Pakistan Economy - News & Updates - Archive

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US working on five-year financing plan for Fata

ISALMABAD (April 28 2007): The United States Agency for International Development (USAID) senior deputy assistant administrator Asia and Near East Bureau, Mark Ward, on Friday said that Washington was working on a five-year financing plan for Federally Administrated Tribal Areas (Fata) and other bordering regions of Pakistan and Afghanistan.

He told a press conference here that US fully endorses Pakistan's strategy that extremism is directly linked with poverty and only a job-oriented multi-pronged strategy could address the related issues to bring the people of affected areas into mainstream.

He said that a legislation was before the US Congress for approval and as soon as it would be cleared the US would push forward Fata development plan. He added that US does not want Taliban-like action from Afghan authorities to stop poppy cultivation. He said US was making huge investment in Afghanistan.

Earlier, Ward issued a statement at Pakistan Development Forum reiterating unflinching US support for Pakistan and its northern bordering region in particular Fata.

The statement said the US pledged $1.5 billion five-year development assistance program to Pakistan. USAID is a vital development partner in delivering the assistance. Other US government agencies provide a range of other assistance related to food assistance, refugees and other areas. It said the core US development assistance program in Pakistan focuses on four main areas: education, health, good governance and economic growth.

All four areas are vital to Pakistan's future. It is no accident that the program includes a heavy emphasis on key social sectors, including health and education. The statement added that the US applauds Pakistan's ongoing efforts to both increase investments in these two areas while also improving the quality of services, and looks forward to greater investments in education and health in the near term.

It noted that in keeping with the precepts of the Paris Declaration, US appreciates Pakistan's efforts for setting development priorities and in working with its international partners to achieve them. The US also noted that, at an operational level, US development support to Pakistan demands significant element of budget support aimed at promoting macro economic stability while also increasing investments in the social sectors, including health, education and water.

It said that for 18 months, two additional areas of US interest and support have emerged. First, in the immediate aftermath of the October 2005 earthquake that devastated parts of northern Pakistan, the US public and private sectors responded with more than $300 million in immediate emergency relief.

The statement said it was now year two of follow-up of earthquake reconstruction program to which the US is contributing an additional $200 million. It said the US commends the Erra for commitment and dedication in pursuing Pakistan's "build back better" objectives in the earthquake affected areas.

Second, the US acknowledges the government of Pakistan's new initiative for the Federally Administrated Tribal Areas (Fata) development and brining it on this years PDF agenda. It said the US strongly supports the initiative and looks forward to work with Pakistani partners and other donors in the future in support of their effort to improve the lives and livelihoods of the people living in this important area.

http://www.brecorder.com/index.php?id=556849&currPageNo=3&query=&search=&term=&supDate=

 

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US and UK investment crosses $1 billion mark

KARACHI (April 29 2007): The US and the UK's investment in Pakistan have crossed $1 billion, reaching all-time high level during July-March. Similarly, the share of both the countries in overall investment in Pakistan also reached 41 percent as compared to 25 percent during the last fiscal year.

Pakistan is the strategic partner of the United State of America (USA) in the war against terror, contributing increased US investment in the last few years. Statistics show that after the 9/11 and since war against terrorism, for the first time during the current year Pakistan is benefited by USA and the United Kingdom (UK) through their investments.

The UK and the USA's share in foreign investment has risen by 16 percent to $2.2606 billion, which is 40 percent of the total investment during July-March of the current fiscal. It was only 25 percent or $841.4 million of the total investment during the last fiscal year 2006.

According to the central bank statistics, during the first nine months of the current year, the USA has invested $1.240 billion as compared to $710 million during the fiscal year 2006, denoting a rise of 75 percent or $530 million against 2006.

In 2001-02 fiscal year, when war against terrorism started, US investment in Pakistan stood at $324.7 million and has been rising gradually, which has now touched a new peak of one billion dollar.

The US investors have invested $604.9 million in the term of portfolio investment and $935.8 million as foreign direct investment (FDI) during July-March of the current fiscal year 2007.

UK is the second leading country in foreign investment as its investment grew by 676 percent or $888.4 million during the first nine months of the current fiscal. UK's investors have invested some $1.019 billion during the first nine months of the current fiscal year as compared to $131.4 million during complete last fiscal year 2006.

FDI by UK has witnessed a growth of 407 percent or $556.9 million to $693.6 million during the current fiscal, while portfolio investment has taken place after one-year gap, it was $0.3 million in fiscal year 2004-05 and during July-March of the current fiscal it has recorded $326.3 million.

