Pakistan Economy - News & Updates - Archive

[mujahideen]

Oil prices, power supply to haunt new govt

By Sabihuddin Ghausi

KARACHI, Feb 18: Whichever political party or coalition of parties is thrown up by Monday’s general elections, to rule the country for next five years, one thing is certain that the government’s future economic policies are bound to be populists, employment generating, promoting some sort of social equity to bridge the wide social and economic disparities created in last eight years because of so called pro-business policies.

The incoming government will have to address immediately the wheat procurement issue, worst power supply problem in summer, the oil prices and, of course, the supply and prices of a vast number of essential commodities.

“The choice is either you keep big feudal lords, stock exchange brokers and big businesses in good humour by keeping people in perpetual deprivation or give some relief to the low-wage industrial workers and office employees in cities and small farmers, fishermen and artisans in rural areas,’’ a university teacher said.

“Compare the socio-economic situation of today with that of 1968 and 1969 when late Ayub Khan’s ‘decade of development’ had given rise to 22 families syndrome,’’ he argued while pointing out that the then undivided Pakistan (East and West Pakistan) was fiercely hit by a backlash wave of capital accumulation policies of Shoaib and Uqaili at the fag end-end of Ayub’s decade.

“The amount of frustration and pent up emotions are no less now than what were 40 years ago,’’ he observed. Then in 1968, the stage was set for bringing Pakistan Peoples Party in power in 1970 with a popular vote. Conditions are not different now in 2008.

But whichever party, even if it is PML (Q), comes with majority votes, the leaders are bound to give a hard look at the economic policies of their last eight years. “These policies are not sustainable and are bound to create a social commotion,’’ he declared.

Chaudhry Pervez Elahi, who led the PML (Q) election campaign, had publicly blamed former prime minister and finance minister Shaukat Aziz on more than one occasion for causing wheat crisis in the country. “Induction of new government coincides with the harvesting of new wheat crop,’’ a senior leader of flour milling industry said.

Neither the previous government nor the caretakers announced any support price for wheat this season. More than 80 per cent wheat farmers are small having 2 acres to 12.5 acres of land. All of them are now in a fix so far as disposal of their wheat is concerned.

Unofficially, Sindh and Punjab governments with Passco are expected to procure some 7 million tons of wheat at Rs600 to Rs650 for 40 kg of wheat from the farmers.

Adding to the woes of small farmers is the fact that a good quantity of imported wheat, ordered sometimes in December, will be landing in April when harvesting in Sindh would be in final stages and in full swing in Punjab.

“Imagine what price the small wheat farmer will get in such a situation,’’ the flour milling leader said. “The previous government and the caretakers have sown seeds of a much severe wheat crisis next season than what we experienced this season,’’ he said.

The warning is that the next government should be ready to face hunger marches on the road and food riots if no steps are taken to give due price to small farmers and ensure uninterrupted supply of wheat flour at affordable prices to consumers in the cities.

Another painful and much-awaited decision for the next government is about oil prices. Oil prices touched about $100 a barrel but the outgoing government preferred to take this hit on the public exchequer. Mounting international pressure has left no choice for the government but to go for elections.

Therefore, a government -- that thrived on support of a small vulgarly rich class -- feared the backlash from the people, if the impact of rising oil prices would have been passed on to the consumers in October or November 2007.

Instead, the government preferred to give oil distribution companies bank bonds thus deferring its liabilities for a few years to the future government. Shahid Javed Burki, the caretaker finance minister in 1996 did the same when he raised interest rates from 16 per cent to 18 per cent on defence saving certificates. “Term deposits in banks flew to the defence saving certificates at an unprecedented rate,’’ Dr Ashfaq Khan, special secretary finance disclosed recently while complaining that the present government paid liability of Rs160 billion last year and is paying Rs100 billion this year on ten-year maturity of all those certificates.

How would the government address the shortage of electric power supply is one issue that is closely linked with the industrial and agricultural growth and to beat the scorching heat next summer. Karachi has seen power and water riots since the decade of eighties.

The privatisation of KESC did not bring any joys for some 20 million population of the city. It is same now in other parts of the country. Had Benazir government not initiated private power projects in 1994, the electric supply situation would have been worse. Her government negotiated power projects at six cents a unit on which there was a lot of hue and cry. The present government is offering 10 and 11 cents a unit.

