Pakistan Economy - News & Updates - Archive

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Friday, June 09, 2006

PESHAWAR: All Pakistan Commercial Exporters Association (APCEA) has held the budget documents 2006-07 as balanced and welfare oriented that would certainly help mitigate worries of the common man especially the salaried class.

Faqir Hussain, chairman APCEA in a statement on Thursday welcomed increase in pension and salaries of government employees. However, he said that exporters should have been given sufficient relief, especially exemption in income tax for five years.

He asked the government to review its decision about increase on duty on banks’ cheques and property tax.

He demanded restoration of 2004 Order regarding import duty on precious and semi precious stones, which was revoked in 2005.

He called for giving free package to the exporters however he expressed the confidence that the government would announce the same at the time of trade policy.

 

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KARACHI: Paktel, a cellular service operator, has broken new ground by launching ‘Talk Free’ package. “With this package, Paktel has set new standards in the industry, keeping in mind the customer’s cellular needs,” a Paktel statement said. “Talk Free package allows Paktel GSM prepaid customers to not only enjoy ‘free’ Paktel to Paktel calls, but also send SMS to all networks in Pakistan for 10 paisa only. All this only for Rs500 per month.”

 

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KARACHI (June 10 2006): The corporate sector of Pakistan has become quite matured during the last few years and is now acceptable to the international community as a developed sector.

These views were shared by president of BASF Market and Business Development Asia Pacific Dr Wolfgang Hapke while speaking at the launching of Product Booklet titled "Help Our Customers To Be More Successful" and 'CDs' here on Friday. "The corporate level in Pakistan has risen many folds internationally," he remarked.

He said: "We are converting the status of Pakistan from an agricultural country to a supplier and mid-manufacturing country. This would help in setting up more industries and ultimately in the generation of more and more employment opportunities."

Dr Wolfgang Hapke further said Pakistan is well positioned geographically and manufacturing sector places this country on a great exposure. Commenting on his first visit to Pakistan, he said it is an honour for me to be in this beautiful country.

Earlier, BASF Pakistan managing-director Qazi Sajid Ali said the company believes in relationship that turn into permanent relation. "We don't want to be market leader but want to be at par with the needs of businesses," he added.

"We want to be a reliable partner to all industries offering BASF's intelligent system solutions and high-value products, agricultural products and fine chemicals to crude oil and natural gas," he added.

"As far as welfare work is concerned," he said, "we followed a noble idea and the company placed an order of 32,000 footballs to Sialkot, which distributed among the BASF community at one dollar each. The amount generated was given to victims of earthquake-hit areas." The money we generated was a little amount but the cause was huge and the idea was not to forget quake victims of Northern Area's.

 

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KARACHI (June 10 2006): Global Investment House KSC, based in Kuwait, has acquired 42.8 percent stake in Jahangir Siddiqui Capital Markets for 2.25 billion rupees ($37.4 million). Global Investment has bought 10.35 million shares at 217 rupees each, Jahangir Siddiqui said in a faxed statement to Karachi Stock Exchange.

Global, having established several new companies to capitalise opportunities in the regional market, has yet again set the company to capture a significant opportunity for luxury serviced residences in Middle East and has joined hands with Fraser, one of the world's leading dedicated serviced residence operators, in order to manage the company's planned serviced residences.

In last three years, Global has successfully established five real estate companies in Kuwait, UAE, Qatar and Bahrain, of which one is listed on Kuwait Stock Exchange. The Company will significantly benefit from Global's expertise and experience in setting up successful operations and achieving accelerated development of seven properties.

Global had successfully launched two new companies in the first quarter 2005, with a capital of KD60 million (Kuwaiti dinar). One was First Bahrain Real Estate Development Company with a capital of KD30 million. The second was Al-Soor Financing & Leasing Company KSCC (Al-Soor), a conventional consumer finance company.

