Pakistan Economy - News & Updates - Archive

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Interventions to control rupee’s value : State Bank’s foreign exchange reserves decline by $270 million​

KARACHI: Foreign reserves held by the State Bank of Pakistan (SBP) took a plunge of $270 million during the week ending on November 17.

The foreign exchange reserves held by the SBP plunged to $13.913 billion on November 17 from $14.183 billion on November 10.

Bankers said this happened because the central bank was active in the interbank foreign exchange market, selling dollars to support the falling domestic currency. It has been intervening in the market since last week, pouring in as much as $100 million on some occasions.

The rupee had fallen to Rs 61.19 for a dollar during the last week, which necessitated SBP’s intervention. The central bank came into action, pumping in dollars and bringing down the greenback’s value to below Rs 61.

However, demand pressures persisted due to increased importers’ buying and outflow from Special Convertible Rupee Accounts (SCRA). As a result, the central bank had to intervene several times during the last week, drawing from its foreign exchange reserves to sell the US currency in the market.

Importers have increased their forward buying, fearing that the value of dollar might surge in case the government took any extraordinary steps (like freezing of foreign currency accounts), said bankers.

Pakistan’s imports have been exceeding its exports by a big margin, putting pressure on its domestic currency. This gap in demand and supply is met through investment and inflows of remittances from abroad. Since portfolio investment has been coming down due to imposition of state of emergency, the pressure on rupee has been increasing. A net outflow of $192 million has been recorded in SCRAs from November 1 to 19. Emergency was imposed on November 3.

The net foreign reserves held by banks other than SBP also fell. They came down from $2.204 billion on November 10 to 2.184 billion on November 17.

The total liquid foreign reserves held by the country declined from $16.387 billion on 10th November to $16.097 billion on 17th November.

Daily Times - Leading News Resource of Pakistan

 

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Textile exports marginally up at $3.6bn in 4 months​

KARACHI: Export of textile products recorded a marginal growth of 1.03 percent in July-October of current fiscal to $3.649 billion over $3.612 billion in the corresponding period of last year.

In month of October, the export growth was not encouraging as it grew slightly by 2.74 percent to $ 836.855 million over $ 814.552 million in the same month of last year and slumped heavily by 9.28 percent when compared to export figures of preceding month when it stood at $ 922.416 million.

The stagnancy in the growth of the textile sector could be attributed to subsequent negative growths — 0.79 per cent in September 2007, 5.55 per cent in August 2007 and marginal growth in July & October 2007.

The events of past few months on the political front might be held responsible for this sluggish growth coupled with the uncompetitiveness of our products due to high cost of production, exporters opined.

During these four months, the export of a number of textile categories fell particularly the declining trend of value added textile sector was more worrisome, which was on the downward path since the beginning of this fiscal year.

The latest export performance of textile sector established the fact again that billions of rupees incentives doled out to this vital sector of economy could not help raise its export, which should be a source of concern for the economic managers of the country.

Analysts viewed that the government will have to rethink its policy of giving cash incentives and trace the fault, which lies somewhere else. However, textile exporters contended that this high cost of production, which is stumbling block in the growth of the textile products. “How one can expect the growth in export in a situation when cost of manufacturing is growing with each passing day,” an exporter remarked while referring to the latest hike in gas prices.

Export of readymade garments witnessed a negative growth of 3 per cent in July-October period of the current fiscal year over the same period last year. A negative growth of 3.46 per cent in export of readymade garments was recorded in the month of October 2007 over the same month last year. Figures showed that export of bedwear also recorded a negative growth of 9.29 per cent in the first four months of the current fiscal year over the last year. However, there was a growth of 2.26 per cent in export of bedwear

Daily Times - Leading News Resource of Pakistan

 

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Quarterly update on economy: ADB for ending political uncertainty ​

ISLAMABAD (November 23 2007): The latest ADB's update makes urgent call for ending political uncertainty, to ensure the present economic growth. In its latest Quarterly Update on Economy, the ADB has listed a number of positive developments on the economic front and spoken of some bottlenecks like upcoming power shortages.

