Profit 23th November, 2011 by Profit Epaper

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KSE witnesses record low activity

Pages: 8

profit.com.pk

Wednesday, 23 November, 2011

PuBlIC SeCtoR DeveloPmeNt PRogRAmme g g

Rs71.6 billion released till Nov 18 Austerity measures for development projects would impede growth Important schemes like Chashma Power Project and Bhasha Dam to be patronised

Govt not to slash funds for development projects ISLAMABAD

AMER SIAL

he government has no plans to cut rs290 billion Public Sector Development Programme (PSDP) for the current fiscal year. rs71.6 billion has been released for infrastructure, social and other projects during July 1 to November 18. 20 pc funds released in second quarter: An official source said the Ministry of Finance has not shared any intention to slash PSDP and funds were being regularly released for different projects. Under the release mechanism, he said, during the first quarter July-September of the current fiscal year 20 per cent of funds were released while during the second quarter another 20 per cent of the ceiling would be released. he said the government was following austerity measures but so far there were no indications of any plans to cut the PSDP. Austerity meas-

ures could work to control expenditures but if adopted for development projects they work to impede growth and jobs. “We are releasing funds as allocated under the budget.” prioritising development: All the government departments were directed to utilise the funds firstly for projects that were more than 90 per cent complete and then give preference to other under implementation projects that were more than 60 per cent complete. however, he said that in some cases initiation on new projects which were critical for the country’s growth were allowed like the Diamer Bhasha Dam and Chashma Nuclear Power projects. “These are critical projects to meet the power requirement of the country and will take years to complete if initiated this year,” the source said. Government has released rs35.4 billion for 328 projects in the infrastructure sector, rs35.5 billion for 849 projects in the social sector and

rs0.6 billion for 83 other projects during July to November 18. The allocations will pick up in the third quarter during which 25 per cent and remaining 35 per cent will be released in the fourth quarter of the current fiscal year. fiscal year targets: The annual plan for the current fiscal year targets a GDP growth of 4.2 per cent, with agriculture growth rate of 3.4 per cent, industry 3.7 per cent and services 5 per cent. Despite the financial constraints and extreme shortage of resources the government increased PSDP to rs290 billion for the current fiscal year against the actual expenditure of rs196 billion during the last fiscal year. The source said rs290 billion PSDP has a foreign exchange component of rs36.5 billion and rs33 billion for special programmes. Since the foreign aid disbursement amount was handled by the economic Affairs Division, and releases against special

programmes were being made directly by the Cabinet and Finance Divisions, the releases of Planning Division were exclusive of foreign exchange amount and special releases. It will be releasing only rs220.5 billion during the current fiscal year. power and education sector: he said the monthly releases to National highway Authority and higher education Commission were made in bulk as they were empowered to utilise the funds for different projects on priority. On the power sector projects, he said, the financing of the projects was being arranged by the Water and Power Development Authority (WAPDA) and it was not part of the budget. even though they were being monitored by Planning Commission as under the rules any project having foreign exchange component of more than 25 per cent of the project cost comes under its ambit.

No mFN if negative list of trade exists: Sec’y Commerce KARACHI

GHULAM ABBAS

here would practically be no grant of Most Favored Nation (MFN), until negative list of trade exists between Pakistan and India, said Commerce Secretary Zafar Mehmood. he was talking to a group of journalists. however, Pakistan made India a special case, and was still formulating the negative list to save domestic industry. For sector specific study and extensive consultation, the process was still going on and after in-depth evaluation the final list would be pro-

vided to cabinet for approval, the secretary said. In reply to a query, Mehmood said the proposed negatives list would be completed by February 2012 after completion of sector specific study consultation. Ministry and Trade Development Authority of Pakistan (TDAP) have already held six extensive meetings with all representatives of sectors and trade bodies so far. referring to a joint statement issued after recently held commerce secretaries meeting in Delhi, he said Islamabad has informed Delhi that consultation process on devising negative list was almost complete. A small negative list

would be finalised and ratified by February, 2012. Thereafter, all items other than those on negative list would be freely exportable from India to Pakistan. In the second stage, negative list will be phased out. Schedule for this phasing out will be announced in February 2012 at the time the list is notified and it is expected that the phasing out will be completed before the end of 2012. The move was instigated after Pakistan’s decision to transit from the current positive list approach to a negative list. To a question, he replied that central bank of India was mulling over a few options to facilitate trade. It is being considered that

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India might open a bank branch or a subsidiary institution in Pakistan to resolve the banking issue. however Pakistani side, he said has made it clear that until banking facility is not there bilateral trade cannot be enhanced. Secretary said physical infrastructure of the second gate at Wagah land route was being developed to ensure un-interrupted transit of goods. All infrastructure construction would be completed, making the new gate fully operational no later than end of February 2012. Talking about the much debated Non-Tariff Barriers (NTBs) he said joint working group would

continue interaction to address any clearly identified sector-specific barriers to trade. he informed that Indian side, in a meeting held in Delhi, had also said that all standards and specifications were nondiscriminatory, and they are applied to all countries exporting goods to India. In reply to a query, he said Indian side has also insured that some technical impediments in investment clauses would be removed to facilitate investment in both countries. Apart from trade with India, Mehmood said, Pakistan was also focusing on trade options with other regional blocks specially, eCO, D-8, GCC, ASeAN, SAArC and OIC etc.

Finance committee seeks transparency in CCP ISLAMABAD JALALUDDIN RUMI

eNATe special committee on finance asked Secretary Finance Waqar Masood to submit written assurance that no charge is proved regarding embezzlement allegations in Competition Commission of Pakistan (CCP). Special finance committee headed by Senator Ishaq Dar asked CCP chairperson rahat Konain to submit enquiry reports regarding investigation in the cases of Trans Global, Telecom Company and a company from the banking sector. Committee members Professor Khursheed and haroon Akhtar also ask clarification related to report submitted by finance ministry regarding two alleged charges reported in the anonymous email. After the email, the committee in light of final observations submits its recommendations to Senate’s finance committee. Senator haroon Akhtar said that charges on CCP chairperson, that the two cases were not dealt with on merit related to CCP chairperson’s sister and husband, raise question of clash of interests. he was of the view that if aforementioned allegation is established as a norm in market, it would tarnish the image of the commission. CCP chairperson denied all charges.

govt still trying to meet ImF conditions ISLAMABAD AMER SIAL

O meet one of the key conditionalities of the International Monetary Fund (IMF), the government is exploring the possibility of opening a special account with the commercial banks to attract funds from public sector enterprises (PSes) and public at flexible terms. An official source said a proposal is under consideration for transition to a treasury single account to meet one of the key demands agreed with the IMF under the incomplete $11.3 billion standby arrangement program. The government is in the process of amending rules governing the placement of funds owned by PSes directing them to invest surplus funds in the government debt instruments. This will help diversify investor base in government securities and reduce debt servicing cost. After signing SBA with IMF, the government introduced the concept of assignment account in 2008. however, a survey designed by the World Bank, to quantify the amount that could be transferred to the government account with the State Bank of Pakistan (SBP) remained inconclusive. The government then opted for bilateral meetings with the institutions holding rs500 million and above with the commercial banks but the conclusion was that there was a small amount that could be transferred to the Federal Consolidated Fund (FCF) from the current stock of government deposits with the commercial banks. To put the issue at rest, the government instructed all the federal ministries, divisions, organisations and attached departments to surrender money belonging to the FCF. Otherwise they would have to provide a certificate to the Finance Division containing details of accounts maintained and sources of funding. The government has failed to submit a satisfactory bankruptcy law to the parliament, even though the cabinet constituted a committee headed by the Finance Minister to examine the Corporate rehabilitation Act 2011.

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Wednesday, 23 November, 2011

debate

the tRADekey PheNomeNoN

Tapping businesses online JAVeD MAHMooD

rADeKey is the 3rd largest business to business website in the world and is facilitating over $100 million trade transactions every month. It facilitates various traders worldwide by offering them an online platform to interact with numerous businesses from around the world. In Pakistan TradeKey has more than 400 employees and by adding the employees from its offices in Saudi Arabia and China, the total workers are over 500. The web-portal has 5.8 million customers in 220 countries. In an interview with Profit, Junaid Mansoor, the CeO of the company said that he had vowed to make his company, number one in the world. To achieve this goal the entire team of Tradekey is making stupendous efforts to evolve the company into one of the best, he said.

gAugINg SuCCeSS CeO Tradekey highlighted the fact that his company has a capital investment of $20 million and more than 9.5 million web-users visit the website with over 32 million page views every month. “So far over 1 billion visitors have visited our website in the last 6 years. At our website there are 36,000 categories of industries in which we have products by sellers for prospective buyers” he informed. TradeKey is the pioneering Business to Business website in Pakistan, having most of its clientele in USA and China. More than $100 million buying and selling takes place majorly from USA, China and europe at this website. As a busi-

ness model, TradeKey doesn’t charge its importers and only charges the exporters who get the chance to sell their products worldwide. More than 1 billion people have visited the website and the active visitors are mainly from China, US, Turkey, Taiwan. Talking about the history of his company Mr Junaid said that TradeKey.com was formed in 2005 with the vision to support international trade and to virtually gather buyers and sellers from all over the world at a single platform. he said “Our dream has come true due to the encouraging fact that within 6 years we were declared as one of the fastest 500 growing companies of Asia in a competition held by All-World Network organised by harvard University”.