Other leading countries in foreign investment are China, Netherlands, United Arab Emirate, Saudi Arabia, Singapore and Switzerland. China is on the third position with $708.4 million investment, while Netherlands has invested $500.9 million, United Arab Emirate $362.3 million, Singapore $191.5 million, Saudi Arabia $105.1 million, Switzerland 67.3 million investment during July-March of the current fiscal.

http://www.brecorder.com/index.php?id=557121&currPageNo=1&query=&search=&term=&supDate=

 

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Government committed to achieve MDGs by 2015: Shaukat

ISLAMABAD (April 29 2007): Prime Minister Shaukat Aziz on Saturday said Pakistan was committed to achieve millennium development goals (MDGs) by the end of 2015 and was moving ahead in the right direction. He was addressing the inaugural session of two-day international conference on "Governing for MDGs"-with focus on incentives, ownership and institutions.

The event was organised by the National Reconstruction Bureau and the World Bank Institute and sponsored by the government of Japan (PHRD Programme), Canadian International Development Agency (CIDA) and United Nations Development Programme (UNDP).

Shaukat Aziz said, "Our government is pursuing a national agenda and national priorities and not personal agenda or priorities in everyday affairs." He said the government through "good governance and transparency" was moving forward rapidly to pursue and achieve the MDGs and had undertaken a series of reforms dealing with improvements in all sectors.

The eight millennium development goals (MDGs) respond to the world's main development challenges and include eradication of extreme poverty, universal primary education, gender equality, reduction of child mortality, maternal health, HIV/AIDS and other diseases, environmental sustainability and developing a Global Partnership for Development.

The Prime Minister spoke at length about the progress Pakistan had made in each of these areas and said unless "there is a sense of ownership in the home-grown policies and self-reliance, it is difficult to achieve these ambitious goals."

He attributed the success to the "continuity and consistency" in the policies of the government to reform country's political, economic, trade, banking and other sectors.

He admitted that there were still challenges in some areas, but said with a clear sense of direction and sincerity of the leadership, these would be met. "We have a long way to go and undertake more reforms in every facet of society," he said.

He said a strong nation was built on the foundations of a strong economy and during the past eight years the government had succeeded in macro-economic policies.

He said Pakistan from an "anaemic and over-borrowed economy" now has a robust financial status with a growth rate of 7 per cent. He said the target for this year looked strong, as it was a good year for the agriculture sector, while the manufacturing sector was also likely to go into double digits.

He said the size of the economy had doubled, the per capita income this year was likely to go up to $950 and cross $1000 mark next year-the highest in South Asia.

Aziz said at the same time the poverty declined from around 34.5 per cent to 24 per cent. He said the urban poverty dropped from 20 per cent to 15 per cent, while the rural from 39 per cent to 28 per cent and 13 million people have come out of the vicious circle of poverty.

However the Prime Minister said the benefits of the economic growth need to be distributed across all segments of the society. He said the higher yield of crops this year was due to the balanced use of fertilisers where the farmers were advised to use both nitrogenous and phosphates. He said brick lining of watercourses, availability of agro credit, better seeds and the helpful mother nature all played their part in this respect.

The Prime Minister said the construction of the new Bhasha dam will increase country's water storage capacity manifold, help meet country's energy needs, prevent silting at Tarbela and add around 2 per cent to country's GDP.

The Prime Minister said the government was continuing with the reforms and was doing well in some areas, while in others more efforts were being made. He said the reform process was very challenging as people are comfortable with status quo.

"If you want to change, if you want to get people doing things differently, it means lot of effort, lot of leadership and then you start getting the results." Shaukat Aziz also mentioned the reforms in the taxation sector and said revenue collection has gone up by 25 per cent, despite the initial criticism.

He said the country's development momentum was way above from where it was some years back and the budget in this regard was much higher than it was a few years back. Prime Minister Aziz said the government was according high priority to education at all levels. He said the public private partnership was a big success.

He acknowledged the role of 'madaris', religious seminaries, in imparting education and said the government was mainstreaming these schools by asking them to impart formal education in all subjects. "Though a very few of these 'madaris' got carried away, yet the bulk was an important part of Pakistan's education system."

"Every faith has seminaries and we are not apologetic about these," he added. He said the government has also initiated short courses to impart various skills to the people.

The Prime Minister said the government has empowered women at all tiers and their job quota has gone up. He said they were being empowered politically and economically and more facilities were being provided to them in education and income generation schemes.

"No nation can progress, unless its women were part of its development," Aziz said and mentioned the high representation of women at national, provincial and local government levels in the country.

On environmental issues the Prime Minister said the government was conscious of the impact of the global warming and said a Centre on Climate Change was conducting research to monitor the impact on Pakistan.

He said the government was also aware of the demographic dividend and said it was investing more in healthcare and education. He said unlike the large ageing population in the developed world, the young Pakistani generation was all poised to play a leading role in the country's development. He said Pakistan was also now part of N-11 group and was part of high potential countries.

