Pakistan Economy - News & Updates - Archive

[Owais]

Engro chemical wins Asian CSR Award


KARACHI (September 29 2006): Engro Chemical Pakistan Limited awarded the prestigious Asian CSR Award in the concern for health category for its telemedicine intervention called "Project Hope" that provides state of the art tertiary healthcare to lesser privileged rural communities in the interior of Sindh.

The award was received by Wajid Hussain Junejo, Public Affairs Manager, at a glittering ceremony held in Manila Philippines, attended by nearly 500 delegates from 24 countries and 321 organisations. In a statement issued here on Thursday, the Engro was adjudged as winner for the Fifth Asian CSR Award among a very strong competition between 178 entries from 98 national and multinational companies operating world-wide with their headquarters based in 14 countries.

Conveying the decision of the judges to Engro, Felipe B. Alfonso, Vice Chairman, Board of Trustees, Asian Institute of Management, Centre for Corporate Responsibility said, "It is my pleasure to inform you that Project Hope - Telemedicine Project submitted by Engro Chemical Pakistan Limited, is deemed the most outstanding project in the Concern for Health category of the Asian CSR Awards 2006. Yours is an outstanding achievement."

Started in August 2005, Project Hope links rural spokes via video-conferencing to the hub in Karachi, where specialist doctors' access x-rays, ECGs and other diagnostics in real time.

The project covers some of the least developed areas in the country, having low literacy and high poverty, with ratio of doctors to population of 1:2915. It makes available no less than fifteen medical specialists ranging from neonatology to cardiology on a daily basis to rural communities located hundreds of kilometers away.

"Winning the Asian CSR Award is of course a matter of great pride for us, but its real significance is that the award is an independent appraisal of our CSR initiative and an endorsement of our Project Hope, which gives us confidence that it will serve the community as we hoped it would," said Asad Umar, President and CEO of Engro Chemical. Dr Rashid Jooma, the renowned neurosurgeon who heads Project Hope stated, "It is indeed gratifying to be recognised through this award and we are greatly encouraged. Engro needs to be lauded for this quite unique corporate social responsibility project that has already proved to be nothing short of a lifesaver for lesser privileged rural communities who otherwise really had very little or no hope."-PR

 

[Owais]

NWFP gas and oil reserves go up by 24.53 percent


ISLAMABAD (September 29 2006): Around 24.53 percent increase has been recorded in gas and oil reserves respectively in the area of Tal in north-west Frontier Province (NWFP). According to a private TV channel, from 21 billion cubic feet to 25.84 billion increase in reservoir was recorded in Makori and Manzilai area of Tal area in Kohat.

It is pertinent to mention here that a foreign company MOL is operating the Tal block fields.

 

[Neo]

ISLAMABAD (updated on: September 29, 2006, 20:35 PST): The government of Pakistan awarded oil and gas exploration rights for three deep water blocks in the Arabian Sea to a local firm, Petroleum Exploration (Pvt) Limited (PEL), on Friday.

"Petroleum Exploration is the first Pakistani private sector company that is venturing in the capital intensive offshore exploration," the Petroleum Ministry said in a statement issued after signing a production sharing agreement between the company and its own Government Holdings Pvt Ltd.

The ministry expects PEL to invest over $3 million during the next two years after being granted licences to explore the three offshore blocks -- Indus-J, -O and -P.

The company is already producing 40 million cubic feet (1.13 million cu metres) of natural gas per day from two of its 11 exploration blocks, the statement said

 

[Neo]

Friday, September 29, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\29\story_29-9-2006_pg5_2
Pakistan improves competitiveness, declares WEF report 2006


ISLAMABAD: The World Economic Forum (WEF) has identified three major areas like infrastructure, education and skill development as gap in the further improvement in Pakistan’s global competitiveness ranking.

However, WEF’s newly released Global Competitiveness Report 2006 finds that Pakistan has improved its competitiveness ranking from 94 to 91 among 120 countries of the world.

The ministry of finance is due to launch the first of its kind ‘State of Pakistan Competitiveness’ report in February 2007, covering all the important indicators for bench marking as well as further improvement.

Addressing a press conference here on Thursday Minister of State for Finance and Revenues Omer Ayub Khan along with Aurther Behen, Chief Competitiveness Support Fund (CSF), said that Pakistan showed solid improvement from last year’s 94th place to 91st place this year.