Currently, Global is managing private placement for three companies--Al-Nawadi Holding Company, National International Holding Company, and Al-Waseela Real Estate Development Company.

Global has managed private placement for 24 companies to over KD405 million, established 16 companies with a total capital of KD340 million, in addition to listing around 13 companies at the Kuwait Stock Exchange. The Global also launched its Global Small Cap Fund, the first of its invests in small capitalisation companies listed on the Kuwait Stock Exchange.

The market studies conducted by Global revealed that historically, small cap companies at Kuwait Stock Exchange continuously outperformed the market indices and other sectors overall. This latest addition to Global's list of unique investments funds is ideal for investors diversify their portfolio, and gain exposure to the potential growth of small cap Kuwaiti market.

Currently Global manages more than 25 investment funds with various strategy, recorded a performance above market indices that won them local and international appreciation's. Recently Eurekahedge ranked Global Distress Fund, third best the world, while Barclay Group ranked it 7th best hedge fund in the world sharpe ratio.

 

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ISLAMABAD (June 10 2006): China will set up alternative renewable energy plants and would also help to manufacture wind turbines and solar cells through joint ventures with Pakistan.

According to the agreed projects between the two countries during the three-day Pak-China Forum include setting up wind farm, waste to energy and hydropower plants along with manufacturing solar and wind turbines.

China would help in setting up various projects of renewable resources in Punjab and Sindh, says a copy of Pak-China Forum, which was made available to Business Recorder.

Two 50-megawatt plants for producing energy from waste would be set up in Lahore and Karachi. Similarly, four 50MW wind farms would be established through joint venture in Sindh and Punjab.

China would also help construct two hydropower plants at the headworks in Punjab. CWE of China and Kingdom Hydro of Pakistan will construct 10-12 MW mini hydro power plant at Marala headworks and 20MW at CJ link canal.

China Poly Group Corporation and Trillium Pakistan through joint ventures would develop solar cells, which would later culminate to manufacture them in the country. CWE China, Xinjiang Wind Energy Liability, China and AEDB, Pakistan will carry out a feasibility for wind turbines manufacturing in Pakistan.

Poly Technologies China Inc and Army Welfare Trust (AWT) would materialise biomass/waste to energy projects in Pakistan.

 

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ISLAMABAD (June 10 2006): Prime Minister Shaukat Aziz has said the government is working to maintain the tempo of growth achieved during the last few years and its vision is to achieve higher growth with dignity and equity.

Talking to a group of MNAs, who called on him at his chamber at the parliament house Friday evening, the Prime Minister said the record high amount allocated for development projects in the budget 2006-07 will lead to improvement in quality and standard of life of people, employment generation and poverty alleviation.

The Prime Minister said the government will spend a substantial amount on providing subsidies and to provide these commodities to the people at affordable rates. He said in addition to providing these commodities through the utility stores, the government is also taking steps to ensure their availability on subsidised rates in the open market.

Parliamentarians discussed with the Prime Minister issues of their respective constituencies. The Prime Minister asked them to ensure timely completion of development projects in their respective areas so that benefits of growth reach the common man.

Among others who met the Prime Minister included privatisation and investment minister Zahid Hamid and minister of state for petroleum and natural resources Mir Muhammad Naseer Khan Mangel.

 

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ISLAMABAD (June 10 2006): The United States will provide $3 billion assistance to Pakistan for economic development, US ambassador Ryan C. Crocker said on Friday. He was addressing at the signing ceremony of Memorandum of Understanding (MoU) between the Gems and Gemological Institute of Pakistan (GGIP), Peshawar and Asian Institute of Gemological Sciences (AIGS), Bangkok at Islamabad Chamber of Commerce and Industry (ICCI).

An official told Business Recorder, "The figure is $3 billion over a five-year time period (FY2005-09), $600 million per year, $300 million in economic assistance and $300 million in military assistance. There is an additional $510 million US assistance for earthquake relief and reconstruction."

