Profit PAGES 16-11-2011_Layout 1 11/15/2011 10:34 PM Page 1
Sugar industry misfortunes Page 3 Reviving tourism industry of Swat Page 2 Balochistan laments exclusion of stakeholders in debate Page 8 Pages: 8
profit.com.pk
Wednesday, 16 November, 2011
PAkiSTAn-indiA SeCreTAry level TAlkS
Trade to lead ‘normalisation roadmap’ Fact check While talking to sources in the commerce ministry, they said that a number of issues still need to be addressed and the secretary level talks can only move beyond empty rhetoric if visa problems are sincerely addressed by the Indian counterparts. there are a number of technical difficulties that need to be resolved on an urgent basis, and if every visa case is sent back for verification, it will considerably delay the process of trade liberalisation. Seeking clarification on a transit trade corridor to facilitate Indian exports to Afghanistan and Central Asia, the source said that this is not part of the mFn debate as it is a separate issue altogether. ALi Rizvi
NEW DELHI
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ReUteRS
AKIStAn took further steps toward normal trade and travel ties with India on tuesday, agreeing to open most commerce with its larger neighbour by February and ease visa rules in the latest sign of a thaw in relations between the nuclear-armed rivals. “We have turned the corner,” Pakistan’s trade Secretary Zafar mehmood said at a joint news conference with his Indian counterpart in Delhi. “We are talking of a complete normalisation roadmap,” he added.
normAliSATion roAdmAP the two countries’ trade secretaries agreed Pakistan will replace a limited list of items India can sell across the border with a short list of items that cannot be traded, minutes of the meeting showed. Lasting India-Pakistan peace is seen as vital to South Asian stability and to smoothing a dangerous transition in Afghanistan as nAto-led combat forces plan to withdraw from that country in 2014. Distrust, border clashes and militant attacks have undermined stability in the region
ever since two nations were carved out of colonial India in 1947 with the disputed region of Kashmir at the heart of the problems. they have fought three all out wars since independence from the British. the border still bristles with soldiers who often exchange fire and both sides man the world’s highest battlefield, the 6,000 meter altitude Siachen glacier.
ThAwing TenSionS even so, the atmosphere between the two countries is at its warmest in years following a flurry of high level meetings and Pakistan’s promise last month of a most-favoured-nation trade status for India. Indian Prime minister manmohan Singh and his Pakistani counterpart Yusuf raza Gilani promised to open a new chapter in their fraught history after a nearly an hour-long discussion at a resort island in the maldives last week. on tuesday, India and Pakistan agreed to push for easing of visa rules that severely restrict travel across the heavily armed border. they will look at the feasibility of electricity trading and will open a second road trading post by February. Under the existing practice, both countries require businessmen to register with police on their
arrival and regularly report to them. visas are issued only for one city. “this time it is different. It’s not just politicians giving statements; there’s a whole roadmap chalked out with a time frame,” Amin Hashwani, president of the Pakistan-India Ceos’ Business Forum told reuters. the ‘negative list” of items that India will initially be restricted from trading includes the pharmaceutical and engineering industries, S.m. muneer, president of the India-Pakistan chamber of commerce told reuters. Pakistani pharmaceutical and engineering companies are worried they will be swamped by Indian imports. mehmood said the list would be drawn up within a couple of months then gradually phased out. He said an expert panel would decide in January on allowing the trade of oil products.
no mirACleS In contrast to the excitement in the business community, India’s defense minister sounded a note of caution. “there are positive signs for a breakthrough but one should not expect a miracle,” Defense minister A.K. Antony told reporters at a meeting on regional security. “We need to change our mindset if we really wish to
reap the benefits of mutual cooperation,” he said. In February, India and Pakistan resumed peace talks that collapsed in 2008 when Pakistan-based militants attacked the Indian city of mumbai. Indian Prime minister manmohan Singh said last week another cross-border attack would put an end to the peace process.
Army on boArd Buy-in from the military on both sides will be crucial to building lasting peace, with Pakistan’s security forces seen as both more powerful and more cautious about a detente than the country’s often unstable civilian governments. Business leader Hashwani said the army was on board this time. “Contrary to popular belief, the Pakistan army has been tacitly supportive of a good relationship with India,” he said. He called on the two countries’ leaders to make the most of the current goodwill between the nations. “It is very important, as the Chinese say, to cross the river by feeling the pebbles under both your feet,” he said. the rapprochement is “a game-changer” if it works, a senior US official in Islamabad recently said. “It’s going the right way. And they’ve made more progress than many expected.”
Government to buy uncertified sugar from PSM g
All sugar mills not certified by Pakistan Standards Quality Control Authority g TCP to buy 0.2 million tonnes sugar shortly KARACHI
G
GHULAM ABBAS
overnment is going to buy at least 0.2 million tonnes uncertified and substandard sugar, since local sugar producers and millers are not certified by Pakistan Standards and Quality Control Authority (PSQCA). none of the members of Pakistan Sugar mills Association (PSmA) holds the license issued by PSQCA. Hence, sugar about to be bought by trading Corporation of Pakistan (tCP) from local millers, courtesy recently issued tender, would also be uncertified. this, according to sources, would also be a violation of government acts and procurement rules of highly consumed kitchen items set by tCP.
Sources said, since PSmA has gone to court against marking fee and procedure of the certification by PSQCA, the inspection of quality and standard at locals mills were still not made by the authority. As per requirements of tCP, certification from PSQCA is mandatory for procurement. However, according to sources it was not clear how tendered sugar would be procured from local mills where it was not being certified by the authority. According to the Parliament Act 2007, it was mandatory for sugar to be certified by the country’s only quality controlling authority. However, official sources at tCP claimed that in light of the procedure of sugar procurement, certification process was mandatory and the corporation itself would ensure quality through an inde-
pendent testing system. Specification and others necessary conditions related to the quality of kitchen items have already been included in tender application and all requirements would be met before procurement, they said. According to recently issued Gallop tender notice of tCP for purchase of 200,000 mt sugar, the corporation has also mentioned it clearly that bids should be in sealed envelops for a minimum quantity of 5,000mt and maximum of 20,000 mt white sugar packed in polypropylene woven sacks. this is according to detailed specifications and PSQCA approved standards as mentioned in tender documents from mills which are member of PSmA. Sugar mills defaulted with tCP are not eligible to participate in the tender. However,
sources claimed that PSmA, owing absence of PSQCA’s inspection, was issuing a certificate of standard itself. talking to Profit, Javed Kiani, Chairman, PSmA said sugar to be sold to tCP would be tested by tCP itself and according to procedure quality inspection process would be completed by the corporation. Certification of mills has not been made so far due to high marking fee and other lengthy procedures of PSQCA. Since the authority wants to establish its monopoly over the process while fixing high marking fee for certification, PSmA had approached the court to avoid losses and unnecessarily prolonged process. Committee formed by economic Coordination Committee is likely to approve procurement of sugar from local millers within the next couple of days.
It is worth mentioning here that PSQCA, under the ministry of Science and technology, is the national standardisation body. PSQCA has been in operation since 1st December 2000 and it works with 81 scientists and engineers, and 254 supporting staff. the self-financed organisation, has been given the task of not only formulation of Pakistan Standards, but is also responsible for its promulgation as well. PSQCA is a member of International organisation for Standardization (ISo), International electro-technical Commission (IeC), and International organisation of Legal metrology (oImL). PSQCA has also been established to advise government on standardisation policies, programmes and activities to promote industrial efficiency and development.
