Pakistan Economy - News & Updates - Archive

[Neo]

Thursday, May 04, 2006

KARACHI: Dewan Motors, the importer for BMW Group brands in Pakistan, BMW, MINI and Rolls Royce, opened the first MINI display center in the country. Dewan Mohammad Yousuf Farooqui, CEO of Dewan Musthaq Group – Automotive Operations, inaugurated the display centre at Zamzama, Karachi on Sunday April 30, 2006.

According to the press statement, Dewan Motors is currently the most successful premium car importer in Pakistan. Sales and after sales is the company’s top priority and Dewan Motors has invested in a skilled and experienced team to ensure premium service, as benefits the BMW Group brands.

 

[Neo]

Thursday, May 04, 2006

ISLAMABAD: Sultan Ahmed Bin Sulayem, Chairman of the Dubai Ports World/Nakheel Group of Companies of UAE, arrived here on Wednesday leading a seven-member delegation to discuss their investment plans in Pakistan, said an official statement issued by the Board of Investment.

During their stay in Pakistan, the delegation will meet President General Pervez Musharraf, Sindh Governor Dr Ishratul Ibad, Sindh Chief Minister Arbab Ghulam Rahim and Minister for Ports and Shipping Babar Khan Ghauri.

The Nakheel Group is one of the leading real estate developers dealing in free-hand property in Dubai. Its real estate development ranges into residential, tourist, commercial and retail property. The group is also involved in infrastructure projects as it is one of the subsidiaries of Dubai World (DW), which is a state-owned enterprise. The DW is involed in a wide range of commercial activities having business interests in the fields of ports and logistics and real estate management of free zones. Another subsidiary of the DW is Dubari Ports, which is one of the largest port operators.

 

[Owais]

Increase in exports to help curb extremism: Musharraf gives away FPCCI awards

ISLAMABAD (May 05 2006): President General Pervez Musharraf on Thursday encouraged entrepreneurs to maximise exports through best use of Pakistan's enormous potential and said their contribution to economic development will be vitally helpful in reducing poverty and stemming the malaise of extremism.

He also called upon the businessmen to diversify their exports, focus on value-addition and improve the quality of their products to help Pakistan in continuing its socio-economic development and scale new heights of exports from this years unparalleled level of more than $17 billion.

"By increasing exports, the business community not only alleviates poverty through employment generation, but also helps in curbing extremism in the society and terrorism from the country, " he said.

President Musharraf was addressing the 29th Exports Awards ceremony organised by the Federation of Pakistan Chambers of Commerce and Industry (FPCCI).

The president, who also gave away trophies and medals to outstanding entrepreneurs of the last financial year, also pledged to make Pakistan a hub of energy and trade corridor among Central Asia, the Gulf region, South Asia and fast growing Western parts of China.

"Any trade or energy link between these regions has to take place through Pakistan - and we are fully focused on utilising Pakistan's key geo-strategic location for our un-stinted high growth and sustained development," he said.

Speaking about exponential increase in the economic activity, the president pointed to the recent upward trend in the import of machinery mainly in the industrial sector and said it bespeaks of Pakistan's shift to industrial sector.

"We are not worried about the figures of external balance of payment - the deficit is short-lived - as import of chemicals and industrial machinery and equipment means new companies are coming up, the businesses are expanding and the people are getting more employment - this will certainly bolster our exports," he said.

He said record inflow of foreign direct investment (FDI), vibrant growth and continuous raise in exports clearly signify that Pakistan's economy is on sound footing and set to sustain high economic growth in the years ahead.

Commerce Minister Humayun Akhtar, Export Promotion Bureau Chairman Tariq Ikram and leading entrepreneurs attended the awards ceremony. The president recalled key steps the government took in the last six years to evolve an enabling environment and said in the first place it set about exploring new markets for its entrepreneurs and also diversifying the export base.

"We realised that we were focused towards the West and anchored in export of agriculture - this was despite the fact that textiles made up just 6 percent of the global trade, while engineering goods accounted for 60 percent of it.

"So we began to explore new markets in Latin America, Eastern Europe, China and South East Asia and that has resulted in leaping our exports from less than $8 billion in 1999-2000 to more than $17 billion in this fiscal year."

Listing achievements of the last six years, he said, Pakistan's per capita income has advanced from $440 to $800, while its GDP has doubled from $64 billion to $125 billion. The gap between demand and supply, continued growth in the industrial sector and attractive profitability prospects have made the country a desirable place for investment, he said.