The Prime Minister said the media in the country was growing rapidly, creating more jobs and opportunities. Prime Minister Aziz also mentioned the phenomenal growth in the telecom sector and said its tele-density has risen from 4 per cent to 38 per cent and brought in direct and indirect investment of US 7 to 8 billion dollars.

He said the government would continue to work on all areas, as it believes that the people need to feel a change in their lives. "People have to feel a change, look forward to a better tomorrow and we are committed to provide it to them," he added.

He said for the accomplishment of the MDGs it was vital that a sense of ownership is created through various facets of society and government where both the host country and its development partners work together. The Prime Minister later launched the MDG countdown timer, showing 8 years and 248 days remaining till the deadline.

http://www.brecorder.com/index.php?id=557120&currPageNo=1&query=&search=&term=&supDate=

 

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Consortium working on 1800 megawatt power for Karachi

KARACHI (April 29 2007): A consortium of investors from Abu Dhabi, Singapore and Italy and the City District Government are jointly working on a 1800 mw power generation project to ease electricity shortage in Karachi, it was learnt on Saturday.

The project would be set up near Port Qasim Authority for which land has already been acquired. Since the project is being set up near the sea, it would use seawater to meet plant need. Along with electricity, sizeable quantity of desalinated potable water would also be available to meet the need of the upcoming industrial site in Port Qasim.

Members of the consortium comprising Tanveer Zaidi from Abu Dhabi, serving as co-ordinator of the group, Stefano Gianati from Italy, Giovani Palo and Larry Salam from Singapore under the leadership of Naib Nazim Nasreen Jalil called on Sindh Governor Dr Ishratul Ibad Khan and briefed him on the project.

The consortium informed the governor that the government of Abu Dhabi had given as gift a few heavy-duty generators to the city government. By next year these generators would generate 320-mw power. More plants to produce 1000-mw are on their way to Pakistan.

To implement the project companies from Singapore and Italy have set up a joint company and named it as 'Portec. This company would take care of operational and maintenance responsibilities and finances would flow from Abu Dhabi.

The governor had asked the consortium to work on the project on priority basis and install all units without loss of time. He assured the consortium of full assistance in their venture.

The governor informed the consortium that power needs of the city were on the increase as more industrial units were being established and commerce and trade activities are expanding. He said that there was constant expansion in civic needs and there was overall growth in industrial activities in the city and around it.

He said that only two years ago there were 40 industrial units in Port Qasim area whereas the number of units had gone up to 100. All these units were operational now, he added. The governor said that to create facility for industrial units 800 acres of land had been acquired in the Port Qasim area.

He said that a new industrial site was in the offing in that area. With the increase in industrial units more jobs would be available and considerable activity in the housing sector would begin. To meet electricity needs of this site where industrial units, housing and commerce would increase, new areas for power generation would have to be explored.

http://www.brecorder.com/index.php?id=557098&currPageNo=1&query=&search=&term=&supDate=

 

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April 29, 2007

$160 million floating LNG terminal at Port Qasim

KARACHI, April 28: Port Qasim Authority (PQA) and Pakistan Gas Port on Saturday signed an implementation agreement for setting up a floating LNG terminal at the Port Qasim at an estimated cost of $160 million on BOT basis, having a capacity of three million tons per annum.

PQA chairman vice admiral M Asad Qureshi and Pakistan Gas Port chairman Iqbal Z Ahmed signed the agreement on behalf of their respective organisations in the presence of minister for ports and shipping Babar Khan Ghauri.

Speaking on the occasion, the minister said that the country needed rapid advancement, and it was necessary that there was no negative propaganda.

He said his ministry’s performance had been appreciated by the US diplomat who stated that the ministry was a role model for others.

Mr Ghauri said in a recent meeting in Islamabad when a question was raised that how quick a piece of land is allotted for setting up an industry, his reply was only 24 hours. However, he said it was unfortunate when you work efficiently, it was branded with such negative remarks that some speed money may have been used to fasten the process, etc.

The minister said that Pakistanis had played a major role in the development of Dubai where trades, like banking, airlines and many other projects and systems, were developed by our nationals, but unfortunately in Pakistan when anyone works hard and delivers goods, he is branded as corrupt, and other negative remarks are given against him.

There was a time, he said, when there was a flight of capital from Pakistan and many Pakistanis even today have overseas setups and houses, but today under the vision of the president and the prime minister, investment is coming to the country and job opportunities were being created.

Mr Ghauri lauded the role of the board of directors of the PQA and said their cooperation and guidance had played a great role in fast progress of the port.

The PQA, he said, was being run on landlord concept and the chairman and his team are dedicated to rapid industrialisation of the port area and upgradation of port facilities to meet the growing demand of port users.

In his address of welcome, the PQA chairman said there was little difference between Dubai and Port Qasim as both were having only sand dunes, but after 30 years the port has become fully operative and a large number of big industrial units, including Pakistan Steel, are functioning in its vicinity.

