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Bulls stampede over 13,000pt barrier as index gains 147points Page 3
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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.
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Saturday, 03 March, 2012
news
25 EU states sign budget discipline pact BRUSSELS
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REUTERS
ll but two European union countries signed a treaty on tighter budget discipline for the euro zone on Friday, marking a coup for Germany which pushed for the accord to try to prevent a repeat of the loose spending that led to a debt crisis. Only britain and the Czech Republic did not sign the ‘fiscal compact’, under which countries in the euro zone are bound to write a ‘golden rule’ on balanced budgets into their national constitutions or equivalent laws, with automatic correction mechanisms if the rule is breached. “This stronger self-constraint ... as regards debts and deficits is important in itself,” said Herman
Van Rompuy, who, as President of the European Council, played a key role in negotiating an agreement acceptable to all signatories. “It helps prevent a repetition of the sovereign debt crisis,” he said, in a speech at the signing ceremony. but the agreement could yet pose significant difficulties. Ireland, which depends on the euro zone for financial support after its banking system collapsed, will hold a referendum on whether it should be party to the pact - a vote the country’s finance minister has compared with asking the nation whether it wants to remain inside the euro currency bloc. Speaking to journalists after the leaders’ gathering, German chancellor Angela Merkel emphasized that only countries that committed to the new regime would
qualify for a bailout from the euro zone’s rescue scheme, the European Stability Mechanism (ESM). “We have the two instruments,” Merkel told reporters. “On the one hand, the fiscal pact, and, on the other, the permanent European rescue mechanism. The two are interlinked.” “That means that in the future, only those that commit to fulfilling the specifications of the fiscal pact will be eligible for support from the permanent support mechanism.” Irish voters have rejected new European laws in referendums in the past. If they were to do so again in a vote expected by June, it could ruin plans to return to borrowing on financial markets as soon as this year because the country may be seen as a higher default risk by investors without the
backstop of the ESM. This in turn would most likely mean the country needs a second financial bailout. If it does not sign the pact, however, it would not qualify for help under the ESM. This vicious circle could have profound implications for a still fragile euro zone. Ireland is seen as the most successful of the three countries to be bailed out by the euro zone and International Monetary Fund during the sovereign debt crisis. “We are still in a fragile situation,” Merkel said. Perhaps an even bigger uncertainty lies in France, where opposition Socialist presidential candidate Francois Hollande has vowed to renegotiate the treaty to add measures to promote growth if, as opinion polls suggest, he defeats
conservative President Nicolas Sarkozy in a May runoff. The fiscal compact will be legally binding and will enter into force following ratification by at least 12 of the 17 euro area member states. Van Rompuy underscored the importance of Eu leaders carrying their parliaments and electorates with them. The pact will only apply to those countries whose currency is the euro, while the others will be bound by its provisions once they adopt the currency or at an earlier date, if they so choose. “You now all have to convince your parliaments and voters that this treaty is an important step to bring the euro durably back into safe waters,” he told heads of state and government. “I am most confident you will succeed.”
EU leaders shift crisis focus to growth BLOOMBERG
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uROPEAN leaders declared a turning point in the Greece-fueled debt crisis, shifting their focus away from the budgetcutting spree that has dominated two years of rescue operations. With a second Greek aid package wrapped up and the euro region slipping into recession, the leaders committed to a pro- growth agenda that sits uneasily with a deficit-control treaty that was signed today at the 17th summit since the outbreak of the crisis. “We’re not out of the economic crisis yet but we are turning the page of the financial crisis,” French President Nicolas Sarkozy told reporters after the brussels summit. European leaders are on guard against a repeat of the false dawn of mid2010 after Greece’s first bailout and the setup of a rescue fund. A phase of market calm was jolted by German demands for bond writeoffs that rattled investors, forcing Ireland and Portugal to fall back on emergency aid. The next tests include Spain’s defiance of deficit- reduction targets, a wrangle over the size of the rescue fund and pleas for more International Monetary