But it stresses that "the fundamental issue is a resolution of the current political uncertainties. The forthcoming presidential and parliamentary elections must be seen by the population as fair and need to ensure the continuity and coherence of economic policy so as to sustain economic and governance reforms". The update sees that economy would continue the growth momentum achieving 6.5 percent by June 2008. This showed slight deceleration, because of tightening of the monetary policy to contain consumer demand, high international prices, and continued slow growth in exports.

In its introductory remarks, the update states that robust and broad based growth marked FY2007 (ended June 2007). Vigorous domestic demand was the catalyst, but it also induced inflation pressures. Monetary policy was tightened while fiscal policy remained expansionary, and a key challenge will be to align the two policies more closely. Encouraging revenue performance helped keep the fiscal deficit unchanged relative to GDP, although the trade and current account deficits widened, financed by strong external inflows. A concern is that these inflows could slow or reverse. The present momentum is expected to continue in FY 2008, moderated by the impact of tight monetary policy conditions, high international oil prices, and slow export growth.

According to the report the overall inflation in FY2008 is expected to subside to 6.5 percent. However, if the government borrows more from the banking system to finance higher than budgeted expenditures resulting in a wider than planned deficit, or if external inflows are unexpectedly strong, SBP will likely find it difficult to offset the impact on the money supply and ultimately inflation.

The government is to continue its expansionary fiscal policy in FY2008 as announced in the June budget, with an increase in salaries and pensions of government employees, larger subsidies, and a 20 percent hike in development spending. Expenditure on earthquake areas will continue, and relief and rehabilitation of districts in Sindh and Balochistan, badly affected by the recent rains and floods, will add to public spending. Servicing the domestic debt will also remain at high levels. The central board of revenue (CBR) expects receipts to stay robust, and the government has set a 21 percent improvement target in revenue collection for FY2008. Taking these factors into account, the update forecasts the fiscal deficit to be 4.2 percent of GDP in FY2008, slightly above the government budget plan of 4.0 percent.

On the external side, relatively slow growth in exports is projected because of continuing weakness in textiles, while import growth is expected to be elevated, reflecting a larger oil bill and continued robust expansion in investment. Accordingly, the trade deficit is likely to remain heavy at 11.4 billion dollars or 7.1 percent of GDP. While the net services and income deficits will continue to widen, workers' remittances, targeted to reach 6.2 billion dollars, should hold the current account deficit to 8.8 billion dollars, or 5.5 percent of GDP, in FY2008. This level is well beyond the ADO 2007 estimate of 3.9 percent of GDP.

Overall, Pakistan's growth over the 4-year period FY2003-2007 has averaged an impressive 7.5 percent, and this rate could be sustained in the medium term if two conditions are met: macroeconomic fundamentals remain strong, and policy commitment to governance and economic reform continues. Also, despite recent improvements, the still-low investment and savings rates represent a constraint to achieving and maintaining high growth, and that has to be addressed.

The lack of industrial and export diversification has to be rectified, to bring down persistent growth in the current account deficits to levels consistent with sustainable financing.

As a matter of some urgency, ongoing power shortages, which could become a bottleneck to growth, need to be resolved. Yet the fundamental issue is a resolution of the current political uncertainties. The forthcoming presidential and parliamentary elections must be seen by the population as fair, and need to ensure the continuity and coherence of economic policy, so as to sustain economic and governance reforms.

Business Recorder [Pakistan's First Financial Daily]

 

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Gas pipeline project: Islamabad and Tehran initiate technical parleys ​

ISLAMABAD (November 23 2007): Following India's exit from the cross-country gas pipeline project, Islamabad and Tehran have initiated technical dialogue for gas transportation from Iran to Pakistan. A technical team from Iran is in Islamabad for discussions to prepare a revised plan for the project. The technical discussions are likely to continue for next two days.

The teams will present their reports on the outcome of the discussions to their respective governments for decision-making. Sources said technical teams were discussing issues such as route for the pipeline, its size, backup storage facility, taxation, security and safety and the pricing system that envisages review of gas rates periodically.