CuttINg eDge weB PoRtAl TradeKey.com is the first B2B marketplace that received Google Page rank 8 and it is also the world’s first B2B marketplace that earned ISO 9001 Quality Management System and ISO 27001 Information Security System certifications to ensure maximum customer satisfaction and safe online trading. TradeKey also helps small businesses to convert into global enterprises by providing them a cutting-edge web-portal; through which they can promote their products, find and satisfy genuine buyers and explore international business opportunities. The global online trade business is touching the mark of $5 trillion but Pakistan doesn’t have any substantial share in it. Internet is indeed the future of the Pakistani economy and if we utilise its full potential our country can easily accelerate its exports significantly in the near future. Currently, TradeKey has 140,000 users in Pakistan which is very less as compared to its world-

wide consumer base of 5.5 million active users. Promotion of locally produced products through the internet in the international market has not yet gained momentum for Pakistani businesses, however; TradeKey is developing Pakistan-specific products that would be able to attract a large number of Pakistani manufacturers and exporters to capitalise on the power of Internet.

tAPPINg loCAl mARket While shedding light on the indigenous market, Mr Junaid commented that for now Pakistani customers are not used to pay for internet-based services and there are so many people who are still not using the computers and internet to fortify their businesses. TradeKey offers basic services with no charges to the Pakistani clients in order to help them promote their products and services on an international level, however, they are charged if they require extensive services. In order to facilitate the Pakistani exporters in exploring the extensive trade opportunities through internet, TradeKey is also planning to forge partnerships with Trade Development Authority Pakistan (TDAP), Small & Medium Business Development Authority (SMeDA) and Organisation for Islamic Countries (OIC). Moreover, the company is providing an opportunity to Pakistani women entrepreneurs to explore the potential of internet-based business. TradeKey has recently announced to launch Women e-Business Incubation Center, to create partnership with Pakistani women. Through this initiative, TradeKey will provide a platform to women for all their innovative ideas with support in areas like product development, marketing and finance.

tradekey facilitates over $100 million trade transactions every month website attracts 32 million page views every month

emPoweRINg womeN “We want to support and promote women who have ideas and are committed to excellence in the field of e-business. This programme would make women’s dream come true by enabling them to develop their own Internet-based businesses with the flexibility of working from anywhere at anytime” the CeO informed. This facilitation by TradeKey is in pipeline, addition to work from home facility provided to women workers in developing countries.

gRowth oPPoRtuNItIeS FoR emPloyeeS The company also provides various growth opportunities to its employees as well, since they would grow with the expansion of the business. As e-business, specifically its B2B sector in an emerging phase, there has been scarcity of human resource that has experience, knowledge and skills to play an important role in the development of this industry. To address this challenge, TradeKey has designed and implemented an innovative strategy and performance management system known as the Grow Unlimited Program (GUP). The Grow Unlimited Program (GUP) identifies, appraises and develops performance of its employees in order to meet business objectives. Unlike other conventional performance management systems, GUP gives control to its employees for their own growth so that they can choose the pace of their career development by themselves. This is achieved by pre-defined criteria and performance based promotions. A positioning system takes care of the promotions of employees through this program. employees earn points based on their performance every quarter and as an employee accumulates certain level of points, he/she becomes eligible for a promotion.

The wages of economic ignorance

RoBeRt SKIDeLSKy

OlITICIANS are masters at “passing the buck.” everything good that happens reflects their exceptional talents and efforts; everything bad is caused by someone or something else. The economy is a classic field for this strategy. Three years after the global economy’s near-collapse, the feeble recovery has already petered out in most developed countries, whose economic inertia will drag down the rest. Pundits decry a “double-dip” recession, but in some countries the first dip never ended: Greek GDP has been dipping for three years. When we ask politicians to explain these deplorable results, they reply in unison: “It’s not our fault.” recovery, goes the refrain, has been “derailed” by the eurozone crisis. But this is to turn the matter on its head. The eurozone crisis did not derail recovery; it is the result of a lack of recovery. It is the natural, predictable, and (by many) predicted result of the main european countries’ deliberate policy of repressing aggregate demand. That policy was destined to

produce a financial crisis, because it was bound to leave governments and banks with depleted assets and larger debts. Despite austerity, the forecast of this year’s UK structural deficit has increased from 6.5% to 8% – requiring an extra £22 billion ($34.6 billion) in cuts a year. Prime Minister David Cameron and Chancellor George Osborne blame the eurozone crisis; in fact, their own economic illiteracy is to blame. Unfortunately for all of us, the explanation bears repeating nowadays. Depressions, recessions, contractions – call them what you will – occur because the private-sector spends less than it did previously. This means that its income falls, because spending by one firm or household is income for another. In this situation, government deficits rise naturally, as tax revenues decline and spending on unemployment insurance and other benefits rises. These “automatic stabilizers” plug part of the private-sector spending gap. True, if governments stop spending altogether, deficits will eventually fall to zero. People will starve to death in the interim, but the budget will be balanced. That is the crazy logic of current economic policy in much of europe

(and elsewhere). Of course, it will not be carried through to the bitter end. Too much will crack along the way – the banks, the monetary system, social cohesion, the legitimacy of the political regime. Our leaders may be intellectually challenged, but they are not suicidal. Deficit reduction eventually will be put into cold storage, either openly, as I would prefer, or surreptitiously, as is politicians’ way. In the United Kingdom, there is already talk of Plan A +. Those who see the need for such a growth strategy, but who also want to help their friends, like the idea of tax cuts – especially for the rich. This knocks a hole in current deficit-reduction plans, but, provided government continues to cut spending, it has the benefit (from a conservative’s point of view) of shrinking the state’s role over time. Apart from questions of fairness, cutting top tax rates is an inferior way to increase spending, because the rich have a higher propensity to save. Tax reductions should be targeted specifically at the poor if one wants the money to be spent to stimulate the economy. In fact, the best option of all is for the government to spend the money itself. Governments can do this consistently with a medium-term

deficit-reduction plan by making a crucial distinction between their budgets’ current and capital accounts. The current account covers spending on services and perishable goods that produce no assets. The capital account is for buying or building durable assets that give a prospective future return. The first is a charge on taxation; the second is not. If today’s accounting rules are too insensitive to make this distinction, a separate entity could do the investing. A national investment bank would be capitalized by the government, borrow from the private sector, and invest in infrastructure, housing, and “greening” the economy. This would simultaneously plug a hole in demand and improve the economy’s long-term growth prospects. There are signs that officials in the UK and the United States are starting to move in this direction. If nothing works, it will be time to sprinkle the country with what Milton Friedman called “helicopter money” – that is, put purchasing power directly into people’s pockets, by giving every household a spending voucher with an expiration date. This would at least keep the economy afloat pending the

development of the longer-term investment program. It would be better if such schemes could be agreed upon by all by G-20 countries, as was briefly the case in the coordinated stimulus of April 2009. If not, groups of countries should pursue them on their own. The european Union desperately needs a growth strategy. Its current bailout schemes only help countries like Greece and Italy to borrow money cheaply in the face of prohibitively high market interest rates, while the schemes’ insistence on more budget-deficit reduction in these countries will reduce european purchasing power further. The recipient governments will have to cut their spending; the banks will have to take large losses. In the long run, the eurozone must be recognized as a failed experiment. It should be reconstituted with far fewer members, including only countries that do not run persistent current-account deficits. everything else that has been proposed to save the eurozone in its current form – a central treasury, a monetary authority that does more than target inflation, fiscal harmonization, a new treaty – is a political pipe dream. Robert Skidelsky, a member of the British House of Lords, is Professor Emeritus of Political Economy at Warwick University. A version of this article was first published in Project Syndicate.