Back in 1995 and 1996, the government negotiated coal-based power projects with foreign investors. The powerful oil lobby in Islamabad is putting all hurdles in setting up these projects. Could the new government make some headway in this direction? ask the eager electorates.

Oil prices, power supply to haunt new govt -DAWN - Business; February 19, 2008

 

[Neo]

Banks planning to open 800 new branches ​

No let-up in consumer woes as expansion programmes continue,banks avoiding rural areas despite SBP directives​

Wednesday, February 20, 2008

KARACHI: Banks are planning to add 800 more branches in their network during this calendar year that may create 10,000 to 12,000 thousand fresh job opportunities, a knowledgeable banking source said. Last year banks had opened 1,000 new branches.

Banks are also planning to increase their customer base and are estimating lending to one million more borrowers. Currently banks have around six million barrowers. According to SBP’s regulations it is mandatory for banks to open 20 percent of their new branches in rural areas but regrettably the banks least care about these regulation and prefer to open new branches in main cities and towns instead of rural areas.

In last few years the financial sector grew rapidly and consumer financing also expanded manifolds. With expansion of banking sector and subsequent surge in consumer financing the different cases in which consumers’ rights were exploited badly also appeared on the surface. But unfortunately consumer protection laws could not be devised accordingly.

However, Complaint Division of State Bank of Pakistan (SBP) was entertaining such banks’ victims. “SBP takes serious action against such banks which are found exploiting consumers,” a senior official at SBP told The News. But he said that as per policy central bank does not interfere in cases which are under trial or sub-judice.

“There are six million borrowers in Pakistan of which SBP receives only four thousand complaints per annum which are very low as compared to total number of borrowers,” the official said.

The Banking Ombudsman court is another forum which hears complaints against banks and provides justice to affectees, but it is very unfortunate that majority of such cases in which consumers’ rights are exploited are not reported at any of the two forums. Moreover, the legislators also failed to protect rights of consumers’ through legislation of proper consumer protection laws. The Automatic Teller Machine (ATM) the basic automated banking service has become popular in the country in last few years. The ATM enable banking customers to excess their accounts 24 hour in 7 day, but underneath this facility there are some sinister problems which are shaking trust of ATM users.

The fake, damaged and written over currency notes doled out to customers by ATM machines is another problem among other numerous daily basis technical issues such as network connectivity and lack of currency notes to dispense.

A customer narrating his saga said, “On Feb 12 at around 11 am I withdrew Rs7,000 from an ATM in Clifton and proceeded to pay several bills. At one of these places, the cashier refused to accept a note of Rs500, which he said had a line on the Quaid’s face written in ink. Despite insistence he said that he could not accept the note. I then went to my bank and asked them to replace it. I did not think it would be a problem because a bank’s ATM had given me the note and commercial banks are legally bound to replace soiled or damaged notes.

However, to my surprise I found that the bank could not replace the note. I told them that their own ATM had dispensed it but to no avail and as for replacing soiled or damaged notes, a senior official at the branch said that the note was neither, I asked him what it was and he did not give me clear enough reply. He also said that if the note was torn the bank could have replaced it, to which I asked him should I tear it, to that also, he gave no reply. I am stuck with a note that nobody not even the bank who’s ATM issued it will accept.”

Banks planning to open 800 new branches

 

[Neo]

Omantel buys Worldcall in $193m deal ​

Wednesday, February 20, 2008

MUSCAT: Oman Telecommunications Co (Omantel) said it paid $193 million for a controlling stake in Pakistan’s Worldcall Telecom, its biggest foreign investment so far as competition at home intensifies.

The purchase, which marks Omantel’s entry to the world’s sixth most-populous nation, will add between 3 and 7 per cent to profit next year, Omantel Chief Executive Officer Mohammed al-Wohaibi told reporters in the Omani capital, Muscat.

State-controlled Omantel said last May it was in talks to buy a Pakistan telecom operator, identifying Worldcall the following month. The company agreed to buy 488.8 million shares equivalent to 60 per cent of Worldcall and will buy another 5 per cent through the Pakistani stock market (KSE), it said in a statement late on Monday.