Presently, he said 10 private sector projects are in the process of being set up at an estimated cost of $4.5 billion.

After deepening the channel, he said freight charges are expected to come down by $2 to $8 per ton.

Similarly, he said PQA contributed highest revenue at Rs70 billion to the national exchequer in the year 2005-06.

Natural gas plays a key role in country’s energy and accounts for more than 50 per cent of its requirement.

With accelerating economic growth and rapidly rising demand of energy, there would be acute shortfall in power and gas.

The projects is expected to come into operation by March next year.

The floating storage and re-gasification terminal by the Pakistan Gas Port is the first of its kind in the country and second in the world.

The project is a green field development, inclusive of financing, construction, operation and maintenance of floating LNG terminal, including de-gasification, storage of gas, dredging from navigation channel to the terminal, all equipment and pipelines.

http://www.dawn.com/2007/04/29/ebr2.htm

 

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April 29, 2007
India to import cement

ISLAMABAD, April 28: India is considering a proposal to import cement from Pakistan to meet its local shortage, said President Islamabad Chamber of Commerce and Industry (ICCI) Nasir Khan.

He said the proposal was discussed at length during a meeting with Indian Commerce Minister Kamal Nath in New Delhi recently. The delegation also discussed five-year multiple visa for Pakistani businessmen.

According to a press release of the chamber, the Indian minister informed the delegation that annual production of cement in India was around 120 million tons, whereas the demand is about 140 million tons.

He said that India was facing shortage of 20m tons of cement per annum and is looking to import cement from Pakistan. Mr Nath said that India was not installing any cement plant in next 3-4 years, whereas the demand is increasing by 11pc a year and asked the Pakistani cement manufacturers for supply of cement to India.

The delegation also took up the matter of 500 tons consignment of Lucky Cement, which was stopped at the Indian port due to inspection by Indian agencies. The Indian minister on the request of ICCI immediately ordered the release of the consignment.

He promised to look into the ICCI proposal for the inspection of cement consignment by International agencies like Cotecna, SGS etc instead of inspection by the Indian agencies.

http://www.dawn.com/2007/04/29/ebr10.htm

 

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Sunday, April 29, 2007

Pak-India trade expected to cross $1.5b in 2006-07

NEW DELHI: Trade between India and Pakistan has shown enormous buoyancy and is expected to cross $1.5 billion in fiscal year 2006-07.

Exports to Pakistan in April-December (2006-07) stood at $980.33 million while imports were $247.48 million during same period, according to Indian official figures. A business delegation led by president of the Islamabad Chamber of Commerce & Industry Muhammad Nasir Khan called on Indian Minister of Commerce & Industry Kamal Nath here, and expressed hope that economic ties between the two countries would strengthen in the near future.

Kamal Nath highlighted many benefits to both India and Pakistan if trade relations between them improve, as it would make both countries more competitive in an increasingly globalised economy.

He hoped that Pakistan would grant the much-awaited ‘most favoured nation’ status to India and said that trade between the two nations that currently takes place through other countries, would then be replaced by direct trade. The Pakistani delegation requested to ensure easing of visa regime for Pakistani businessmen by the Indian government. Kamal Nath assured that the government of India was committed to strengthening economic ties with its neighbour and this issue would also be taken care of in due course.

The main commodities of exports to Pakistan include sugar, dyes, plastic products, and cotton, while the main import items from Pakistan are petroleum and crude products, fruits and nuts (excluding cashew nuts), cotton yarn and fabrics, and organic chemicals.

http://www.dailytimes.com.pk/default.asp?page=2007\04\29\story_29-4-2007_pg5_3

 

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Sunday, April 29, 2007

Import of agri & other chemicals drops by 3.15%

KARACHI: Pakistan’s import of agricultural and other chemicals stood at US$ 3,098,410 during July – March 2006-07 as compared to US$ 3,199,339 in the same period of last year, showing a decline of 3.15 percent.

Fertiliser manufactures comprise the major portion of agricultural chemicals’ import. Importers shipped a quantity of 920,477 metric tons (MT) fertiliser manufactures at US$ 258,955 in the first nine months of this fiscal year as compared to 1,950,704 MT at US$ 543,597 imported in the corresponding period last year.

A quantity of 20,394 MT insecticides worth US$ 73,377 was imported in the first nine months of this fiscal year as compared to 25,812 MT imported at US$ 88,682, registering a decline of 17.26 percent.

However, a substantial rise was observed in the import of plastic material, medicinal and other chemical groups. Total import of plastic material increased up to 10.47 percent during July – March 2006-07 as importers shipped a quantity of 601,163 MT at US$ 845,776 as compared to 624,923 MT at US$ 765,630 imported last year.

Medicinal import increased up to 18.65 percent. Importers shipped a quantity of 8,743 MT at US$ 297,543 as compared to 7,951 MT imported at US$ 250,773.

