on Saturday, as President Obama signed into law a massive defence bill, which includes strict sanctions on Iran. The latest sanctions target Iran’s financial sector, most notably the central bank, which is the hub of Iranian money orchestrated by the finances generated
T
by oil trade. The sanctions also encompass countries and foreign banks that are involved in doing business with Tehran, and the rationale behind the movie is to curtail Iran’s nuclear maneuvers. Washington feels that by smothering Iran’s fiscal nucleus they would be able to up the ante sufficiently and in turn force the nation to backtrack on its nuclear programme. However, the two missiles tested in the waters of the Strait of Hormuz yesterday were the metaphorical Grand Slam homer as Tehran clobbered Washington’s latest pitch out of the Middle eastern ballpark. Iran pulled out the Hormuz card recently, as was expounded in this space a couple of weeks back. and while the Western media initially touted it as Tehran bluffing in desperation, Iranian hierarchy’s relentless repudiation showcases the strength of the nation as it simply refuses to succumb to the US bullying. The missile tests have depicted
Iranian potential when it feels that the menace of being cornered – at any level – is on the horizon. But the US is in constant denial and fails to accept the fact that a nation has the mettle to stand up to its skewed policymaking and unremitting threats. Maybe, just maybe, Washington should accept its defeat in trying to force Iran into chickening out of its uranium enrichment plans and also start reconsidering its policy in the region – as a continuum of failures continues to mar american wars on a multitude of fronts. The prudent approach from Washington would be to revert to diplomacy in lieu of war threats, which could have massive ramifications, not only in terms of blowing oil prices out of proportion; they could also trigger a globally catastrophic war. Washington talking about potential military action in Iran every single day would only provoke Iran into further retaliation. If the US genuinely wants Tehran to take the foot of the gas in its quest for nuclear enhancement, noises about militaristic tactics are definitely not the way to go about it. US needs to explore a new approach towards dealing with Iran; for, one doesn’t need this writer’s words to realise the fact that the custom-
ary US stratagem is backfiring on a daily basis. US government would be wise in vying to settle the issue through dialogues and engagement, or else Tehran would leave no stone unturned in its quest to nourish Washington’s paranoia. Ten days of Iranian naval war games culminated yesterday as the Iranian vessels flaunted a new “tactical formation”, which can be conjured up whenever the government decides upon the closure of the Strait of Hormuz. Iranian Navy spokesman Commodore Mahmoud Mousavi also stated that for the first time, an anti-radar medium range missile was successfully launched during recent naval drills. This signals the fact that Iran’s warning about the strait’s closure is not a hollow clamour, but a veritable possibility now that Iran has paraded its naval prowess in the past week and a half. The Iranian atomic energy Organisation has also followed suit by announcing that its scientists have tested the first nuclear rod produced from uranium ore deposits inside the country. This achievement connotes that a colossal step towards becoming a self-sufficient nuclear nation has been taken by Iran; and that it now
05
possesses enough technological arsenal to ward off West’s interference. This is exactly what has blown the lid off Western apprehensions that Iran’s real intent – with its development of the nuclear programme – is to develop a capability to enrich uranium to the 90 per cent level that is required to synthesize a nuclear bomb. Following the news of the sanctions on Iran, the Iranian rial plummeted to an all-time low – sliding down to around 16,000 to the US dollar. and of course that was to be expected as Iran’s fiscal locus has been shrouded by uncertainty. Nevertheless, the economic plunge has not dented Iran’s unwavering defiance, as President Mahmoud ahmadinejad reassured one and all that the central bank was the “backbone of dealing with the enemies’ pressure.” Characteristically Mr ahmadinejad has rebuffed the West’s delusion with regards to squeezing Iran’s economy by reassuring the central bank of its vivacity and by clarifying that no amount of sanctions can compel the nation to bring out the white flag that the West is hankering after. With Vice President Mohammad reza rahimi vowing recently that “not a drop of oil will pass through the Strait of Hormuz if more sanctions were imposed”, Iran has unequivocally stated that they have scores of pinch hitters if US wants Iran to play ball. The writer is Sub-Editor, Profit. He can be reached at khulduneshahid@gmail.com