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Wednesday, 16 November, 2011
debate
before 2006 (the year when militants took control of the valley), an average of 0.5 million tourists had been travelling to the beautiful valley of Swat to relax and enjoy the picturesque landscape. The tourists came not only from within Pakistan, but also hailed from different parts of the world
PARADISE ON EARTH
Reviving tourism industry of Swat
‘t
ADEEL PAtHAN
He last time I visited Swat, it was difficult to even find a room in any hotel, but the situation has now improved so much that tourists can even get a good bargain on room rates,’ Junaid, a tourist hailing from Islamabad shares his experience of the valley. He is not the only person who has travelled to Swat and witnessed this much needed change for tourists.
hiSTory of TouriSm in SwAT Before 2006 (the year when militants took control of the valley), an average of 0.5 million tourists had been travelling to the beautiful valley of Swat to relax and enjoy the picturesque landscape. the tourists came not only from within Pakistan, but also hailed from different parts of the world. they travelled to malakand division in Khyber Pakhtoonkhwa (formerly nWFP) to spend their holidays in the valley before the region had gone into disarray due to constant encroachments by militants and unforeseen disasters. estimates show that the tourism industry contributed around $60 million per annum to Swat’s economy before 2006, whereas it dropped to $25 million when militants took control of the valley. the economy registered another sharp decline after the conflict in 2007 and the resulting military intervention, with total revenue losses in excess of $27 million.
volATile SeCuriTy And iTS imPACT the fisheries sector in Swat was also badly affected due to militancy, as fish stock and
operational assets were stolen and infrastructure was severely damaged. the floods in July 2010 added to the hurdles faced by Swat. Post-flood revenue losses to Swat’s hotel industry are estimated at $2.18 million, while the post-flood financial losses for the fisheries sector amount to approximately $0.3 million. the tourism industry provided livelihood to thousands of residents of Swat who not only worked for the hotel industry but other small and medium industries as well, such as restaurants, shopping centers, guided tours and transport. the floods ultimately led to the closure of the tourism industry because of damaged infrastructure, broken roads, desecrated hotels and restaurants coupled with a significant loss of human lives. According to statistics available with FIrmS, a USAID project working on the rehabilitation of tourism industry and small and medium enterprises in Swat, the total losses due to these multiple disasters are estimated at rs2.29 billion out of which losses of rs550 million were caused by the floods of 2010.
uSAid rehAbiliTATion ProgrAmme Around 25,000 international tourists had been visiting Swat and its suburbs such as Kalam, but this figure registered a sharp decline in recent years. However, now there is hope for Swat in the form of a rehabilitation program of USAID being implemented by FIrmS. most of the hotels based in Swat were either not constructed as per building plans or had been built near the river bed which therefore left them vulnerable to disasters. the agency (FIrmS) invited applications from hotels which not only enabled them to obtain funds for reconstruction but also provided them with training programs to help improve their businesses. Inamullah Khan
(Program manager FIrmS) says that according to their census, 239 hotels have submitted applications and have been provided with support in the form of funds and training programmes for hotel management. He says that as of June 2011, the project disbursed working capital, rehabilitation grants, and procurements such as production inputs, machinery, equipment, and hotel supplies worth $2.11 million to 239 hotels and 22 trout fish farms. 8 training workshops have also been conducted.
mediA CAmPAign Furthermore, he says that a media campaign has been launched to promote Swat as a safe and viable tourist destination. the campaign includes the use of print, television and radio media, exposure trips for journalists and travel writers, and a promotional song. A web portal (www.tourswat.com) has been launched which provides information on Swat’s scenic and historical places, weather, distances, hotels, important landmarks and all other information relevant to Swat. mr Inamullah says that a number of organisations were individually working to revive Swat and its suburbs after the flood and conflict situation; there was a desperate need of an organised effort to improve the image and infrastructure of Swat. therefore, StAG (Swat tourism Advisory Group) was formed which is represented by all such organisations (including civil and military), working together to make Swat a tourist-friendly place once again. With the resumption of activities recently organised by the military and other donor organisations in Swat, there is hope that the tourism industry would stand on its own feet again in the next few years.
viSiTing SwAT FIrmS is also collaborating with other stakeholders and has been busy planning and organising festivals in Swat throughout the year so that the industry can be fully revived. the web portal (www.tourswat.com) also provides information aimed at capturing the attention of stakeholders who want to organise activities, youth and cultural festivals and competitions in the valley. Ahmed Zeb, a local resident observes that the new-found peace in Swat will reinvigorate tourist activities only if it is accompanied with a positive image of Swat. media has a significant role in accomplishing this, he said.
vACATion AT AffordAble rATeS ‘the negative perception of Swat should be minimised in media’, exclaims ehsanullah Khan, another local resident associated with Sarhad rural Support Program. Swat is one of the best vacation destinations in Pakistan where one can enjoy picturesque views and hospitable services at an affordable price. the valley is as beautiful as any other foreign location for which tourists pay an exceptional amount of money, only much more affordable. other regions in the world such as nepal and Sri Lanka have also seen bloodshed and violence in the past, but they have now recovered from the turmoil and have a flourishing tourism industry. this is also possible for Swat or any other disaster-hit region of Pakistan but to accomplish this, we require a policy of zero tolerance on security so that such calamities never affect our tourist industry again. The writer is a freelance journalist and development practitioner based in Islamabad. Email: adeelahyd@yahoo.com
Wal-Mart profit below Wall St despite better sales
W
REutERs
AL-mArt Stores Inc’s quarterly profit growth missed Wall Street’s expectations on tuesday, as the economy continues to weigh on customers at Walmart U.S., by far the company’s largest division. Still, key sales at those U.S. discount
stores rose more than expected, reversing a string of nine quarterly declines. Shares of Wal-mart, the world’s largest retailer, were down 1.8 percent at $57.93 in premarket trading. Wal-mart earned $3.34 billion, or 97 cents per share, from continuing operations in the third quarter ended on october 31, compared with $3.44 billion, or 95 cents per share, a year earlier.
there were fewer shares outstanding during the most recent quarter. the company had forecast a profit of 95 cents to $1.00 per share. Analysts on average expected 98 cents, according to thomson reuters I/B/e/S. “every business segment is stronger today than it was a year ago,” Chief executive officer mike Duke said in a statement. Sales momentum at Walmart U.S. and
the Sam’s Club warehouse chain position the company “exceedingly well for the holidays,” Duke added. net sales rose 8.2 percent to $109.5 billion. Sales at U.S. discount stores open at least a year rose 1.3 percent. that topped the company’s forecast, which called for Walmart U.S. samestore sales, excluding fuel, to be down 1 percent to up 1 percent. It also exceeded
the analysts’ average forecast for a rise of 0.3 percent, according to thomson reuters data. Wal-mart forecast fourth-quarter of $1.42 to $1.48 per share from continuing operations, up from $1.41 a year earlier. that would lead to fullyear earnings per share from continuing operations of $4.45 to $4.51, up from $4.18 last year.
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Wednesday, 16 November, 2011
EDITORIAL
Oil discovery
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GDCL’S discovery of “significant reserves” of hydrocarbons in KP comes at a good time for Pakistan’s stressed reserve-position. not only has oil’s erratic rise in the international market played havoc with predominantly commodity-import economies, it has also fed into healthy remittances coming Pakistan’s way. more importantly, the landmark discovery will position Islamabad to bolster savings and become more self-reliant. It is important to note that oil industry dynamics and pricing patterns have departed from traditional norms in the current, strained situation among swing producers. Usually, Saudi Arabia, the market-dubbed central bank of black gold, pushes for lower prices than its more hawkish counterparts in opec (read venezuela and Iran). the reasoning is simple. Higher prices push down demand in strong western economies, undermining oil earning in the long run. But with the Saudi’s having to float
$138b to grease appropriate palms in the eastern provinces, riyadh’s breakeven price has jumped to the $90-95 mark, opening a brand new chapter in international oil pricing politics. Absent a game changer, oil is unlikely to mimic the dramatic ’08-’09 hundred-dollar drop. these developments make indigenous extraction, refining and production that much more important. Any hike in oil prices translates into inflation across the board, since the commodity makes for the chief input cost in all industries. Pakistan’s abnormally large oil import bill has kept it hostage to cross currents in international political economy for far too long. It is heartening that testing of four more potential reserves is being undertaken, with expectation of similar results. now, Islamabad must quickly position to translate these gains to the wider economy, where high input costs, along with acute power shortage, are retarding production and growth. this discovery should play a significant role in easing the centre’s fiscal crunch.