The two sides had agreed in Tehran meeting last month to push forward the project without India. They had also agreed that Iran and Pakistan will lay down the pipeline on their respective territories. The pipeline size will be of big dia to transport at least one bcf gas per day. The two sides also have understanding that they will welcome India whenever it intends to join the project. As long as India stays away from the project Pakistan will buy one bcf gas per day.

Business Recorder [Pakistan's First Financial Daily]

 

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'Netherlands fifth most important export destination' ​

SIALKOT (November 23 2007): Netherlands has always been an important economic partner of Pakistan and there is a great potential for further expansion of bilateral trade between the two countries.

Addressing a meeting held here on Thursday in connection with presentation on 'Netherlands Toolkit' President Sialkot Chamber of Commerce and Industries (SCCI) Sheikh Abdul Waheed Sandal said that the support and assistance being extended by Netherlands to Pakistani businessmen would greatly help in this direction.

Sandal said that in European Union, the Netherlands is Pakistan's fifth most important export destination after United Kingdom, Germany, Italy and France.

Pakistan enjoys favourable trade balance with Netherlands, Sandal said adding presently exports to Netherlands are $287 million and imports are around $194 million with the total trade volume of more than $480 million.

He said that in order to further enhance trade volume between the two countries better communication is direly needed. To make progress in this regard active engagements of chambers of both the countries, exchange of trade delegations and holding of joint trade exhibition are more important, he added.

The SCCI President further stated that in recent past Netherlands has emerged as one of the most important foreign direct investor in Pakistan adding presence of 19 Dutch multinationals bear evidence to the strong growth in economic relations between the two countries due to the policies of Pakistan government based on de-regularisation, liberalisation and privatisation.

In his presentation Deputy Head/First Secretary of Royal Netherlands Embassy to Pakistan Marc Leon Mazairac said that Netherlands was making adequate efforts to increase the share of developing countries on the European Union market.

Marc Leon said that CBI, an agency of Dutch Foreign Ministry serves three target groups like exporters in Pakistan and it will offer market information, matchmaking and long-term export development programmes aimed at preparing companies and their products for EU market besides, CBI will also support companies in maintaining or expanding their existing market share.

Business Recorder [Pakistan's First Financial Daily]

 

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Pakistani stocks up, led by energy sector​

23 Nov, 2007, 1118 hrs IST, REUTERS



KARACHI: Pakistani shares rose more than 1 per cent in early trade on Friday, led by the energy sector as investors accumulated shares on cheap prices, amid positive developments on the political front, dealers said.

The Karachi Stock Exchange (KSE) benchmark 100-share index gained 1.08 per cent, or 146.52 points, to 13,689.39 on turnover of 41 million shares by 10:10 a.m. (0510 GMT).

The free-float KSE-30 share index was up 1.34 per cent to 16,439.53 points.

"The market is positive today as there have been further positive political developments as Nawaz Sharif expected to come back," said Mohammed Sohail, Director Equity Broking at JS Global Capital Ltd. Former Prime Minister Nawaz Sharif, the man President Pervez Musharraf deposed in 1999, is set to return to Pakistan within days, an aide said on Friday.

His return is seen as promoting reconciliation and stability. Dealers said the energy sector drew investor interest as it had been underperforming the market. "Energy shares are still at attractive prices compared with the market and even regionally," said Faraz Farooq, an analyst at First Capital Equities Ltd.

The KSE-index is up almost 35 per cent since the beginning of the year while Oil and Gas Development Co Ltd (OGDCL) is up only 5.8 per cent while Pakistan Oil Fields (POL) is down 4.15 per cent. Among heavyweights, OGDCL rose 1.55 rupees to 122.50, POL was 8.40 rupees higher at 343.40, and National Bank Ltd <NBPK.KA> gained 3.05 rupees to 240.25.

Pakistani stocks up, led by energy sector- Global Markets-Markets-The Economic Times

 

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Importance of engineering sector highlighted ​

Saturday, November 24, 2007

ISLAMABAD: Minister for Industries, Production and Special Initiatives, Salman Taseer has emphasised the need of accelerating the process of development in the engineering sector as it contributes to economic progress of the country.

He expressed these views during his visit to the Engineering Development Board (EDB) on Friday. Zahid J Yaqoob, General Manager (Policy) briefed him on the boardís working, achievements and future plans.