CORPORATE CORNER Zong wins ‘1st bankers t20 tournament’
LAHORE: Zong cricket team won the ‘1st Bankers T20 Tournament’ by beating liberty Power by 5 wickets. Bating first liberty Power set a mammoth target of 197 runs in 20 overs. Zong Gladiatorz in reply, achieved the target in 20th over with the loss of 5 wickets. This exciting match was witnessed by cheerful crowd, who appreciated the efforts being put in by Zong players in winning the tournament. Zong team was unbeaten throughout the tournament by outclassing Telenor, ericsson, MOl and Shifa International in the league matches. PReSS ReLeASe
samsung galaxy-y smart phone brings smart bid offer LAHORE: Samsung electronics Company ltd has recently launched the Samsung Galaxy Y smartphone (model S5360). To promote this innovative and affordable smart-phone for the youth, Samsung has launched an online Facebook campaign called “Smart-Bid”. Through this offer, the participants will get great opportunities to win a brand new Samsung Galaxy smart-phone for as low as rs1,000. Samsung Pakistan’s Managing director, Mr Hee Chang Yee said, “The Samsung Smart-Bid has been instrumental in creating a positive buzz for the Samsung Galaxy ‘Y’. This gives us a great platform to launch more attractive campaigns for the revolutionary Samsung products in future.” PReSS ReLeASe
delegation of employees from Punjab meets advisor to prime minister ISLAMABAD: a delegation of Shaheed Benazir Bhutto Women Crisis Centres, from Punjab met with the advisor to Prime Minister, Mr Mustafa Nawaz Khokhar, in the latter’s office in ministry of human rights. The delegation requested the advisor to address the grievances of the women centres’ employees, who have been seeking regularisation of their jobs for many years. There
has been uncertainty and insecurity among the employees. The delegation also appreciated the efforts of the advisor for taking notice and resolving their problems. Mr Mustafa assured the delegation that their issues will be raised at the Council of Common Interests in order to reach an agreement with the Punjab government and all possible steps will be taken for regularisation of their jobs. PReSS ReLeASe
brighto Paints receives an international award
bring the world’s best players to doha for what is one of the most prestigious sporting events in the country. PReSS ReLeASe
chourdhry akram receives appreciation on winning elections LAHORE: Choudhry Mohammad akram from labour Union CBa wins the all Pakistan Oil and Gas Company (aPOGC) election for year 2011. While addressing on this occasion, Joint Secretary Ghulam Shabbir and Secretary General Kalim Khan congratulated the labour Union, especially, Ch Mohammad akram. They further appreciated the labour friendly policies of Choudhry Mohammad akram and said, “We will continue supporting our members in time of need and ensure our performance exceed the expectations of our supporters.” PReSS ReLeASe
ufone to assist citizens foundation in Rahbar mentor progamme LAHORE: Pakistan’s fastest growing paint manufacturing company; Brighto Paints (Pvt) ltd has won an international accolade for its quality, leadership, technology and innovation. Khawaja ejaz ahmed Sikka, Chairman of the company, received the ‘International Quality Crown award in the Gold Category’ at the International Quality Convention of the Business Initiative directions, an event held in london to present awards to 74 leading companies from 56 countries around the world for their achievement in quality and excellence. Brighto Paints was the only company from Pakistan this year to brighten up Pakistan’s name in the international business market. PReSS ReLeASe