Crocker said the United States Agency for International Development (USAID) was funding AIGS to assist the new partnership under the Pakistan Initiative for Strategic Development and Competitiveness (PSIDC) to make it a world-class institute.

He said new affiliation between GGIP and AIGS would help upgrade the skill level in gemology in Pakistan, increase productivity of gems and jewellery industry and generate employment opportunities as well as increase exports.

Speaking after the MoU signing ceremony, industries minister Jehangir Khan Tareen said the government was making efforts to enhance exports of gems and jewellery to $500 million following the Bangkok Gems and Jewellery fair 2005, in which Pakistani companies received orders worth more than $4 million.

Later, talking to newsmen, Jehangir Tareen said the government is not reviving the ration depots' era of 1970, as utility stores are aimed at providing essential commodities at subsidised rates.

He was of the view these stores are being set up across the country to bring stability in the prices of essential commodities and rationalise prices of these commodities in the market.

The minister said prices of essential commodities have escalated because of rapid economic growth that has increased the purchasing power of people. As a result, the demand-supply gap had widened, he added. Under the MoU, GGIP will be offered all courses available at AIGS, Bangkok, with certificate and diplomas. These certificates and diplomas will be internationally recognised and will be based on completion of coursework meeting AIGS standards.

 

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ISLAMABAD (June 10 2006): Pakistan's recent economic turnaround and its effective handling of last year's earthquake catastrophe have raised the country's profile, say Pakistani expatriates in their emails sent to President Pervez Musharraf's website.

In a number of emails, the Pakistanis living in various countries around the world, have praised the country's growing regional and international importance and government's efforts aimed at internal consolidation and economic stability.

They have questioned the unscientific approach and conclusions derived from sketchy newspaper reports that have led to a foreign organisation's bracketing Pakistan with some weak and "failing states" and described its inclusion in the list as preposterous in view of improved ground and economic realities.

The emailers particularly note the country's sustained turnaround and an attractive investment climate, and emphasise that this fact has been repeatedly and duly recognised by leading world financial institutions and economy-rating organisations.

A Paris-based Pakistani expatriate, Iqbal Latif while commenting on the rating of states by Foreign Policy and the Fund for Peace, tersely points out that a state winning international confidence in the form of tremendous sales of various international bonds cannot be counted as not delivering.

"Some e-mailers take into account indicators used in the ranking of states like mounting demographic pressures, movement of refugees and other internal factors and assert that "Pakistan just does not fit the criterion."

Counting a series of achievements, the e-mailers contrast Pakistan's ground realities with some of the regional countries, contending strongly that Pakistan is gaining strength as it attracts investment and opens up economic opportunities for its people.

In their detailed comments, they also note that some regional countries face instability while others are home to one of the world's largest population living below poverty line but they have been ranked better than Pakistan.

"The exceptional management of the earthquake disaster alone should have propelled Pakistan to much higher ranking. The Economist wrote this week the earthquake that struck Kashmir and northern parts of the country, killed 73,000 people, displaced three million and left the local government in pieces. It was feared that the Himalayan winter would bring another wave of death. That it did not, can be explained by two things, the Herculean labours of Pakistan Army and outsiders' generosity," concludes Latif.

 

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ISLAMABAD (June 10 2006): Minister for Communication, Muhammad Shamim Siddiqui said on Friday that Rs 400-500 billion would be spent on roads network in the country during the next ten years and the process is going on smoothly.

Speaking in a PTV programme he said that last year an amount of Rs 20 billion was initially allocated for roads network under Public Sector Development Programme (PSDP) while a grant of Rs 4 billion was given in the last quarter. By including the income of toll money and other sources the Ministry spent an amount of Rs 30-31 billion He said that this year the overall expenditures on the road network is expected to remain about Rs 40 billion.

He said the improvement and expansion of highways and construction of motorways from Karachi to Peshawar and onwards to China, Iran and Afghanistan is part of the ten years plan.