The minister described the engineering sector as the most important sector for the future of Pakistan. He directed the authorities that the board should expand its activities so that major sub-sectors of engineering could be developed.

Taseer said that the Ministry of Industries, Production and Special Initiatives was preparing comprehensive industrial policy for rapid industrialisation of the country. He invited EDB to provide necessary inputs on engineering sector for it. Noting the importance of the steel in development of engineering sector, he said that country needs more steel mills so that raw material requirement of the industry could be met.

CEO, EDB Almas Haider briefed the minister about the history of the board and engineering vision. He also highlighted various issues of engineering sector. Haider said that EDB was ready to present five-year tariff programme for each sub-sectors of engineering after successfully introducing the same in auto sector.

The minister assured full support to EDB in meeting national targets. Secretary, Ministry of Industries, Production and Special Initiatives Shahab Khawaja and Additional Secretary, Abdul Hafeez were also present in the meeting.

Importance of engineering sector highlighted

 

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Russia lifts ban on citrus, opens rice market​

ISLAMABAD, Nov 23: Russia on Friday announced lifting of ban on the import of Pakistani citrus fruit and hinted towards re-opening its market for the Pakistani mango and finally rice in the near future.

After three days of deliberations held here, the Pakistani delegation led by the federal food ministry’s additional secretary Saleem Jhagra convinced the Russian quarantine team to announce lifting of the ban, which had adversely affected the overall performance of the country’s agricultural exports and its future prospects.

Russia had banned import of Pakistani agricultural products in the end of year 2006 after its phyto-sanitary watchdog found an insect ‘Khapra Beetle’ in a rice shipment sent from Pakistan.

Meanwhile, a notification has been issued from Moscow directing the country’s customs authorities to immediately facilitate the unhindered access of Pakistani citrus to its market.

“This is a major breakthrough and success for our team,” Mr Jhagra told Dawn soon after the hours long meeting with the Russian team. He said the notification was issued from Moscow as the country’s quarantine officials in Islamabad called their high ups back home and informed them about their decision.

“Now, the seven Central Asian countries, once part of the USSR, will also hopefully re-open their markets for the Pakistani farm products,” Mr Jaghra said.

He said these countries followed the Russian food and health safety standards and never allowed import of products, which had been banned by Russia.

The additional secretary said that the export of mango to Russia would also be resumed and another team from Moscow would visit Islamabad to discuss lifting of ban on Pakistani rice.

According to an agreement reached between the two countries a few Russian quarantine inspectors would stay in Sargodha and would inspect kinno consignments meant for Russia.

Hence, there is no chance that the Pakistani consignments would be turned back from Russia as the Russian inspectors would stay here throughout the citrus season, the official added.

Before the ban, Pakistan exported 30,000 tons of citrus to Russia, about 15 per cent of its total export (620,000 tons).

It is hoped that the Pakistani citrus exports to Russia may be double this season due to the increased production of the small size kinno – a hot favourite of the Russian consumers.

The Pakistani inter-ministerial team, which also included representatives of the private sector, had visited Moscow in August to discuss the issue, which ultimately led to the suspension of the ban.

Russia lifts ban on citrus, opens rice market -DAWN - Business; November 24, 2007

 

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$46m plan to boost microfinancing​

RAWALPINDI, Nov 23: A $46 million programme will boost commercialisation of the microfinance sector and make it available to about 160,000 new clients -- at least half of them women.

The programme for increasing sustainable microfinance will be partly funded by a loan of $35 million from the International Fund for Agritultural Development (IFAD).

“It is time for microfinance in Pakistan,” says Nigel Brett, IFAD country programme manager for Pakistan.

“Future growth in this sector will depend partly on microfinance institutions and commercial banks forging successful financing partnerships. This programme will work to build such partnerships,” he added.

The loan agreement was signed at the IFAD headquarters in Rome on Thursday by the Minister and Charge d’ Affaires of Pakistan Embassy in Rome, Jamil Ahmad, and IFAD’s President, Lennart Bege.

Banks and commercial financial institutions in Pakistan will contribute 10.3 million dollars to the programme.