Qatar airways becomes official airline of exxonMobil Open 2012 DOHA: Qatar airways is the official airline of the Qatar exxonMobil Open 2012 tennis tournament, taking place in doha from 2nd to 7th January, 2012. Widely acclaimed as Qatar’s most prestigious association of Tennis Professionals (aTP) event, former World No.1 players rafael Nadal and roger Federer will take centre stage and battle it out on the courts of the Khalifa International Tennis & Squash Complex in doha. The strong line up of players also include other top notch players from around the world like the former defending champion, Nikolay davydenko of russia. Qatar airways Chief executive Officer akbar al Baker said that the airline is delighted to
ISLAMABAD: Taking a step forward to promote education amongst the underprivileged, Ufone volunteers are assisting in “The Citizens Foundation’s (TCF)” rahbar mentor programme. In continuation of Ufone’s collaboration with TCF, an interactive workshop was arranged for Ufone employees in lahore. The workshop was to prepare the volunteers, who are taking part in TCF’s rahbar programme (commencing from January), and instill in them the knowledge and expertise to carry out mentorship activities. Moazzam ali Khan, Head of Public relations and Corporate Social responsibility at Ufone, said that the volunteers were very keen on sharing their experiences with the students at TCF schools. He also added that the aim was to make a difference, no matter how big or small, in the lives of these children. PReSS ReLeASe
member countries, financial institutions, as well as international consultants and specialists in the area of commodity trading, financing and warehousing. United Nations Conference on Trade and development (UNCTad) and Food and agriculture Organisation (FaO) were also represented at the seminar through their experts in these fields. The purpose of the seminar was to share experiences and learn from representatives of agricultural commodity trade, commodity exchanges, financial institutions and other individuals and organisations from developing as well as developed countries. PReSS ReLeASe
caa extends date of increase in airport charges KARACHI: Caa Pakistan has deferred the implementation for enhancement of airport charges to January 16, 2012 instead of January 01, 2012. The revised or new charges will not apply on passengers travelling prior to January 16, 2012. However, tickets issued now/before January 16, 2012 with travel on/after January 16, 2012 will be subject to the revised/new charges. PReSS ReLeASe
Pia cuts night coach fare KARACHI: deputy Managing director PIa, Captain Junaid Younus said that as a New Year gift and the immense response by the traveling public within the country, fares of night coach has been further reduced from rs6,666 to rs5,000 (excluding taxes). He said that PIa is operating night coach flights with full load in order to facilitate the domestic travel by air as the rail-road services are not adequate to meet the traveling demand within the country. Soon PIa would be announcing night coaches for Multan as well. PReSS ReLeASe
Pakistan Mercantile exchange representation in turkey KARACHI: Pakistan Mercantile exchange (PMeX) was recently invited to participate and make a formal presentation in a seminar on “experiences in establishing effective Commodity exchanges in IdB member Countries”. This seminar was held on 15th-16th december 2011 in ankara, Turkey and was organised by the Islamic development Bank. Participants in the seminar included Commodity exchanges and Chambers of Commerce from IdB
LAhoRe: Director General Provincial Disaster Management Authority, Khalid Sherdil, handling over firefighting vehicle Turkish Red Crescent to assistant commissioner Murree. PRESS RELEASE
PDF Profit_Layout 1 1/2/2012 11:44 PM Page 6
Tuesday, 03 January, 2012
06 Markets top 10 sectors
49% 09% 10% 04% 04%
Chemicals
01% 03% 01% 02% 17%
Real Estate Investment
Construction & Materials Electricity Banks
Fixed Line Telecommunication
Oil & Gas
Financial Services
Personal Goods
Equity Investment Instruments
top 5 perForMers sector wise syMbOl
OPeN
high
lOw cuRReNt
chaNge
VOluMe
412.90 108.58 22.52 6.61 81.94
408.60 106.51 21.90 6.53 80.51
410.84 107.72 22.52 6.60 81.45
-1.66 0.07 0.00 0.03 0.45
13,856 244,929 300 135,943 7,131
15.99 0.13 27.15 5.45 152.88
14.36 0.01 25.35 5.00 148.01
14.36 0.01 26.89 5.00 150.00
-1.00 0.00 0.98 0.00 1.00
1,001 100 1,414,035 1 4,060
Oil and Gas Attock Petroleum Attock Refinery Burshane LPG Byco Petroleum Mari Gas Co.