Some 125 countries participated in this year’s survey over 117 in the prior year. Pakistan’s move up the ranks added significance when compared to the drop in the rankings experienced by many noteworthy emerging economies like Brazil, China, Malaysia, Russia and Thailand.

Russia and Brazil dropped by 9 places in the GCI ranking, China by 6, Thailand by 2 and Malaysia by 1. With its rise of two places over the last year, regional competitor India failed to keep pace with Pakistan’s improvement.

Omer said that a host of indicators make up the GCI. Pakistan ranked 79 for Initiatives, 67 for Infrastructure, 86 for Macro Economy, 54 for Market Efficiency, 89 for Technological Readiness, 60 for Innovative Factors and 66 for Business Sophistication in the world.

Omer termed Pakistan’s ranking improvement in the GCI as a result of the reforms and higher spending in the infrastructure during the last few years. He said that this ranking still indicates that there is a need to put further emphasis on primary, secondary and tertiary education, in ways that contribute to the tactical skills of the workforce.

He said that the report also suggest that Pakistan would do well to increase its number of business educational institutions. Interestingly, Pakistan scores relatively well in areas related to innovation and business sophistication.

Mr. Aurther said pointed out that the Competitiveness Support Fund (CSF) which is a joint initiative of Ministry of Finance and United States Agency for International Development USAID, is working closely with World Economic Forum on the ranking of Pakistan as well as on identifying the areas to be improved and methodology that will bring about help create university and industry linkages to promote knowledge-based enterprise, knowledge based economy in the Pakistan.

He said that CSF is at present doing policy analysis in the areas like motorcycle industry, food processing, fisheries processing industry where Pakistan has competitive edge and can improve its exports.

He said that the CSF is trying to develop a strong partnership between government, industry and universities to promote research activities and commercialisation of important research and ideas for benefit of the peoples. He said that Pakistan’s global Competitiveness Index can further be improved through upgrading of skills of the industrial as well as the agriculture workers and CSF is also focusing these areas.


http://www.dailytimes.com.pk/default.asp?page=2006\09\29\story_29-9-2006_pg5_2

 

[Neo]

Friday, September 29, 2006javascript:; http://www.dailytimes.com.pk/print.asp?page=2006\09\29\story_29-9-2006_pg5_9
India, Pakistan banks seek branches in each other’s country

MUMBAI: Indian and Pakistani banks have shown interest in starting operations in each other’s countries, State Bank of Pakistan Governor Dr. Shamshad Akhtar said.

However, she did not name any banks, as both the regulators are still to endorse the applications. She said that, as per the understanding between the Reserve Bank of India and the State Bank of Pakistan, two Indian and two Pakistani banks would be permitted in each other’s countries.

Dr. Akhtar also said that the relations between the central banks of the two countries are cordial and open and added that focus of the relationship would sharpen going forward.

Pakistan has steadily reduced government holding across all sectors and 80 percent of Pakistani banks are now privately owned, she said. Pakistani banking is also approaching a phase of consolidation with the intention of avoiding over expansion. Market forces will determine the consolidation process, Dr. Akhtar added.

 

[Neo]

QUETTA: Balochistan Chief Secretary KB Rind on Thursday said that a marble city, comprising over fifty industrial units, is being established for uplift of mineral sectors in the province.

Talking to a World Bank mission, led by Ronald White here, he said the government has spent a huge sum on the construction of Gwadar port, Kachhi Canal and Coastal Highway to remove sense of deprivation among people as well as attract foreign investment in various sectors in the province.

He termed the current environment of the province extremely suitable for investment and said the investors could make profitable investment in various sectors including minerals and fisheries.

Besides, he said, the government has taken special measures to ensure better education and health facilities to the people.

As a result education and health infrastructures have been extended to every nook and corner in the province, he said adding that efforts are also being made to promote women education in view of their important role in national progress and prosperity.

Regarding the working of local governments the CS termed their performance satisfactory due to exemplary relations and harmony between the provincial and district governments. The problems at grassroots level are being gradually resolved, the CS said.