“Entering the Pakistani market is important because it is one of the markets that has the fastest growth rates due to the dense population and low penetration levels in several telecommunication services,” Wohaibi said in the statement.

When initially agreed last year, the 60 per cent stake was going to cost $204 million, but it was lower now because the Pakistani rupee was weaker against the dollar, Omantel said. “We are not worried about the political situation,” Wohaibi told reporters about Pakistan. “This transaction is a long-term investment for the future ... we don’t feel that those disturbances have any long-term impact.” Worldcall posted a $10 million profit in the year to June 30 on revenue of $70 million, which it expects to boost by 20 per cent this fiscal year.

Omantel buys Worldcall in $193m deal

 

[Neo]

1m tons of molasses to be exported​

KARACHI, Feb 19: The country will export over one million tons of molasses worth $5 to 6 million at an average world market rate of $55 to $60 per ton.

According to estimates the expected bumper sugarcane crop of around 60 million tons will yield about 4.5 million tons of white refined sugar and over 2.5 million tons of molasses.

Molasses exporters have received substantial orders from their buyers and brisk activity is going on at the Karachi Port for loading molasses onto ships. Already, 130,977 tons of molasses have been exported and exporters believe that they would export around one million to 1.2 million tons of molasses this season.

The balance quantity of around 1.5 million tons of molasses would be converted by distilleries into 3 million tons of ethanol. Again this will help the country to earn around $140 to $150 million at an average world market rate of $510 per ton. Last year, 250,000 tons of ethanol was exported.According to the exporters, European Union (EU) member states are the major buyers of molasses, who generally place big orders during early crushing season when the produce is normally of good quality. However, the exporters, who follow good management practices (GMP) laid down by Product Dutch Board, Holland, are getting higher price for molasses.

Responding to a question a leading exporter of molasses and ethanol Mohammad Qasim, who also owns a sugar mill, told Dawn that the 14 distilleries had to strike a balance between production of ethanol and export of molasses. Though most of the distilleries are owned by sugar mills but even then they have to buy large quantity of molasses from other mills to produce ethanol.

Consequently, he said the distilleries, running short of molasses, have to buy it at world market rates from other sugar mills, which is calculated in term of export market. This means when any distillery purchases molasses from other sugar mill it has to calculate the cost and profit on the basis of world market of both the products.

However, Mr Qasim said that there were other problems, which are confronted by the distilleries such as liquidity crunch, production and transportation problems. He said there was an acute shortage of tanker-lorries required for the haulage of molasses.

He said a large number of tanker-lorries were set on fire during the unrest after the assassination of former prime minister Benazir Bhutto on December 27. As a result owners of these vehicles were always apprehensive of the law and order situation, which also badly affects cargo movement from the hinterland to port city of Karachi.

However, he said that once the exporters enter into export contracts they become committed and have to strive hard to ensure timely delivery of molasses. Presently, two vessels with a capacity of around 55,000 tons are waiting off port for loading molasses. Mr Qasim said that the molasses and ethanol exporters faced no problem at the port where state-of-the-art loading, unloading system is in place.

1m tons of molasses to be exported -DAWN - Business; February 20, 2008

 

[Neo]

Stock market buoyant after elections results​

KARACHI: Country’s stock market joined the jubilations of the winning political parties on their victory in general elections when it surged heavily and stock gurus foresee stability and normalcy in the coming days with the smooth transition of power to the winning party.

Benchmark KSE-100 index registered the heaviest gain of 443 points or over 3 percent, which analysts and market players attributed to holding of free and fair polls without any major incident of violence and disturbance.

It bodes well for the future of the country that elections were held in a peaceful manner and losing parties conceded their defeat gracefully, stock brokers said.

Elections are always considered a major event, which may trigger the stock markets either side depending upon the way of polls are held and following political developments.

However, the market players also feel that a likely smooth power transition would also help in further restoring foreigners’ confidence and pave the way for resumption of dollar inflows in the equity market.

They believed that fortunately, as evident by the cross-border valuation yardstick, Pakistan qualifies as one of the cheapest investment options, which will encourage and attract portfolio investment in equity market. “It will attract the foreign investors and they will be more active in post-election political stability,” they added.