He emphasised that in order to sustain its high growth rate, Pakistan must succeed in three areas - trade, joint ventures and investment.

President Musharraf also underlined the importance of tax collection and said it has increased from Rs 300 billion to Rs 800 billion in the last six years.

"This has made it possible for us to boost allocations for Public Sector Development Programmes from Rs 100 billion to Rs 300 billion."

He encouraged the entrepreneurs to pay taxes as they expand their business and promised to provide them improved infrastructure for further expansion of their businesses.

President Musharraf said the government would encourage food and fruit processing industry, as this would impart a new vigour to the value-added agrarian exports. He quoted the example of high quality of Pakistani mangoes and apples and said these could not be exported in the past due to apathy of the previous regimes. Now Pakistani mangoes are on sale at prominent stores like Harrods in London, he said.

Similarly, he said dairy products in the form of cheese and milk can bring about a white revolution, as Pakistan is the fifth largest milk producing country.

The president also cited the example of precious gemstones found in the country, adding that the government is setting up a dazzle park in Karachi to provide cutting and polishing facilities. The export of gemstones in finished form would invigorate activity in the sector, he added. He said the annual and numerous other industrial export being held in Karachi and also due to start in Lahore in near future would provide a befitting platform to small and medium enterprises as they would be able to showcase their products to the world and market them properly.

Musharraf said Pakistan's debt to GDP ratio has been brought down considerably from over 100 percent to around 59 percent - below that benchmark set by some of the highly developed economies - and vowed that debt would not climb back.

Later, He awarded trophies and gold medals to business leaders and the government officials who contributed significantly to increasing Pakistani exports.

The recipients of special gold medals included Commerce Minister Humayun Akhtar, former investment minister Dr Abdul Hafeez Shaikh, former State Bank of Pakistan (SBP) governor Dr Ishrat Husain and Central Board of Revenue (CBR) Chairman M. Abdullah Yousuf.

Nishat Mills Limited won the President of Pakistan Export Award, while Businessman of the Year Gold Medals went to Zafar Fabrics Ltd, Faisalabad, Pakistan International Container Terminal Ltd, Karachi and Kalia Group, Karachi.

The Best Lady Exporter Award was bagged by head of M. M. Commodities Karachi. More than 100 entrepreneurs from across the country received Best Export Performance Award at the ceremony. Earlier, Commerce Minister Humayun Akhtar paid tributes to vision and policies of President Musharraf for recent economic strides and expressed a strong hope that he would be able to invite the president to a ceremony marking $20 billion export target in the next financial year. The FPCCI president in his address of welcome said that President Musharraf's sustained emphasis on economic growth has been a source of inspiration for the business community, adding that the entrepreneurs would do their utmost to spur further growth in exports.

 

[Owais]

TCP issues 50,000 tonnes sugar tender
KARACHI (updated on: May 05, 2006, 11:32 PST): The Trading Corporation of Pakistan (TCP) on Friday issued a tender to buy 50,000 tonnes of refined sugar, with shipment due in July and bids to be submitted by 0630 GMT on May 19, a company spokesman said.

Only 18 pre-qualified foreign firms would be allowed to participate in the tender, and the winning bidder would have to make shipments within four weeks of the opening of a letter of credit.

Last week, the TCP had issued another tender for the import of a similar quantity of sugar from worldwide sources. Bids for that tender are due by 0630 GMT on Saturday.

The corporation has been regularly buying sugar from the international market, and the latest is the eighth tender it had issued since February after the government estimated that at least 800,000 tonnes of imports would be needed in 2006.

Pakistan's sugar output has declined to 2.6 million tonnes this year, as farmers switched to crops with higher returns, from 3.2 million tonnes the previous year. Pakistan's annual consumption is 3.8 million tonnes.

The TCP bought a total of 325,000 tonnes of refined sugar in earlier tenders.

 

[Owais]

Decision on IPI gas line within three months: Ahmadinejad tells Shaukat BAKU (May 05 2006): Prime Minister Shaukat Aziz on Thursday held in-depth discussions with Iranian President Mahmoud Ahmadinejad covering the gas pipeline project, Iran's nuclear issue, situation in the region and bilateral matters.

Both the leaders, who are in Baku to attend the ninth session of the Economic Co-operation Organisation (ECO) Summit, in more than an hour long meeting focused on the Iran-Pakistan-India (IPI) gas pipeline project and Iran's nuclear issues.