 

[Owais]

Three deep water blocks awarded to PEL


ISLAMABAD (September 30 2006): The Petroleum Exploration (Pvt) Limited (PEL), a local private sector oil and gas exploration and production company, on Friday signed three agreements with the government for exploration in offshore blocks. The PEL is the first Pakistani company to come up for offshore exploration in ultra deep waters.

The production sharing agreements pertain to Blocks No 2266-4 (Offshore Indus J) covering an area of 2436.3 kilometres; Block No 2266-7 (Offshore-O) spread over an area of 833.78 kilometres; and Block No 2365-3 (Offshore Indus-P) covering an area of 896.48 kilometres.

All the three blocks are located in ultra deep waters in the exclusive economic zone of Pakistan in the Arabian sea. The company will invest millions of dollars on exploration and production of its offshore blocks. Petroleum secretary Ahmad Waqar, PEL chairman & chief executive Zaheeruddin, director-general, petroleum concessions, M. Naeem Malik and managing-director, Government Holdings (Private) Limited, Khurshid Anwar, signed agreements.

The signing ceremony was witnessed by petroleum minister Amanullah Khan Jadoon and state minister for Petroleum Nasir Mengal.

The PEL has registered encouraging growth over the past few years to become a leading company in Pakistan's oil and gas sector. It's producing 40 mcf gas per day from it's two concessions. It is also committed to drill 26 onshore explorations and development wells, besides acquiring 1000 kilometres 2D seismic data in next three years.

The PEL is operating petroleum concessions. These were Mirpur Mathelo (2769-9) 1030.7 PEL (operator) 47.6 percent; Fr Frontier Holdings Ltd, 47.5 percent; GHPL, 5 percent; Salam (2769-13) 200.22 PEL (operator) 50 percent; Frontier Holding Ltd, 50 percent. Karsal 3272-12) 724.42 PEL (operator) 50 percent; Frontier Holdings Ltd, 50 percent. New Larkana (2768-10) 2426 PEL, 100 percent.

Badin IV north (2467-6) 1246 PEL (operator) 50 percent; Frontier Holdings Ltd, 50 percent. Badin IV south (2458-6) 1265.3 PEL (operator) 50 percent; Frontier Holdings Ltd, 50 percent. Jhangara (2567-5) 358 PEL (operator) 40 percent; OGI, 60 percent. Sukkur (2768-9) 2435.4 PEL, 35 percent, Man Gas (operator) 65 percent. Offshore Indus-J (2266-4) 2436.4 PEL, 100 percent. Offshore-P (2365-3) 897.48, 100 percent share and Offshore-O (2266-7) 833.78, 100 percent.

PEL's developmental and production leases included Badar Hasan, Sadiq Hamza EWT Kandra. In addition, PEL owns 10 percent working interest in Zamardan block and 35 percent working interest in Sukkur block.

In his comments, petroleum minister Amanullah Kahn Jadoon said the government was committed to extend all possible assistance to local and foreign companies for oil and gas exploration and production. State minister Nasir Mengal said the government will keep on encouraging investment in Pakistan's oil and gas sector.

PEL chief executive and chairman Zaheeruddin appreciated the offshore and onshore policies of the government. He said he feels the government policies need improvement to cater well to alluring investment for Pakistan's oil and as sector.

He thanked the petroleum minister, minister of state, secretary and petroleum concessions director-general for co-operating with his company in conducting oil and gas exploration and production activities. He said the petroleum ministry has made it possible for his company to work with great zeal and commitment for exploiting gas resources.

 

[Owais]

ADB held responsible for water projects delay


ISLAMABAD (September 30 2006): The Asian Development Bank (ADB), one of the major lenders of National Drainage Program (NDP), has been held responsible for delay in the projects of North-West Frontier Province (NWFP) and Balochistan, official sources told Business Recorder here on Friday.

The issue was discussed at a recent meeting between the Secretary Water and Power Ashfaq Mahmood and ADB team, which visited Pakistan to discuss the country's four years' funding strategy, sources said.

They said that NWFP had finalised portfolio for funding the NDP through ADB loan but, according to the Provincial NDP Co-ordinator, six month from October 2005 to April 2006 have been lost due to delay in clearance of sub-projects by ADB.

They said that ADB had agreed in March 2006 to fund all works that could be awarded up to June 30, 2006. However, so far Rs 1.680 billion worth of contracts have been awarded in the provinces, while Bid Evaluation Report (BER) of remaining contracts were awaiting clearance from the bank.