The Pakistan Poverty Alleviation Fund (PPAF) will also provide 700,000 dollars and its partner organisations a further 600,000 dollars.

Access to micro-finance in Pakistan is still very limited and unmet demand is enormous. To date, the sector has relied largely on donor funds.

“These existing funds are already failing to meet demand and only limited donor funding can be expected for micro-finance in the future,” says Brett. “Unless commercial funding sources can be tapped, the growth of the sector will be constrained.”

Pakistan’s government recognises micro-finance as an important tool for reducing poverty in the country and supports the principles of market competition, commercialisation and innovation.

It wants to reach a target of three million borrowers within the next three years.

The country’s banks and micro-finance institutions have said they are willing to work together to expand outreach in services, such as loans, savings, insurance and credit.

The IFAD-supported programme will work with three groups: small farmers, livestock owners, traders and micro-entrepreneurs; women and households, headed solely by women; and vulnerable rural households living below the poverty-line.

“When the programme closes, a number of high-performing micro-finance institutions reaching out to these groups will have developed partnerships with commercial banks,” says Brett.

“Through programme-supported mechanisms, such as cash collateral, guarantees, letters of credit and equity contributions, commercial banks will increase their lending to micro-finance institutions and this will lead to the overall growth of the micro-finance sector.”

With this programme, IFAD loans and grants totalling more than $422 million have helped finance 22 programmes and projects in Pakistan.

$46m plan to boost microfinancing -DAWN - Business; November 24, 2007

 

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$1bn to be raised for Wapda​

ISLAMABAD, Nov 23: Pakistan plans to raise more than $1 billion from overseas investors next month to enable the cash-starved Water and Power Development Authority (Wapda) to fund some of the projects needed to be undertaken to overcome the country’s worst ever electricity shortage.

A finance ministry official told Dawn the government was assisting Wapda and Pakistan Electric Power Company (Pepco) to issue international bonds of over a billion dollars to meet the needs of some hydropower projects, including the 969MW Neelum-Jhelum Hydropower Project.

After recent restructuring, Wapda is now responsible for irrigation and hydropower projects while Pepco, an umbrella organisation of power sector, looks after thermal power generation and distribution companies.

Some of the funds to be generated through the bonds could be used for general budgetary support in view of rising foreign debt repayment requirements but the primary objective would be Wapda’s foreign exchange needs, the official said. The bonds would most probably be of 5- and 10-year maturity and would be backed by the sovereign guarantees of the government of Pakistan, he added.

He said the government was in contact with about a dozen leading local and international banks as part of groundwork leading to the formal launching of the bonds next month so that the transaction could be closed within December. Wapda currently faces a shortage of about 3,000MW in peak hours, resulting in load-shedding across the country, mostly in rural areas. The situation aggravates when generation from the hydel sources drops owing to reduction in river flows. An official said that Wapda’s hydel generation had gone below 2,000MW against its total installed capacity of more than 6,500MW.

Wapda has been under immense financial pressure in recent months owing to non-payment of over Rs60 billion bills by the public sector and another Rs30 billion in subsidy being held back by the ministry of finance despite government’s commitment made last year. This stems from the 33 per cent tariff increase allowed by the National Electric Power Regulatory Authority (Nepra) last year, but the government decided to pass on only 10 per cent to consumers and promised to subsidise the remaining part.

The finance ministry, however, did not pay this subsidy to Wapda, and is now asking the water and power ministry to notify the remaining 23 per cent tariff increase allowed by Nepra last year.

The power ministry, however, is hesitant to increase tariff at its own unless a fresh government decision is taken. As a result, not only the self-financed development projects of Wapda are getting delayed but the fuel suppliers’ ability to finance oil supplies is being affected, and problems are being created for independent power producers. This has also triggered a chain of non-payment resulting in creation of a huge inter-corporate circular debt. Pakistan had a comfortable supply position till recently, but started facing shortages due to restrictions on Wapda to develop new thermal power projects and Wapda’s refusal to offer reasonable tariff to hydel projects, coupled with higher economic growth over the past few years. As a result, the consumers suffered the worst-ever electricity crisis during summer this year.