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Wednesday, 23 November, 2011

EDITORIAL

Social media for business

On the same team?

eWS reports highlighting the communication breakdown between ministries of commerce and textile, that too regarding the crucial MFN debate, are worrying. And it’s no less unsettling that the initiative with India is cause for confusion at the highest levels to this day. Usually, we’d expect landmark decisions involving the eastern neighbour to have the highest level sanction from Islamabad, and as such vigorously debated with all relevant ministries and stakeholders. Also, since the MFN argument revolves around trade, and textile is our prime export earner, the ‘solo flight’ charge leveled against the commerce ministry defies explanation. The division betrays something far more serious than ad hoc decision making at the top. It shows that not only is there no credible long-term policy, but more surprisingly, there seems little regard for the government’s earning capacity. At the risk of repetition, with textile important enough to have its own ministry, leaving it

out of crucial trade talks is akin to maneuvering for political leverage even at the cost of loss of revenue. Already, there has been increasing talk of too many negative spill-overs of the MFN initiative for the win-win hype to be accepted. Considering the government’s precarious fiscal situation, it ought to have postured towards bolstering manufacturing and industry with the specific purpose of incorporation value addition in the export mix. Not only has no particular patronage been accorded to improving the export base, it is becoming abundantly clear that there are far too many division within the government machinery for trade and revenue generation to be given the attention it deserves anytime soon. And with the other main earner, tax collection, also badly compromised, the middle and lower income groups can look forward to yet more austerity as the bigger boys play politics. While settling this argument, those at the helm should remind all parties that they are on the same team, and should work accordingly.

S A J Shirazi

Devil wears Prada

Economic ties with South Korea

The article raises a number of important issues. however, the economically strained and crises ridden people, like myself, have redefined luxury/ fashion as per the depth of their wallets. In a way the fashion industry is increasing the gap between the rich and the poor, the effects may not be immediate, but the class difference will come on surface in the long run. The size of this pond is getting bigger and so are the number and size of fish in it, there is a lot of business potential here that can be further exploited- Ironic how we are an intolerant bunch of mullahs at one extreme and fashionistas at the other.

I believe the South Korean ambassador’s recent proclamations are a positive note. South Korea has been one region that we have criminally neglected and hence such positive exclamations from their diplomat bode well for the bilateral ties. While the MFN debate continues to hog the headlines, we need to ensure that we continue to explore other areas and look to enhance our trade with other countries as well. South Korean ambassador’s proposals were also meticulously thought out. hence, it seems as if he wasn’t merely giving the speech for the sake of it he actually wanted things to ameliorate. let’s hope we respond positively.

DoDAR KHAn

KASHIf IMRAn

ISLAMABAD

OCIAl media has come of age overtime and now it provides a powerful means to reach out and engage with online population in an extremely cost effective and efficient way. even as social platforms shift in popularity or come and go, businesses can introduce themselves and interact with those who share the same interests. Savvy businesses are already using Facebook, twitter, youTube and so many other platforms to engage their audience. Now they have one more; Google+ your business. Google, a search engine we are so familiar with, released its social network in June this year and was asking enterprises and organisations to wait for using the site for business purposes. last Monday (October 7, 2011), Google rolled out Google+ pages for businesses to create a presence on the social networking platform for connecting with their users locally and worldwide in a big way. Google+ is google’s answer to Facebook. like Facebook pages, at Google + pages, businesses can share content - text, photos and video - to not only a network of contacts but to anyone using Google services. like Facebook, individuals can have a personal profile at Google+ and a Page for local business, place, product or brand, company, institution or organisation. The page can also support arts, entertainment, sports and much more. Overall, it is a social site to post information in different formats for a cause. So, what is the difference? Why businesses should create pages at Google+ for what they are already achieving at Facebook? A simple answer is the penetration of the search results. People search on Google billions of times a day. having Google+ pages can help people transform their queries into meaningful connections because Google is

Savvy businesses are already using Facebook, twitter, YouTube and so many other platforms to engage their audience

bringing Google+ pages into its search results. Google has integrated + into its World Wide Web dominating search engine. In addition, with Google+ direct connect, searchers can insert a “+” before their query and jump directly to a business’s Google+ page. Type “+youTube” into a Google search box, for instance, and Google will take you straight to youTube’s Plus page. This is where Google will have an advantage over Facebook or any other social media platform. This ability alone gives Google+ an edge over other more familiar social networks. This interesting and innovative feature can be a welcome mat for eager marketeers and is likely to put them into motion to claim their own brand pages. Another difference lies in counting Facebook likes and Google +1 that are considered as public endorsements. Presently, Facebook has more than 800 million active users (Google+ so far has only 40 million in less than six months), 50% of them log on to Facebook in any given day and an average Facebook user has 130 friends. It will not be an exaggeration to add that almost everyone online has a Google account. For people that already use features like Gmail, Google Docs and Google Calendar, the inevitable integration between these tools and Google Plus is useful. But let me hasten to add that counting number of likes or +1 is not a measure. Instead, businesses that want to track how well their page are doing can simply use Google+ search to look for keywords for their products or services. Businesses can also use Google Analytics to measure the popularity of their page. Facebook is for people (family and friends) you already know and Google+ is for netizens who are trying to find relevant information online. Marketeers need to pay very close attention because Google+ pages are likely to change users’ search experience and web masters’ search engine optimisation forever. Instead of being an aggregator or a medium to find relevant information about your products and services, Google+ is poised to be both the platform and means of distribution for content. While everyone in the tech space is exploring Google+ and weighing its potentials, one thing is sure, it is better to claim your own business space with Google+ pages and have a presence on it for the back link to Google. That will make your business more available on Google. Not only that, it is more in line with engagement marketing. The writer is Deputy Controller of Examinations at Lahore School of Economics. He blogs at http://logicisvariable.blogspot.com/ and can be reached at sajshirazi@gmail.com

kARAcHI

Europe and the bitter Beijing pill

Kunwar Khuldune Shahid

eGeND has it that the pied piper of hamelin was hired by a town to purge their locality from rat infestation in 1284. The pied piper duly ensnared the rats with the tune of his piper and lured them all away into the Weser river. however the sting in the tale came when the inhabitants refused to pay back the promised sum to the piper and in turn invoked his fury-laden antagonism which eventually culminated in the pied piper baiting away the children of the town. With eurozone border-

ing on a rat-plagued dominion, a south-east Asian piping giant has all the rhythmic force to drive away the rats. But is the panic-ridden europe ready for the payback? There are quite a few pipers that are being touted as europe’s saviours. In fact if one were to traverse time dilations and move back in time, europe has proven itself to be the battle ground for all sorts of piping rivalries. Although Uncle Sam has been piping all over the globe for the last hundred years or so, 1930’s young Plan or 1947’s Truman Doctrine are a couple of melodies that bear an uncanny resemblance to the modern day scenario in europe. Truman Doctrine, in particular, aided european cause after World War II’s aftereffects had taken their toll; and it proved to be a metaphoric stick used to ward off any communist penetration within Uncle Sam’s musically influenced realms. Now, just as the US flexed its economic muscle to enhance its hegemony over global matters back then, the gauntlet has been thrown towards China in 2011.

There are quite a few versions of the ‘Pied piper of hamelin’ tale. One of them suggests that the piper amplified his demands, from those that were settled prior rat cleansing. Another version narrates the fact that it was actually the town residents who refused to pay after the pied piper had dug them out of their quagmire. either way, europeans should be wary of the repercussions that accompany any salvage act. Beijing has been parrying away suggestions that it is willing to be europe’s liberator-in-chief. But with Chinese stake in the global economic order and the fact that China itself has been the major beneficiary of such an order; Beijing might have to rethink its reluctance. China’s foreign exchange reserves tower above the rest, and hence their fortunes are intermingled with the rest of the world. eurozone being Beijing’s most significant trading partner – with 20 per cent of the country’s total exports – connotes that its stability is of paramount importance to Chinese hierarchy. Chinese growth could drop

ShAhAB JAFRy Business Editor

kuNwAR khulDuNe ShAhID Sub-Editor

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hAmmAD RAZA Layout Designer

With Eurozone bordering on a ratplagued dominion, a south-east Asian piping giant has all the rhythmic force to drive away the rats

by seven per cent and real GDP growth by one per cent, owing to a one per cent GDP decline in the european Union, according to estimates. There’s no denying the fact that China has the wherewithal to conjure up a bailout package. But the real opportunity lies in investing in eU and enhancing domestic consumption of european products. The Asian pied piper has quite a few harmonies up its sleeve that might prove to be europe’s lifeline. It can aid europe bilaterally by back-stopping the stability facility. It could even purchase bonds from countries like Italy and Spain at generous rates or supply finance via IMF. In return China could reign supreme in financial matters, especially by augmenting its influence over IMF and its gov-

ernance. however, what might pinch the europeans is if the rescue act has a political tradeoff. With China’s financial sway, the european payback was never going to be a strictly monetary matter – China’s european investment would inevitably have a pecuniary advantage, with or without europe’s intent. however influencing political matters – like asking France to not invite Dalai lama, or countering U.S decision-making in Italy – could be too big a price for europe to pay. Salvation has a price tag, the people of hamelin learned it the hard way; europe wouldn’t want to follow suit. The writer is Sub-Editor, Profit. He can be reached at khulduneshahid@gmail.com