STOCK MARKET HIGHLIGHTS Index 11282.01 2822.49 2485.98
KSE-100 LSE-25 ISE-10
Change -65.65 +28.33 -51.46
Volume 29,301,396 649,399 10,001
Agritech Limited Agritech(PREF)(R) Arif Habib Co SD Bawany Air Products Clariant Pakistan
Open 149.54 5565.80 65.99 134.60 92.70
High 154.50 5570.00 69.28 137.85 95.70
Low 147.90 5570.00 66.00 133.00 90.25
Close 153.95 5570.00 69.28 137.08 94.88
Change 4.41 4.20 3.29 2.48 2.18
Turnover 1,411,482 39 6,344 1,094,024 2,489,071
Major Losers Nestle PakistanXD Siemens PakSPOT National Refinery Oil & GasXD Shahtaj Sugar
3597.11 1056.75 242.69 151.62 89.18
3609.77 1056.75 242.00 151.98 93.40
3443.00 1003.92 235.00 147.11 84.76
3453.50 1004.32 236.15 147.74 86.50
-143.61 -52.43 -6.54 -3.88 -2.68
259 66 46,622 764,997 1,160
Volume Leaders Fatima Fert.Co. Fauji Fert Bin Qasim Engro Corporation NIB Bank Limited Arif Habib Co SD
22.92 42.43 92.70 1.73 25.91
23.94 43.45 95.70 1.77 27.15
22.72 41.10 90.25 1.61 25.35
23.84 43.22 94.88 1.64 26.89
0.92 0.79 2.18 -0.09 0.98
9,985,940 3,350,157 2,489,071 1,779,392 1,414,035
Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)
Per Tola (PKR) 52,735.00 51,608.00 938.00 1025.00
Per 10 Gm (PKR) 45,259.00 44,245.00 805.00 880.00
Per Ounce US$ 1,565.00 – 35.05 –
Al-Abbas Cement Attock Cement Bal.Glass Berger Paints Buxly Paints
2.50 51.00 1.78 13.20 5.61
18.00 1.10 36.11 11.05 6.51
18.24 1.10 37.05 11.61 6.51
0.09 -0.05 -0.96 0.00 0.00
9,008 8,097 2,767 203 18
27.35 3.66 41.03 7.50 82.72
2.60 51.99 1.78 13.50 6.50
2.40 50.50 1.75 13.00 5.61
2.50 51.00 1.78 13.20 5.61
0.00 0.00 0.00 0.00 0.00
3,008 874 20 477 1
5.46 192.84 5.10 28.50 7.28
Agriautos Industries Atlas Battery Ltd. Atlas Engineering Atlas Honda Ltd. Bal.Wheels
57.50 161.71 58.00 122.18 26.12
Adam Sugar AL-Noor Suger Mills Bawany Sugar Chashma Sugar Mills Clover Pakistan
18.72 53.37 11.99 7.99 54.60
18.70 51.89 12.99 8.98 57.29
27.30 3.88 42.15 7.30 83.00
26.71 3.38 40.05 7.25 81.00
5.70 193.00 5.90 28.99 6.50
5.50 184.24 5.85 28.50 6.30
57.50 161.80 58.00 122.99 27.35
26.80 3.45 41.03 7.27 82.66
-0.55 -0.21 0.00 -0.23 -0.06
2,318 4,313 16 500 10,512
18.38 51.89 12.99 7.99 54.60
-0.34 -1.48 1.00 0.00 0.00
1,725 1,000 500 1 1
5.57 191.96 5.90 28.50 6.49
834 231 504 10 4,050
57.50 161.40 58.00 122.18 26.12
0.00 -0.31 0.00 0.00 0.00
4 167 31 25 145
109.00 111.18 145.05 145.58
0.69 -4.44
1,170 203
Beverages 110.49 111.43 150.02 150.00
24.50 8.20 3.49 15.94 8.20
25.50 8.93 3.64 15.94 8.30
24.50 8.20 3.35 14.94 8.01
24.50 8.20 3.40 15.94 8.22
0.00 0.00 -0.09 0.00 0.02
1 1 18,006 1 3,417
AL-Qadir Textile Amtex Limited Artistic Denim Mills Aruj Garments Azam Textile
13.00 1.20 21.75 4.50 1.11
13.25 1.36 22.75 5.00 1.11
13.00 1.19 20.75 4.50 1.11
13.00 1.29 21.75 4.50 1.11
0.00 0.09 0.00 0.00 0.00
501 278,611 253 1 1
26.19 108.55 19.15 93.63 42.70
AHCL-JAN ATRL-JAN DGKC-JAN ENGRO-JAN FFBL-JAN
27.25 109.10 19.19 96.50 43.70
25.60 107.05 18.90 91.20 41.21
26.98 108.38 19.10 95.68 43.43
0.79 -0.17 -0.05 2.05 0.73
120,500 96,500 17,000 1,460,500 1,355,500
Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. IBL HealthCare Searle PakistanXD
99.79 81.99 67.08 16.65 45.06
101.00 81.99 67.85 17.65 45.06
99.73 81.99 67.34 17.65 45.05
-0.06 0.00 0.26 1.00 -0.01
5,070 293 2,278 18,473 550
99.00 77.90 67.00 16.65 45.05
Fixed Line Telecommunication 0.11 -0.88 0.80 0.00 -0.79
56.50 161.00 58.00 122.18 26.12
AL-Abid Silk Mills Diamond Ind. Pak Elektron Ltd. Singer Pakistan Tariq Glass Ind.