The Iranian president said a final decision on the $7.2 billion gas pipeline would be taken within 90 days and hoped some positive outcome within the stipulated time. He also informed Shaukat about his recent talks with Indian Prime Minister Manmohan Singh and said a positive decision was expected within three months.

Pakistan, which had already agreed to the project in principle, is seeking early initiation and has indicated that it would go ahead with the project, even if India does not join. Shaukat said Pakistan, owing to it rapidly growing economy, is looking forward to an early completion of the project. He said the demand for natural gas was on the rise with the existing industries switching over to natural gas and addition of new cement and heavy industrial plants. Both the leaders also discussed bilateral ties, the challenges in the region and ways to further strengthen their relations in all areas.

The prime minister said both the countries were tied in strong historical and cultural bonds and there was a need to spell these into equally stronger economic relations.

On the nuclear issue, Shaukat said that it was a very important issue and Pakistan has a very clear position on the matter. There is no change in our position, he added.

Pakistan has been voicing its concern over use of any force against Iran and has urged the international community to resolve the issue through negotiations.

Pakistan also supports Iran's use of nuclear technology for peaceful purposes, under the International Atomic Energy Agency (IAEA) safeguards. Pakistan is, however, opposed to proliferation of nuclear weapons

 

[Owais]

Dubai group keen to operate Gwadar Port
ISLAMABAD (May 05 2006): A delegation of Dubai-based investment group called on President General Pervez Musharraf on Thursday and conveyed to him its willingness to operate Gwadar Port. A delegation of the Nakheel Group Investment of which Dubai Ports World is a part is nowadays visiting Pakistan.

The meeting was part of the group's efforts to operate and manage the country's multibillion port that is often termed energy and trade corridor for China and Central Asia.

The first phase of Pakistan's largest deep-sea port at Gwadar along with the coastal belt of Balochistan is about to complete within the next few months.

Prime Minister Shaukat Aziz has time and again been saying that the government would like some international operators to run Gwadar Port after its completion.

"We have told the President (Musharraf) that we want both operational and managerial control of the port," Dubai Ports World Chairman Sultan Ahmed bin Sulayem told media.

"Pakistan's economy is growing...we want to participate in the development of the country and it is the best time to be here (in Pakistan)," Sultan said.

About the modus operandi of the deal the group wanted to have with the Government of Pakistan, he said, there was nothing specific at the moment.

"We have just started negotiations. Talks are at the initial stage and will take some time to mature," Sultan said, but another member of his delegation added the group would like to operate Gwadar under a deal at least for 50-60 years.

Planning Commission Deputy Chairman Akram Sheikh said the government would prefer a Built, Operate and Transfer (BOT) basis for the second phase of Gwadar Port.

Sultan said the group also wanted to invest in various other sectors in Pakistan, including real estate, transportation and logistics.

Minister of State for Privatisation and Investment Umar Ahmed Ghuman said the government would sign an umbrella memorandum of understanding (MoU) with the group for the investment it wanted to make in Pakistan.

The group also includes representatives from Dubai Islamic Bank Limited, the UAE and Jebel Ali Free Zone.

 

[Owais]

SHC quashes duty-free tractors import scheme

ISLAMABAD (May 05 2006): The Sindh High Court (SHC) has quashed the federal government's duty-free tractors import scheme, saying that entire proceedings suffer from lack of transparency, smack of subjective decision, arbitrariness and excess of jurisdiction as well as favouritism.

The decision was taken by a two-member bench, comprising Justice Muhammad Mujibullah Siddiqui and Justice Syed Zawar Hussain Jafari on two constitutional petitions filed by the Shahzad Riaz Trade Links and the Fecto Belarus Tractors Limited.

"The entire proceedings initiated with the advertisements inviting proposals for import of agriculture tractors are not in accordance with the decision of the Economic Co-ordination Committee (ECC) of the Cabinet", the court observed.

The industries and production ministry had allowed three parties, Dewan Automotive Engineering Limited, Universal Tractors Pakistan (Pvt) Limited, and Agro Tractors Limited to import 7,500 tractors, out of total of 10,000 tractors under the approved scheme.

The ministry had completed all the paper work to allocate 2,500 tractors to the Hero Tractors Limited, but the decision was withheld after SHC stayed duty-free tractor scheme.