While an increase of 4.65 percent was observed in other chemical groups.

http://www.dailytimes.com.pk/default.asp?page=2007\04\29\story_29-4-2007_pg5_8

 

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Sunday, April 29, 2007

ADB to help Pakistan enhance exports

By Sajid Chaudhry

ISLAMABAD: A high level advisory group of the Asian Development Bank (ADB) would help Pakistan to identify areas for investment and products which could be produced on competitive basis for enhancing exports.

ADB high level advisory group comprising experts of international repute would start working and within next six months would recommend Pakistan what is best possible to produce to enhance exports from Pakistan.

Juan M Miranda, Director General, Central and West Asia Department, Manila based ADB disclosed this during an interview with Daily Times. Mr Miranda is visiting Pakistan on an official tour to attend Pakistan Development Forum and consultation with Pakistani authorities on issues of mutual interest.

Advisory group would also look into what are the options available for reforms in the important new areas for improvement to improve Pakistan ’s export base and competitiveness regionally and internationally, he added.

“Pakistan’s export base is narrow and diversification of export base is the need of time to tap opportunities that are available and would be available to Pakistan by conclusion of Doha Development negotiations.”

Replying to a question on causes of negligible foreign direct investment in export oriented industries of Pakistan he said, non-availability of required infrastructure is the major bottleneck in attracting foreign direct investment in export-oriented industries.

“Availability of infrastructure for setting up of export industries is pre-requisite for attracting foreign direct investment and competitiveness of the export oriented unit.”

Investors do not find it feasible to invest in a sector where they are not competitive as compared to other regional competitors, he mentioned.

Pakistan has huge potential to attract foreign direct investment in export-oriented industries if government is able to provide required infrastructure, which includes availability of roads, transportation facilities, security, utilities, raw materials, easy access to domestic as well as to international markets, he said.

Trade and current account deficit are the areas, which need the government attention; however, he said that higher budget deficit is due to earthquake expenditures.

Replying to a question on state of economy in Pakistan, he said, “We are optimistic about Pakistan ’s economic future and hope that this country would be able to maintain its current growth level through ensuring ongoing reforms.”

Pakistan has been in difficulties in the past, but now its over. Pakistan has sound basis for economic growth and to reap the benefits of its reforms process. Second generation reforms that are the outcome of the first phase of reforms need to be implemented to ensure sustained economic growth.

Pakistan is the fastest growing economy in the region and its future growth prospects are bright. Elaborating this, he mentioned that commitment by the government of Pakistan to follow reforms is essential and rewarding for the country as well its population.

He said Pakistan’s economy could perform much better if the connectivity of the country with regional markets is further improved; investment in manpower increased to fill the skill gap and investment environment is further improved.

On Pakistan and ADB relations, he said Pakistan is an active partner of the bank and is benefiting from its services. ADB wants to serve each deserving segment of society of the country through project financing, technical assistance and grants. He expressed satisfaction on the implementation of ADB funded projects and said completion of such would bring a major positive change in the life of the peoples of Pakistan and its economy.

http://www.dailytimes.com.pk/default.asp?page=2007\04\29\story_29-4-2007_pg5_9

 

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Saturday, April 28, 2007

‘Record $5b FDI to boost world’s confidence in Pak economy’

LONDON: Pakistan High Commissioner to Britain, Dr Maleeha Lodhi has said a record foreign direct investment of around US$ 5 billion this year will boost greater international confidence in Pakistan's economy.

Speaking at a largely attended seminar on private equity investment organised by a top law firm in the city, SJ Berwin, Dr Lodhi said investment flows into Pakistan are at a record level.

Nevertheless, she pointed out, Pakistan's remarkable economic turn around remains under reported and under recognised in the western media.

In her presentation titled 'Why Invest in Pakistan', Dr Lodhi said that Pakistan's economic reforms and growth path had acquired an autonomy from partisan politics, and was in any case underpinned by a consensus among political parties about the content and direction of economic policy.

Dr Lodhi said there were over 600 multinationals operating in Pakistan which was testimony to the country's investor-friendly climate. "Today foreign investors are very upbeat about Pakistan's economic future."

"Recent months have seen major new investment flows into Pakistan. While Pakistan's international bond issues and equity floatation through GDRs having been consistently oversubscribed and are priced at fine margins."

Pakistan, she asserted, had achieved a decisive transition from a vulnerable to a resurgent and viable economy. "The country's strong recovery is predicated on domestic demand sustaining the growth momentum."

Pakistan's envoy said in the past, geo-strategic location had been a challenge, but in future Pakistan wanted to convert this into an asset. As a country of about 160 million people with a growing middle class, Pakistan also serves as a gateway to the markets of Central Asia and the adjacent Middle East, she added.