Sugar industry misfortunes
Iskandar Muhammad Khan
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Here is a reason Pakistan’s sugar industry is constantly riddled with crises. Startling as it may seem, ours is still an industry where price is not set in accordance with product quality. rather, the government continues to stick to its novelty of deciding sugar cane price based on weight. that this arrangement often pushes farmers to opt for obsolete varieties, lower in quality yet of higher weightage, ought to surprise few familiar with intricacies of the unforgiving market mechanism. In this way, quality is compromised right at the outset, feeding into the entire product cycle, deliberately compromising efficiency and giving rise to bottlenecks that cramp production, consumption as well as exports. Presently, Pakistan has a production capacity of approximately seven million tones annually, while total requirement of the domestic market is around 4.5 million tones, leaving an excess capacity of 2.5 million tones that should be judiciously utilised to prop up exports. of course, that such an exercise can chip in an extra $2-3 billion in forex earnings, in addition to putting downward pressure on sugar price in the local market, should be a win-win situation. Also, Pakistan is ranked at number five among sugar growers in terms of cultivated area, yet yield wise we are at the bottom of the table, at number 15. the discrepancy speaks volumes about official misreading of sugar industry dynamics, turning a potential goldmine into an inefficient industry always avoiding pitfalls.
Invariably, government policies engineer crises in the sugar industry, not solutions
Strengthening yen haunts local car assemblers
Debt, Berlusconi and pepperoni
the continuous weakening of the rupee against Japanese yen and US dollar will surely decrease the gross profitability of Indus motors this year. As the Pakistani currency is devaluing day by day, this is yet another industry that will have to face losses as a result. I believe that the problem does not only lie in the currency devaluation, but the Pakistani taxation system is also one of the major problem makers. the prices keep on getting inflated whereas, the quality of cars remain almost the same. At least, this is what I have been experiencing for the last three to four years.
the Italian crisis is a huge problem for not only Italy or europe, but indeed for the entire world. the europeans were already fighting for survival on the Greek front – to name one – but now the Italian problem seems like a problem too many for the europeans. Berlusconi was never going to be the answer to the hole that Italy finds itself in, and hence his departure was inevitable. Italians would need to muster up all of their energy to dig themselves out of this mess. I hope for the Italians’ sake that the man who replaces Berlusconi comes up with a better reform policy than the previous Prime minister.
HAsHIm sARWAR
NAmRAH syED
Despite hectic efforts spanning nearly a decade to convince those at the helm of the damage present policy is doing to the sugar industry, and subsequently the overall economy, I fail to see any shift in perception in Islamabad at least in the near future. And even after cabinet approval for proposed reforms, the official position continues to revolve around provincial governments announcing sugar cane price, leaving end sugar price to the mercy of market forces. Since mostly sugar is extracted from inferior quality cane, supplydemand forces are always shifting, toggling the sugar price that sometimes leaves mills winning at the cost of farmers, and sometimes the other way round. the Shaukat Aziz government’s decision to install 13 new mills epitomised how Islamabad’s policy is akin to groping in the dark. When told that there was no need for new mills, since the present setup had enough production capacity for 40 years, and the funds were better spent on power plants to meet energy requirement for the industrial sector as a whole, no notice was taken of the advice. more than half a decade on, neither sugar nor power are worth writing home about. In fact, the sugar industry is a classic example of natural endowment and comparative advantage being deliberately wasted at a time when the entire international financial order is reorienting with particular focus on trade earnings. the hangover of the great recession, and Asia’s emerging economies performing better than others, is leading to reprioritisation of trade agreements. Already our export base is minimal, and along with slow growth, stands at the heart of the economy’s inability to snap out of the painful cycle of stagflation. In sugar, we have a potential national winner. We boast enough growth and production capacity to feed our markets and earn valuable revenue. With the economy now in a desperate state, I find myself hopeful once again that neglect will make way to proactive posturing, removing unnecessary bottlenecks and improving efficiency. If we fail to tap this winner, we will have only our own official circles to blame, while the people on the street continue to suffer. The writer is Group Director, Priemer Group and former Chairman, Pakistan Sugar Mills Association
LAHoRe
KARAcHi
Crisis of governance
T
Amjad Riaz
Here is no denying the fact that we are confronted with an uproar in the public sphere about putting the economy on track. the size of the economy has naturally grown to a point where the issues of governance need to be taken seriously. Any decision taken today would continue to reverberate in the socio-political territory of economy for a long time to come. the coming elections in the history of Pakistan bear an
urgency whose importance probably cannot be expressed in words. Prior to partition, the 1945 elections determined the future of the map of the subcontinent. the 1970 elections again resulted in proving themselves as a watershed of events; bringing massive alterations in the mode of governance. In the last forty years, every kind of political and administrative model has been followed and tried, with results that are there for all to examine. the contours of a public policy are not difficult to define but they are the mechanisms that implement effective economic policies. It is not just Pakistan Steel, PIA, Pakistan railways or other institutions that are on the brink of disaster. these entities can be turned around in a matter of few months, if not days. the real concern about the national economy is its ability to perform many other very important functions that it has failed to do
so. take the example of mr Berlusconi and his mishandling of the national economy during the last ten years of his rein. the Italian economy arrived at this extremely difficult stage due to the policy of political expediency that stopped him from bringing the necessary economic reforms that should have been introduced years ago. the parliament had to finally put through the much needed economic austerity measures leading to the resignation of Silvio Berlusconi. the upsurge of political activity here is sure to sharpen the issues that the national economy is facing. With political players of different credentials and experiences, the concerns about the national economy are going to matter the most. With all the noises or political rant of throwing blames or mudslinging; the economic issues are going to stay right in the forefront of all politicking. the information revolution is
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
All the protagonists and players in the political economy are aware of the significance of tackling the crisis of governing an economy
bringing in a silent transference and a sort of maturity in the electorate that was not witnessed before. We are living in an inter-dependent world and to avoid a traumatic entry into the international economy, it is necessary to streamline the economy. As we go closer to the election time, the choices that are made now would no doubt affect the outcome of the elections whenever they are held. the mode of politicking is very gradually giving space to a modern consciousness of economic issues that matter most to the people of Pakistan. All the protagonists and players in the political economy are aware of the significance of tackling the crisis of governing an economy that has been sub-
jected to jolts and shaking. the confidence of the marketplace to continue to perform and perform well is a sine qua non for all efforts leading to govern the same. A repeated enhancement in energy tariffs under the pressure of ImF is definitely no solution to put the economy on track; a far greater imagination and will are required to think of solutions. there is no dearth of think tanks in the country that do give honest opinions of running an economy in a more effective style of governance. The writer has served as consultant to the United Nations and other developing economies on the issues of trade and development and 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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Wednesday, 16 November, 2011
Cost of the Neelum Jehlum Hydropower project is estimated to increase more than 70 per cent
news
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Chairman wAPdA, Shakil durrani
APTmA apprehensive about $15 billion export target
Pakistan approaches donors for Neelum project
LAHORE StAFF RePoRt
IsLAmABAD
PtmA Chairman mohsin Aziz said, while addressing press conference at APtmA House on tuesday, the association has feared that export target of $15 billion will not be achievable if government started three-day gas closure per week. APtmA also demanded the government to not opt for more than two days closure in a week. mohsin Aziz was accompanied by APtmA Punjab Chairman Ahsan Bashir, APtmA Former Chairman Gohar ejaz and other members including Sheikh Akbar, Sm tanveer and Kiran Chaudhry mohsin Aziz said textile sector is the backbone of economy and it should be strengthened. He said last year textile sector exports were more than $15 billion and this year we were expecting $16 billion exports, but gas curtailment for three days in a week spoiled everything. “If three day gas closure continued then it is feared that we would not be able to touch $15 billion exports. He said last year till november gas closure was for 75 days, but this year the gas during the same period was closed for 120 days. “Adding insult to injury, now the government is tal ing about closing gas for three days a week and it would be catastrophic for textile sector,” he said adding textile is the biggest employer of labour and we fear if textile sector was not given gas then a large number of people would get unemployed. mohsin Aziz said the problem of gas management at distribution level has been resolved.