Fund backup, all flanked by the multiyear effort of stepping up Greece’s aid and then making sure it gets paid back. Greece’s 130 billion-euro ($172 billion) second package, confirmed on the eve of the summit, brought to at least 386 billion euros the sums committed or disbursed by European governments and the IMF to keep the euro — a currency designed to last forever - intact. ECB Cash: Added to that are 219.5 billion euros spent by the European Central bank to buy the bonds of struggling countries, and another 1 trillion euros in unprecedented ECb loans to tide the banking system through the crisis. “It’s a reassuring picture which is still very fragile because we have a lot of uncertainty and the countries of Europe have to persevere,” ECb President Mario Draghi said at the summit. “It’s a much much better picture than we had until November.” The Euro Stoxx 50 Index (SX5E) has advanced to a seven-month high and yields on Spanish and Italian government bonds have plunged as investor concerns that the single currency was at risk eased. “For the short term the risk of contagion has been eliminated, but the deeper problems are still there,” Zsolt Darvas, an economist at the bruegel research insti-
tute in brussels, told bloomberg Television today. DEBt swap: The next hurdle is to line up private investors to take losses of more than 70 percent on Greek bonds in a bond exchange, the key plank in a strategy to reduce Greece’s debt to about 120 percent of gross domestic product by 2020, a figure still double the euro-area limit. Finance ministers will hold a March 9 teleconference to review the outcome of the swap offer. The incentive for bondholders is that a refusal to take part might lead to even bigger losses. Whether there is a fallback position was left open. luxembourg Prime Minister Jean-Claude Juncker said there is a back-up plan for Greece, Finnish Prime Minister Jyrki Katainen said there isn’t, and Sarkozy called talk of yet more aid an “odd declaration.” Prime Minister Helle ThorningSchmidt of Denmark, one of 10 Eu countries outside the euro, concluded: “Everyone knows that we are not completely finished in terms of the Greek situation, but everyone understands that we take substantial steps in a positive direction. For the first time in many, many months this is not a crisis summit.” ‘UniqUE’ CasE: leaders labeled Greece
a “unique” case, promising that bond writedowns are a thing of the past, in a reversal of the strategy demanded in late 2010 by Chancellor Angela Merkel ofGermany, Europe’s dominant country. Merkel executed another reversal at the summit, agreeing to speed the payments into the planned 500 billion-euro permanent rescue fund barely a year after she won a deal to slow them down. “We are still in a fragile situation,” Merkel said. ‘This situation has calmed down a bit, but the crisis is hardly over and further steps will be required to get there.’’ under pressure from world leaders and the IMF to reinforce the European firewall, the euro’s stewards pledged to pay the first two annual installments into the fund this year. Known as the European Stability Mechanism, the permanent fund will go into operation in July. FUnD installmEnts: The timing of the remaining three installments to bring it up to its 500 billion-euro capacity will be set later in March, along with a decision whether to add on the 250 billion euros left in the temporary rescue fund, the European Financial Stability Facility. The month will also bring an austerity-versus-growth confrontation, as the signers of the freshly minted fiscal treaty
weigh whether to push back Spain’s deficit-cut timetable as it struggles through its second recession since 2009. “For the credibility of the whole operation, I think it is necessary that we maintain these budgetary targets,” said Eu President Herman Van Rompuy, who was named to a second 2 1/2- year term at the summit. “If we don’t do that in a consistent fashion, then we will be punished by the markets.” The tension is between abiding by the Eu’s fiscal corset and the economic logic of forcing more cuts on a country suffering unemployment over 20 percent. After most leaders left the Eu building, Spanish Prime Minister Mariano Rajoy scuttled his target of a 4.4 per cent deficit in 2012, aiming for 5.8 percent instead. ‘sovErEign DECision’: “I didn’t communicate the deficit target to the heads of state, nor do I have to,” Rajoy said. “This is a sovereign decision taken by Spain.” Spanish bonds fell today, with 10year yields rising 4 basis points to 4.91 per cent, exceeding Italy’s for the first time since August. The next move lies with the European Commission, which will decide whether Rajoy’s re-affirmation of reaching the Eu deficit limit of 3 per cent of GDP next year entitles it to leniency in 2012.