P.T.C.L.A Pak Datacom Ltd Telecard Limited Wateen Telecom Ltd WorldCall Telecom
10.39 34.50 0.80 1.79 1.00
10.17 36.20 0.84 1.89 1.05
10.00 34.50 0.77 1.75 0.91
10.09 34.50 0.80 1.82 1.00
-0.30 0.00 0.00 0.03 0.00
219,504 1 6 60,883 410,692
0.37 34.20 0.65 1.60 15.77
0.38 34.50 0.66 1.62 16.24
0.30 34.00 0.61 1.58 14.80
0.30 34.32 0.62 1.60 14.86
-0.07 0.12 -0.03 0.00 -0.91
504 208,043 5,254 41,015 2,341
53.87 10.03 5.41 11.25 28.53
54.50 10.14 5.62 11.50 28.80
52.00 10.00 5.27 11.25 28.11
53.54 10.11 5.56 11.35 28.45
-0.33 0.08 0.15 0.10 -0.08
60,371 19,802 799,088 139,838 63,734
Electricity Genertech Hub Power Co. Japan Power K.E.S.C. Kohinoor Energy
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 18.36 51.89 12.99 7.99 54.60
Pharma and Bio Tech
Industrial Engineering Ados Pakistan AL-Ghazi TractorsXD AL-Khair Gadoon Bolan Casting Ghandhara Ind.
VOluMe
Future Contracts
General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass Ltd MACPAC Films Packages Limited
chaNge
Adamjee Ins Atlas Insurance Century Insurance EFU General Ins Habib Insurance
46.51 36.10 7.11 38.15 9.85
47.75 37.00 7.11 38.47 10.00
45.10 36.99 6.94 36.51 9.70
46.55 36.99 7.11 37.38 9.91
0.04 0.89 0.00 -0.77 0.06
50,992 801 1 4,287 1,398
13.50 1.40 65.53
14.50 1.40 65.53
0.00 0.00 0.00
2 1 157
0.35 14.36 14.28 0.89 1.69
-0.03 0.00 0.10 0.00 0.19
8,836 36 5,540 1 1,000
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 Investmen Arif Habib Ltd. Dawood Equities Escorts Bank
0.38 14.36 14.18 0.89 1.50
0.37 15.00 15.14 0.90 1.69
0.32 13.40 13.75 0.89 1.69
Equity Investment Instruments 1st.Fid.Leasing Mod AL-Noor Modar Allied Rental Mod Asian Stocks Fund B.R.R.Guardian
1.52 4.20 22.45 2.50 2.53
1.61 4.06 22.45 3.50 2.70
1.61 4.06 21.33 2.50 2.17
1.61 4.06 22.45 2.50 2.26
0.09 -0.14 0.00 0.00 -0.27
12,001 2,500 26 1 4,711
31.70 36.25 32.00 12.35 8.99 66.00 1.15 63.50 22.05 26.20 16.25 525.00 1.91 15.41 19.00 71.30 59.41 1.25 8.01 2.18
31.96 36.25 32.00 12.71 8.99 69.28 1.17 64.51 23.00 26.20 16.25 527.00 1.95 15.64 19.18 72.98 62.39 1.32 8.45 2.18
1.201,500 0.85500 0.00 1 0.00 31 0.00 10 3.29 6,344 -0.05 476,139 0.99 3,788 0.00 30 0.00 20 0.25 500 0.00 3 -0.02 15,020 -0.07 12,793 -0.11 6,345 -1.82 7,687 0.00 101 0.02 63,514 -0.172 13,036 0.00 1
Miscellaneous Pak Paper Prod. Security Paper Pakistan Cables P.N.S.C. Pak IntCon(Pre) Pak.Int.Con. SD TRG Pakistan Ltd. Murree Brewery Grays of Cambridge Shifa Int.Hospitals Hum Network Ltd. Dreamworld P.I.A.C.(A) Sui North Gas Sui South Gas EFU Life Assur Jubilee Life In Pace (Pak) Ltd. Netsol Technologies Pak Telephone
30.76 35.40 32.00 12.71 8.99 65.99 1.22 63.52 23.00 26.20 16.00 527.00 1.97 15.71 19.29 74.80 62.39 1.30 8.62 2.18
32.25 36.25 33.58 13.00 9.99 69.28 1.24 64.51 24.00 27.51 16.25 527.00 2.03 15.95 19.59 74.58 62.39 1.40 8.65 3.00
Mutual Funds Buy 89.50 115.41 138.61 1.1573 87.32 11.35 24.30 23.80 91.00
International Oil Price WTI Crude Oil
$99.06
18.65 1.22 38.50 11.61 6.88
Construction and Materials
Murree Brewery Co. Shezan Int’l
89.9349 138.5807 1.1590 116.1599
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal Australian Dollar
18.15 1.15 38.01 11.61 6.51
lOw cuRReNt
Personal Goods
Industrial metals and Mining Crescent Steel Dost Steels Ltd. Int. Ind.Ltd. Inter.Steel Ltd. Siddiqsons Tin Plate
high