AMeR SiAL
A
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AKIStAn has approached China, Saudi Arabia and Kuwait to double their pledged financial assistance to expedite construction of 969 mW neelum Jehlum Hydropower Project (nJHP). talking to reporters after the meeting of the national Assembly Special Committee on power crisis, Chairman Water and Power Development Authority (WAPDA), Shakil Durrani said the cost of the nJHP is estimated to increase more than 70 per cent and they have approached friendly countries and their donor agencies to double their assistance for the project. Initial cost of the project was $2.1 billion with a foreign exchange component of $775 million, but due to the escalation in cost, the government decided to seek more financing from the friendly countries. the project cost is expected to rise to $3.7 billion. Durrani said they have changed the financing plan for the project as half of the project cost will be made available from the surcharge on electricity bills, imposed in 2008 which generates rs5.2 billion per
annum while the other half will be managed from the donors. He said the progress on the project was expedited from last one year and monthly contractors were paid rs600 million as compared to monthly payment of rs100 million, a year back. He said two tunnel Boring machines (tBm) have been purchased at a cost of $93 million each. He also said tBms were manufactured in Germany and will reach China in December for assembly and will start working on the project site from February. Durrani said a loan amount of $450 million with the exim Bank of China is near finalisation, while an additional assistance of $220 million was under negotiation with Islamic Development Bank (IDB) and $40 million with Saudi Fund. “As the cost has increased we have asked all the donors to double their assistance”. the project cost has increased during the last few years due to the changes in design after earthquake and rupee Dollar parity. the Kuwait Fund for Arab economic Development has already provided $40 million for the project. Islamic Development Bank (IDB) and Saudi Fund have provided $138 million and $40 million respectively for the project. the government had imposed a
surcharge at the rate of 10 paisa on electricity bills to provide financing for the project which generates about rs5 billion every year. the government had generated more than rs18 billion during the last few years, but due to financial constraints the pace of the project was quite slow. Prime minister, Syed Yusuf raza Gilani has also expressed serious concerns over the delay in the project and had recently directed the ministry of Water and Power and WAPDA to work out financial plan in consultation with the ministry of Finance. the project was initially approved by eCnCe in 1989 at the cost of rs15 billion which was delayed due to which its cost has gone upto rs333.1 billion. Pakistan wants to complete construction of nJHP in Azad Kashmir before the completion of 330 mW Kishanganga Hydro electric Project by India, in the Indian occupied Kashmir. Pakistan and India are separately constructing two hydropower projects on the same neelum river. the Court of Arbitration, Hague has already stopped India from carrying out construction of any permanent works on or above the Kishanganga river bed at the Gurez site that may inhibit the restoration of the flow of the river to its natural channel.
SeCP to revamp regulatory regime for brokers IsLAmABAD StAFF RePoRt
S
eCUrItIeS and exchange Commission of Pakistan (SeCP) is revamping the regulatory regime for brokers of stock exchanges to bring it in line with best practices, standards and IoSCo principles. Proposed regime reinforces reforms undertaken during recent times. It is aimed at strengthening procedures and processes at stock exchanges, sound reporting system at brokerage houses and risk-based exposure by brokers to bring in more protection for investors as well as brokerage community. During last decade, capital markets in Pakistan have adopted various proficient international practices, standards and policies to align themselves with other regional markets. However, existing broker regime could not be altered to provide impetus to these developments. SeCP has, therefore, decided to alter the regime to incorporate stipulations of different legal and regulatory changes made during the past few years. After a thorough review, a paper specifying concept of revised Broker registration regime has been prepared by SeCP. According to the concept paper, revised regime will provide an adequate regulatory framework for corporate brokerage houses, having a strong organisational structure with clear lines of responsibility and authority.
Index ends flat, as speculative activity rescues bourse
KARACHI StAFF RePoRt
L
oW volume led price erosion during early hours pushed the index deep in the red zone on sell-off in high priced stocks along with fertilisers stocks, which were losing values on gas load shedding fears. But all this was indeed well countered by speculative activity in the group specific stocks, wherein corporate and groups support in the listed stocks allowed the bleeding stocks some respite. While the propagation of friendly ties with India did inspire consolidation in cement along with short term spike in front line banking and textile stocks, absence of follow-up as reflected by low volumes however disallowed any sensation. the KSe 100 index closed at 11994.01 with the loss of 14.47 points, while KSe 30 index lost 22.44 points to close at 11358.07 levels. All Share index closed at 8293.44 levels after losing 10.86 points. total 103 scrips advanced 134 declined and 113 remain unchanged out of total 350 scrips traded. Although the activity was well timed
and directed in terms of the end buyers as the short term participants did enter the arena for short term trade, rumours of resumption of gas supply to the most hard hit fertilizer company along with rigorous and volumetric activity in the stocks was made to inspire similar activity in various frontline expensive stocks, mainly to tempt sideliners. Low volumes however seemingly tempted short sellers along with some from both corporate and high net worth, not part of syndicate, as they looked anxious to book profits. Hasnain Asghar Ali at Aziz Fida Husein said choppy activity with low volumes will continue to signal alarm bells, although intra-day spur to execute block trades on strength may trigger short term trading signals, however under the prevailing scenario intra-day strength will continue to provide short term off-loading/short selling opportunity, mainly in the stocks facing tough time due to gas curtailment. Financial and political horizon likely to stay gloomy, so dips can be awaited for placements in the stocks away from the visible threats prevailing in the economy, he added.
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Wednesday, 16 November, 2011
Formation of new governments in Greece and Italy may help calm world markets roiled by the European debt crisis
news
uS President barack obama
05
Italy’s Monti center stage, France ‘alarm bells’ ROmE
P
ReUteRS
rIme minister-designate mario monti raced to assemble a new government for Italy on tuesday while a sharp rise in French borrowing costs raised fears that the twoyear debt crisis may spread to the euro zone's second biggest economy. european shares and the euro fell on tuesday as investors renewed selling of Italian and Spanish bonds and any relief from having new leaders in Italy and Greece proved short-lived with investors seeking safe-haven assets like German bonds. Italy's 10-year bond yield rocketed back above 7 percent, pushing its borrowing costs to a level widely seen as unsustainable and which helped trigger the fall of Silvio Berlusconi's government last week. Global markets harbor deep concerns about whether monti and new Greek leader Lucas Papademos, unelected european technocrats without a domestic political base, can impose the needed tough austerity and far-reaching economic reform. A think-tank report said the situation in triple-A rated France should also be "ringing euro zone alarm bells" because of the country's inability to make rapid adjustments to its economy. Germany and France posted solid growth in the third quarter, statistics released on tuesday showed, but euro zone nations on the front line of the debt crisis fared much worse and analysts expect bleaker times ahead in the core economies. "the German economy has lost its immunity," said Carsten Brzeski of InG, a Dutch bank. "With the latest stage of the sovereign debt crisis, today's numbers are as good as it gets for the German economy." As the euro zone's largest economy and growth engine for the past two years, any hiccups in the coming business quarters in Germany
would have wider effects in the region. A rebound in household consumption lifted France's growth to a better-thanexpected 0.4 percent in the third quarter, after a contraction in the second, but economists warned it was just a lull before a likely return to recession. "You could call this the lull in the storm," said marc touati of Assya Compagnie Financiere. "What's worrying is that industrial investment has started going down, which proves that the virtuous circle of investment, growth and job creation is not working."