She cited several factors as to why Pakistan should be considered an attractive option for foreign investment. This included consistency of policy, a stable exchange rate and the capacity and resilience the economy had developed to meet exogenous shocks and mitigate event risks.

Dr Lodhi said Pakistan had an open and foreign investor-friendly trading and production regime in which investors could freely choose which sector they wished, with no government sanction required. Addressing attention to the level playing field provided to investors, she said, equal treatment is given to foreign and domestic investors, with uniformity in rules and regulations applicable to all.

She also spoke about the standards of corporate governance that have been strengthened and enforced, which should give foreign investors greater reassurance.

In conclusion, Dr Lodhi quoted a recent World Bank report, Doing Business 2007 that ranks Pakistan higher than the countries in South Asia in terms of ease of doing business.

http://www.dailytimes.com.pk/default.asp?page=2007\04\28\story_28-4-2007_pg5_3

 

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April 28, 2007

PIAC suffers Rs 3.95b loss after tax

KARACHI: Pakistan International Airlines Corporation (PIAC) has incurred Rs 3.95 billion loss after tax in the first quarter ended March 31, 2007.

The losses in the first quarter were higher by 38 percent against Rs 3.08 billion, it suffered in the same quarter of the last year.

The financial results for the said quarter were approved by PIAC board of directors in its meeting, a notice to Karachi Stock Exchange stated here on Friday.

The net turnover showed growth as it stood at Rs 17.67 billion as compared to Rs 16.93 a year earlier. The cost on fuel head indicated decline and stood at Rs 7.42 billion in the period under review as against Rs 8.03 billion a year earlier. The administrative expenses increased to Rs 969 million in the said period compared with Rs 786 million a year back.

Financial costs also rose to Rs 1.56 billion against Rs 906 million a year back and loss from operations also went up to Rs 2.50 billion as against Rs 2.11 billion in the said period of previous year.

Attock Cement reported 63 percent decline in its net profit during the quarter ended on March 31, 2007. It earned Rs 112 million in the said quarter as against Rs 183 million in the corresponding period of previous year. However, Attock Cement posted 12 percent growth in its net profit in the first nine months of current financial year. The net profit was Rs 612 million in the period under review as against Rs 545 million in the same period of previous year.

The net sales of the company stood at Rs 1.22 billion in the first quarter of 2007 compared with Rs 849 million in the same period of previous year and earnings per share came to Rs 1.56 in the said period against Rs 2.55 a year earlier.

The Indus Motor Company Ltd earned a net profit of Rs 1.9 billion in the first nine months of current financial year as against Rs 1.8 billion in the same period of previous year, posting a growth over five percent due to increase in sales volumes, optimization of cost and favourable exchange rate.

The net sales of the company stood at Rs 28.28 billion in July-March 2006-07 compared to Rs 25.35 billion in the same period of last year and earnings per share came to Rs 24.53 in the said period.

Arif Habib Securities Ltd has earned a profit after tax of Rs 440 million in the quarter ended on March 31, 2007, aggregating to Rs 2.5 billion in the first nine months of 2006-07. This profit translates into a basic and diluted earnings per share of Rs 4.40 and Rs 25.07 respectively on the enhanced capital of Rs 1 billion compared to Rs 270 million for the corresponding period of previous year.

The company announced a bonus share of 200 percent, two shares for every one share held in addition to the interim cash dividend and two bonus issues declared earlier during the current financial year.

JS Bank Limited (JSBL) has declared a pre tax profit of Rs 8.7 million and a post tax profit of Rs 7.4 million for the first quarter ended March 31, 2007.

http://www.dailytimes.com.pk/default.asp?page=2007\04\28\story_28-4-2007_pg5_4

 

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Pakistan's auto industry plans to invest Rs225b

29 April 2007

ISLAMABAD — Pakistan's auto industry plans to invest Rs225 billion in the next few years to achieve the new target of 500,000 cars a year, generating more than 30,000 jobs in the sector.

At the current, rate by 2010, Pakistan would make 500,000 cars a year and would pay Rs100 billion in taxes provided the government ensured a long-term and consistent policy for protecting the interests of the local industry and to attract fresh investment.

Officials concerned said the auto industry has shown an average growth of about 25 per cent per annum over the last three years. During the fiscal year 2006-07, the growth was expected to be between 10-15 per cent.

The import of used cars was continued to hurt both local car manufacturing firms and vendors, an official said adding that it would also severely affect revenue collection.

To a question, he said that the import of used cars was not a threat to local production. He added that in the neighbouring countries including India and Thailand the customs duty on import of used cars was much higher than in Pakistan.

The demand for automobiles in the last five years has been spurred by a positive economic outlook and political stability, he said.

He said the proposed policy should be framed in such a way to protect the national interests. Encouragement to local production would help in generating more employment in the country, he added.

The government had already worked out a tariff structure under the new auto policy, which would be presented for approval at the next meeting of the Economic Co-ordination Committee (ECC) of the Cabinet.