Initially, the firm had submitted deletion programme of the Belarus Tractors to the Engineering Development Board (EDB), but later replaced with agreement of the Ukranian company.

The firm, however, imported parts of millions of rupees on behalf of agreement with the Belarus Tractors, which was a clear violation of criteria set by the federal government.

The court has directed members of the committee constituted by the ECC headed by the Prime Minister, to devise a detailed scheme containing modalities for the proper implementation of the ECC decision.

The committee should prescribe the criteria in line with the ECC decision as well as measures which are to be adopted for achieving the purpose of tractors supply to the farmers at reasonable rates and put in place safety-valves to prevent the misuse of duty-free tractors scheme, the court further observed.

After devising the detailed scheme, giving the parameters, conditions, requirements, timeframe and other necessary guidelines, the scheme should be re-advertised, invite proposals and thereafter recommend import of tractors to those companies/investors found eligible and most suited, the court added.

The ECC in its original and modified decision allowed import at zero tariff to tractors in CBU condition, but the CBR has issued exemption notification under section 20 of the Customs Act, extending the benefit to the import in CKD condition also.

The court observed that it was not known as to how the import in CKD was included in the facility and no decision of ECC has been produced before the court to show that the facility was also meant for the CKD.

The two-member bench also struck down the exemption notification issued by the CBR to the extent of import in CKD condition being beyond the purview of the ECC decision, while the exemption to import by the approved parties in CBU condition would remain intact, but fresh notification should be issued after the new allocations.

"The existing notifications are not to be acted upon," the court said.

At the conclusion of arguments, Mehmood A. Shaikh, the counsel for the Agro Tractors Limited contended that his client has already imported 156 tractors which are not in CBU condition and has to bear heavy demurrages, praying that the party should be allowed to get the tractors released at zero tariff.

The court observed: "we are not inclined to allow this relief because we have held that the exemption granted by the CBR to import in CKD condition is beyond the purview of the ECC decision, and we have struck down the exemption notification to that extent. The party should get released imported tractors on payment of normal duties and taxes."

The court was of the opinion that the committee constituted by the ECC also ought to have devised necessary ways and means to ensure that the benefit of duty-free tractors scheme is actually availed by the farmers and the amount saved on zero-rated import is not siphoned off by the companies.

 

[Owais]

Cement companies profit up by Rs 4.1 billion in 9 months
RECORDER REPORT KARACHI (May 05 2006): The performance of cement companies during the last nine months of the current fiscal year was highly commendable as their earnings in this period recorded an increase of Rs 4.1 billion because of demand for cement.

Cementing exceptional local demand with better profitability owing to improved margins, the cement sector seems to be the flavour of the month these days. The recently announced nine-month results of the cement sector show astonishingly improved gross margins with healthy profitability following the volumetric boost in sales. Some 19 companies have been picked up, representing 91 percent of the sector out of the 21 listed companies leaving Pakistan Cement (formerly Chakwal Cement) and Mustehkam Cement.

Khurram Shehzad, research analyst from Investcapital Securities, said the cement sector's bottom line grew by a whopping 83 percent during 9MFY06 YoY. In absolute terms, total profit of the cement sample totalled Rs 9 billion compared to Rs 4.9 billion in 9MFY05.

Leading the profitability track, the share of DG Khan Cement alone was 19 percent in the total profitability of this sector, with Lucky following with 15 percent. Maple Leaf and Fauji Cement came next each taking up around 9 percent of the total profitability.

THE REASON BEHIND THIS REMARKABLE GROWTH IN PROFITS WAS TWO-FOLD: Volumetric growth in sales with increased ex-factory and thus improved retention prices - 20 percent and 25 percent respectively. Also, relatively lower cost of sales led to unprecedented increase in gross margins, which in turn contributed well enough to the companies' bottom line.

Dispatches of our sample companies have increased from 9.70 million tons in 9MFY05 to 11.29 million tons in 9MFY06, showing a demand growth of around 16 percent. This made up 84 percent of the total industry dispatches; here the total industry demand grew by 14 percent during the same period.

Yet again the top three producers were DG Khan Cement, Lucky Cement and Maple Leaf Cement. However, this was not the only reason behind this drastic growth in profitability.

Gross margins of the cement sector ascended to 38 percent in 9MFY06 compared to 30 percent in 9MFY05. This was due to a burgeoning of retention prices as compared to the increase in COGS.