‘ALARM BELLS’ the urgency of resolving the crisis was underscored by a report by the Lisbon Council, which said France's inability to make rapid adjustments to its economy was a serious worry and should be of acute concern for the euro zone. "Among the six euro zone countries with a AAA rating, France achieves by far the lowest ranking in the study's fundamental health check," the Brussels-based think-tank found in the 75-page report, called the euro Plus monitor. "the results are too mediocre for a country that wants to safeguard its place in the top league alarm bells should be ringing for France. With the survival of the 17-state currency zone in its current form now at risk, eU governments have until a summit on December 9 to come up with a bolder and more convincing strategy, involving some form of massive, visible financial backing. Prospects are uncertain as the German government, the Bundesbank and hardliners in the european Central Bank have so far blocked key policy options. these include issuing common euro zone bonds, mutualizing the euro zone's debt stock, letting the eCB create money to fight the crisis, or having it act as lender of last resort, directly or via the euro zone rescue fund.
the debt crisis is likely to make matters worse in the next months with nations such as Italy, Greece, Ireland, Portugal and Spain forced to adopt politically unpopular cuts to stop the bond market driving them toward default. economists say there is no visible growth strategy in place to counter those austerity measures.
EUROPE FACES ‘TOUGHEST HOUR’ German Chancellor Angela merkel caught the mood of crisis with a stark warning on monday that europe could be living through its "toughest hour since World War two." She told her CDU party she feared europe would fail if the euro failed and vowed to do anything in her power to stop this from happening. monti pursued his efforts on tuesday to secure support from feuding politicians to allow his cabinet of experts to speed up reform of pensions, labor markets and business regulation needed to put Italy's finances on a sustainable footing. Italy has to refinance some 200 billion euros ($273 billion) of bonds by the end of April, a daunting prospect. High borrowing costs and the release of figures showing industrial production slumped by 2 percent in the euro zone in September, raised the specter of recession and provided a gloomy backdrop to monti's talks with the heads of smaller parties. "monti spoke about a significant program with many sacrifices," Francesco nucara, a lawmaker from one of the myriad tiny parliamentary groups involved in the talks, said after meeting the prime minister-designate. monti, a respected form e r european commissioner, o n
tuesday met leaders of the two largest parties of the center-right and the centerleft, unions, and representatives of women and youth groups. expected to seek a confidence vote by Friday, monti has said that he aimed to serve until scheduled elections in 2013, not just until reforms had been pushed through. Far-reaching reforms are seen as crucial if Italy is to end years of stagnant growth, trim a debt mountain equal to 120 percent of gross domestic product and avoid the sort of crisis that forced bailouts of Greece, Ireland and Portugal.
GREEK DEFAULT FEARS Papademos said late on monday that Greece had no choice but to stay in the euro zone, telling law-makers reforms were the only solution. But conservatives on whom Papademos must rely for support demanded progrowth policies and rejected any more cuts, fueling fears of a Greek default that may force Athens out of the currency group triggering a euro
zone debt meltdown. Austerity measures had deepened Greece's recession but reforms -- including widening the tax base and fighting rampant tax evasion -- could mitigate the problem, said Papademos, who oversaw Greece's entry to the euro zone in 2002. But new Democracy leader Antonis Samaras said he would not vote for new austerity measures. Spending cuts and tax rises agreed with foreign lenders should be changed in favor of economic growth, he said. Inspectors for Greece's international lenders, known as the troika, were due to meet Papademos's administration after the confidence vote, but an eU official said the v i s i t might not happ e n until the end of t h e week. m o s t Greeks hailed Papademos's appointment, but thousands of people angry at more than a year of austerity are expected to rally on thursday, the anniversary of a 1973 student uprising that helped to bring down the colonels' junta of 196774.
CORPORATE CORNER PrCS donates $0.1m for Turkish quake victims
Sindh Bank’s outreach while providing them the flexibility to rapidly establish new branches in line with their aggressive growth plans.” PReSS ReLeASe
PTCl broadband Pakistan introduces exciting new packages
ISLAMABAD: the Pakistan red Crescent Society (PrCS) donated $100,000 for the victims of october 23 earthquake that struck eastern turkey, killing hundreds, injuring more than a thousand, and leveling dozens of multistory buildings. PrCS Chairperson Sherry rehman handed over the donation cheque to turkish Ambassador H. e mustafa Babur Hizlan during his visit to the PrCS national Headquarters. PReSS ReLeASe
ISLAMABAD: Leading the country’s broadband revolution, Pakistan telecommunications Company Limited (PtCL) has introduced exciting new Broadband packages keeping in view the evolving needs of its valued customers. PtCL customers can now subscribe to 1mbps package for rs1,199; 2mbps package for rs1,499; 4mbps package for rs1,999; 6mbps package for rs4,999; 8mbps package for rs6,999; 10mbps package for rs9,999; 20mbps package for rs15,000; and 50mbps package for rs20,000 only. PReSS ReLeASe
warid extends its commitment to support SlumS, lumS Sports Society
AutoSoft dynamics to automate Sindh bank with AutobAnker software LAHORE: AutoSoft Dynamics, an industry leader in bank automation It solutions, has signed an agreement with Sindh Bank Ltd to provide its robust AutoBAnKer software to automate their core banking operations in over 150 branches. the popular banking solution was chosen over products presented by 6 other local and international software vendors. the AutoBAnKer software package has fast become the go-to banking solution for the Pakistani financial services industry. mr Lutfullah Khan, Chairman and Ceo AutoSoft Dynamics commented, “We have no doubt that AutoBAnKer will enhance
ISLAMABAD: Warid telecom (Pvt) Ltd, the finest cellular service provider of the country extends its commitment by sponsoring SLUmS, Sports Society of LUmS (Lahore University of management Sciences) for the Year 2011-2012. mr Amer Aman Khan, Head of Sales &
Distribution, Warid telecom (Pvt) Ltd signed an agreement with Dr Ali Khan, Patron, SLUmS to provide year long sponsorship to SLUmS. PReSS ReLeASe
Samsung Tv Apps service surpasses 10 million downloads LAHORE: Samsung electronics has announced that Samsung Apps, the world’s first HDtv-based app store, is growing rapidly in popularity. Samsung Apps tv recently celebrated the milestone of 1,000 registered applications and crossed the 10 million downloads mark. Samsung is on its way to build a global Smart tv ecosystem. PReSS ReLeASe
PemrA takes action against violating cable tv operators ISLAMABAD: Pakistan electronic media regulatory Authority (PemrA) in a recent enforcement bid against violating cable tv operators in Southern Punjab including rahimyar Khan, Sadiqabad, Bahawalpur, multan, D.G Khan, muzaffargarh, Kot Adu, Layyah, Khanewal, mian Channu, Bahawalpur, Burewala, vehari and mailsi took stern action against nearly 40 cable tv operators who despite repeated warnings were involved in relaying proscribed /banned content and excessive CD channels. PReSS ReLeASe