They said that Balochistan remained out of NDP from 2001 to 2003 and it rejoined the program in September 2003. However, it took a long time to put in place the necessary infrastructure for resumption of NDP activities.

The ADB kept itself away from those projects, which could have been delayed. "Sensing that delayed start of activities would ultimately delay the completion of development work, ADB refused to fund different components of the program in case of Balochistan," sources said, adding that persistent efforts at federal government level persuaded ADB to resume funding for those schemes that could be safely awarded up to June 30, 2006 for their completion before December 2006.

The bank, however, agreed to finance the Environment Management Plan (EMP) of the federal and provincial governments including AJK under the NDP to the extent of Rs 77.121 million, which is progressing.

The Ministry of Water and Power has already conveyed to the concerned quarters that since no soft loans are available for energy sector, the government should finalise its strategy to arrange hard loans from the bank.

Sources said the government's concerns had been conveyed to the senior management of the bank during the recent visit to Islamabad and meetings with the officials of Ministries of Finance and Water and Power.

 

[Owais]

OGDCL earns Rs 46 billion profit


ISLAMABAD (September 30 2006): The Oil and Gas Development Company Limited (OGDCL) has earned after-tax record profit of Rs 46 billion, against Rs 33 billion of last year. The ninth annual general meeting (AGM) of OGDCL was held here on Friday, which was attended by shareholders, and chaired by OGDCL Chairman/CEO Arshad Nasir, according to a press release.

The AGM approved accounts of the company for the year ended June 30, 2006 duly recommended by the board of directors. As compared with last year's sales, revenue of the company increased by 31 percent; profit before tax by 34 percent; and profit after tax by 39 percent despite higher exploration write-off on account of increased exploration activities.

The company achieved operating profit margin of 64 percent; net profit margin of 48 percent; return on assets of 39 percent; and return on equity of 52 percent. Higher profitability of the year resulted in earnings per share of Rs 10.69 as compared with Rs 7.67 in last year.

The members were informed that the company had maintained its status as leading oil and gas exploration and production company in the country. It has 37 percent of the total acreage granted to all exploration and production companies operating in the country.

Its average daily production, including the share from joint ventures, averaged 39,659 barrels per day crude oil, 937 mmcfd gas and 358 metric. tons per day LPG compared with 39,130 barrels crude oil, 919 mmcfd gas and 334 metric. tons LPG during the previous year.

Approval was also granted for the final dividend of 37.5 percent in addition to 52.5 percent already paid as interim dividend during the year, which makes total dividend for the year to 90 percent. KPMG Taseer Hadi & Co and M Yousuf Adil Saleem & Co, Chartered Accountants, were re-appointed as statutory auditors for next year.-PR

 

[Owais]

Cotton production target cannot be achieved: FAP


LAHORE (September 30 2006): Due to severe virus attack on cotton crop, the target of 12.8 million bales of cotton would not be achieved this year. This was stated by acting chairman, Farmers Associates Pakistan (FAP), Hussain Jahanian Gardezi, while addressing the 108th meeting of the FAP here on Friday.

He said that initially the target of 13.8 million cotton bales was fixed but later the target was revised to 12.8 million bales. The areas like Mulatn, Vehari, Khanewal, Kabirwala, Mailsi, Lodhran and Karorpacca were worst hit by virus.

He welcomed the government's decision to bring down the prices of DAP fertiliser. However, he asked the government to ensure smooth supply of the fertiliser. He also appreciated the decision of the government to enhance wheat support price. He asked the sugar mills to start sugarcane crushing from October15. He hoped that sugarcane crushing season would start according to schedule.

He asked the government to take steps for giving due return of milk to the farmers. Director FAP, Rabia Sultana and Secretary, Muhammad Adrees were also present on the occasion.

 

[Owais]

Work on Rs 140 million expo center begins


SIALKOT (September 30 2006): The initial construction work on Rs140 million project Sialkot Expo Center has been started. The site of the expo center was identified adjacent to Sialkot Chamber of Commerce and Industry (SCCI) building.

SCCI sources told Business Recorder here on Friday that the purpose of setting up of expo center was to display locally manufactured products under single roof. The under construction center would be a multi-storied building consisting of four display centres, two halls, office box, auditorium, restaurant and living rooms for the foreign visitors.