Household Goods
Automobile and Parts
Interbank Rates US Dollar UK Pound Japanese Yen Euro
15.36 0.01 25.91 5.00 149.00
OPeN
Food Producers
Chemicals
Market Value 1,415,804,172 13,840,663 453,664
Major Gainers Company Fauji Fertilizer UniLever Pak Ltd. Pak.Int.Con. SD MCB Bank Ltd Engro Corporation
412.50 107.65 22.52 6.57 81.00
syMbOl
Sell 90.00 116.89 140.33 1.1712 89.22 11.61 24.62 24.09 92.94
Brent Crude Oil
$107.27
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 Crosby Phoenix Fund Dawood Islamic Fund Faysal Income & Growth Fund Faysal Islamic Savings Growth Fund Faysal Money Market Fund Faysal Savings Growth Fund First Habib Cash Fund First Habib Income Fund First Habib Stock Fund HBL Income Fund HBL Islamic Money Market Fund HBL Islamic Stock Fund
501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800 102.5100 0.0000 103.9600 101.4000 101.1400 101.4400 100.8800 100.8900 101.4400 98.8551 100.2278 105.1082
501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500 102.5100 0.0000 102.9300 101.4000 101.1400 101.4400 100.8800 100.8900 99.4500 98.8551 100.2278 103.0473
NaV 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500 102.5100 0.0000 102.9300 101.4000 101.1400 101.4400 100.8800 100.8900 99.4500 98.8551 100.2278 103.0473
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 Lakson Equity Fund Lakson Income Fund MCB Cash Management Optimizer Fund MCB Dynamic Cash Fund MCB Dynamic Stock Fund NAMCO Income Fund National Investment Unit Trust PICIC Income Fund UBL Capital Protected Fund II UBL Islamic Savings Fund UBL Savings Income Fund
100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000 106.3763 102.2115 100.5994 103.2259 83.2931 108.2753 26.55 101.3261 106.7800 100.4576 101.9855
100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000 103.2779 100.7009 100.5994 101.6775 83.2931 108.2753 25.74 101.3261 101.4400 100.4576 100.9757
NaV 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087 103.2779 100.7009 100.5994 101.6775 85.4288 108.2753 25.74 101.3261 106.7800 100.4576 100.9757
PDF Profit_Layout 1 1/2/2012 11:44 PM Page 7
Tuesday, 03 January, 2012
07
I can firmly say that mobile financial services will have a significant impact on the economic and societal growth of countries
analysis
President and ceO telenor Jon baksaas
Mobile banking can increase GDP by 3pc g
Pakistan ranks 69/122 countries in terms of high spreads g Mobile density growth presents opportunity for banking sector g 85pc adults in the country financially excluded Paisa has done very successfully is that they have leveraged their mobile phone subscriptions and their distribution networks along with collaborating with Tameer bank’s microfinance initiatives to develop a system that allows the un-banked lower and middle classes to have access to branchless banking. The thing that stands out with easy Paisa is that it is not only limited to Telenor subscribers but is a facility that can be availed by all mobile phone users, a move that expands the domain of the services being offered. “Branchless banking has the potential to cut down on logistics, in the present age of globalisation of information. It has the power to develop unprecedented electronic linkages, allowing transactions to be made with great ease,” said a senior banker in SMe bank.