lotte Pakistan PTA receives fire and safety award 2011 KARACHI: Lotte Pakistan PtA (Lotte PPtA), a subsidiary of Lotte, one of South Korea’s largest conglomerates operating in Pakistan, was presented the 1st Fire and Safety Award 2011 at
the Fire and Safety Awards 2011. the Fire and Safety Awards 2011 were a part of the 2nd International Convention on Fire and Safety Pakistan 2011; jointly organised by the national Forum for environment and Health (nFeH) and Fire Protection Association of Pakistan (FPAP). Ceo Lotte PPtA, Asif Saad, expressed profound delight on this occasion saying “We believe this award is recognition for our efforts towards caring for our people.” PReSS ReLeASe
bank Al habib offers senior citizen account KARACHI: Bank Al Habib Senior citizen account is a monthly savings account for senior citizens of 60 years and above. It provides convenience and financial independence at old age. the account offers high monthly return i.e. 10 per cent p.a. and no restrictions to withdraw funds. Besides, no minimum deposit limit, free Atm / Debit Card, free online banking and loan up to 90 per cent of deposit amount is also offered. PReSS ReLeASe
5th Pakistan microfinance country forum to be held on december 2 LAHORE: the 5th Pakistan microfinance Country Forum 2011 organised by Shamrock Conferences International in collaboration with mazars Asia-Singapore, tameer microfinance Bank and Khushhali Bank Limited, will be held on December 2, 2011 at the marriott Hotel, Karachi. Governor State Bank of Pakistan, mr Yaseen Anwar will be inaugurating the conference. the theme of the moot will be “Stretching out to the unreached” and will include case study discussions and face to face deliberations in a round table setting of key stakeholders. PReSS ReLeASe
Profit PAGES 16-11-2011_Layout 1 11/15/2011 10:35 PM Page 6
Wednesday, 16 November, 2011
06 Markets
top 10 sectors
24% 09% 35% 10% 08%
Chemicals
01% 07% 02% 03% 01%
General Industrial
Construction & Materials Electricity Banks
Fixed Line Telecommunication
Oil & Gas
Financial Services
Personal Goods
Equity Investment Instruments
STOCK MARKET HIGHLIGHTS Index 11994.01 3165.62 2658.55
KSE-100 LSE-25 ISE-10
Change -14.47 -1.34 -11.21
Volume 42,562,423 1,173,082 57,336
Market Value 2,444,992,637 38,931,038 992,169
Major Gainers Company Nestle PakistanXD Engro Corporation Atlas Honda Ltd. Indus Motor Co. Clariant Pakistan
Open 2991.81 129.72 120.50 202.57 155.07
High 3048.00 135.50 126.52 207.00 161.00
Low 2982.00 126.26 119.50 202.00 153.21
Close 3043.08 134.50 124.84 203.98 159.67
Change Turnover 51.27 75 4.78 5,178,687 4.34 5,302 1.41 791 4.60 11,019
5806.00 900.00 790.00 218.00 67.22
5500.01 891.00 790.00 217.55 67.22
5581.94 898.50 790.00 217.70 67.22
-64.41 -39.20 -22.31 -11.30 -3.53
Major Losers UniLever Pak Ltd. Siemens Pak Bata (Pak) Ltd. Bhanero Tex.XD Blessed Tex.XD
top 5 perForMers sector wise Symbol
oPen
high
low CurrenT
ChAnge
volume
404.69 120.40 6.98 93.80 334.90
396.00 116.10 6.75 89.30 308.94
396.87 117.57 6.77 92.03 310.82
-6.98 -1.21 -0.12 1.02 -14.37
61,485 833,559 399,510 91,674 314,938
15.00 31.05 71.99 143.49 40.80
14.00 29.29 65.17 137.50 37.06
15.00 29.30 70.64 139.79 37.39
0.00 -1.53 2.05 -0.90 -1.57
1,500 2,485,646 855 4,017 244,529
Oil and Gas Attock PetroleumXD Attock Ref.XD Byco Petroleum Mari Gas Co.XB National Ref.XD
403.85 118.78 6.89 91.01 325.19
9 40 400 151 528
Agritech Ltd. Arif Habib CoXDXB SD Biafo IndustriesXD Clariant Pakistan Dawood Hercules
15.00 30.83 68.59 140.69 38.96
Volume Leaders PICIC Gro Fund Fatima Fert.Co. Engro Corporation Fauji Fert Bin Qasim Lotte PakPTA
12.35 24.00 129.72 59.78 10.98
12.60 24.79 135.50 61.35 11.10
12.26 24.11 126.26 59.51 10.62
12.38 24.35 134.50 60.87 10.69
0.03 0.35 4.78 1.09 -0.29
6,870,411 6,532,880 5,178,687 3,207,284 3,015,391
Bullion Market Gold 24K Gold 22K Silver (Tezabi) Silver (Thobi)
Per Tola (PKR) 57,599.00 51,608.00 1,114.00 1025.00
Per 10 Gm (PKR) 49,435.00 44,245.00 956.00 880.00
Per Ounce US$ 1,773.00 – 35.05 –
Interbank Rates US Dollar UK Pound Japanese Yen Euro
23.25 1.41 8.60 34.00 11.00
23.59 1.45 9.00 34.50 11.00
-0.31 0.00 0.07 -0.48 -0.56
Al-Abbas Cement Attock CementXD Berger Paints Bestway Cement Cherat Cement
2.00 51.11 11.79 8.11 7.66
29.62 2.49 41.17 7.72 22.00
Buy 86.30 116.35 136.40 1.1117 84.03 10.85 23.43 22.95
Sell 87.00 117.90 138.10 1.1223 87.83 11.18 23.65 23.14
Brent Crude Oil
$111.89
6.93 184.30 28.50 7.00 108.00
2.00 51.99 12.00 9.11 8.19
1.90 50.81 11.60 8.11 7.50
1.92 51.02 11.91 8.11 8.01
-0.08 -0.09 0.12 0.00 0.35
26,799 108,952 4,762 100 197,042
58.00 169.52 117.00 2.63 168.53
30.40 3.25 42.00 7.95 22.00
28.14 2.21 39.12 7.01 20.95
28.14 3.08 39.60 7.65 22.00
-1.48 0.59 -1.57 -0.07 0.00
14,022 614,084 16,802 993 70
Abdullah Shah Colony Sugar Mills Engro Foods Ltd. Habib Sugar Mills Habib-ADM Ltd.XD
8.00 1.75 23.52 28.10 11.58
8.00 1.75 23.90 28.50 11.70
7.90 184.30 28.50 6.90 108.00
6.93 184.30 28.25 6.25 102.60
58.00 170.00 118.00 2.79 169.99
0.00 0.00 -0.24 -0.30 0.00
10 90 5,055 5,004 2
58.00 168.94 117.94 2.51 168.53
0.00 -0.58 0.94 -0.12 0.00
2,000 240 302 39,802 31
109.00 111.18 145.05 145.58
0.69 -4.44
1,170 203
58.00 168.50 117.00 2.43 168.53
110.49 111.43 150.02 150.00
(Colony) Thal AL-Qadir Textile Amtex Limited Annoor Textile Artistic Denim XD
1.70 11.25 1.67 13.00 18.50
1.11 11.25 1.70 14.00 18.50
31.00 30.82 4.01 120.42 119.16
AHCL-NOV AHCL-OCT ANL-OCT ATRL-NOV ATRL-OCT
31.00 30.82 4.25 121.50 120.30
Abbott Laboratories Ferozsons (Lab) Ltd. GlaxoSmithKline Pak. Highnoon (Lab) IBL HealthCare XD
102.49 80.00 68.92 28.09 10.92
103.00 80.00 68.26 28.09 11.92
6.93 184.30 28.26 6.70 108.00
P.T.C.L.A Pak Datacom LtdXD Telecard Limited Wateen Telecom Ltd WorldCall Telecom
10.89 35.03 0.95 .68 1.13
10.98 34.01 1.00 1.70 1.19
P.T.C.L.A Pak Datacom Ltd. Telecard Limited Wateen Telecom Ltd WorldCall Telecom
11.47 31.65 1.09 1.51 1.32
8.00 1.74 22.54 27.88 11.50
0.00 -0.01 -0.98 -0.22 -0.08
53 23,501 91,748 70,820 2,995
1.11 11.25 1.45 14.00 18.25
1.11 11.25 1.60 14.00 18.49
-0.59 0.00 -0.07 1.00 -0.01
1,000 500 132,822 1,000 1,049
29.45 29.28 3.90 117.90 116.50
29.51 29.32 3.95 119.21 117.71
-1.49 -1.50 -0.06 -1.21 -1.45
376,500 516,500 24,500 201,000 200,000
101.00 78.10 67.01 27.65 10.99
102.10 80.00 68.06 28.09 11.92
-0.39 0.00 -0.86 0.00 1.00
1,283 45 1,557 100 25,154
10.71 34.01 0.90 1.65 1.06
-0.18 -1.02 -0.05 -0.03 -0.07
470,873 500 68,502 152,954 235,458
10.65 34.01 0.90 1.52 1.00
11.77 32.66 1.09 1.68 1.35
11.42 31.65 1.01 1.47 1.15
11.64 32.66 1.03 1.50 1.28
0.17 1.01 -0.06 -0.01 -0.04
4,752,418 1,430 194,249 449,333 649,632
0.50 36.38 0.75 1.70 41.36
0.50 36.50 0.77 1.70 41.80
0.36 36.10 0.70 1.56 41.25
0.50 36.10 0.71 1.60 41.53
0.00 -0.28 -0.04 -0.10 0.17
1 1,022,035 38,682 752,756 220,355
63.16 11.15 5.94 11.15 29.95
64.00 11.29 6.08 11.35 30.20
62.50 10.75 5.79 10.70 29.55
62.69 10.89 5.83 10.89 29.91
-0.47 -0.26 -0.11 -0.26 -0.04
32,694 944,906 319,287 1,929,563 175,090
Electricity Genertech Hub Power Co.XD Japan Power K.E.S.C. XR Kot Addu PowerXD
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 7.00 1.70 22.50 27.50 11.50
Fixed Line Telecommunication
Beverages Murree Brewery Co. Shezan Int’l
volume
Pharma and Bio Tech
Automobile and Parts Agriautos Indus.XD Atlas Battery Ltd. Atlas Honda Ltd. Dewan Motors Exide (PAK)
ChAnge
Future Contracts
General Industrials Cherat PackagingXD ECOPACK Ltd Ghani Glass LtdXD MACPAC Films Merit Pack
low CurrenT
Personal Goods 40,885 8,285 3,035 25,300 63,850
Construction and Materials
Ados Pakistan AL-Ghazi Tractors Bolan CastingXD Ghandhara Ind. Hinopak Motor
International Oil Price WTI Crude Oil
$97.89
24.70 1.50 9.00 35.00 11.52
Industrial Engineering
86.7584 137.5641 1.1261 117.5055
US Dollar Euro Great Britain Pound Japanese Yen Canadian Dollar Hong Kong Dollar UAE Dirham Saudi Riyal
23.90 1.45 8.93 34.98 11.56
high
Household Goods
Industrial metals and Mining Crescent Steel Dost Steels Ltd. Huffaz Seamless Pipe Int. Ind.Ltd. Inter.Steel Ltd.