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

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Wednesday, 23 November, 2011

Pakistan needs to discover more oil and gas in the country to address the mounting challenges

news

Secretary Petroleum, ejaz Chaudhary

Logistics experts apprehensive about lack of government support LAHoRe

STAff REPoRT

AKISTAN’S leading logistics and supply chain management experts have observed that government’s lack of support to this important sector has been causing a loss of two per cent of Gross Domestic Product (GDP) per annum. They were addressing participants of 1st International Conference and exhibition on logistics and Supply Chain Management. The conference was jointly organised by Pakistan International Freight Forwarders Association (PIFFA), Air Cargo Agents Association of Pakistan (ACAAP) and Publicity Channel here at a local hotel. Vice President of SAArC Chamber of Commerce and Industries Iftikhar A Malik inaugurated conference. Iftikhar A Malik, while speaking as chief guest, termed logistics and supply chain as the lifeline of economy in the country. he said floods had damaged road infrastructure, which inflicted a heavy loss on road transportation of goods.

however, he also expressed his concern over lack of initiative on part of business community to improve air, sea, and rail and road logistics and supply chain system in the country. he urged private sector to get up and face challenges rather than look for shortcuts. “If a warehouse can be established across the border, then why are freight forwarders sleeping here?” he asked. he added that business community needed to minimise inventory and become the doer and deliverer. While outlining problems faced by logistics and supply chain management, Moin Ahmad Malik, a leading logistics expert and former PIFFA Chairman, revealed that India had been the top ranked nation in the logistics hub owing to implementation of government’s supportive policies and timely decisions. Pakistan, on the contrary, was positioned at the bottom among attractive logistics hub in South east Asian countries, he added. Although trade with India will open opportunities but, he believed, border facilities were least facilitating regional trade. Imports were much higher

than exports, which cause trade deficit. he said railways couldn’t even cater passenger transportation leave alone freight transportation within the country. he said only available option of goods transportation was through trucking system, which he believed, had also been disintegrated after the present government withdrew previous government’s waiver of 16 to 17 per cent on trucking. This increased cost per trucking unit up to 100 per cent i.e. rs1.7 million per year, he added. he said trucking was an un-organised sector and corporate sector was not ready to take over this mode of transportation for the simple reason that government had completely ignored this sector. “The government policies reflect progress by taking one step forward and five steps back in this sector,” he said. he added that rising cost of fuel and electricity coupled with decades old trucks and bad road infrastructure were badly hurting progress of this sector. he said up to 30 to 35 per cent of the perishable goods like fruits and vegetables during transportation from

PAmCo to promote mass production of fruits LAHoRe IMRAN ADNAN

UNJAB Agriculture and Meat Company (PAMCO) is going to set up imported olive, seedless citrus and grape nurseries, in collaboration with private sector, to start mass scale production of certified imported fruits. Speaking to Profit, PAMCO Chief executive Officer Dr hamid Jalil revealed PAMCO was going to develop Potohar region, including Attock, rawalpindi, Jehlum, Chakwal and Khushab, as olive production zone. Similarly, seedless citrus zone would be established in Thal region on fertile lands of Bhakhar and layyah, while grapes valley would be developed in sweet

water zone of Cholistan, which surrounded over Bhawalnagar, rahim yar Khan and Bahawalpur. In the initial phase, he said, PAMCO had invited expression of interest (eoI) from international and local firms for provision of certified mother plants that have proven fruit quality and international recognition. he said project would be run on public-private-partnership model. PAMCO would provide these imported mother plants and technical expertise to private sector free of cost for development of local nurseries, he maintained. Speaking about olive development locally, Dr Jalil said PAMCO had selected nine internationally recognised olive varieties, including Moralolo, Pendolina,

Frontoio, Coratina, leccino, Ottobratica, Nabali, Gemlik and Sevillano, for domestic production. Initially, around 500 disease free olive mother plants would be imported from different parts of the world. These would later be reproduced in locally established nurseries for mass production, he added. Similarly, seedless citrus varieties, including Kinnow Mandarin, Washington Navel and Valencia late, and grapes varieties, like Thompson Seedless, Kings ruby and Perlette, are being imported. Most mother plants would be imported from Turkey, Italy, Spain, egypt, Tunisia, etc and strict certification and photosanitary compliance would be ensured, he underscored.

farm to market were lost due to lack of cold chain system. he emphasised the need to prepare trained human resource by establishing vocational training institutes to streamline road transportation sector in the country. he stressed the need to make legislation to regulate carriage of goods through air, sea, rail and road routes within and outside the country. “It will help put in place a regulatory mechanism for transport logistics and supply chain in the country,” he stressed, and urged government to recognise freight forwarding as an industry. Tahir Malik, Chairman ACAAP, also criticised government for failing to cater to improve air freight to support business community, which was contributing billions in taxes every year. he said national carrier didn’t have a single cargo aircraft, and no proper cargo complex was built in Pakistan till 2001. he added that non-availability of shells at air freight units for perishable goods, which resulted in decay of a large quantity of items like mangoes and kinnows are major hurdles towards progress as well.

India buoyant about mFN sialKot: high Commissioner of India in Pakistan Mr Sharat Sabharwal has said India was keen to increase mutual trade between Pakistan and India. Boosting mutual trade and promoting strengthened trade ties with Pakistan was the top priority of India, as India was ready to enhance mutual trade volume from existing $2 billion to $6 billion. India was actively building up its trade and economic relations with Pakistan and other countries on priority basis, besides, ensuring the provision of maximum opportunities to Pakistan by India. he stated this while addressing an important meeting of Sialkot business community held at Sialkot Chamber of Commerce and Industry (SCCI). ARIf MEHMooD SHEIkH

leather industry fears losses due to load-shedding KaracHi: The export oriented leather sector has given SOS to federal government to save the industry from collapse due to massive load-shedding resorted by KeSC in industrial areas. Chairman Pakistan Tanners Association (PTA), M Khurshid Ahmed said at this juncture, losses of millions of rupees are feared in Tannery Zone in Korangi industrial area due to loadshedding. “Power outage for over 10 to 12 hours per day will ruin all the raw material lying at the tanneries worth millions of dollars and leather exporters will not be able to fulfill their commitment in the international market,” Khurshid said adding that KeSC should earnestly declare Tannery Zone exempted from load-shedding. STAff REPoRT

President ABF concerned over falling economic indicators laHore: President American Business Forum (ABF), Salim Ghauri has expressed concerns over dwindling economic indicators, including 61 per cent decline in foreign private investment during the four months of current fiscal and increase in Non Performing loans (NPls) to rs629 billion. This situation is likely to dampen growth of economy further if no timely action is taken by concerned authorities, he said. Salim said Pakistan should make efforts to keep its house in order to rebound economic activity once sluggish trends are over. President ABF said government should launch image building campaign in a situation when security situation has improved impressively. On the rising NPls, President ABF said NPls are likely to catch up further due to deteriorating state of different industrial sectors amidst short supply of energy. energy situation is yet in doldrums and the project of rental Power Plants (rPPs) has also been scrapped after embezzlement reports followed by apex court intervention. STAff REPoRT

FBR should address income tax issues of small traders: ICCI islamaBad: Although the documentation of economy is a step forward towards increase in tax to GDP ratio, but there was a great trust deficit that existed between the tax payers and Federal Board of revenue's (FBr) tax officials. Vice President Islamabad Chamber of Commerce and Industry (ICCI), Shahid Zaman Shinwari said requirement of annexure D relating to the personal expenditures of individual tax payee, that includes details of expenditures on personal phones and other utilities, children education and other personal expenditures, have been demanded. The small traders are frightened to provide all this detail as this step may also lead to tax harassment. On demand of small traders, ICCI urged FBr to take small traders in confidence so that they can file their returns and deposit tax in government treasury. STAff REPoRT