He said the prices of cars depend on the localisation of the parts manufacturing sector. He said 35 per cent of parts are still being imported for assembling local cars.

He said that auto manufacturers alleged that the government did not have any law to control the price of cars.

Until 2000 Pakistan was producing around 40,000 vehicles annually but production has since grown four times to around 160,000. He said after the 9/11 incident, the purchasing of cars has increased tremendously because of introduction of car financing schemes by various banks and overall growth in the economy.

http://www.khaleejtimes.com/Display...l/business_April701.xml&section=business&col=

 

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MONEY WEEK: surge in money supply continues

KARACHI (April 30 2007): A month ago, on March 17, the incremental money supply during FY07 stood at Rs 335.5 billion or 9.82 percent after having dropped from Rs 350.2 billion or 10.25 percent on March 10. It was hoped that growth in money supply would still continue though it may not reach or exceed the year-end target of Rs 460 billion.

A month afterwards, on April 14, it had expanded by 11.63 percent or Rs 397.2 billion, an increase of Rs 62.3 billion on the March 17 level. The entire expansion effect originated from government/private sectors on the credit side (whose borrowing/credit utilisation reached Rs 129.6 billion and Rs 266.4 billion respectively) and a net build-up of assets of Rs 72.7 billion on the NFA side.

The increase in money supply would have been higher but for the contraction effect of credit to PSEs (which showed a net retirement of Rs 2.3 billion) and changes on account of other items (net) or OINs (which showed higher liabilities than assets to the extent of some Rs 69.5 billion) which neutralised the expansion impact of above sectors to some extent.

Nearly, 30 percent of all incremental money supply consisted of increase in currency in circulation (up Rs 119 billion representing government borrowing from the SBP and rupee counterpart of increased home remittances) and another 70 percent by deposit money, including demand deposits (up Rs 1,313 billion representing private sector borrowing), time deposits (down Rs 1,037 billion reflecting depositors disenchantment about bank profits) and RFCDs (up Rs 1.7 billion).

At its present level, it appeared well nigh possible that by the end of the year not only that money supply would catch up the target, it may even exceed it except that the government receives some foreign exchange through privatisation, floating of Euro bonds or successful listing of GDRs of government-owned companies at foreign stock exchanges to cut to size its bank borrowings and simultaneously the resultant surge in foreign assets of the system is neutralised as economic agents surrender cash funds to buy additional foreign exchange to finance their increased trade bills.

Meanwhile, the government borrowing, which stood increased to Rs 73 billion during the year on March 17, shot up to Rs 129.6 billion on April 14, suggesting increased pressure on money supply originating from the government sector which understandably has inflationary implications.

Enhanced government borrowing was entirely on account of budgetary borrowing (up Rs 180.3 billion on April 14 as against the whole year target of Rs 120.1 billion) as borrowing for official commodity procurement especially wheat still stood at Rs 50.5 billion in the wake of the beginning of the harvest of an expected bumper crop of wheat in Punjab, Sindh, NWFP and Balochistan though harvest in NWFP and upper Punjab starts late.

The rise in budgetary borrowing, however, was entirely on account of the federal government whose net borrowing on April 14 stood at Rs 185.5 billion, while provincial governments borrowing showed a net retirement of credit to the extent of Rs 5.2 billion on the same date.

The private sector credit which during FY07, showed an expansion of Rs 246.6 billion up to March 17, rose further in the subsequent weeks and stood at Rs 266.4 billion on March 14, showing an increase of about Rs 20 billion during the last one month. At this speed, it is nearly an impossibility that the private sector credit would reach its whole year target of Rs 390 billion.

The growth in credit to the private sector which showed deceleration as year-on-year basis, it rose by 12.57 percent during July 1-April 14 (FY07) compared with the growth of 19.84 percent during the same period last year. The data on the sector-wise growth in the private sector credit are not available though available information for the period July-February FY07 showed that credit to the business sector grew by 13 percent compared with 14.8 percent in the corresponding period last year.

Within it, credit for working capital (including trade financing) grew by 15.8 percent compared with 15.4 percent in FY06 while credit for fixed investment grew by 6.7 percent compared with 13.7 percent in FY06. Also, credit to textile sub-sector grew by 8.1 percent compared with 17.2 percent in the corresponding period last year.

Within it, credit for working capital (including trade financing) rose by 15.7 percent compared with 23.7 percent in FY06 while credit for fixed investment decreased by 10.5 percent compared with a rise of 3.3 percent in FY06.

The credit to business (excluding textiles) increased by 15.1 percent compared with 13.8 percent in FY06 and, within it, the credit for working capital (including trade financing) rose by 15.8 percent compared with 12 percent in FY06, while the credit for fixed investment increased by 13.8 percent compared with a rise of 18.8 percent in FY06. It may be seen that the slowdown primarily stemmed from a deceleration in fixed investment loans (particularly in the textile sector) as the working capital requirements actually accelerated.