oPen
Food Producers
Chemicals
5646.35 937.70 812.31 229.00 70.75
Symbol
Adamjee Ins XD Ask.Gen.Insurance Atlas Insurance Central Ins Co. Century Insurance
49.64 8.50 34.49 48.67 7.16
49.50 8.50 35.00 50.00 7.50
48.60 8.10 33.86 48.00 7.06
49.40 8.47 33.99 49.79 7.50
-0.24 -0.03 -0.50 1.12 0.34
6,785 1,651 1,110 3,909 1,500
13.50 1.40 65.53
14.50 1.40 65.53
0.00 0.00 0.00
2 1 157
0.30 14.89 17.71 0.86 7.25
-0.02 -1.00 -0.25 -0.02 -0.01
9,463 13,487 19,659 9,495 2,100
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 InvesXD Arif Habib Ltd. Dawood Equities Invest & Fin.Sec.
0.32 15.89 17.96 0.88 7.26
0.35 15.50 18.34 1.09 7.26
0.22 14.89 17.20 0.86 7.25
Equity Investment Instruments 1st.Fid.Leasing Mod 1.70 AL-Noor ModarXD 3.98 Allied RentalModXDXB 19.90 Atlas Fund of Fund 6.00 B.F.ModarabaXD 5.56
1.50 4.00 19.90 6.10 5.56
1.50 3.60 19.88 5.90 5.00
1.50 4.00 19.90 5.90 5.56
-0.20 0.02 0.00 -0.10 0.00
15,000 25,100 3,700 414,000 7
13.56 31.75 35.10 7.00 31.00 16.00 69.00 1.64 70.80 111.19 4.50 12.00 8.01 24.00 62.50 28.54 15.40 8.48 1.90 10.80 0.96 1.95 1.08 17.50
13.56 31.79 35.28 7.00 31.00 16.02 70.00 1.65 70.80 115.96 4.60 13.00 8.25 25.00 65.60 28.54 15.40 8.48 1.92 10.82 1.01 1.96 1.13 17.80
-0.06 -0.21 -0.31 0.00 0.00 -0.44 -0.01 -0.08 -0.07 0.11 0.10 0.00 -0.35 0.00 0.00 -1.36 -1.00 0.00 -0.12 -0.01 0.01 -0.05 0.03 -0.14
6,916 2,043 3,168 1 100 6,000 2,035 256,223 4,404 1,489 14,902 2 13,216 14 6 6,321 7,502 5 67,268 174,666 151,734 236,698 184,507 3,500
Miscellaneous Century Paper Pak Paper Prod. Security Paper Johnson & Philips Pakistan Cables P.N.S.C.XD Pak.Int.Con. SD TRG Pakistan Ltd. Murree BreweryXDXB Shezan Inter.XD Pak Elektron Ltd. Singer Pakistan Tariq GlassXD Grays of Cambridge Pak Tobacco Co. Shifa Int.Hospitals Hum Network XD Media Times LtdXR P.I.A.C.(A) P.T.C.L.A Telecard Limited Wateen Telecom Ltd WorldCall Telecom Sui North GasXDXB
13.62 32.00 35.59 7.00 31.00 16.46 70.01 1.73 70.87 115.85 4.50 13.00 8.60 25.00 65.60 29.90 16.40 8.48 2.04 10.83 1.00 2.01 1.10 17.94
13.95 32.02 35.41 8.00 32.50 16.50 71.94 1.78 73.50 119.00 4.60 13.00 8.70 25.00 68.85 29.90 16.50 8.48 2.14 10.85 1.08 2.10 1.24 17.95
Mutual Funds fund 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
offer 501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800
repurchase 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500
nAv 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500
fund 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
offer 100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000 106.3763
repurchase 100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000 103.2779
nAv 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087 103.2779
Profit PAGES 16-11-2011_Layout 1 11/15/2011 10:35 PM Page 7
Wednesday, 16 November, 2011
balochistan is already bleeding and mfn status to india without consultation with stakeholders from the province would result in great damage to both the social and economic facets of the province
news
07
Sardar Shoukat Popalzai
equity market overshadowed by major players, analysts claim g
kSe board calls eogm to extend the board’s tenure to two years g market participants, Akd and Arif habib groups are controlling affairs of stock exchange KARACHI
m
iSMAiL DiLAWAR
AnY of the market participants may be found nodding to the widely-held perception that equity tycoons, like the AKD Group and Arif Habib Group are engaged in an undeclared race for controlling the affairs of the country’s largest stock exchange. the market sources took the development in the same context as tuesday saw KSe’s Board of Directors deciding to convene an extraordinary General meeting (eoGm) to extend the present one year
tenure of the board to two years. According to KSe, the 10 member board in its emergent meeting decided to convene an eoGm on 8 December 2011 to recommend to the general body amendments in the Articles of Association with reference to the term of the board. the decision came as the board’s one-year term is going to expire next month (end-December) and the fresh elections of the directors would be conducted by the exchange for the calendar year 2012. the market sources, however, do not hold a simplistic view of tuesday’s decision of the board that, they claim, is currently dominated by the pro-AKD directors. “this is part of a longstanding power struggle be-
tween the two giants namely AKD and Arif Habib (groups),” claimed an analyst, requesting anonymity. He said the proposal for term-extension was backed by the AKD group with Arif Habib group who was strongly opposing it. “AKD, after succeeding in having installed the chairman and managing director of his liking on the board, wants to prolong his grip on power,” the analyst said. Further, another source said, the proArif Habib directors on the board had recently rejected the AKD backed proposal for a three year extension. “After having their move rejected by the board the AKD group now has turned to the General Body
(eoGm) to get the proposal approved,” he claimed. the present KSe board comprises muneer Kamal (chairman), nadeem naqvi (managing director) and directors Ashraf Bava, Abid Ali Habib, muhammad Qasim Lakhani, Abdul Qadir memon, Zafar Siddiq moti, Asif Qadir and mohammad Sohail. of the 10 board members, five directors are elected by the KSe members while the remaining five, including the chairman and mD, are nominated by the Securities and exchange Commission of Pakistan (SeCP). the source claimed that of the five elected directors, Asif Qadir, mohammad Sohail and Qasim Lakhani were pro-AKD,
mfn To indiA
Balochistan laments exclusion of stakeholders in debate KARACHI WAqAR HAMzA
P
AKIStAn’S recent act of granting India most Favored nation (mFn) status would add insult to the injuries of Balochistan, as it would diminish the economy of the province worth approximately $15 billion. the northern belt of the province that starts from Chaman and ends at the border of taftan, Iran, is heavily dependent on Afghan transit trade, and this is going to get a severe blow from the granting of mFn to India. President Balochistan economic Forum Sardar Shoukat Popalzai while talking to Profit said Balochistan is already bleeding and this status to India without consultation with stakeholders from the province would result in great damage to both the social and economic facets of the province. He further said that trade that would be done under this status is merely worth $2 billion, but the loss to the economy of the northern belt of the province will amount to $15 billion, yet the socioeconomic loss to the province would be unbearable and could create more unrest among the people of Balochistan. ‘It is ironic that the government on the one hand claims Indian involvement in fueling cross border insurgency in the province, and on the other gives the mFn status to the same country,’ he said, adding that this would only work to invigorate the negative sentiments among the people of the province about their lack of involvement in decision making. “We are aware of the fact that nAto and Pakistan are doing their best to engage the locals peacefully in the said area, but after granting of mFn status there are chances that narcotics and arms smuggling would increase manifold in the northern belt,” he added. ‘In other words
LAHORE: Agri-Forum Pakistan Chairman, muhammad Ibrahim mughal has urged the government to provide a level playing field to the Pakistani farmers before awarding most Favoured nation (mFn) status to India. In an appeal to the Prime minister, Syed Yousaf raza Gillani; Agri Forum Chairman claimed that India used to give an annual subsidy (in Pak rupees) of rs855 billion to its agricultural sector and rs340 billion to the food sector. ‘Pakistan should ensure abolition of this subsidy or extend same amount of