INDEX TUMBLES BY 127 POINTS

KSE witnesses record low activity KARACHI STAff REPoRT

ArAChI stocks market remained bearish Tuesday with the index nose-diving by 127.79 points or 1.04 per cent on the back of international and domestic factors, viewed the market observers. The trading volumes once again plunged to a record 28.368 million shares against 31.097 million of the previous day. The market analysts believe that decline in global stocks and commodities due to prevailing europe and US debt crises coupled with the traders’ cautious approach towards the State Bank of Pakistan’s discount rate announcement at the end of this month played havoc with the investors’ confidence on the day. The day saw the benchmark, KSe 100-share index, dipping to 11,767.00 points as against 11,894.79 points of Monday. The

intraday high and low were recorded, respectively, at 11,894.79 and 11,751.41 points. “Bearish activity in stocks was witnessed across the board with record low activity at KSe,” said Ahsan Mehanti, a director at Arif habib Investments. The shares traded at the ready-counter during the day totaled at 28.368 million, some 2.729 million down from 31.097 million shares traded a day earlier. The trading value, however, improved and swelled to rs1.3 billion compared to the previous rs1.1 billion. The market capitalisation accounted for rs3.061 trillion, about one per cent down when compared with rs3.093 trillion of the previous day. Some 320 scrips were traded, of which 73 gained, 150 declined and 97 remained unchanged. Mehanti said that the head-on dip in the KSe 100-share index was stimulated by the fall in global

stocks and commodities on the United States and european debt fears that affected sentiments of the risk-averse investors. “Fall in global stocks and commodities on prevailing europe and US debt crises played a catalyst role in the steep fall witnessed at the bourse,” the analyst said adding the investors stayed alarmed despite strong fundamentals in some local commodity stocks. “(The) investors remained

cautious ahead of SBP policy announcement next week,” Mehanti said. The analyst said even the hopes for an ease in circular debt concerns in the country could not help restore the investors’ confidence. Fauji Fertiliser Bin Qasim was volume leader of the day seeing 2.39 million of its shares traded at the highest per share rate of rs59.65. The fertiliser giant’s share price depreciated by rs1.58 and con-

tracted to rs58.04 after opening at rs59.62. Other scrips that were marked among the top 10 best traded included Bank Al-Falah, Fatima Fertiliser Company, lotte PakPTA, National Bank of Pakistan, NIB Bank limited, J.O.V and CO, Fauji Fertiliser XD, MCB Bank limited and engro Corporation. These scrips counted their traded shares, respectively, at 2.3 million, 2.3 million, 1.5 million, 1.3 million, 1.1 million, 0.943 million,

0.919 million, 0.895 million and 0.892 million. The turnover at future market also witnessed a downward trend and slid to 6.1153 million shares against the previous 6.773 million. The futures scrips that were rated as plus numbered 10, with 129 rated as minus and one unchanged. NBP-NOV was the volume leader on the future market having 1.026 million of its shares traded during the day.

PROFIT pages 23-11-2011_Layout 1 11/23/2011 12:11 AM Page 5

Wednesday, 23 November, 2011

The US economy won't be good next year and Europe will be worse, meaning weak external demand for China

news

Xia Bin, head of Financial Research Center

China may post trade deficit next year: adviser tAIPeI

REUTERS

hINA'S trade balance faces the risk of sliding into a deficit for the first time in two decades in 2012 as export demand in europe and the United States slumps, an academic adviser to the central bank said on Tuesday. China needs a "very proactive" fiscal policy to spur domestic demand next year amid weakness in Western economies, Xia Bin told reuters in an interview late on Monday during a visit to Taipei to promote his new book. But he also said that the world's No.2 economy will not loosen monetary policy, which he said now has "about the right tone." "The U.S. economy won't be good next year and europe will be worse, meaning weak external demand for China. We can't rule out the possibility of a trade deficit," Xia said. "To increase domestic demand, fiscal policy must be very proactive, reform of the tax system should be speeded up and wages raised to stimulate consumption," he added. he did not give a forecast for any deficit. Xia, head of the financial research institute at cabinet think tank Development research Center, sits on the 15-member monetary policy committee of the central bank but does not have real influence on key decisions on interest rates or China's yuan currency. The People's Bank of China has loosened credit conditions recently to help small firms and promised to "fine-tune" policy if needed to support economic growth, which slowed in the third quarter to 9.1 percent, its weakest in more than two

years. But, barring a sudden and sharp blow to the economy, more aggressive policy easing such as a cut in banks' reserve ratios or interest rates is seen as months away. Meanwhile, the cash-rich government is flexing its muscles by offering tax cuts to companies.

SLOWER YUAN RISE Despite faltering Western demand, China's economy is still seen as on track to grow over 9 percent this year. Xia said China expects to maintain economic growth at 8 percent to 9 percent in 2012 and sees further inflationary pressures, though Beijing will look to keep price rises to 2 percent to 3 percent next year. Annual inflation hit a three-year high of 6.5 percent in July. Though it has eased in recent months, it remains elevated at 5.5 percent. China's commerce ministry warned last week that the outlook for exports could be grim for the rest of this year and the early part of next, as europe struggles to contain its debt crisis and the

United States seeks to spur its fragile recovery. China's imports surged 28.7 percent in October while exports grew at 15.9 percent, their slowest rate in months, suggesting Beijing's efforts to tilt the economy toward domestic demand may be offsetting the external weakness that has dragged on economic growth this year. That capped October's trade surplus at $17 billion. The government expects the full-year trade surplus to narrow to around $150 billion in 2011 from last year's $183 billion, the third straight year of decline. Despite the global gloom, Xia's view of a possible trade deficit remains a minority one. last month, Wei Jianguo, a former vice commerce minister and secretary general of thinktank the China Center for International economic exchanges, also raised the possibility [ID:nl3e7lI00G]. however, most economists say that while there is little doubt the trade surplus will continue to narrow, it might take a few more years for

China to see a full-year trade deficit, unless exports collapse. Also, there may be limited room for the government to spur domestic demand as economic growth slows. The massive trade surplus has long been a source of friction with the United States and China's other major trading partners, many of whom complain that Beijing keeps its yuan currency undervalued to boost exports. But U.S. trade and employment problems would not be solved by even a major appreciation of China's yuan versus the dollar, Chinese President hu Jintao was quoted as saying last week. The yuan has gained about 40 percent in real effective exchange terms since Beijing abandoned its peg to the U.S. dollar in 2005, and has rallied almost four percent against the dollar in nominal terms this year. On the growing internationalization of China's yuan currency, Xia said that by 2020 the yuan will make up about 3 percent to 5 percent of the world's reserve currencies. But he saw the process only happening slowly.

east Asia cushioned from global crisis: world Bank SInGAPoRe AfP

rOWTh in east Asian economies will slow next year with demand from key export markets in the United States and europe falling as they struggle with their debt crises, the World Bank warned Tuesday. however the region's large foreign reserves and current-account surpluses will cushion it from the impact of another global financial crisis, while the bank said China could pick up some of the slack from the West. In its biannual report the Washington-based bank said developing east Asia eyes growth of 8.2 per cent this year and 7.8 per cent in 2012, down from 9.7 per cent in 2010. "lower growth in europe in the course of fiscal austerity and the banks' needs to increase capital coverage would affect east Asia," said Bert hofman, the bank's chief economist for the east Asia and Pacific region. "less credit from european banks can also affect capital flows to east Asia, but high reserves and current account surpluses protect most countries in the region against the impact of possible renewed financial stress." According to the bank, the region - which includes China, Indonesia, Malaysia, the Philippines, Thailand, Vietnam and Cambodia -- had foreign reserves, excluding gold, totalling $4.9 trillion as of September. China alone has foreign reserves of $3.2 trillion. The region's export-led economies have already been affected by the ongoing turmoil in the West with its industrial sectors, especially electronics, facing weaker demand, the World Bank said. It added that flooding in several countries, including Thailand, contributed to the expected slowdown as companies in the region were forced to stop production due to broken supply lines and parts shortages. With the US economy struggling and europe grappling with a crippling debt crisis, China has emerged as a major export market that would be able to fill in some of the gaps in demand, the World Bank said. The Chinese economy is still expected to expand at a solid 9.1 per cent this year despite Beijing's efforts to rein in inflation -- including raising interest rates -- with growth expected at 8.4 per cent next year, it said. "China's growing consumer goods market represents a potentially significant new opportunity for east Asian exporters, if it continues to expand from its low base of just two per cent of the world consumer goods market," it said. China's share of global imports has grown steadily and it now buys as much as the european Union, the bank said. For the short term, the main challenge for east Asia is how to strike a balance between stimulating growth and fighting the effects of the global uncertainty, the bank said. The region's policymakers "are likely to hold off further policy tightening and stand ready to act should negative shocks to growth occur or in the unlikely event of a disorderly resolution of the eurozone debt problem," it added. While fiscal positions are not as strong as they were before the 2008 meltdown, most middle income countries in the region still have room for stimulus packages should it become necessary, the bank said. For the medium to long term, however, east Asian policymakers must implement further reforms that will boost domestic demand and productivity. "higher investments in infrastructure, education and social security systems can help countries increase productivity and move toward higher value added production," said senior economist ekaterina Vostroknutova, the report's lead author. "Any possible stimulus programs should be fiscally sustainable, welltargetted and directed at promoting the structural transformation needed for stronger, domestically driven growth."