ALI RIzvI
a
CCOrdING to the State Bank of Pakistan’s financial stability review of the 1st half of 2011, pre-tax profits of the banking industry rose to an impressive 77.3 billion, the highest for the period in well over a decade. The recently released report further noted that during the half year under review, asset base of the banking system witnessed strongest growth since 2007 amid robust increase in investment, predominantly in government papers. Therefore, for the banking industry the incessant government borrowings have proved a blessing in disguise. The report highlighted that the amount of investment in government papers has more than doubled from rs1.08 trillion in december 2008 to rs2.62 trillion in June 2011. dispelling the impression that Pakistani banks enjoy the highest spread in the world, the state bank report mentions that Pakistan ranks 69 out of 122 countries with high spreads. However, what still needs to be understood is that the banking industry has fared relatively well in the last few years.
labORatORy Of iNNOVatiON State Bank data further consolidates the argument presented by the official at SMe bank, noting that branchless banking transactions have increased phenomenally by 27 per cent in JulySeptember, while the volume of transactions increased by 43.2 per cent during the period under deliberation. a research and policy centre at the World Bank, ‘Consultative Group to assist the Poor’ (CGaP), has said Pakistan is a laboratory of innovation for branchless banking. With over 180 million people and a GdP per capita of $2400, according to the CIa world Factbook, the banking industry of Pakistan after having enjoyed a year of success need’s to diversify into branchless banking to tap this important resource. CGaP, conducted a survey in Pakistan were 300 easy paisa customers were interviewed. The findings were astonishing, since they noted that almost 5 per cent of easy Paisa customers lived below $1.25 a day, while almost 40 per cent lived on less than $2.5 per day. The estimated further revealed that over 90 per cent of all customers rated the service as highly effective, with a significant proportion stating that it had a huge impact on their lives. It is encouraging to note that other banks have also decided to jump in and tap into this promising opportunity, with Habib Bank limited initiating branchless banking services in 2012. like UBl, Habib Bank limited has also decided to take this journey solo. With banking assets growing by an impressive 8 per cent in the period under review according to the State Bank Financial Stability report,, and the market still evolving financial inclusion through branchless banking is an area that promises to pay great dividends to the banking industry in the year 2012.
lackiNg fiNaNcial iNclusiON What seems to be lacking however in the banking sector is financial inclusion that remains to be quite low. In a recent study by Boston Consulting Group for Telenor titled ‘Shaping our financial future,’ the percentage of un-banked adults is at a staggering 85 per cent. Keeping in mind the strength of Pakistan’s banking industry, such figures remain alarming to say the least. This figure implies that 85 per cent of adults in Pakistan are financially excluded. The substantial growth in the telecom sector of Pakistan has resulted in an increase in mobile sim penetration that according to estimates is approximately 60 per cent of the total population. Growing density of mobile phone users presents an opportunity to the banking sector to utilise the platform to bridge the financial divide in the country. adoption of branchless banking therefore is an initiative that promises great dividends for the country. The fact that 85 per cent of Pakistani’s are financially excluded implies that they have to rely on often illegal means to manage their money. The potential for the banking industry to further grow exponentially is great. The same research by the Boston Consulting Group reveals that access to mobile financial services has the potential to increase Pakistan’s GdP by three per cent in the next decade. MFS can potentially allow 27 million people to have access to savings accounts through mobile phones, 17 million people will be able to pay their utility bills through MFS, 10 million people will have access to credit and four million people can potentially be insured through initiating branchless banking.