He said, a Malaysian firm has been assigned the project of M-4 from Faisalabad to Khanewal on BOT basis while the World Bank and Asian Development Bank have arranged funding for M-5 from Khanewal to Rajanpur.

Kárakurram highway is being upgraded rapidly and the reconstruction of Thahkot bridge would be completed within two years. Once constructed, the bridge would help expedite the construction work on KK highway.

To a question he said, total length of roads in country is 2,60,000 kilometer out of which 10,000 kilometers are under the control of central government. To another question he said that Super Highway between Karachi and Hyderabad is being made into a six-lane road.

 

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Saturday June 10, 2006

ISLAMABAD: Chairman Pakistan Telecommunication Authority (PTA) Shahzada Alam has said 3-G technology will be introduced in 2007 in the country adding that 80 percent work on mobile number portability system has been completed and it will be implemented till October.
He said this while addressing the concluding session of training course for engineers organized by Com Global here Friday.

He held that world is witnessing new technology with every passing day. It is incumbent on us that we should continue to keep our engineers updated on modern technology.

He went on to say that m0bile phone sector is progressing on fast track basis in the country. We have gone ahead other countries in terms of development in the region.

He informed the state of the art 3-G technology would be put in place in 2007. However, we don’t want to take any hasty step presently in this connection, as 6 mobile phone companies operating in Pakistan are engaged with reference to other packages.

He told that work is underway on fast paced on mobile phone number portability system. 80 percent work has been completed and soft ware, hard ware have been secured. But still reservations of some operators are there which will soon be alleviated. System will be implemented in October and Pakistan will become the first country in the region in introducing this system.

 

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Saturday June 10, 2006

LAHORE: Thuraya’s regional head of Gulf and South East Asia, Ahmed-Al-Sharief, has said Thuraya is the largest satellite mobile phone service provider globally. "We are providing our services in 120 different countries all over the world", he said while addressing a press conference here on Friday.
Mr. Sharief appreciated the policies of Pakistan government that has provided friendly market to the international investors. "We are decreasing the satellite broadband tariff for different cities of Punjab due to which common citizens of the province can enjoy the latest and cheapest services of Thuraya", he stressed.

With the help of Punjab government, we are establishing regional offices that would be setup in different cities of Punjab especially in Rahim Yar Khan and Multan and we would set up IT and Telecom institutes so that young talent can get the latest knowledge, he added.

He claimed that this cooperation will be fruitful for both countries in future as the UAE government has already invested a lot here. He emphasized that satellite mobile phone is very important and we are trying to provide its services to far flung areas by reducing the tariffs.

"We are planning to introduce monitoring system for water reservoirs that would enable the irrigation department to monitor the water level and for this the government of Punjab has asked our consultancy", he said.

The government has also demanded the monitoring system for the movement of cars with latest technology. "For this, we are in contact with different companies of Lahore and it would lead to eliminate the car smuggling within the country".

At the occasion, Chief Operating officer, Thuraya Mr. Sheheryar Hasan and Senior Project Manager, Thuraya, Mr. Junaid Hashmat also expressed their views.

 

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Saturday, June 10, 2006

KARACHI: The pioneer in Islamic banking, Dubai Islamic Bank (DIB), has committed to invest $100 million in its Pakistan operations with a plan to substantially increase its branch network over the next 18 months.

According to a press release here on Friday, a letter of intent was handed over to Dr Shamshad Akhtar, Governor of the State Bank of Pakistan, by Saad Abdul Razzak, Group CEO, Dubai Islamic Bank, in the presence of Shaukat Aziz, Prime Minister of Pakistan, and Sheikh Mohammad Bin Rashid Al Maktoum, Vice-President and Prime Minister of the UAE and ruler of Dubai during his recent visit to Pakistan.