CORPORATE CORNER Schneider electric launches new business line lAhOre: Schneider electric, a global specialist in energy management solutions, has announced the launch of a new business line - ‘Schneider electric Secure Power Systems for Industry and Infrastructure’, providing fast and effective solutions for large facilities to increase power availability and systems uptime of mission critical applications. Schneider electric’s new business line comes as part of its strategy to expand its products and services range for industries and facilities beyond data centers. PRESS RELEASE

Bin Saqr Al Qasimi and the team at ras Al Khaimah Investment Authority (rAKIA) were certainly commendable, and reaffirms all the positive facts we had been learning about the emirate of ras Al Khaimah..” PRESS RELEASE

haier launches nationwide promotional campaign

unifico Copper FZC llC announces opening of regional oﬃces laHore: Pakistani entrepreneur’s venture, Unifico Copper FZC llC, has announced the opening of its two million square meter regional operating offices and processing facility for copper and gold in ras Al Khaimah. The technologically advanced processing facility, which is expected to be operational by the fourth quarter of 2013, will eventually supply up to 500,000 tonnes of lMe (london Metal exchange) standard copper cathodes a year to Asia and Middle east. Unifico Copper Chairman, Khurshid A Shah said, “The level of support extended by supreme council member and ruler of ras Al Khaimah Sheikh Saud

ceremony to mark the closure of the three-month long promotional campaign. PRESS RELEASE

NuSt arranges conference on Application and methods of Physics islamaBad: A two-day Conference on Application and Methods of Physics was arranged by National University of Sciences and Technology (NUST) at their main campus. The conference was organised by Center for Advanced Mathematics and Physics (CAMP), a constituent institute of NUST. The aim of the conference was to provide a forum where the new developments occurring in the domain of physics could be discussed on regular basis. PRESS RELEASE

between Sapporo and Nagoya. PRESS RELEASE

Annual technical Conference 2011 ends today islamBad: Annual Technical Conference (ATC) 2011 organised by Pakistan Section of Society of Petroleum engineers (SPe) and Pakistan Association of Petroleum Geoscientists (PAPG) was inaugurated on November 22 at Serena hotel, Islamabad and will end today with a panel discussion drawing recommendations for the challenges faced by the country in meeting the energy demand and supply. PRESS RELEASE

Cathay Pacific adds more destinations to Japan laHore: haier Pakistan recently launched their nationwide promotional campaign, “haier Pakistan Washing Machine Campaign”. The promotion was a grand success as hundreds of passionate haier customers participated and many won various prizes, including instant rewards in cash and kind. At the end of the promotional campaign, a mega prize was announced through a lucky draw. The mega lucky draw winner was Mr Muhammad Tariq Javed from lahore who became a proud owner of Suzuki Mehran which was handed over to him at an impressive

KaracHi: Cathay Pacific Airways today announced a further expansion of its code-share services with one world alliance partner Japan Airlines to cover more destinations within Japan. Under the enhanced arrangement between the two airlines, Cathay Pacific's “CX” code will be placed on selected Japan Airlines domestic flights between haneda Airport in Tokyo and eight Japanese cities – Izumo, Miyazaki, Misawa, Matsuyama, Nagasaki, Oita, Tokushima and Ube; between Tokyo’s Narita Airport and Nagoya; and

kARAcHI: chairman, Travel Agents Association of Pakistan (TAAP), Yahya Polani, presenting a souvenir to the Ambassador of the Republic of Indonesia to Pakistan, H E Ishak Latuconsina in 3rd Indonesian Solo Exhibition. Also seen present at the occasion are Sindh IT Minister, Raza Haroon, Indonesian consul General, Rossails R Adenan and Abdul Majeed Haji Muhammad. PRESS RELEASE

PROFIT pages 23-11-2011_Layout 1 11/23/2011 12:12 AM Page 6

Wednesday, 23 November, 2011

06 Markets

top 10 sectors

49% 09% 10% 04% 04%

Chemicals

01% 03% 01% 02% 17%

Real Estate & Investment

Construction & Materials Electricity Banks

Fixed Line Telecommunication

Oil & Gas

Financial Services

Personal Goods

Equity Investment Instruments

STOCK MARKET HIGHLIGHTS Index 11767.00 3070.01 2639.3

KSE-100 LSE-25 ISE-10

Change -127.79 -1.46 -40.95

Volume 22,464,964 1,149,164 24,421

Market Value 1,280,008,895 22,907,994 1,200,450

top 5 perForMers sector wise

Major Gainers Company UniLever Pak Ltd. Linde Pakistan Ltd. Shell Pakistan Security Paper Wazir Ali

Open 5362.40 100.39 195.09 35.20 11.60

High 5449.99 103.99 197.25 36.40 12.60

Low 5250.00 102.99 195.00 36.39 12.60

Close 5399.70 103.07 197.04 36.40 12.60

Change 37.30 2.68 1.95 1.20 1.00

Turnover 826 1,483 2,010 520 1,865

747.72 2979.39 384.13 314.52 252.84

720.00 3020.00 366.00 314.00 253.48

710.34 2901.00 365.13 306.10 247.14

710.34 2955.74 365.13 307.76 247.55

-37.38 -23.65 -19.00 -6.76 -5.29

340 121 100 42,291 208,421

Volume Leaders Fauji Fert Bank Al-Falah Fatima Fert.Co. Lotte PakPTA National Bank

59.62 12.04 23.01 10.63 44.52

59.65 12.08 23.17 10.73 44.31

57.90 11.83 22.55 10.29 43.46

58.04 11.90 22.78 10.32 43.70

-1.58 -0.14 -0.23 -0.31 -0.82

2,396,753 2,366,273 2,327,677 1,577,877 1,300,674

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

Per Tola (PKR) 55,308.00 51,608.00 1,033.00 1025.00

Per 10 Gm (PKR) 47,468.00 44,245.00 887.00 880.00

Per Ounce US$ 1,695.00 – 35.05 –

hIgh

low CuRReNt

ChANge

volume

412.75 127.68 23.89 7.38 97.00

406.10 125.01 23.22 7.19 93.15

406.99 125.37 23.22 7.25 93.74

-4.15 -1.35 0.00 0.05 -2.26

18,325 226,908 1 1,147,404 47,325

15.48 29.90 5.25 156.74 39.35

15.00 29.45 5.00 155.00 38.50

15.00 29.51 5.25 155.18 38.62

0.00 -0.34 0.25 -1.16 -0.46

1,002 252,944 1,000 2,897 15,788

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

411.14 126.72 23.22 7.20 96.00

Agritech Ltd. Arif Habib CoXDXB SD Bawany Air Products Clariant Pakistan Dawood Hercules

15.00 29.85 5.00 156.34 39.08

1.51 9.20 33.86 10.80 6.97

1.91 52.50 1.95 14.18 6.00

1.59 9.48 33.00 11.00 7.25

1.46 9.06 32.18 10.77 6.97

1.48 9.06 32.53 11.00 6.97

-0.03 -0.14 -1.33 0.20 0.00

71,503 2,002 16,754 5,352 205

28.15 3.10 39.88 9.00 89.50

AL-Ghazi Tractors Bolan CastingXD Ghandhara Ind. Hinopak Motor K.S.B.Pumps

87.3113 136.6159 1.1348 118.2544

169.86 28.00 6.94 96.11 26.95

2.19 52.52 1.98 13.70 6.50

1.90 52.40 1.95 13.70 6.00

1.90 52.49 1.95 13.70 6.00

-0.01 -0.01 0.00 -0.48 0.00

3,005 1,288 100 500 1

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

International Oil Price WTI Crude Oil

$98.38

Sell 87.90 119.05 137.54 1.1360 85.64 11.31 23.89 23.38 87.93

Brent Crude Oil

$106.88

Agriautos Industries Atlas Battery Ltd. Atlas Honda Ltd. Bal.Wheels XD Dewan Motors

60.27 172.01 125.27 26.00 2.15

28.60 3.15 40.50 9.38 92.00

27.80 2.85 39.00 8.53 85.03

27.86 3.11 39.34 9.38 88.55

-0.29 0.01 -0.54 0.38 -0.95

14,445 110,806 1,261 502 17,243

AL-Noor Suger Mills Bawany Sugar Clover Pakistan Colony Sugar Mills Crescent Sugar