bRaNchless baNkiNg To this effect the State Bank of Pakistan has taken some very good initiatives to promote branchless banking in Pakistan and other corporate entities have followed suite with the foremost example being Telenor through their easy paisa scheme and United Bank limited with their Omni initiative. What easy
Impact of gas price hike on industry KARACHI
e
STAFF RePoRT
VeN though, the recent hike in the prices of gas would generate additional revenues for the government, it would at the same time impact the major listed sectors adversely, if the same was not passed on to the consumers, the analysts warned. The federal government through issuing two notifications, cumulatively increased gas prices for various categories of consumers by 14 to 207 per cent. “Where former reflects the impact of change in international energy prices, the latter is intended to rationalise gas demand by reducing price anomaly with other alternative fuels,” observed a Topline research
report issued Monday. This, the report said, would help the government to generate additional revenue. The report said under recent gas price revision, gas prices for domestic (all categories), commercial and industrial consumers, increased by 14 per cent while gas prices for WaPda companies and IPPs increased by 7-16 per cent. For fertiliser sector, which consumes 10-12 per cent of total countries gas, OGra increased both fuel and feed stock prices (for old plants) by 14 per cent. On the other hand, the report said, one time gas cess by government of Pakistan was imposed on industrial consumers (3 per cent of existing price), power companies (6-19 per cent) transport/CNG (15 per cent) and feed stock for old fertiliser plants (193 per cent).
Operating on fixed return formula, the increase would not have direct bearing on SSGC and SNGPl profitability, but is expected to ease the strain on individual company’s gas position.With 207 per cent increase in feed gas prices for old fertiliser, the impact will be negative on FFC, FFBl, engro old, agritech and dawood Hercules. However, the impact of gas increase is limited on new plants like engro enven and Fatima, as their feed price increased by only 1.8 per cent (exchange rate variation). However, 14 per cent increase in fuel price is similar for both old and new plants. “according to our estimates, the highest impact will be on FFC (rs350-370 per bag) unless, it is passed on to the consumers while minimum impact would be on Fatima
(rs20-25 per bag),” the report said. On engro, the weighted average impact will be around rs180-200 per bag, since there is no feed impact on the new plant. “Similarly, it bodes negative for textile sector, however, it will be slightly positive in long term as gas cess would some how improve gas availability,” it said. On account of pass-through nature of fuel component in the IPP tariff, 35 per cent increase due to tariff increase and cess imposition would have no bearing on the individual company’s profitability. Furthermore, the report said, with e&P profitability linked to wellhead gas prices rather than consumer prices, the aforementioned gas price revision would not have any bearing on the sector.
inflation dips to single-digit after two years KARACHI STAFF RePoRT
C
ONSUMer price index (CPI) inflation in the country fell to signal digits during the month of december after a lapse of 24 months to clock at 9.75 per cent as against 10.19 per cent recorded in the previous month. Moreover, after February 2011 the figure registered a decline of 0.7 per cent on month-on-month (MoM) while average 6MFY11 inflation stood at 10.9 per cent. “Though we still await the complete break-up of the number but our initial assessment suggests that the soft number is primarily attributed to declining prices in the food categorym,” said Nauman Khan of Topline Securities. The analyst said that in line with the historical trend food prices had softened as effect of eid-ul-azha faded away. With these soft numbers, there is high probability that current financial year, FY12, would see average inflation falling well below the government’s target of 12 percent, Khan added. another market observer, Khurram Schehzad of InvestCap research, opined that the inflation rate for december was “way lower than the consensus forecast”.