“The economy is linked with the politics and any development on the political front has far-reaching impact on the economy,” Arif Habib, a leading stock broker and former Chairman Karachi Stock Exchange (KSE) felt and described the holding of general elections in a peaceful and fair environment a positive omen for the economy in general and stock market particular.

He said in a statement that market sentiments were strong and positive today because of free elections and ensuing events of accepting the defeat by losing parties.

Arif Habib did not see any major change in the current economic policies except minor things because elections manifesto of winning and losing parties carried major similarities.

Also, these were not economic or investment policies, which caused major dent in the popularity of former ruling party but the events on the political side which brought them to knees in the elections.

KSE former Chief noted that peaceful elections have also sent positive signals abroad and would improve the image of the country, subsequently would help in bettering the credit rating.

Stock broker Siddique Dalal welcoming the holding of elections in a peaceful manner said that much challenging times are ahead for the coming government as they would be dealing with some of toughest matters related to economy.

“Stock market views the new political development positively, which would restore the much-needed stability, a pre-requisite for the economic activities,” he noted.

Though there would not by any major change in the economic policies, Dalal said some hard decisions await the government in the economic front.

Pointing out the post-elections formation of new government, he said the Commonwealth is likely to restore Pakistan’s membership, which would be playing well with the foreign investors

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Transition to democracy : ‘Inflow of portfolio investment to resume’ ​

KARACHI: The country is likely to begin attracting foreign investment in its stock markets following the transition to full democracy, stock analysts believe.

An analyst said the outflow of foreign investment from the country’s stocks would now stop and instead the country would again be a recipient of portfolio investment. He said postponement of elections earlier had been a major setback and now that the elections have been held, it is expected that the foreign investors would return towards the country. “Who forms the government is not so important. The important thing is full restoration of democracy,” he said.

The most important thing that should be noted is that every party that has won a significant number of seats is liberal, he said. The impression of Pakistan as “a country of militants” would be removed as a result of the elections, he said.

“With greater political clarity and (hopefully) an investor-friendly government, investors’ confidence (particularly offshore funds) is likely to be restored, thereby, propelling renewed interest in the market,” Muhammad Imran Khan, an analyst at First Capital, said in a report.

“The election delay was one of the major reasons attributable behind the range-bound performance of the market during last one month,” he added.

The KSE-100 index on Tuesday gained 443.34 points or 3.09 percent to close at 14,797.18 points. The KSE-30 index closed at 17,948.26 points with a gain of 652.29 points or 3.77 percent.

“We believe that the market sentiments would be largely driven by the developments on political front in coming sessions with all eyes on the formation of new setup. A likely smooth power transition would also help in restoring foreigners’ confidence and pave the way for the resumption of dollar inflows,” said the analyst.

As evident by the cross-border valuation yardstick, Pakistan qualifies as one of the cheapest investment options, which will encourage and attract portfolio investment in equity market, he said.

Now that political uncertainty has ended, the stocks are expected to make gains, Khurram Shehzad, an analyst at InvestCap said. He said the trade of 373 million shares on Tuesday showed that the investor confidence had increased. Inflow of foreign portfolio investment is also expected to resume, he said.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Hungarian oil firm keen to invest in Pakistan ​

ISLAMABAD (February 20 2008): Hungarian biggest oil and gas firm MOL intends to boost its range in various countries including Pakistan. The company officials said in an interview that MOL is interested in purchasing the several targets including production sites in countries like Pakistan, India, Russia, Libya and West Africa, a private news channel reported.

MOL has tremendous bulge in income last year and in the fourth quarter of 2007, the company earned $525 million.

Business Recorder [Pakistan's First Financial Daily]

 

[mujahideen]

New govt asked to fully implement economic policies

Thursday, February 21, 2008
By Mansoor Ahmad

LAHORE: Managing economy would be a delicate issue for the next government as investors would expect continuation of the economic policies that apparently have failed to resolve the problems of common man.

Economists have said that there was no flaw in the economic reforms introduced by the past regime. The reforms failed to deliver because the state either did not had the political will to implement them in their true spirit or it had lost its writ to ensure compliance.

They said the tax-to-GDP ratio had declined during the past nine years because many sectors of the economy that were included in the GDP could not be brought under the tax net. Tax compliance by the traders dropped drastically as their fixed tax rates were reduced substantially.