Sharing the expansion plans of the Bank, Saad Zaman, CEO Dubai Islamic Bank Pakistan, said: “As a first step, we will be submitting a detailed 18-month branch network expansion plan to the SBP for approval.

Our flagship branch in Karachi is fully operational and we will now be opening branches in Lahore, Islamabad, Faisalabad and Rawalpindi by June 15. We are targeting more branches by end of this year to reach our customers.”

The CEO also highlighted the product portfolio of DIB, saying: “The DIB will offer cutting-edge financial solutions through a world-class banking service, the Islamic way. This will include a full suit ranging from entire consumer banking products to wealth management solutions and corporate & investment banking products. Dubai Islamic Bank also plans to expand in private equity business.

Dubai Islamic Bank has been very active in attracting foreign direct investment in Pakistan and is working closely with Dubai World and other large business corporations in identifying opportunities and channeling hard currency flows into the country.

In addition, the DIB is working closely with the ministry of finance, State Bank of Pakistan, Securities and Exchange Commission of Pakistan and other relevant agencies in developing and promoting Islamic capital market products in the country, it said.

 

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KARACHI, June 9: TMT Ventures, Pakistan's pioneering venture capital and private equity company, Thursday signed an agreement to jointly launch and manage a 100-million dollar private equity fund with SEAF, a Washington D.C. based global investment management firm.

The new fund will provide growth capital, operational support and global market access to select Pakistan companies with high growth potential.

Speaking at the signing ceremony, Sohaib Umer, CEO of TMT Ventures, said the joint venture signified the interest of foreign investors in Pakistan as an emerging market with tremendous latent growth.

“For the last five years we have invested in Pakistan's budding entrepreneurs through our flagship Incubation Fund. Now it is time to merge our learning and SEAF's global experience to unlock value in promising local ventures, with strong management teams operating in traditional but high growth sectors.”

The ceremony was also attended by Hubertus Van der Vaart, President and CEO of SEAF. He said Pakistan was at the threshold of an economic growth curve that favoured the entry of focussed private equity funds.

“By combining TMT's extensive local experience with SEAF's global best practices in managing investments hands-on in over 20 countries, I believe we have formed a formidable partnership for the future success of the fund,” said Van der Vaart.

He said the keen interest of international financial institutions in the TMT/SEAF private equity fund was a clear indication that the investment community was taking notice of the economic potential of Pakistani companies and entrepreneurs.

Private equity in its purest form operates on Islamic Shariah principles of partnership with sharing of risk and reward. “It is our intention to make the fund Shariah compliant,” said Sohaib Umar

 

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Pradeep Kumar
Business Reporter

Global Investment House (Global) has acquired a 42.8 per cent stake in the Karachi-based Jahangir Siddiqui Capital Markets Limited (JSCM). The Kuwait-based investment company informed the stock exchanges in Kuwait and Bahrain, where its shares are listed, that it paid $37.5 million to purchase 10,350,000 shares of JSCM.
Brokerage firm JSCM is a subsidiary company of Jahangir Siddiqui and Company, one of the biggest investment firms in Pakistan.
“Global acquired the stake through a special issue of shares by JSCM,” a senior official of the Karachi firm told Bahrain Tribune over telephone. The official said that Jahangir Siddiqui and Company owned 75 per cent shares of JSCM before the deal. He, however, claimed ignorance of the new shareholding pattern after the Global deal.
The official, who did not want to be named, said: “Global would infuse fresh capital into the company. The money would be used to further strengthen our brokerage services and investment banking business.”
The official added: “In investment banking, we would want to focus more on corporate financing and underwriting businesses.”
Global told the stock exchanges that it is waiting for the Pakistani market regulators to officially approve the deal. “We expect to close the deal, including getting all regulatory approvals, by September this year,” the JSCM official told the Tribune.
Global, in April, had said it acquired 22 per cent stake in the Jordan-based bank Societe Generale De Banque – Jordanie.
“We are currently looking into expanding into key emerging markets, and this comes as one of the many steps taken by Global to achieve its expansionary goals,” Global’s Vice Chairman and Managing Director, Maha K. Al Ghunaim said after acquiring the stake in Societe Generale De Banque – Jordanie.
Pakistan is now considered among the top destinations for investment by many of the region’s companies. According to reports, the country registered 6.6 per cent economic growth during 2005-06.
Earlier this month, Dubai-based property developer Emaar and DP World announced projects worth $30 billion in the South Asian country. Dubai Islamic Bank recently said that it will open 70 branches in Pakistan in the next 18 months.