Average retention price per ton increased by 25 percent from Rs 2,920 per ton to Rs 3,660 per ton. On the other hand, COGS per ton increased by 11 percent from Rs 2,044 per ton to Rs 2,276 per ton.

The report said that financial charges have increased by 72 percent in 9MFY06 for dual reasons; high financial leverage for aggressive expansions taken by the companies and soaring interest rates in the economy.

Moreover, operating expenses were used effectively that reflect in the improved net margins, from 17 percent in 9MFY05 to 22 percent in 9MFY06.

Going forward, the brokerage expect gross margin to come down significantly from current levels, since the cement import scenario is still bleak and local ex-factory prices are still hovering around Rs 290-300 level. Expansions of the cement manufacturers are in full swing and most of major capacities are expected to come online by next year.

On the other hand, India has contemplated to stamp a ban on its cement export. As far as demand is concerned, we expect full-year demand growth of around 13-14 percent, which will take cement sales to 18.5-18.6 million tons for FY06.

An analyst from Al Habib Capital Markets said that in order to meet the demand for cement, its manufacturers have entered into the aggressive phase of expansions. For this purpose, manufacturers have acquired heavy debts for financing these projects, which is resulting in higher financial charges in addition to rising interest rates.

"In future, when industry's capacity utilisation will be low with the downward trend of prices, we expect that rise in financial charges will hurt the bottom line growth", he added.

 

[Owais]

Move to import Indian cement not to be reversed
RECORDER REPORT ISLAMABAD (May 05 2006): The federal government has no plan to reverse its decision regarding import of cement from India. "ECC took the decision after detailed discussion and it will not be reversed before the prices come down at Rs 270 to Rs 272 per bag," said, Dr Ashfaque Hasan Khan, Economic Advisor to the Finance Ministry while talking to Business Recorder on Thursday.

Some of the manufacturers met the official of industries ministry a couple of days ago for reversal of the decision regarding import of cement from India, but their demand was rejected, said an official in the ministry.

The export of cement to Afghanistan has already been suspended by the Prime Minister, until prices come down below Rs 300 per bag, although industries ministry wanted to resume export after April 30.

Dr Khan was of the view that Indian cement has not yet reached the domestic market, therefore, it was out of question to put any bar on it. "As long as cement prices touch Rs 270-272 per bag on sustained basis, there will be no change in import policy," he added.

He was of the view that when the government felt that prices have come down to the expected level, import policy would be reviewed for further action.

The ministry of industries and production has estimated a monthly shortfall of 200,000 tons, which would continue till September, suggesting that import of cement should continue till December.

The sources said that Earthquake Rehabilitation and Reconstruction Authority (Erra) has also been allowed to import cement from India for its reconstruction activities in AJK and NWFP.

When contacted, an official of commerce ministry told that import of cement from India would continue till prices come down to a benchmark set by the ECC, in its previous meeting.

 

[Owais]

Pakistan on path of sustainable democracy: President ISLAMABAD (May 05 2006): President General Pervez Musharraf on Thursday said that Pakistan has been put on the path of sustainable democracy and economic stability and pledged to transfer benefits of economic progress across the country.

The president stated this during his meeting with the parliamentarians at his chamber at the Parliament House. He said that the government is on course to bring about socio-economic uplift at the grass roots level with the participation of elected representatives.

He said that today Pakistan is a vibrant country where all democratic institutions are functioning and the media enjoys freedom of expression. "The local government system is working successfully and taking roots for development of people at the local level and all tiers of governance are functioning in harmony," he added.

The president said that the political empowerment of women and minorities has led to their participation in the mainstream development of the country.

About the economic upsurge, he said, it is visible in the form of tremendous investment activities in a number of areas.

The government, he said, will provide all basic facilities, including education, health and energy for continued development. "We are fully conscious that human capital is our greatest asset, therefore, we are focussing on its development."

Pakistan, he said, has all the resources to progress as a modern democratic and enlightened society. The elected representatives, who called on the president included Hamid Nasir Chattha, Ijazul Haq and Mian Manzoor Ahmad Wattoo.

They discussed with the president the political environment and the efforts for socio-economic well being of the people in their respective areas.

 

[Owais]

PTCL privatisation hits telecom deregulation policy

KARACHI (May 05 2006): The government deal of handing over Pakistan Telecommunication Company Limited (PTCL) to Etisalat has started hurting the "telecom deregulation policy 2004" that supported the phenomenal increase of telecom sector and grabbed potential foreign investment in the country.