They said reduction in traders’ tax was surprising as trading activities increased substantially on domestic consumption-based growth. The number of traders paying even this fixed tax did not increase corresponding to the increase in the number of shops or trading activities.

They said the tax would have to be linked to income. The new set-up would have to muster political courage to impose fair taxes. Tax evasion would have to be discouraged. They said the governance level goes down whenever merit is ignored. The transfer and posting of bureaucracy, they added, on political grounds lower the governance level and spawn opportunities of corruption. They said discretion in posting and transfers would have to go if the new government wants to establish its writ.

The economists said the past regime was against subsidies in its initial years and all financial support to exporters was withdrawn. Special SROs were banned and implicit subsidy through devaluation was stopped.

The exports, they added, multiplied during this period when everyone was operating on a level-playing field. The exports started stagnating and then declining once the government reintroduced subsidies through R&D grants and other measures. They said rates of DAP fertilizer increased after government subsidy as the amount granted by the government was pocketed by the importers.

The fudged figures also contributed to the bad electoral performance of the past government. They said the Punjab government claimed that it created 5.8 million jobs in four years. Had this been true the level of unemployment in Punjab would have reduced substantially? They said the performance speaks itself and there is no need to propagate it.

The economists pointed out that the main concern of the new government would be to control the rates of daily edible items. They said it would not be an easy job. In the long run farmers would have to be motivated to grow more by ensuring higher rates of their produce and availability of quality inputs at reasonable rates.

They said delay in increasing petroleum rates forced the government to resort to debt. They said it has now been universally proved that the government’s debt invariably results in increase in prices and inflation. They said now the surge in oil rates now would have to be managed in different stages.

New govt asked to fully implement economic policies

 

[mujahideen]

Optimistic investors push KSE to all-time high

Banking, cement, telecom scrips lead the rally, oil and energy sectors witness profit-taking

Thursday, February 21, 2008
By Salman Siddiqui

KARACHI: As expected the Karachi bourse benchmark KSE 100-share Index surged to all time high at 14,830 points on Wednesday inching above its previous peak level of 14,815 points recorded on December 26, 2007.

Overnight gains and 163 points surge in opening hour invited profit taking that restricted gains to moderate levels while losers outnumbered gainers on board. “Market has potential to go beyond 15,000 points psychological barrier any moment and it might be Thursday (today) to witness achieving this milestone,” foresaw Ahsan Mehanti, CEO of Shahzad Chamdia Securities and added, “One should also not ignore the chances of profit booking at current inflated share pries, as winning political parties are yet to form the next government.”

The leading benchmark 100-Index also briefly crossed 14,900 points level for the first time in KSE entire history and touched 14,957 points intra-day high in the wee hour - registering a growth of 163 points.

Profit-booking mainly in the energy stocks towards the session end pulled KSE 100-share Index down and finally closed at 14,830 points new historical high level - posting a fresh gain of 32 pints.

Its junior partner the 30-Index also surged by 141 points and closed at a new height of 18,089 points. Turnover remained healthy, but slightly declined to 359.151 million shares as compared to 17-week high of 373.441 million shares changed hands a day earlier.

However, future market volume remained flat at 56.592 million shares against 56.833 million shares generated yesterday. It was the sixth consecutive bull-run session at the local bourse where the cumulative gains of these sessions together stand at 945 points or 6.8 per cent from 13,885 points pre-opening level of Feb 12.

Mehanti sees foreign buying in some of the best performing stocks i.e. Pakistan State Oil, National Bank and MCB Bank. Besides, the local Financial Institution and retail investors’ participation also remained on higher side, he added.

“Today, market failed to sustain high share prices in oil scrips, however, this sector is expected to perform well tomorrow (Thursday), as the oil prices in the international markets have once against surged beyond US$100 per barrel,” he added.

Again, it was banking sector that made the day rally backed by cement and telecom scrips too. Exploration and production (oil) stocks came under selling pressure on technical correction while the fertilizer stocks performed in negative to neutral territory.

Live Securities said, “Compared to its previous session, profit taking dominated the market. Profit booking was expected on Wednesday as 100-Index surged by more than 400-index point yesterday.”

Hasnain Asghar Ali of Aziz Fidahusein said that banking giants witnessed extended buying interest although major buying was of speculative nature. Therefore, positive numbers in main banking stocks (MCB and NBP) allowed the index to keep the positive posture alive, although closing hour saw index make a short visit to negative zone.