The World Bank estimates power shortage to the extent of 5,500MW by fiscal 2010 if new capacity is made available now. These estimates suggest the country is most likely to face a major energy crisis in natural gas, power and oil in three to four years that could choke the economic growth for many years to come.

The total energy requirement would increase by about 48 per cent to 80 million tonnes of oil equivalent (MTOE) in 2010 from about 54 MTOE currently, but major initiatives for meeting this gap are far from turning into reality. A major shortfall is also expected in the natural gas supplies.

According to official energy demand forecast, the demand for natural gas, having about 50 per cent share in the country’s energy consumption, would increase by 44 per cent to 39 MTOE from 27 MTOE currently. Partly contributed by gas shortfalls, the power shortage is expected to be over 5,250MW by 2010, a little lower than World Bank estimates of 5,500MW.

Simultaneously, oil demand would increase by over 23 per cent to about 21 million tonnes in 2010 from the current 16.8 million tonnes. This would leave a deficit of about nine million tonnes of diesel and furnace oil imports, he said. Since the gas shortfalls were expected to be much higher, the country would need to enhance its dependence on imported oil, thus increasing pressure on foreign exchange situation, more so as international market continues to go up.

$1bn to be raised for Wapda -DAWN - Top Stories; November 24, 2007

 

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Pakistan’s borrowing from IDB to cross $600m​

ISLAMABAD: Pakistan’s borrowing from the Islamic Development Bank (IDB) for imports of crude oil and petroleum products is expected to cross well over the $600 million mark this fiscal year on account of an unprecedented rise in the prices of crude oil in the international market, sources told Daily Times here on Friday.

IDB loans amounting to $270 million, $194 million, and $25 million were utilized during the financial years 2004-05, 2005-06 and 2006-07 respectively. Two agreements of $200 million each were signed with the IDB in April and May 2007 – out of these, $300 million have been utilized so far and the remaining $100 million are expected to be utilized in the near future.

Usually loans amounting to around $200 million to $300 million are annually extended by the IDB, and the Finance Division makes budgetary provisions for these. Loans are provided in the trenches of $15-25 million under Import Trade Financing Operations, Export Financing Scheme and Syndicate Morabaha Financing arrangements. There is no financial liability on the part of the petroleum and natural resources ministry or the oil importing companies.

Pakistan’s borrowing from the IDB has already crossed the $200 million average annual borrowing limit and has touched the $400 million mark. These borrowings are expected to cross well over $600 million this fiscal year.

Pakistan’s oil import bill surged by 8.68 percent to $2.859 billion during July-October of the current fiscal year (as opposed to $2.631 billion over the same period last year). Official data reveals that the import bill of petroleum crude was up by 18.30 percent to $1.491 billion in first four months of 2007-08 (compared to $1.26 billion over the same period last year). The import of petroleum products, however, was almost flat at $1.368 billion during the period under review (as opposed to $1.371 billion over the corresponding period last year).

Sources said that the IDB loans are arranged annually by the Economic Affair Division for financing the import of petroleum products and crude oil through Pakistan State Oil (PSO) and Pak-Arab Refinery Company (PARCO) respectively. The purpose behind this arrangement is to support the balance of payments.

Loan agreements are signed either by the Petroleum and Natural Resources secretary or Economic Affairs Division secretary on behalf of the Government of Pakistan (GoP). PSO and PARCO act as executing agents and the State Bank of Pakistan (SBP) extends a guarantee on behalf of government of Pakistan.

Normally the maturity period of these loans is 12 months. PSO and PARCO then open Letters of Credit for the import of oil and deposit rupee equivalent funds with the SBP in the appropriate head of account 30 days after the Bill of Lading date of each oil cargo. Payment to oil suppliers is made directly by the IDB. The repayment of principle and the mark-up amount is made by the SBP after maturity. Repayment instructions to the SBP are issued by the EAD. Moreover, foreign exchange fluctuation is also picked up by the EAD through the SBP.

Daily Times - Leading News Resource of Pakistan

 

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Meezan Bank takes part in Rs 53bn investment​

KARACHI: Meezan Bank has made Rs 53 billion worth of investment banking transactions for corporate entities during the year 2007, according to a press release issued Friday.