This step has raised some serious concerns in the telecom sector and its allied industries over the restrictions on "open licensing regime" for the next few years and secondly unjustified broadband bandwidth tariff structure.

The PTCL is the country's only and largest service provider of all kinds of telecom and allied services to the consumers and the allied sector.

Sources told Business Recorder that the allied telecom industry had concerns about the working of telecom watchdog agency (Pakistan Telecommunication Authority) as a regulator considering its marginalised role in finalising the privatisation deal of the country's largest phone utility.

The PTCL's privatisation deal was handled at the highest "government level" in which the power corridors had to accept a number of terms and conditions from its buyer (Etisalat), which could also seriously hurt the growth of various telecom services in the country.

Experts believed that such undisclosed deal further left the country's consumers at the mercy of a new "monopolistic regime" that was also a clear-cut negation of telecom deregulation policy.

The worst sufferers are those allied industries that use the PTCL infrastructure and service like internet service providers (ISPs), information technology & enable services (ITeS), business process outsourcing (BPO), call centres and software exports.

The experts said, in Pakistan the internet and data communication industry was deregulated in 1994 much earlier than in India where such step was taken in 1999.

"Unfortunately, we are unable to nurture such a time span of five years than India, and we are far behind from their service level, overhead cost and growth of broadband services," they said.

The unfriendly aspect is the continuos non-professional approach of the government officials, dealing and planning such broadband policies and above all high tariffs that kept the growth at a very slow pace.

The Ministry of Information Technology and Telecom announced the Broadband Policy 2004, which defines that the broadband access is widely recognised as a catalyst for the economic and social development of a country.

Broadband rollout has a more powerful impact than the spread of basic telephony.

The policy further says that the country should achieve DSL user base to 100,000 by December 2006, but the tariff is considered a major factor in the slow growth of such services.

"Presently," the sources said, "there are only 15,000 DSL broadband connections activated in the country after the announcement of the policy. It means that at the current speed of deployment the conservative target for 100,000 DSL users set by the government will be achieved by 2013."

According to Internet Service Provider Association of Pakistan (ISPAK), the tariffs for Japan, South Korea, Hong Kong, Singapore, Malaysia and India reveal that India is most uncompetitive in international and domestic bandwidth pricing.

The ISPAK did a price comparison with the least competitive country in international and domestic bandwidth pricing ie India and defines that in Pakistan, "We are 240 percent higher in DS3 (45Mbps) international IPLC price, 226 percent higher in STM-1 (155Mbps).

"A 155-mbps circuit of 1000KM will cost 94,000 dollars per month in Pakistan whereas in India, it will cost only at 38,000 dollars," said the ISPAK.

The ISPAK also observed that there were some serious disparities in tariffs in Pakistan. For example, a full circuit of 155-mbps will cost 76,000 dollars per month, whereas 155Mbps 1/2 circuit (IPLC) will cost 185,000 dollars.

Another interesting fact in tariff disparity is that an international full circuit of 155-mbps from Pakistan to United Kingdom is priced at 76,000 dollars, whereas the same capacity between Karachi and Islamabad costs 123,500 dollars per month.

The ISPAK further said no action had been taken by the Ministry or the PTA to address this great anomaly in tariffs, which was the greatest impediment in the proliferation of broadband services in Pakistan.

By January this year, 96 percent internet users were using broadband in South Korea; 47.75 percent in China; 14 percent in India; seven percent in Malaysia; and only 0.63 percent in Pakistan.

 

[Owais]

Kinnow exports set all time record

KARACHI (May 05 2006): An all time record in the exports of kinnow has been set by sending 162,873.81 tonnes till April 22 (2005-06 Kinnow export season), according to latest figures provided by the Pakistan Horticulture Development and Export Board (PHDEB).

In 2004-05, the total exports stood at 96.755 tonnes and the previous export record was 149,000 tonnes. A spokesman of PHDEB told Business Recorder here on Thursday that the figure pertained only to exports that took place via Karachi. Since the exports by road via Afghanistan to Russia have not been reflected in this figure, exporters maintain that citrus export, in fact, had crossed 200,000 tonnes during the 2005-2006 season and the process still continues.

Export to the Central Asian States and other neighbouring countries skipped normal customs procedures and did not form part of these figures, he said.