With new government still in process of formation, certain questions are still unanswered on political fronts; the economic issues are likely to be addressed after formation of new government the immediate shift in policy stance is therefore expected, he added.

Minus signs, however, led the runners on board, as 214 companies stocks declined against 123 stocks advanced. The value of 45 scrips remained unchanged with total 382 active counters in the broader market.

Highest volumes were witnessed in Arif Habib Securities at 39.027 million closing at Rs182.20 with a gain of Rs3.60, followed by Pakistan Telecommunication Company at 32.135 million closing at Rs44.20 with a gain of Rs1.05, National Bank at 23.927 million closing at Rs259.65 with a gain of Rs2.40, Bank of Punjab at 21.584 million closing at Rs103.70 with a loss of Rs2.70 and Oil and Gas Development Company at 18.764 million closing at Rs128.10 with a loss of Rs1.65.

Optimistic investors push KSE to all-time high

 

[Neo]

Optimistic investors push KSE to all-time high ​

Banking, cement, telecom scrips lead the rally, oil and energy sectors witness profit-taking​

Thursday, February 21, 2008
By Salman Siddiqui

KARACHI: As expected the Karachi bourse benchmark KSE 100-share Index surged to all time high at 14,830 points on Wednesday inching above its previous peak level of 14,815 points recorded on December 26, 2007.

Overnight gains and 163 points surge in opening hour invited profit taking that restricted gains to moderate levels while losers outnumbered gainers on board. “Market has potential to go beyond 15,000 points psychological barrier any moment and it might be Thursday (today) to witness achieving this milestone,” foresaw Ahsan Mehanti, CEO of Shahzad Chamdia Securities and added, “One should also not ignore the chances of profit booking at current inflated share pries, as winning political parties are yet to form the next government.”

The leading benchmark 100-Index also briefly crossed 14,900 points level for the first time in KSE entire history and touched 14,957 points intra-day high in the wee hour - registering a growth of 163 points.

Profit-booking mainly in the energy stocks towards the session end pulled KSE 100-share Index down and finally closed at 14,830 points new historical high level - posting a fresh gain of 32 pints.

Its junior partner the 30-Index also surged by 141 points and closed at a new height of 18,089 points. Turnover remained healthy, but slightly declined to 359.151 million shares as compared to 17-week high of 373.441 million shares changed hands a day earlier.

However, future market volume remained flat at 56.592 million shares against 56.833 million shares generated yesterday. It was the sixth consecutive bull-run session at the local bourse where the cumulative gains of these sessions together stand at 945 points or 6.8 per cent from 13,885 points pre-opening level of Feb 12.

Mehanti sees foreign buying in some of the best performing stocks i.e. Pakistan State Oil, National Bank and MCB Bank. Besides, the local Financial Institution and retail investors’ participation also remained on higher side, he added.

“Today, market failed to sustain high share prices in oil scrips, however, this sector is expected to perform well tomorrow (Thursday), as the oil prices in the international markets have once against surged beyond US$100 per barrel,” he added.

Again, it was banking sector that made the day rally backed by cement and telecom scrips too. Exploration and production (oil) stocks came under selling pressure on technical correction while the fertilizer stocks performed in negative to neutral territory.

Live Securities said, “Compared to its previous session, profit taking dominated the market. Profit booking was expected on Wednesday as 100-Index surged by more than 400-index point yesterday.”

Hasnain Asghar Ali of Aziz Fidahusein said that banking giants witnessed extended buying interest although major buying was of speculative nature. Therefore, positive numbers in main banking stocks (MCB and NBP) allowed the index to keep the positive posture alive, although closing hour saw index make a short visit to negative zone.

With new government still in process of formation, certain questions are still unanswered on political fronts; the economic issues are likely to be addressed after formation of new government the immediate shift in policy stance is therefore expected, he added.

Minus signs, however, led the runners on board, as 214 companies stocks declined against 123 stocks advanced. The value of 45 scrips remained unchanged with total 382 active counters in the broader market.