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Saturday, 03 March, 2012
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news
Bulls stampede over 13,000pt barrier as index gains 147points KARACHI
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STAFF REPORT
HE Karachi stocks market witnessed a bullish trend in scrips across the board as Friday saw the benchmark 100-share index crossing the 13,000 points mark after a gap of 45 moths. “The stocks closed bullish in scrips across the board on positive statement by uS State department on no threat for uS Secretary statements against Iran Pipeline,” viewed Ashen Mehanti, a director at Arif Habib Securities.. On last trading day of the week the KSE 100-share index gained 147.59.50 points to close at 13,088.97 points against 12,941.38 points of Thursday. “As a follow on of apex regulator confirmation for reformed CGT regime implementation from April 1st, institutional and retail interest witnessed amid higher
ISLAMABAD
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N this age of tablets that allow work on the move, the Securities and Exchange Commission of Pakistan (SECP) has finally woke up to provide companies with cost-effective and easy communication service by having a designated email address for receiving information from all
Company
Open
High
Low
Close
Change
Turnover
Nestle PakistanXD Indus Dyeing National Refinery Pak Oilfields Ltd Colgate Palmolive
3649.93 370.62 260.02 380.06 810.00
3824.99 389.15 269.79 388.00 840.00
3662.00 352.09 261.00 380.01 810.00
3801.89 388.66 267.93 386.83 816.50
151.96 89 18.04 525 7.91 300,539 6.77 1,356,974 6.50 46
Major Losers Unilever Pak Foods Bata (Pak) Ltd Wyeth Pak Limited Faisal Spinning Fauji FertilizerXDXB trades leading the index to close above 13,000 level,” said Mehanti. The index was seen hitting the intraday high of 13,101.09 points and then sliding to 12,941.38 points, the intraday low. The total traded shares also skyrocketed to 253.003 million shares against 182.219 million shares of the previous day. The trading value also rose to Rs6.576 billion from Rs5.4 billion on Thursday. According to analysts,
the factors that played as a catalyst on Friday include strong valuations in banking, oil and fertilizer stocks, resumption of gas supplies in fertiliser sector, easing circular debt concerns in power sector after electricity tariffs were raised by 39pc by Nepra. This was “despite concerns for falling rupee dollar parity and current account deficit,” said Mehanti. The market capital increase to Rs3.392 trillion against Rs3.352
trillion of the last session. Of the total 349 scrips traded, 183 gained, 73 lost while 93 remained unchanged. The turnover in future contracts also upped and was recorded at 14.310 million shares compared to 10.59 million shares of the previous day. Fauji Cement continued to dominate the volumes by counting its traded shares at 44.64 million shares each priced at Rs4.47 in the opening and Rs5.03 in the closing.
SECP designs email address for listed companies STAFF REPORT
Major Gainers
listed companies. In order to facilitate the listed companies, SECP has approved mandatory requirements for listed companies to transmit notice of annual general meetings and extraordinary general meetings through email. The listed companies can now submit the notice of general meetings by clicking a button – with minimum hassle and maximum reliability. The link is a custom-built email ID and
has been displayed prominently on the SECP website. Now the listed companies have been given the option to submit copies of the notices of general meetings, statements of material facts and proof of their publication in the local newspaper through email on a designated email address. It may be noted that choice of the medium adopted for submission of the said document shall remain open to the companies. To ensure that the share-
holders receive the notice of meeting in time and that it contains all the relevant material information, SECP has laid down the regulatory framework. One of the most important aspects of this regulatory framework is ensuring that listed companies transmit the copies of notices of AGM/EOGM to the SECP on the same date on which the notices are issued to the shareholders. Till now the listed companies were required to do so through fax.
1797.41 649.59 779.96 41.65 122.84
1715.00 630.00 780.00 40.10 123.81
1708.00 617.12 751.00 39.57 120.25
1708.00 619.36 760.97 39.57 120.84
5.10 25.45 9.78 31.25 29.96
4.58 24.35 9.21 30.00 28.65
5.03 25.45 9.37 30.97 29.74
-89.41 44 -30.23 163 -18.99 628 -2.08 1,000 -2.00 2,543,770
Volume Leaders Fauji Cement Fatima Fert Co Jah.Sidd Co Arif Habib Co SD DGK Cement
4.47 24.24 9.18 29.87 28.56
0.56 44,646,862 1.21 19,354,964 0.19 14,447,392 1.10 14,383,469 1.18 13,481,977
Interbank Rates US Dollar UK Pound Japanese Yen Euro
90.9878 144.7980 1.1155 120.5771
Buy
Sell
US Dollar
90.70
91.20
Euro
119.50
120.60
Great Britain Pound
143.38
144.58
Japanese Yen
1.1049
1.1138
Canadian Dollar
91.22
92.60
Hong Kong Dollar
11.51
11.76
UAE Dirham
24.68
24.85
Saudi Riyal
24.17
24.32
Australian Dollar
96.94
99.26
CORPORATE CORNER ZONG celebrates success by giving away 150 cars to franchisees