55.09 11.10 51.41 1.90 12.00

55.09 12.00 53.00 1.90 13.00

172.00 28.55 7.40 95.76 27.13

168.00 28.00 7.34 91.31 25.61

60.99 172.01 126.00 25.99 2.60

60.27 172.00 125.00 24.70 2.11

110.49 111.43 150.02 150.00

AL-Abid Silk Mills Diamond Ind. Hussain Industries Pak Elektron Ltd. Tariq GlassXD

23.34 8.20 3.90 4.20 8.65

23.60 9.03 3.90 4.40 8.89

Amtex Limited Artistic Denim XD Ashfaq Textile Azam Textile Azgard Nine

1.31 19.50 7.10 1.35 3.71

1.44 19.45 8.10 1.40 3.85

29.94 29.94 3.74 3.74 127.13

AHCL-DEC AHCL-NOV ANL-DEC ANL-NOV ATRL-DEC

29.94 29.76 3.80 3.80 127.50

169.86 28.00 7.38 95.76 26.95

60.27 172.01 125.00 24.84 2.13

109.00 111.18 145.05 145.58

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

102.51 76.66 69.25 29.29 12.78

103.20 78.00 69.90 29.50 13.29

0.00 0.00 0.44 -0.35 0.00

68 4,001 500 11 418

0.00 0.00 -0.27 -1.16 -0.02

50 100 500 537 79,586

0.69 -4.44

1,170 203

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

10.80 34.50 0.96 1.85 1.11

55.09 11.10 51.41 1.63 12.99

0.00 0.00 0.00 -0.27 0.99

35 1 100 14,431 771

23.34 8.20 3.80 4.20 8.65

23.34 8.20 3.90 4.25 8.65

0.00 0.00 0.00 0.05 0.00

2 2 6 8,650 10

1.30 19.00 8.10 1.34 3.62

1.38 19.01 8.10 1.35 3.66

0.07 -0.49 1.00 0.00 -0.05

26,864 74,958 5,000 5,200 672,596

29.80 29.55 3.71 3.65 127.00

29.89 29.61 3.75 3.65 127.23

-0.05 -0.33 0.01 -0.09 0.10

9,000 34,500 1,286,500 1,354,000 12,000

102.74 76.66 69.00 29.38 13.18

0.23 0.00 -0.25 0.09 0.40

6,920 100 3,312 3,502 9,773

102.50 76.66 69.00 28.70 12.80

10.95 34.50 1.00 2.00 1.17

10.70 34.00 0.89 1.82 1.05

10.74 34.50 0.90 1.88 1.06

-0.06 0.00 -0.06 0.03 -0.05

873,286 50 179,056 2,098,153 74,429

0.36 37.11 0.68 1.63 17.01

0.42 37.15 0.68 1.71 17.00

0.32 37.00 0.64 1.63 16.61

0.32 37.01 0.65 1.70 17.00

-0.04 -0.10 -0.03 0.07 -0.01

3,307 416,249 164,679 232,001 300,022

62.23 10.95 5.69 12.07 29.87

62.80 11.00 5.80 12.31 30.00

62.10 10.80 5.62 12.00 29.75

62.23 10.86 5.65 12.04 30.00

0.00 -0.09 -0.04 -0.03 0.13

216 77,973 350,983 5,499,424 71,128

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

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

SymBol

oPeN

hIgh

low CuRReNt

ChANge

volume

Non Life Insurance 52.35 11.10 51.41 1.63 12.99

Fixed Line Telecommunication

Beverages Murree Brewery Co. Shezan Int’l

volume

Pharma and Bio Tech

Automobile and Parts Buy 87.20 117.64 136.03 1.1266 83.36 11.05 23.70 23.22 85.34

ChANge

Future Contracts

General Industrials Cherat Packaging ECOPACK Ltd Ghani Glass LtdXD MACPAC Films Packages Limited

low CuRReNt

Personal Goods

Construction and Materials Al-Abbas Cement Attock Cement Bal.Glass Berger Paints Buxly Paints

hIgh

Household Goods

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

oPeN

SymBol

Food Producers

Industrial Engineering

Interbank Rates US Dollar UK Pound Japanese Yen Euro

oPeN

Chemicals

Major Losers Bata (Pak) Ltd. Nestle PakistanXD Indus Dyeing XD National Ref.XD P.S.O.

SymBol

Adamjee Ins Atlas Insurance Century Insurance Cres.Star Insurance EFU General Ins

47.94 36.49 7.23 2.40 36.61

47.59 36.49 6.80 2.99 36.51

46.80 35.27 6.36 2.00 36.50

47.07 36.49 6.51 2.01 36.51

-0.87 0.00 -0.72 -0.39 -0.10

15,293 2 10,100 1,123 1,713

13.50 1.40 65.53

14.50 1.40 65.53

0.00 0.00 0.00

2 1 157

0.25 16.40 15.97 1.25 0.86

-0.10 0.00 -0.06 0.00 -0.23

36,032 101 2,207 4 631

Life Insurance American Life East West Life Assur EFU Life Assur

14.50 1.40 65.53

14.50 2.34 68.80

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

0.35 16.40 16.03 1.25 1.09

0.33 16.40 16.29 1.29 1.07

0.25 15.56 15.96 0.75 0.83

Equity Investment Instruments 1st.Fid.Leasing Mod 1.52 Allied RentalModXDXB 21.64 Atlas Fund of Fund 5.86 B.R.R.GuardianXD 2.00 Cres. Stand.ModXD 0.49

1.53 22.45 5.85 2.00 0.44

1.53 21.64 5.85 1.72 0.34

1.53 21.64 5.85 2.00 0.42

0.01 0.00 -0.01 0.00 -0.07

2,500 1 29,600 493 69,931

13.36 31.90 36.39 30.60 15.01 69.00 1.46 69.00 117.56 6.50 4.20 8.35 24.00 26.70 58.57 28.25 14.52 8.90 1.95 10.52 0.88 1.85 1.05 17.13 19.80

13.50 30.60 36.40 32.17 15.07 70.00 1.48 69.99 115.96 6.58 4.20 8.65 24.00 26.70 61.65 30.14 15.04 7.96 2.04 10.60 0.88 1.90 1.08 17.17 19.88

0.26 0.00 1.20 0.00 -0.64 0.00 -0.11 -0.01 0.00 -0.92 -0.05 0.00 -1.00 -1.30 0.00 0.41 -0.46 0.00 0.06 -0.14 -0.02 0.02 0.02 -0.27 -0.12

4,852 108 520 170 11,725 1,950 862,396 1,748 1 516 3,302 290 1,005 2,600 422 4,260 7,642 3 7,604 173,093 156,263 150,499 170,316 25,796 32,556

Miscellaneous Century Paper Pak Paper Prod. Security Paper Pakistan Cables P.N.S.C.XD Pak.Int.Con. SD TRG Pakistan Ltd. Murree BreweryXDXB Shezan Inter.XD Hala Enterprise Pak Elektron Ltd. Tariq GlassXD Grays of Cambridge Khyber Tobacco Pak Tobacco Co. Shifa Int.Hospitals Hum Network XD Media Times Ltd P.I.A.C.(A) P.T.C.L.A Telecard Limited Wateen Telecom Ltd WorldCall Telecom Sui North GasXDXB Sui South GasXDXB

13.24 30.60 35.20 32.17 15.71 70.00 1.59 70.00 115.96 7.50 4.25 8.65 25.00 28.00 61.65 29.73 15.50 7.96 1.98 10.74 0.90 1.88 1.06 17.44 20.00

13.69 31.95 36.40 30.60 15.99 70.00 1.60 72.50 117.56 6.76 4.55 8.49 25.00 28.00 59.00 30.44 15.97 8.90 2.12 10.85 0.94 1.95 1.10 17.43 20.19

Mutual Funds Fund

oﬀer

Repurchase

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

501.2900 114.7196 103.6501 100.6900 519.3500 519.0900 516.9700 453.1500 82.9800

501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500

NAv 501.2900 111.8516 102.6136 100.6900 514.2100 513.9500 516.9700 444.2600 81.3500