 

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By Sher Baz Khan

ISLAMABAD, June 8: The ministry of food, agriculture and livestock (Minfal) on Thursday set this year’s cotton production target at 13.8 million bales, 1.4 million bales more as compared to 12.4 million achieved last year.

The cotton production fell by 1.9 million bales last year as against the bumper crop of 14.3 million bales in 2004-05 because of adverse weather conditions and unavailability of cheap inputs to farmers, particularly fertilisers and pesticides.

A 13 per cent decrease in the cotton production along with 6.2 per cent negative growth in sugarcane badly hampered the overall GDP growth last year, as the agriculture sector could only grew by 2.5 per cent as compared to 6.7 per cent the year before.

The cotton target was fixed at a meeting here presided over by Food, Agriculture and Livestock Minister Sikandar Hayat Bosan. Senior officials of the commerce ministry, Trading Corporation of Pakistan, provincial and federal governments and representatives of the All Pakistan Textile Mills Association, Karachi Cotton Association, Pakistan Cotton Ginners’ Association and growers also attended the meeting.

It was decided that in order not to miss this year’s target, the government had to provide inputs to the farmers well on time with special focus on pesticides and fertilisers. An action plan intimating the responsibilities of stakeholders from various public and private sectors was also finalised to achieve the cotton target and avoid untoward situations during sowing, growth and marketing of the crop.

The minister also directed the organizations and departments concerned to keep a close eye on the day to day situation of cotton crop and ensure availability of inputs, including fertilisers and pesticides.

The meeting was informed that the government had already enhanced the seed cotton intervention price to Rs1,025 per 40kg from Rs975 last year in order to safeguard the interest of growers.

Mr Bosan said the TCP would be inducted in the process whenever required to ensure that farmers received these rates.

Official sources told Dawn that the meeting was also informed that farmers in southern Punjab were not getting the Rs415 per 40kg minimum price announced by the government for the procurement of wheat and allegations of kickbacks and commissions by food department officials allegedly in connivance with landlords.

They said representatives of the provinces informed Minfal that the production of cotton fell last year because in some areas farmers were not given reasonable rates for their produce. This year, wheat growers were not getting the minimum prices for their crop which had increased the possibility of reduction in the wheat sowing area next year.

Mr Bosan informed the meeting that the inter-ministerial committee would regularly monitor the market price and payment of premium price to those who grew high quality of cotton.

The meeting was told that in order to encourage the production of clean and contamination-free cotton, the ministry of textile industry would launch a special campaign in collaboration with the TCP and Pakistan Cotton Standard Institute, provincial governments and stakeholders from the private sector to ensure that premium on better grade cottonseed was passed on to the farmers.

The question of middlemen was also raised at the meeting by the representatives of growers, who said usually the money meant for the farmers went to the pockets of the middleman, compelling them to stay away from quality cotton production which cost them more.

The meeting also reviewed the cotton situation at the global level. It was informed that the world’s consumption of cotton was likely to surpass production by about three per cent that would likely to push up price by 10 per cent in 2006-07.

Cotton sowing in the country was reportedly being done at a high pace and that there were good prospects for achieving the target. Salient features of the Cotton Vision 2015 were also discussed to firm up the cotton production targets and methodology for its achievement with identified roles of all public and private sector stakeholders.