Highest volumes were witnessed in Arif Habib Securities at 39.027 million closing at Rs182.20 with a gain of Rs3.60, followed by Pakistan Telecommunication Company at 32.135 million closing at Rs44.20 with a gain of Rs1.05, National Bank at 23.927 million closing at Rs259.65 with a gain of Rs2.40, Bank of Punjab at 21.584 million closing at Rs103.70 with a loss of Rs2.70 and Oil and Gas Development Company at 18.764 million closing at Rs128.10 with a loss of Rs1.65.

Optimistic investors push KSE to all-time high

 

[Neo]

US to discuss boosting trade with Pakistan ​

Thursday, February 21, 2008

LAHORE: US Ambassador to Pakistan Anne Patterson has said that she will visit the Lahore Chamber of Commerce and Industry very soon to discuss with the business community as to how trade between Pakistan and the US could be given a further boost.

The US ambassador was talking to LCCI President Mohammad Ali Mian at a luncheon reception, hosted by US Consulate Principal Officer Brian D Hunt at his residence. Frank G Lowenstein, Senior Foreign Policy Adviser to Senator John Kerry, Rexon Y Ryu, Senior Foreign Policy Adviser, Antony J Blinken of Committee on Foreign Relations, US Senate and E Candace Putnam, Political Counsellor, US embassy, also talked to the LCCI president on a number of issues ranging from trade relations to the political situation in Pakistan. The US ambassador said that Pakistan and the United States have excellent bilateral relations, but the trade ties are far behind the desired levels which need to be tackled by both sides on priority basis.

The ambassador assured LCCI President Mohammad Ali Mian that she would take all possible measures to bring both the countries closer in terms of trade and economy. Anne Patterson also spoke highly about the Lahore Chamber of Commerce and Industry for playing a pivotal role in the economic well-being of the country.

The LCCI president informed the US ambassador that Pakistan and the United States have huge trade potential, but it could not be materialised so far only because of a comparatively lesser access allowed to Pakistani businessmen to the US market, as is being given to other regional countries.

“Once the Pakistanis are provided the right amount of access to the US market, the country will not be in need of any sort of aid as trade is the best substitute to aid.” Mohammad Ali Mian said that Pakistani textiles and textile made-ups are the best in the world but are not getting the right place in the US market for multiple reasons that must be taken care of.

While stressing the need for exchange of more and more trade delegations between Pakistan and the United States, the LCCI President Mohammad Ali Mian said that this is the best available solution to increase the volume of two-way trade and improve the perception of Pakistan, which has been tarnished by unseen forces as a result of their ulterior motives.

US to discuss boosting trade with Pakistan

 

[Neo]

SMEDA to help implement UNDP project ​

Thursday, February 21, 2008

LAHORE: The United Nations Development Programme (UNDP) has agreed to engage the Small and Medium Enterprise Development Authority (SMEDA) as an implementing partner at the national level to undertake its gender promotion (GenProm) project in Pakistan.

A three-member delegation of UNDP Islamabad in a meeting with SMEDA Chief Executive Officer Shahid Rashid discussed the scope of SMEDA’s partnership in the GenProm project and agreed that the authority had adequate capacity to work out the industrial sectors identified by UNDP for the project.

The UNDP delegation included Faiza Effendi, Assistant Resident Representative of Poverty Reduction & Gender Unit, Cyra Syed, Programme Analyst of Poverty Reduction & Gender Unit and Sajeel Butt, National Project Manager of GenProm Faisalabad.

UNDP officials informed the meeting that earlier the project was being carried out in collaboration with the Pakistan Readymade Garment Manufacturers and Exporters Association in the Sindh region and the Faisalabad Institute of Textile and Fashion Design in the Punjab region.

The UNDP has established a ‘project management unit’ in each region and hired world-renowned consultant company KSA Techopak for all training-related activities. Skill development for females is being carried out in selected garment factories. About 1,300 female operators and 190 master trainers have so far been trained and employed in 20 garment factories countrywide under the GenProm project. SMEDA CEO Shahid Rashid appreciated the GenProm project for focusing on filling the skills’ gap and generating employment opportunities for female workers in the garment industry.