Fund

oﬀer

Repurchase

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

100.2768 87.0103 97.6745 101.8987 112.3545 121.5000 104.1200 0.0000

100.2768 85.3042 95.2922 100.8898 109.6141 111.5200 96.5000 0.0000

NAv 100.2768 85.3042 95.2922 100.8898 109.6141 117.3900 101.5800 100.1087

PROFIT pages 23-11-2011_Layout 1 11/23/2011 12:12 AM Page 7

Wednesday, 23 November, 2011

government is committed to a reforms agenda to ensure that economic stability remains intact

news

Finance minister, hafeez Shaikh

CNG kit ban to multiply consumer woes LAHoRe

NAUMAN TASLEEM

rOPOSeD CNG kit ban will not do any good for gas sector. On the contrary, it will increase problems of the middle class and open gates of smuggling and corruption. This would subsequently be damaging for government. Ban will also increase smuggling of the product and at the same time, it will open gates for corruption. Also, environment would be in danger because of the ban. CNG emits far less pollution than petrol therefore chances of increase in air pollution would also be high. Around 50,000 kits and cylinders have been imported during this year. last year around 200,000 kits were imported. More than 150,000 kits and cylinders are in the market and in case of ban their prices would go up sharply. Currently, CNG kit and

verted to CNG. Process of conversion started in 1994, when government was encouraging green fuel. Consumers invested more than rs70 billion only to convert their vehicles to CNG. And now once again government is reversing the policy, objecting that CNG sector consumes a lot of gas. According to economic Survey of Pakistan, out of total available gas by SNGPl in the country CNG sector consumes 10 per cent, domestic consumers take 40 per cent, power sector takes 19 per cent, fertilisers seven per cent, general industry (e.g textile) 20 per cent and commercial users take four per cent. Under these statistics, the ban on CNG kits would not do anything good for the country rather it will make current political government more unpopular. hence, it would be

cylinder in a corroborator vehicle is installed for rs25,000-30,000 and in an effective fuel injunction (eFI) vehicle for rs50,00060,000. Market stakeholders said that as soon the ban would be imposed prices of these kits would double and it would be problematic for consumers. They said there is no point in stopping CNG conversion of vehicles. In fact, these kits would enter through smugglers and ultimately their prices would go up. In the past when there were heavy duties on air conditioners their prices inflated and ultimately people used to buy smuggled air conditioners, which in turn damages exchequer and economy. Similarly, in case of ban rates of CNG would increase due to smuggling. Currently, import of CNG kits is duty free. Kits and cylinders are imported from Italy, Argentina, China and India. During last 15 years more than 2.5 million vehicles were con-

Pak, China seek to promote economic ties By September bilateral trade had touched $7 billion g Pakistan, China to revive old Silk Route g

BeIJInG APP

MBASSADOr Masood Khan has said the leadership of Pakistan and China is paying special attention to the promotion of economic relations between the two countries. "The indicators of trade and economic cooperation are good. last year, bilateral trade was US $8.7 billion. This year, we are set to cross the US $10 billion mark," he said, while addressing an investment forum. By September this year, the bilateral trade had already touched the figure of $7 billion, he told APP. Chinese corporations are investing in the energy, telecommunications, construction, mining, manufacturing, and agricultural

sectors, he said. "We are also turning our attention to education, health, human resource development, and water resource management," he said, adding that we have to work hard to realise the full potential of our geographical contiguities and economic complementarities. Together, Pakistan and China will revive the Old Silk route and create new trade, transportation and energy corridors that will connect China with West Asia and europe. And Pakistan will be the bridge and the economic hub between China, West Asia and europe, he noted. Our strategic and political ties are at their height, he said, emphasising that between our two nations, we have trust. President Zardari, he mentioned,

has visited China eight times in the last three years and Prime Minister Gilani four times. Premier Wen Jiabao paid a historic visit to Pakistan last year, he added. he said Pakistanis are a resilient and hardworking nation. like the Chinese people, they are ingenious and innovative. like China, Pakistan also values its independence, integrity, and dignity. "We in Pakistan are keen to learn from our Chinese brothers and sisters and work for winwin partnerships based on the principle of mutual respect and mutual benefit," he noted. We appreciate Chinese businesses strong commitment to Pakistan's market.

For our part, we assure you to provide safety and security for Chinese enterprises and personnel in Pakistan, he added.

GAS CURTAILMENT TO FERTILISER SECTOR

Price hike in DAP market expected KARACHI

IMPACT OF GAS SHORTAGE

STAff REPoRT

he reported curtailment of gas in the fast approaching winter season to the country’s leading fertiliser manufacturer, Fauji Fertiliser Bin Qasim limited (FFBl), would create a 30 to 35k tonnes shortage of Di-Ammonium Phosphate (DAP) in the agrarian economy. The shortage, the analysts believe, would lead to an increase of rs50 to rs100 in the per bag price of DAP in the local market. The increase would take the DAP prices to rs4,100-4,200 from the existing rs4,070.

Citing media reports, the analysts at Topline Securities opine that owing to higher gas shortages during the upcoming winter season, the FFBl was likely to face an additional 15day gas curtailment during next month (December). “This additional gas curtailment would adversely affect the company’s production in 4Q2011 and thus, create a DAP shortage of 30-35k tonnes,” said Farhan Mahmood of Topline Securities. The analyst, however, said the company’s management was yet to confirm this. he said looking at persistent gas shortage of 27-30 per cent

on SSGC network, there was a high probability of the shortage materialising, unless the government decides to divert gas from other sectors in the upcoming gas load management meeting on November 29. “If this happens, this would be the first time that FFBl would face winter gas curtailment starting from December,” Farhan said.

UREA AND DAP SALES last year, he recalled, the company had faced gas curtailment of more than 45-days, from January 2011 to mid February, while so far this year the company had witnessed gas curtailment of 27-30 per cent

during 2011. This in turn had adversely affected the company’s urea sales as well that declined by 9 per cent in 9M2011 to 339k tonnes as compared to 372k tonnes in the same period last year, he added. On the other hand, the DAP sales had remained robust showing a growth of 32 per cent in 9M2011.

EARNING PER SHARE OF FFBL “This is primarily due to higher DAP sales in 3Q2011 as some pre-buying of DAP before rabi season was also witnessed amid fear of gas shortage,” said Farhan. This additional gas curtail-

ment would adversely affect the company’s production thus creating a DAP shortage, he said. According to the analyst, the supply shortage scenario might exert an upward pressures on the DAP prices that might rise by rs50 to rs100 per bag within next few days. “In case there is complete 15day gas curtailment in December 2011, our estimate suggests that FFBl’s 2011 ePS will reduce by rs0.35-0.45,” he said. This, Farhan said, was due to the fact that there was generally higher DAP demand in rabi season. “We have assumed average DAP margin of $250-260 per tonne in 4Q2011.”

hard for Pakistan People’s Party (PPP) to secure votes in next general elections according to the stakeholders of the industry, who shared their views with Profit. They said bureaucracy is misguiding political government through such proposals, which are severely damaging for PPP government. All Pakistan CNG Association Senior Vice Chairman Central executive Committee and Punjab Former Chairman raja Anwer said that in case of ban, prices of kits and cylinder would go up and middleclass would suffer badly. he said maximum users of CNG vehicles are found in the middle class. “In case of ban, these people would be deprived of cheap transport,” he said. he added that under absence of better public transport system, this ban would play havoc with common man, who is already facing inflation and price-hike. “liquor is banned in the country but people use it; but they get it at higher prices,” he said. Banning anything is not the solution of the problem, he concluded.

ministry of textile starves for funds to pay exporters ISLAMABAD JALALUDDIN RUMI

INISTry of finance has released only rs1 billion to ministry of textile out of total rs7.5 billion allocated for current fiscal year under Textile Policy 2009-14, for disbursement through State Bank of Pakistan (SBP). Ministry of textile requires rs2.5 billion to pay off the claims of textile exporters under ‘The Duty Drawback Scheme’ for which secretary textile, Shahid rashid took the matter to finance minister, Dr Abdul hafeez Shaikh, documents available with Profit reveal. To compensate value added textiles exports and to offset the cost imposed on exporters, by a variety of government agencies, and disruption caused by law and order problems; ministry of textile took up the initiative of duty drawback of all sorts of local levies and on tax paid by the exporters. It is pertinent to mention here that the scheme was operational since September 2009, during fiscal year 2009-10 and 2010-11. Funds amounting to rs7.40 billion have been disbursed under this scheme during the last three years. This scheme was terminated in June 2011 and 100 per cent of the claims pertaining to September 2009 to September 2010 have been paid whereas, 14.68 per cent of the claims pertaining to June 2010 to January 2011 have been paid. Currently, total outstanding amount of duty drawback claims till June 30, 2011 amounted to rs10.70 billion. Whereas, finance division has only allocated rs7.5 billion for this scheme and released only rs1 billion so far which has been creating problems in textile exports, officials explained. Moreover, textile ministry officials told that according to cotton crop assessment committee, before rains and flood in Sindh and Punjab, cotton crop was cultivated on 0.65 million hectares in Sindh and 2.5 million hectares in Punjab. however, recent rains and floods in Sindh damaged over 50 thousand hectares of crop which makes more than 75 per cent of the cotton cultivated in the province.