net enthusiasts use their mobile phones to browse the internet at a very economical rate. Taking another step forward in offering greater value addition; ufone is offering this internet bucket at a daily charge of just Rs0.99 and it is valid from 1am to 3pm. To subscribe to this bucket the users just have to dial 810 and enjoy unlimited internet to download songs, send or receive attachments and mails at the speed of light. users will also be able to remain connected on all social media networks. After the first opt in to the bucket, it will automatically re-opt every day. This bucket is available to all pre-paid users of ufone. To unsubscribe to the offer the user can dial the short code 7810. There are no charges to unsubscribe to the bucket. users using hourly internet package cannot subscribe to this package. PRESS RELEASE
Eighth Orient - Dawa Adbi awards lahorE: ZONG, the fastest growing network of Pakistan, enormously widened its subscriber base during the year 2011. The telecom company contributed immensely to the overall growth of the industry as more than 50 per cent of the total number of net addition to the subscribers’ base in 2011 belonged to ZONG. To celebrate this accomplishment, ZONG has decided to share its success with stakeholders by rewarding them through one of its kind scheme named Wheel for all 2011. As part of this scheme ZONG is awarding 150 franchisees to have achieved sales targets with Suzuki cars. In the history of Pakistan, this is the first time that a company has decided to honor every accomplishing franchisee by giving away rewards of such huge amount. During the year 2011, ZONG – the digital partner of Pakistani people, attained unprecedented success and was able to add 10 million users to its subscriber’s base. Also, Pakistan’s telecom industry witnessed a huge number of subscribers migrating from one network to another. A total number of 5.6 million mobile users used the Mobility Network Portability (MNP) service to shift to their preferred service provider. ZONG left all other operators behind in net users gain. PRESS RELEASE
Ufone launch Mobile Internet Bucket islamaBaD: ufone has launched a phenomenal new Mobile Internet bucket which will enable inter-
PTCL introduces new Vfone line rents islamaBaD: In line with its sustained efforts to facilitate customers with value-added services, Pakistan Telecommunication Company limited (PTCl) has introduced new line rents for unlimited use of Vfone to Vfone and Vfone to PSTN calls for all its existing and new Vfone subscribers. This remarkable initiative will result in a reduction of Rs.5 in the line rent of Vfone’s unlimited package, which will be charged at Rs15 per day effective from March 06 2012 instead of the earlier rates of Rs20 per day. The daily line rent for Vfone’s Family package has been revised from Rs5.99 per day to Rs6.99 with effect from the same date. PTCl has already removed all types of call set-up charges in Simple, Family and unlimited packages with effect from February 17, 2012. PTCl’s Vfone is Pakistan’s largest CDMA service providing blanket coverage across the country available in a variety of exciting pre-paid and postpaid packages. The unlimited free On-Net dialing services against highly affordable daily line rent charges provide unparalleled, effective and affordable communication to the masses. Vfone also offers high speed Internet facility supported with CDMA 1x technology and SMS service to and from all networks at highly nominal rates. PRESS RELEASE
KARACHI: Mr Naeem Yahya Mir, CEO and MD, Pakistan State Oil (PSO) is inaugurating the Mobile Publicity Unit which is an activation project launched by PSO for publicising its complete range of automotive and industrial lubricants. The branded vehicles will travel nationwide and engage trade and end customers. The senior officials of company were also present on the occasion. PRESS RELEASE
Toyota ‘Dream Car Art Contest’ held in Islamabad
KaraChi: Orient Advertising (Pvt) ltd along with its regular operations, encourages the talents of the young generation in the fields of urdu, physics, chemistry and IblAGHIAT by awarding them with gold medals and other cash prizes, related to well known personalities of the Nation. In honor of this event, children are being awarded with awards in the name of well known and famous personalities of the literary world by late S.H. Hashmi. These awards are awarded under five different categories: Mirza Adeeb award in the drama category; Syed Nazar Zaidi award in the story category; Ismail Meerthi award in the poem category; Aziz Asri award in the novel category and Imtiaz Ali Taj award in the humor category. PRESS RELEASE
KaraChi: The 6th nationwide Toyota ‘Dream Car Art Contest’ was held in lahore yesterday. A total of 27 art works, nine from each region (Islamabad, Karachi, lahore), were selected out of approximately 13,000 entries by children less than 10 years, 10 to 12 years and 13 to 15 years. Over 290 schools across the country participated in this nationwide contest including schools for special children. Out of the 27 regional winners, the best 15 art works will be short listed and sent to Toyota Motor Corporation in Japan for inclusion in the World Dream Car Art Contest.This nationwide ‘Dream Car Art Contest’ was organised by Indus Motor Company (IMC). Minister to the Japanese Embassy in Islamabad Mr Akira Kono was the chief guest of this mega event, while renowned celebrities Mr Jamal Shah and leila Zuberi were also present. PRESS RELEASE
ISLAMAbAD: Emaar Pakistan delivers on its promise: Mr Khurram Noor (Right), Emaar Pakistan, handing over the villa to Mr Hamid Farooq (2nd Right), Senior Executive Vice President – PTCL at Canyon Views Islamabad. PRESS RELEASE