The city industrial sector is contributing handsome foreign exchange amounting to 800 million dollars annually that is exceptional feat, considering the small size and population of the city. The completion of Sialkot Expo Center would be another addition in this export-oriented city and hub of cottage industry of the country, which would help facilitate the foreigners especially the diplomats on their visit to Sialkot.

The Sialkot City Package Programme was started by SCCI in collaboration with other trade bodies and the exporters are voluntarily contributing 0.25 percent against their export invoices to change the face of the city by constructing roads and remodelling the sewerage system. Under the programme most of the city roads have been completed while work on remaining roads is in progress.

 

[Neo]

LAHORE (October 01 2006): Pakistan-Canada Business Council (PCBC)'s executive committee member, Mian Fahim Qamar has said that President Pervez Musharraf's recent US visit will have a far-reaching impact on the country's economy and its future.

In his reaction, Fahim Qamar, who is also executive committee member of Lahore of Chamber of Commerce and Industry (LCCI), said that this visit has removed some misconceptions prevailing in the West about our role in the war against terrorism. As a result of the President's American tour, US investors are planning to rush to Pakistan to invest in several mega projects here, he claimed.

 

[Neo]

GWADAR (October 01 2006): An international standard oil refinery would be established in Gwadar, which will be the biggest refinery of Pakistan. This was stated by the Balochistan Governor Owais Ahmad Ghani at a briefing to correspondents after presiding over a high level meeting here on Saturday.

Owais said site for the refinery was being considered and talks with international firms were underway in this connection. Governor said Gwadar Port is future of Pakistan. Future of Gwadar is bright and secure dredging along the port would be completed towards the fall of the current year.

An international standard airport would also be built in the city which would not only for Gwadar but for entire central region. A committee has been set up for acquiring land for this airport with minimum losses.

He said talks were also underway with international private companies for the development of fishery sector. It would have direct access of fish cache to European markets. He said a 350 bed hospital was also being built in Gwadar and its first phase will be completed towards the end of the year. It would be expanded from Workers Welfare Fund.

To resolve drinking water problem of Gwadar, desalination plants would be set up at Pasni and Ormara at a cost of Rs 500 million.

 

[Neo]

KARACHI, Sept 30: Net inflow of foreign funds in the country’s stock market during September amounted to $79.7 million, which represents the highest single month portfolio investment by overseas investors in eight months of this calendar year.

According to the data released by the State Bank of Pakistan, net inflow of funds in the stock market stood at a staggering $37.6 million in the last four trading days of September (Sept 25-28).

Foreign portfolio investment in the first three months of the current financial year (July-Sept) amounted to $89.2 million. Analysts thought that since the settlement of trade of the last day’s transactions would be next week, the figure could cross over the $100 million mark early in the first week of October.

So what has rejuvenated the interest of foreigners in the country’s equity markets?

“International fund managers are positive on the Pakistani market, specifically in the banking sector,” says Aqeel Karim Dhedhi (AKD), one of the most known brokers at stock exchanges. He said that some of the foreign fund managers were in talks with local brokerages so as to establish joint ventures for investment in equity market.

Dhedhi said that India and China were already benefiting from huge flow of funds in emerging markets, but Pakistan has now come to be discovered as a new destination, because of its attractive stock valuations and a flourishing economy.

He contended that according to accepted norm, foreign portfolio investment must at least be one-third of the direct foreign investment. “It has just begun to happen in our country”, he says.

Foreign direct and portfolio investment in Pakistan registered a 131 per cent increase in the last fiscal year amounting to $3.87 billion compared to $1.67 billion the year earlier.

Other brokers held similar views.

A stock broker who was part of the team of CDC delegation that held roadshows last month in Dubai and Abu Dhabi to introduce Pakistan’s capital market observed that a number of fund managers and brokerages had shown interest in opening their representative offices in the UAE to facilitate investors to invest in Pakistani stocks.

But it is possible to dismiss a stock broker’s enthusiasm for their livelihood depends on selling optimism. Independent analysts, nonetheless, admit that the holy month of Ramazan has started with good gains for stocks.

Last week, the market saw its third consecutive positive closing with benchmark KSE-100 index up by two per cent to close above 10,500 points mark on weekly basis.