According to the latest SBP quarterly report, the deceleration in demand for fixed investment loans is mainly due to structural problems in the real sector of the economy that reduced its ability to absorb additional credit at the same pace as in the past two years. Excluding the textile sector, the growth in the rest of business sector advances seemed to have increased.

According to the latest SBP report data on sectoral distribution of credit revealed that during July-January FY07 major slowdown was witnessed in the commerce and trade sector, the growth of which was only one-thirds of the growth in the preceding year.

Further, the growth in personal sector advances during July-January FY07 was almost half the growth during July-January FY06. Within personal loans, all consumer financing products registered slowdown, with loans for consumer durables showing a net retirement which expected because of accelerated retirement of maturing past consumer loans.

In line with the position of NFA of the banking system, liquid foreign exchange reserves, which stood at $13,506.5 million on March 17 ($11,244.6 million with the SBP and $2,261.9 million with the scheduled banks) have been reported to have risen to $13,590.7 million on April 14 ($11,421 million with the SBP and $2,169.7 million with the scheduled banks). (For comments and suggestions research.dept@aaj.tv)

http://www.brecorder.com/index.php?id=557701&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Annual coal production in Punjab rises to 600,000 tons

LAHORE (April 30 2007): Punjab Minister for Mines and Minerals (M&M) Muhammad Sibtain Khan has said that the overall annual production of coal has increased up to 600,000 tons in Punjab which would be further increased by discovering new reserves in various areas.

Addressing a high level meeting of M&M department, the minister said that the work to explore new area of coal had been speeded up and the services of private sector were being utilised for this purpose. He said that the consumption of coal was increasing day by day. The minister further said that during one year, more than 129 licenses had been issued for the exploration of coal in various areas and 332 leases had been granted the concerned people.

http://www.brecorder.com/index.php?id=557731&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

April 30, 2007
Drastic energy-saving measures on the cards
By Khaleeq Kiani

ISLAMABAD, April 29: The government is set to introduce this week drastic measures for energy conservation, including closure of commercial activities after sunset and possibly two weekly public holidays, to overcome the energy crisis in the country.

This is part of a larger “demand management plan” which will be announced on Monday in Karachi by Minister for Water and Power Liaquat Ali Jatoi and come into force the following day for about four months, subject to approval by Prime Minister Shaukat Aziz.

A senior official told Dawn on Sunday that the prime minister had gone through the plan before leaving for the country’s commercial and industrial capital where he would hold two meetings – one on the Karachi Electric Supply Corporation situation and the other on energy demand management.

“Demand management is inevitable now because of a wide gap in energy demand and supply,” the official said, adding: “Demand management is better than loadshedding because it allows people to adjust accordingly, instead of living in uncertainty.”

He said industrial concerns would be required to stagger their weekly holidays on Fridays and Saturdays. This would enable power utilities to supply similar quantities on most days of the week, instead of the lean day on Sunday, he said.

An official close to the secretary for water and power said the ministry had also proposed two weekly holidays – Saturday and Sundays – in the public sector. This will not only be an energy-saving measure but also an alternative for business and commercial concerns against their loss arising out of business closure after sunset. All markets and commercial centres would close at 8pm.

There will be no power supply to wedding halls after 10pm and they will have to arrange their own generators if they desired to prolong their functions. Likewise, public street-lightening will be cut by 50 per cent to save another 25MW of electricity every day.

Various programmes and advertisements will be run on the print and electronic media to persuade the general public to save energy. The government hopes that the measures will effectively bridge the gap between demand and supply and there will be only limited scope for loadshedding.

With a demand of about 16,000MW, Pakistan currently faces a shortfall of about 1,000MW, which is partially offset by excessive release of water from two reservoirs without provincial demands for irrigation. Luckily, hydrological conditions are better this year and, according to an estimate, water availability has been at its highest in 12 years. The power shortage, however, has been estimated to reach 2,500MW in June-July.

The demand and conservation plan has been prepared in consultation with power utilities, National Electric Power Regulatory Authority, National Energy Conservation Centre (Enercon) and other stakeholders. The Alternate Energy Development Board and Enercon are also separately working on another plan to encourage use of energy-saving devices through different kinds of subsidies.

The government has not been able to plan for the future despite repeated warnings from Nepra and Wapda and failed to firm up enough power generation capacity as the demand continued to increase and the pace of unplanned village electrification was pushed up on political considerations. Installation of two old and rented power stations of about 300MW is the only capacity addition that has taken place in seven years.

Last year, loadshedding was restricted to two-three hours daily in rural areas and between half and one hour daily in most of major cities. The shortage this year has gone up significantly.

http://www.dawn.com/2007/04/30/top9.htm