SMEDA to help implement UNDP project

 

[Neo]

Bhasha dam Delay in construction to increase cost​

ISLAMABAD: The further delay on the construction of Diamer Bhasha Dam project is likely to escalate the project cost, as federal government has not utilised any money for the project, a senior official told the Daily Times on Wednesday. Federal government had allocated Rs 2.6 billion for the land acquisition of Bhasha dam under current financial year’s Public Sector Development Programme (PSDP). Official said that Diamer Bhasha consultants have estimated tentative project cost of $8.505 billion at present against the earlier projected cost of $6.5 billion in 2005.

This cost may further escalate due to delay in land acquisition of dam. Government had allocated as many as Rs 10 billion from Public Sector Development Programme (PSDP) 2007-08 for the land acquisition of five big dams including Kalabagh, Munda, Krum Tungi dams. No amount has been utilised even after passing over the half of the current financial year. Official said that financial institutions would arrange the rest of the amount. Official also said that in this regard government had formed a task force headed by Finance Minister to generate money amounting to Rs 35 billion out of PSDP from different financing institutions for five big dams construction.

He said that now the government would make dam companies like Kalabagh Dam Company, Bhasha Dam Company to generate funds for the construction of five big major dams announced by President Pervez Musharraf.

Daily Times - Leading News Resource of Pakistan

 

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Domestic debt increases by Rs 280.529bn​

KARACHI: The country’s domestic debt rose by Rs 280.529 billion during the first half of the current financial year as the fiscal deficit expanded beyond estimates.

Large amounts were borrowed through treasury bills, Pakistan Investment Bonds and MTBs for replenishment.

The government borrowed Rs 69.571 billion through sale of treasury bills during the period mentioned above. The government also borrowed Rs 136.942 billion through MTBs for replenishments. The overall floating debt rose by Rs 206.513 billion.

The permanent debt of the country rose by Rs 39.092 billion due to inflows of Rs 41.236 billion through sale of Pakistan Investment Bonds and Rs 9.007 billion through sale of prize bonds. Debt under some other heads was repaid.

The un-funded debt of the country surged by Rs 34.922 billion. Major inflows were recorded in Special Savings Certificates (Rs 8.003 billion), Bahbood Savings Certificates (Rs 22.349 billion), Special Savings Accounts (Rs 6.046 billion) and Pensioners’ Benefit Accounts (Rs 5.426 billion). Outflows through Regular Income Certificates and Savings Accounts were also recorded.

Daily Times - Leading News Resource of Pakistan

 

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Textile exports may face 14 percent fall in fiscal year 2008 ​

ISLAMABAD (February 21 2008): Not fully equipped to cope with the regional competition the country may face 14 percent decline in its textile exports during the current fiscal year as compared with fiscal 2006-07; official sources told Business Recorder here on Wednesday.

The export of textile products decreased to $2.449 billion during the first quarter (July-September) of the current fiscal year against $2.73 billion over the same period last year, thus showing a decline of 10.29 percent. The export of knitwear, bed-wear and towels decreased by 10.08 percent, 19.06 percent and 4.82 percent, respectively, during the first quarter of the current fiscal year as compared with the corresponding period last year.

The textile exports have shown a decline of 5 percent up till now in the ongoing fiscal year. The first six months (July 2007-December 2007), the total textile exports have been recorded worth $5.228 billion as compared with the corresponding period last year when textile exports were $5.489 billion.

This clearly shows that the textile exports are going down rapidly and calls for immediate intervention to avert this trend as our balance of trade largely depends upon exports earnings of the textile sector.

Sources said, at present, the situation is unfavourable to the extent that the export orders worth $57.6 million for readymade garments and knitwear have been diverted to the regional competitors whereas the power shortage in the country is forcing industrialists shift their businesses from Pakistan almost to other countries.

The gravity of the situation could be judged from the fact that almost 75 percent industrial units, including 300 spinning mills and weaving mills were closed. In December 2006, the textile exports were $987.402 million while in December 2007; these were $740.702, showing a decline of 25 percent. "This clearly shows that just in the month of December, the textile exports have shown a downward trend of 25 percent.

An official in the textile ministry told this scribe that the government's plan to establish a 'textile city' 35-km away from Karachi will be completed till 2009. But the government does not have resources sufficient to establish a 'one-window operation system' in the textile sector. "We have power shortage and unskilled labour. So, it is impossible to have one-window system like Bangladesh that is surplus in electricity generation."

Business Recorder [Pakistan's First Financial Daily]