Traders said that heavy buying by offshore funds was witnessed last week in the Oil & Gas Exploration (E&P) sector due to news of new findings. But bulk of the foreign investment went into the banking sector.

Following the acquisition of Union Bank by Standard Chartered, which has become the first multinational bank to be listed on the country’s stock exchange, the market was rife with rumours of a UK’s banking giant in advanced takeover talks with a Middle Eastern bank in Pakistan.

“Last week, commercial banks’ market capitalisation grew by 4.6 per cent, thereby, outperforming the market,” says an analyst.

He mentions that banking sector profitability, which stood at over $1 billion, is at an all-time high and is generated by the enhanced business volume, the rising share of high-yield assets and widening spreads. All of which provides a considerably healthy return on equity of over 26 per cent after tax in the banking sector.

Overall it is the good corporate earnings and dividends; continued drop in long-term interest rates; expectations of economic growth and possible settlement of external and internal political issues that are cited by most market gurus as the reasons that makes market attractive.

But in the last resort, it is an improved coordination between the apex and the frontline regulators; the liquidity; (P/E) multiple of 12.5x; and better yields that are at the back of generating interest in equities of both local and foreign investors.

 

[Neo]

ISLAMABAD, Sept 30: Pakistan is likely to offer additional fiscal and non-fiscal incentives to the international institutional investors with a view to luring them to make new investment in the country.

"Although we have a very liberal investment policy that helped achieve an all-time high over $3.5 billion foreign direct investment (FDI) by June this year, the government would very much like to further facilitate foreign investors," said Minister for Privatisation and Investment Zahid Hamid.Talking to Dawn on Saturday on telephone from Dubai, he said he and Dr Salman Shah were currently visiting the United Arab Emirates (UAE) and Kuwait for attracting institutional investors to invest in various fields, including the privatisation.

"We are here to hold country road shows for institutional investors and to explain them about various investment opportunities and exceptional good performance of the Pakistani economy," Mr Hamid said.

"This is an effort to further attract foreign investment on a sustained basis for which the Pakistan government would provide all possible incentives," he said adding that there existed an improved investment climate and better security situation in Pakistan.

Responding to a question, he said that there was no FDI target for 2006-07, but it was expected to be much higher than that of over $3.5 billion achieved in the last financial year.

He was sure that investment houses, commercial banks and other international financial companies based in the Middle East would invest in Pakistan.

The minister for privatisation and investment said that the Privatisation Commission had lined up a number of transactions, which will be completed during the current financial year.

He said that the institutional investors of the UAE and Kuwait were largely expected to take part in the privatisation programme of Pakistan.

"We have identified a broad-based privatisation programme, which is being shared with the investors of the UAE and Kuwait," he said and hoped that they would benefit from the investment opportunities that now existed in Pakistan.

The commission, he said, has accelerated the privatisation process to finalise a number of transactions including that of Pakistan State Oil (PSO) during 2006, positively.

"We are finalising dates to further push up the privatisation process and both the PSO and OGDCL's Global Depository Receipts (GDR) along with some other state-owned entities will be disinvested during 2006," he said.

He said he was deliberately avoiding giving exact dates for clearing some bigger transactions at this stage, although their timings had been firmed up by the PC.

He said the government was committed to vigorously pursuing its privatisation policy and to transfer the management of the public sector entities to the efficient private sector, which had the capacity to bring in new investment and latest technology for expansion of the projects to increase production and revenues of the government.

Earlier, on September 9, the privatisation board approved recommendations of the committee for pre-qualification of the bidders for the privatisation of National Power Construction Corporation (NPCC). It discussed matters related to the secondary public offering of the shares of the United Bank Limited (UBL) and offer of shares to employees of the Pakistan Telecommunication Company Limited (PTCL).

The PC board also discussed the recommendations of the committee for the proper sequencing of strategic sale of the public sector entities to be offered and the initial public offering (IPO) as well as secondary public offering for the divestment of government shares through capital market.

The PC board also considered the case of Saindak Metals Limited and Saindak Development Corporation (SDC) and recommended their de-listing from the privatisation programme in view of the fact that the project has been leased out for 10 years to a Chinese company.

In the case of public offerings, this would not only benefit small investors but also increase market capitalisation.