India is trying to have a “dragon trap” on Balochistan by getting this status aiming to exploit all trade routes through Iran to Afghanistan,’ he said, adding that this is all being done for India’s future ambitions to fulfill its energy requirements through
Central Asian republics. Similarly, the international community had promised special development packages to Balochistan but nothing has been done so far in that regard, particularly with respect to reconstruction opportunity Zones (roZ), a project that has been stalled for almost 10 years now, he added. ‘Given that Pakistan does not have strong anti-dumping legislations, India will use this opportunity to subsidise their business community to sell products cheaply in the indigenous market,’ he added. earlier studies on the mFn issue suggest that Pak-India trade liberalisation is likely going to benefit both countries as it would help enhance trade to an estimated $5.2 billion (estimated bilateral increase of 79 per cent going forward from FY04 levels), with a potential to push Pakistan’s exports by another $2.5 billion.
subsidies to Pakistani growers; ensuring a level playing field,’ mughal added. He appreciated setting up of a ministry at the federal level for food security and hoped that this new ministry would work more and spend less. He also appreciated the government’s steps for timely stopping sugar imports and for allowing import of urea. Ibrahim mughal claimed a bag of urea fertiliser weighing 50 kilogram, is available in Pakistan from rs1300 to rs1700, but at the same, in India it is sold at rs513 per bag. Similarly, DAP
It is to be noted that India holds a very small portion of direct and portfolio investment in Pakistan $0.5 million for Jul-Sep’11 (0.2 per cent of the total foreign investment), historically, languishing at a meagre $0.1 million (3-Year, average) of the total investment inflow. In recent years India has emerged as a major global sourcing, particularly in the sector of technology. As per State Bank of Pakistan report the mutual cooperation between the two countries holds potential benefit to sectors, including auto, minerals, agri, pharma, energy and telecommunication etc. In tERMS Of tRADE: on average Pakistan has remained a net importer of goods and services from India. In FY11 alone Pakistan’s total share of exports to India stood at 1.1 per cent ($0.3 billion) against the import share of 4.0 per cent ($1.44 billion). In tERMS Of COMMODItIES: Commodity wise composition of Pakistan’s exports to India remained concentrated in six sectors mainly. out of this, textile, clothing and fresh food contributes 80 per cent of the total exports to India and Pakistan. Pakistan holds a comparative advantage over India in these commodities, in terms of product diversification and overall performance. over the years both the sharewise and value-wise exports of goods to India have increased but at a lower pace (FY95: $41 million, 0.51 per cent of total exports, FY11: $286mn, 1.1 per cent of total exports).
bag is being sold in Pakistan at rs4200, while in India the same is available at rs1539; diesel is rs94 per litre in Pakistan while the same in India is available at rs77 per litre. electricity is being provided to Indian agriculturists at rs1 per unit and in Pakistan it is being provided at rs8.38 per unit. He said if Pakistan wants to import something, then it should import cheaper fertilisers, diesel and electricity. He said if India declines to end subsidies to its growers, then Pakistan should also extend the same amount of subsidy to its growers.
He proposed that the amount for this subsidy could be generated by reducing government official vehicles by half and saving expenses on petrol and maintenance of these vehicles. mughal also drew the attention of the government towards cotton situation and demanded that the trading Corporation of Pakistan (tCP) should be mobilised immediately to stabilise cotton prices. He also appealed that the wheat prices should be fixed at rs1250 per maund and Basmati rice prices at rs2000 per maund. StAFF RePoRt
while Abid Ali Habib and Zafar moti were in the Arif Habib’s block. “the Arif Habib group is resisting the AKD group’s attempts to prolong its grip on power,” he said. When asked whether or not the board’s term should be extended, an investor replied in negative. “What is so special that this board does during the whole year for the benefit of the market and the investors therein,” he replied. the investor went on to say that: “If they (directors) really want to do work, then one year is more than enough.” “the extension should not be granted,” he opined. Any final outcome, however, is due on December 8 when the eoGnm would be voting for or against the controversial proposal.
govt to consider wheat support price increase LAHORE iMRAN ADNAN
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eDerAL government is seriously considering the proposal to increase wheat support price from rs950 to rs1,150 per maund on the pretext of inflation. though farmers are terming it a welcoming move, urban masses and economic experts are considering it a politically motivated development. official inflation figures show that food group has the highest weightage of over 40 per cent in Consumer Price Index (CPI), which mainly consists of wheat, rice, edible oil, pulses, sugar, milk, meat and everyday use seasonal vegetables. numbers indicate that in terms of weightage, wheat is ranked at fourth place in CPI, after house rent, fresh milk and electricity. Available statistics of various developing and developed economies rank Pakistan at eighth place in list of inflation-hit countries, as inflation in the country is hovering above 11 per cent. Figures compiled by Profit indicate that Pakistan already have the highest wheat support price in the region, after China. In Pak rupee terms, farmers in Pakistan are still getting highest price, at rs950 per maund, for their wheat produce. Price statistics show that India has recently fixed minimum support price for wheat at Indian rs1,170 per quintal that means India farmers are getting Pak rs21,990 per tonne. on the other hand, Pakistani farmers are getting rs23,750 per tonne at present wheat support price. numbers suggest that Pakistan will surpass not only India but also China – a relatively expensive wheat buyer, if it fixes wheat support price at rs1,150 per maund (rs28,750 per tonne). economic experts argue that no doubt prices of seeds, fertilisers, pesticides and diesel have been increased to unprecedented numbers during the past three years. this has made wheat cultivation unprofitable for farmers. they underscore that the politically motivated move might help the ruling party in the forthcoming general elections, but it will never benefit masses, especially in urban centers. Pakistan Flour mills Association (PFmA) is also of the view that increase in wheat support price will result in a new wave of price hike in the country. It estimates that the proposed increase in wheat support price would add an additional rs125 in the price of 20-kilogram wheat flour bag, which will touch over rs700. After taking charge of economic affairs, present government announced highest ever increase of 46 per cent in wheat support price in 2008. It increased support price from rs650 to rs950 per maund in one go, which multiplied wheat flour and wheat products prices across Pakistan.