This includes Rs 10.6 billion for Liberty Power Tech Limited in a privately-placed Sukuk, Rs 8.58 billion to Attock Gen Limited in a Syndicated Finance facility, Rs 8 billion to Pakistan Water and Power Development Authority (WAPDA) in SLR Eligible Sukuk, Rs 7.7 billion to Dawood Hercules Chemicals Limited in Syndicated Finance, Rs 3 billion to Engro Chemical Pakistan Limited in a privately-placed Sukuk, Rs 2 billion to Sui Southern Gas Company Limited (SSGCL) in a privately-placed Sukuk, Rs 2 billion to the Pakistan International Airline Corporation (PIA) in SLR Eligible Sukuk, Rs 2 billion to the D.G. Khan Cement Company in a Syndicated Finance facility, Rs 500 million to the Quetta Textile Mills Limited in a privately-placed Sukuk, Rs 800 million to Arzoo Textile Mills Limited in a privately-placed Sukuk and Rs 625 million to Sitara Chemical Pakistan Limited in a privately-placed Sukuk.

Meezan Bank president and CEO, Irfan Siddiqui, said that the bank was striving to ensure a rapid expansion of Islamic banking in all financial spheres, and that the Pakistani industrial sector was showing a significant paradigm shift away from conventional banking to the Islamic mode of finance.

Daily Times - Leading News Resource of Pakistan

 

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Daily-use items’ prices rise 8.36pc ​

Sunday, November 25, 2007

ISLAMABAD: The Sensitive Price Indicator (SPI) year-on-year of 53 daily-use items for the week ended on November 22, 2007 has shown an 8.36 per cent increase as compared to the corresponding week of last fiscal.

The significant feature of the weekly bulletin of the Federal Bureau of Statistics (FBS) was that year-on-year rise in the prices of some necessities and kitchen items was exorbitant. These items were wheat and wheat flour, rice, vegetable ghee, red chillies, farm egg, chicken (farm), fresh milk, powdered milk, cooking oil and firewood, which hit the low-income group.

The bulletin on SPI, based on data collected for about 53 items from 17 centres, recorded that 18 items registered increase, and 11 items showed decline, while prices of 24 items remained unchanged. However, further analysis of the data revealed that year on year basis, 13 items were dearer by double digits. These include rice basmati (broken) whose price is up by 60 per cent, mustard oil 57 per cent, vegetable ghee (loose) 53 per cent, rice Irri-6 51 per cent, masoor pulse 40 per cent, vegetable ghee (tin) 31 per cent, cooking oil (tin) 30 per cent, wheat 27 per cent, wheat flour 25 per cent, chicken (farm) 24 per cent, washing soap 12 per cent, fresh milk 12 per cent and curd price up by 12 per cent over the same week of the last fiscal.

In a span of one week the prices of chicken (farm) shot up by 2.67 per cent, rice Irri-6 1.75 per cent, washing soap 1.34 per cent and mustard oil 1.12 per cent. The FBS figures further showed that though prices of 24 items posted no change during the week, yet compared to the corresponding week of last year, several items are now costly. For example powdered milk is dearer by 24 per cent, match box 25 per cent, firewood 13 per cent and plain bread up by 13 per cent.

It also indicate that the prices of 11 items decreased, but still compared to the prices of corresponding week of last year, some items recorded increase in their prices ie red chillies up by 42 per cent and egg (farm) by 19 per cent.

Daily-use items’ prices rise 8.36pc

 

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KSE recovers 650 points during the week ​

Sunday, November 25, 2007

KARACHI: After remaining bearish for the last four consecutive weeks, the positive trends prevailed at Karachi bourse this week (Nov 19-23) and all the five day-long trading sessions managed to finish with extended gains.

KSE 100-share Index posted a handsome recovery of 650 points or five per cent on week-on-week basis and concluded at 13,732 points this weekend.

During the last one month (prior to this outgoing week), the benchmark 100-Index had lost 1,706 points or 11.5 per cent to 13,082 points by the last weekend (Nov 16) on account of profit booking that later converted into panic selling following imposition of emergency on Nov 03.