According to PHDEB Chief Executive Officer (CEO) Shamoon Sadiq, the feat has been accomplished without Indonesia that has been Pakistan's traditional market and used to consume some 40 percent of total citrus exports from Pakistan.

The Indonesian authorities had raised duty on Pakistan citrus by 20 percent and drove it out of the local market, he said.

Had the Indonesian market still been available, the exports would have easily touched 250,000 tonnes, he added.

Figures available here show that Russia had been the biggest buyer of Pakistan's citrus this season by importing 31,282 tonnes till April 15. This was followed by the UAE 34,539 tonnes and the Philippines 17,271 tonnes. Iran, which resumed kinnow imports from Pakistan last year after 25 years, bought 21,319 tonnes and more deals were in process. Indonesia had imported only 6,893 tonnes and Saudi Arabia 13,153 tonnes.

Shamoon Sadiq, expressing his views in the PHDEB newsletter, said that the momentum for kinnow export had now been set. "China has also recently cleared seven Pakistani companies for citrus export and so has Philippines. The government is also negotiating Early Harvest Programme (EHP) with the Indonesian authorities and, hopefully, good news may be heard soon," he said.

Citrus export duty remained key in talks with Indonesia, he said, adding that from next year the Iranian market would expand further throwing new opportunities for Pakistani citrus fruit exporters.

All these trends show that citrus exports were well set on their way to grow.

"If everything goes well, the country would be able to touch a figure of 250,000 tonnes next year," he said.

The PHDEB plans to celebrate the new kinnow export record, achieved as a result of an enabling environment provided by the government and efforts of all the market players, including exporters, growers and service providers.

The board feels that the "gigantic efforts" of the players need to be appreciated. Acknowledging their efforts would help maintain kinnow export tempo and enlarge exports of horticulture produce from the country.

A national kinnow gala is scheduled to be held in Lahore some time this month in this connection. The date for the gala is being finalised keeping in view the convenience of all private and public stakeholders of kinnow trade.

Meanwhile, Philippines has cleared seven Pakistani firms for kinnow export. The board was informed about this development in the first week of April.

In a letter, received by the board, the Bureau of Plant Industry has said that seven companies, ie Chase International, JMB Traders, Mateela Kinnow factory, Zahid Kinnow and Grading Plant, National Kinnow Factory, Iftikhar Ahmed & Company and Sadurddin Co, are entitled to export kinnow to the Philippines, as they now meet the import criteria.

The Philippines, already a big market for Pakistani kinnow, has so far imported over 15,000 tonnes of fruit, and the shipments are still continuing. The clearance accorded to seven firms would give a big boost to exports and Filipinos may become major consumers of Pakistani kinnow.

The Bureau of Plant Industry, Philippines has also promised to finalise its recommendations and send the same to both the governments for inclusion in the memorandum of understanding (MoU) that the two countries intend to sign soon.

The requirements for company accreditation included conformity to international standards in product handling, segregation, storage, and cold treatment, packaging, labelling and documentation procedures.

 

[Owais]

MCB Bank rating upgraded to 'AA+'
RECORDER REPORT KARACHI (May 05 2006): The Pakistan Credit Rating Agency (PACRA) has upgraded the long-term entity rating of MCB Bank Limited to "AA+" (Double A plus), while maintaining the short-term rating at "A1+" (A one plus).

The rating of unsecured subordinated TFC issue of Rs 1,600 million has also been upgraded to "AA" (Double A). These ratings denote a very low expectation of credit risk, emanating from a very strong capacity for timely payment of financial commitments.

MCB's ratings reflect the bank's very strong risk absorption capacity, emanating from its strengthened capital structure supplemented by a sound asset quality.

The ratings also take into account the management's demonstrated ability of aligning the operations in line with the changing dynamics of the sector, enabling the bank to remain well positioned to face competitive pressures.

MCB Bank issued unsecured subordinated TFC of Rs 1,600 million during August 2002 for a tenor of 51/2 years at a floating rate of latest cut-off yield on five-year PIB plus 1.50 percent with a floor of 11.75 percent and a cap of 15.75 percent. Major principal redemption will be in three unequal instalments, commencing February next.

A number of distinguished corporate groups, led by Nishat Group, jointly own majority stake in MCB since its privatisation in 1991. MCB continues to derive substantial benefits from the resourcefulness, financial strength and business acumen of the members of the board of directors.

The President and Chief Executive Mohammad Aftab Manzoor has extensive banking experience locally and abroad and has been in this position for the last six years.

