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FUEL ADJUSTMENT PRICE INCREASE
Saturday, 03 March, 2012
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The pipeline policy
APTMA demands T withdrawal ISLAMABAD
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STAFF REPORT
ll Pakistan Textile Mills Association (APTMA) on Friday demanded immediate withdrawal of the 39 per cent increase in the fuel adjustment price determined by the National Electric Power Regulatory Authority (NEPRA) as it would lead to the massive closure of the industrial units. Chairman APTMA Mohsin Aziz in a statement urged the Prime Minister Yusuf Raza Gilani and Minister for Water and Power Syed Naveed Qamar to withdraw the decision of NEPRA. He said such deduction would put textile industry into a financial crunch, as APTMA estimates that a mill with consumption of 70,000 to 100,000 units per day is supposed to bear an additional impact of Rs7 to 10 million. If implementation it would lead to massive closures of industrial units which are already
faced with energy shortages and financial crunch due to high bank mark ups. He said charging of FAS by over Rs3 per unit is excessively high and the worst part of the decision is that it is meant for the month of August 2011 with retrospective effect. He lamented that the textile industry had already affected sales and realized proceeds on agreed cost factor and it would be impossible to retrieve it from the customers. He said it would be taken as negation of good business practices both inside and outside country. He said even the government would not be able to come up with a practical mechanism as to how the FAS can be recovered from the customers and then paid to the concerned DISCOs. Chairman APTMA said the textile industry was already on the brink of collapse with no liquidity available to meet its expenses and deduction of additional amount from mills under the FAS would bring total closure of industry. No textile mill is in a position to pay such huge amounts and any power supply cut from DISCOs would pave the way for bank defaults across the country. He said textile industry is an export-oriented industry and it could not pass on this additional burden against already materialised transactions. The textile industry is highly energy intensive and is faced with six hours a day load shedding and gas supply is also restricted. He expressed the hope that sanity would prevail in government circles and the Prime Minister would direct the authorities concerned to withdraw the decision to protect jobs of millions of workers.
Pakistan equities return to top five regional stock list KARACHI
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ISMAIL DILAWAR
EbRuARY augured well for Pakistan stocks market where most of the indictors are in the green zone with Pakistan equities clinching back the top-five equity market slot by what the analyst said outshining the global average returns. Pakistan equities with 7 per cent returns were rated fourth after China (7 per cent), India (5 per cent) and Indonesia (1 per cent) in terms of average market returns in the Asia Pacific region for the month of February. On the inflows front, of the total $12.53 billion net inflows that came into the Asia Pacific region during the month under review Pakistan received $8.2 million, which placed the country on third position in the region after India and Indonesia which, respectively, attracted foreign portfolio investment of $4.9 billion and negative $166 million. Thursday saw the benchmark 100-share index closing as high as 12,941 points after peaking to the intraday high of 12,957 points, the market observers foresee the index all set to cross the 13,000 level anytime soon. “With the upside trends the KSE 100 index (is) preparing itself to cross 13,000 points level,” viewed Abdul Azeem, an analyst at InvestCap Research.
During February, the index outperformed its benchmark MSCI Frontier Market index with a fat margin of 2 per cent, the Emerging Markets by 6 per cent and the MSCI World index b 5 per cent. The trading turnover at KSE is also higher with daily average volumes standing at 128.4 million shares and market capital accumulating to at $36.7 billion. The market observers, however, warn that the ball was in the government’s court as a stretch from Islamabad’s assurances on the implementation of reformed CGT (Capital Gains Tax) regime might spoil the current rosy picture at the country’s bourses. “Continuity of the market rally is now largely contingent upon the materialisation of the verbal acceptances with respect to the changed CGT regime while any stretch from April 2001 (implementation deadline) may cascade negative impacts on both volumes and returns,” warned Khurram Schehzad, Head of Research at InvestCap. The analyst said the long-awaited acceptances over the most-aching CGT-related concerns by the Ministry of Finance did the KSE 100 attract the desired liquidity levels. As such, he said, besides yielding over 8.4 per cent in Feb-12, KSE 100 recorded healthy improvement in average trading volumes of 40.7 per cent MoM and 36.9 per cent YoY to $61.9 million during the month.
HERE was never any question of the government abandoning the Iran gas pipeline project. There was just the matter of conveying it to the Americans. And the foreign office’s snub, coupled with the prime minister’s firm stand on national television, further aggravates Washington’s mideast and AfPak dilemma. With regard to Arabia and the Gulf, does it materialise some of it more potent threats, or should it bear more frustration, after Russia and China’s veto on Syria, and India and Pakistan continuing business with Iran. With regard to Pakistan, with the
Salala spillover still hanging, is it wise to flex financial muscles, or is it best to stay quiet and invite greater insignificance? It seems Pakistan’s decision, and Iran’s for that matter, does not concern just the pipeline. Recent events have betrayed high level attempts at greater regional integration. And few better ways of constructive engagement between neighbours than binding the two together through long term economic projects. Already the Indians have done themselves, as well as the region, a great disservice by de-linking from the initiative some years ago. The fruits of compromising on local
interest to cater to foreign designs ought to be obvious to New Delhi, hence the no to cutting oil imports from Iran this time around. but with the recent trilateral summit, and Iranian energy for balochistan, and clear signals from Islamabad, Kabul and Tehran that regional interests must take precedence at this crucial juncture, it seems the uS will have to quietly remove itself to the back seat. We must have energy. The TAPI project, though obviously doubtful, must also be considered. For far too long we have let political pressures – both internal and external – destroy energy policy. Imposing sanctions on Pakistan from here will erode what little credibility Washington has not already blundered away in this region.