The free-float market capitalisation based 30-Index also regained 992 points or almost six per cent to 16,529 points on weekly basis.

The average daily volumes in the ready market surged to 225 million shares from previous week at 204 million shares turnover.

Sentiments turn bulllish: Another analyst said that the local participants widely welcomed the latest moves in the political arena. The Supreme Court dismissal of all petitions against Gen. Pervez Musharraf and accordingly expected oath taking of President of Pakistan in a day or two and doffing of his army uniform simultaneously; all were in line with the market expectations.

These developments in the country turned the negative sentiments in the market to positive during the week.

Energy stocks lead rally: Buying on across the board, under the lead of oil exploration and production (E&P) companies and oil marketing companies (OMC) increased the overall market capitalisation by Rs236 billion and stands at Rs4.240 trillion by the weekend.

International oil prices moved near S$100 per barrel mark this week, resulting in massive buying in the energy sectors. E&P sector led the rally, increasing its market capitalization by 7.4 per cent on week-on-week basis. Moreover, OMCs and refineries, on the expectation of better second quarter results due to inventory gains, showed a rise of 6.5 per cent and four per cent, respectively. Furthermore, expectation of increase in retail petroleum prices improved investor sentiments in OMCs, Bilal Hameed of JS Research reported.

Amongst other sectors, Insurance, Banks and Fertilizer improved by 9.5 per cent, 7.7 per cent and 6.4 per cent, respectively on account of their attractive valuations owing to decrease in stock prices in the past one month, he added.

Local institutions uphold: Strong buying from the locally run governmental institutions e.g. National Investment Trust (NIT), State Life Insurance, Employees Old Age Benefit Institute (EOBI) and some others was noted in the market that also helped in generating enhanced volumes comparatively.

These institutions extended their possible support to mitigate the bad impression of emergency rule at the bourse following they developed understanding with government to do so, sources informed. The other speculators with small amount and short temperament followed the institutional movement and took high risk of attaining smart price differential or payouts in future.

They also bought shares with borrowed money, as CFS investment surged to the ceiling level of Rs55 billion from Rs50 billion on last weekend.

Foreigners on back foot: However, the foreign fund managers continued to withdraw their funds from the markets due to the prevailing uncertainty on political front. They also paid heed to the Commonwealth decision of suspending Pakistan membership from the 53-nation bloc, as Gen. Musharraf failed to lift the emergency rule in the given timeframe, as was demanded by this organization on Nov 12.

SCRA balances further shrank to US$72 million to date for the fiscal year 2008 from US$100 on the last weekend. During the week, the total overseas inflows and outflows in the account stand at US$108 million and US$136 million respectively. The difference of inflows and outflows calculated at US$28 million were withdrawn this week.

KSE recovers 650 points during the week

 

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Cotton import hits record 1.24m bales ​

Sunday, November 25, 2007

KARACHI: Textile mills have imported highest-ever quantity of 190,055 tonnes or 1.24 million cotton bales worth $286.931 million or Rs17.371 billion by October 31, 2007 from USA, India and other sources due to crop shortage in the country.

Provisional data of the Federal Bureau of Statistics for July-October 2007 shows a phenomenal increase of 154.62 per cent in raw cotton import in just four months.

Mills had imported 81,839 tonnes or 491,034 bales of raw cotton worth $112.688 million during July-October 2006.

Chairman Cotton Brokers Forum, Naseem Usman said that the news about the huge import of cotton has slowed down cotton trade at Karachi Cotton Exchange. The spot rate of Karachi Cotton Association (KCA) has declined by Rs100 to Rs3,125 per bale of 37.3324 kg on Saturday due to lack of interest, he added.

Usman said that rates of good quality cotton have also fallen in Punjab by Rs150 per bale due to declining demand.

Cotton ginning factories have closed down their operations across the country on the call of Pakistan Cotton Ginning Association (PCGA) till Sunday (November 25) as a “protest” against the mixing of water and wood in cotton by growers and taxes on ginners at various levels.

PCGA has also convened a general body meeting in Multan on November 25, to discuss the market situation over the reports of import of about 2 million bales in the country.

Cotton import hits record 1.24m bales