 

[Owais]

KSE equities suffer erosion
RECORDER REPORT KARACHI (May 05 2006): The equities suffered erosion on Thursday under the lead oil, gas and banking sectors as some of individuals stay away from the market which reduced the daily turnover.

The KSE-100 Index closed at 11690 levels down 37.88 points from previous closing of 11727. The volume in the ready market was 268 million shares almost 87 million less than recorded on previous trading session. However, volumes in futures market were 91 million shares against 119 million shares recorded on Wednesday.

The market opened on a positive note, but the bull-run couldn't continue due to selling pressure by investors. One of the major reasons for the dull activity was the PIB auction that was announced on Wednesday evening by the State Bank of Pakistan, said Junaid Iqbal, research analyst at Jahangir Siddiqui Capital Markets. The coupon rate for this auction has been increased to almost 200-300 basis point. With the increase in coupon rate, investors are also expecting an increase in National Saving Scheme rates (NSS).

International oil prices also came down, therefore, less activity was observed in the oil sector. Relatively, low volumes and heavy tilt towards companies registering a negative close (192 companies showed declines versus 116 advancers), representing investors' lack of interest in the market at current level.

Noor Hameed at Elixir Securities, said the oil exploration sector remained under selling pressure where heavy weights, OGDCL, PPL and POL, closing in the negative territory pulling down the KSE-100 index.

Lucky's expansion which is expected by end of May/early June managed to keep the investors' interest alive at lower levels and caused the stock to close in the green.

PTCL which took a heavy battering for several trading sessions after posting disappointing nine-month results finally registered good gains on Thursday despite an overall weak market behaviour. "We feel the market will remain choppy and it is advisable to book profits when and where available", he said.

Hettish Karmani from Atlas Investment Bank said that after trading in the greens for the couple of days banking and cement sector ended in the red amid profitability. Cement scrips failed to pick up even though the possible embargo by Indian government on cement export to neighbouring countries.

 

[Owais]

Equities ease on LSE
RECORDER REPORT LAHORE (May 05 2006): Share prices stayed easier on Lahore Stock Exchange (LSE), as profit-taking in key shares, including fertiliser, petroleum and banking stocks offset the two-day winning streak.

The LSE-25 index closed at 5403.14 points compared with 5412.96 of Wednesday, depicting a slight fall of 9.82 points. Volume also drifted lower to 49.563 million shares from 65.274 million of the previous session, marking a decrease of 15.711 million shares.

Trading began with a positive note, but after staying in positive column, the market turned depressed following profit-taking in key chips. The market showed an outstanding performance during the last two sessions; and almost all key sector shares made hefty gains, therefore, it took a breather to consolidate itself, brokers said.

According to them, there was no change in fundamentals of the market; and room for further improvement was still there.

Analysts said that news that the government had decided to list OGDCL's global depository receipts (GDRs) at London Stock Exchange was a positive development, which would boost overall sentiment of the market. "I foresee a very positive outlook of the market ahead, especially for the genuine investors' point of view; and all those with capacity to hold their stocks," an analyst commented on the future prospects of equities. However, small investors are advised to be in limits and not to go for overtrading to avoid losses, he added. Bank and Pakistan Telecommunication were the top gainers while Engro Chemical Pakistan Petroleum, were the major losers of the day.

The sentiment was positive at the open, but subsequently the market underwent profit-taking, dragging the index in minus column, Javed Iqbal, chief executive of Javed Iqbal Securities Ltd, said. He, however, pointed out that the market will soon start behaving normal as there was nothing negative in the background. Cement sector, which, after the government decision to allow its duty free import was depressed, is likely to take the lead once again, amid the reports that India had declined to export cement to Pakistan, he observed.

In all, 108 scrips changed hands on the floor, of which 5 improved, 43 showed negative vibes while 60 were unchanged. In positive column, National Bank gained Rs 2.05, PTCL Rs 1.10, Punjab Modaraba 1st Rs 0.85, PSO Rs 0.80 and PICIC Commercial Bank Rs 0.30. Among major losers, Engro Chemical dipped Rs 10.10, PPL Rs 4.35, UBL Rs 3.00, Pakistan Oilfields Rs 3.00 and Adamjee Insurance Rs 1.95. OGDC topped the volume leaders column with 5.779 million shares followed by DG Khan Cement with 5.637 million shares.