Pakistan Economy - News & Updates - Archive

[Owais]

Upward trend continues on LSE

LAHORE (July 13 2006): The upward trend continued on Lahore Stock Exchange (LSE), where share values, led by petroleum sector, recorded more gains and eventually finished 3.49-percent up, on Wednesday.

The LSE-25 index surged to 4,340.84 points from 4194.33 of Tuesday, posting a net rise of 146.51 points (3.49-percent). Volume improved to 43.697 million shares from 30.549 million of the previous session, registering an improvement of 13.147 million shares (43-percent).

The market showed positive signs form the outset of trading and then maintained the tendency later in the day, with petroleum sector remaining atop. According to brokers, they witnessed good trading in the market where equities extended the overnight bullish spell following an aggressive buying in petroleum sector which, led by PPL and PSO, outperformed and added handsome gains to its worth.

Banking and cement sectors' shares also traded well and added to strength of the market, brokers pointed out. It appears the market is gradually resuscitating from the trauma it suffered after submissions of former SECP chairman Dr Tariq Hassan before the National Assembly standing committee and alleging high profiled government personalities for the March 2005 crisis, analysts said.

According to them, "tension caused by such allegations is defusing gradually and we might witness more good sessions ahead."

"In wake of train blasts in Mumbai, we were not expecting such a marvellous performance of the market on Wednesday, but what we witnessed pleased every one," Mirza Muhammad Irfan, equity research head of Capital Vision Securities Ltd, said. Even the Indian markets ignored the tragic blasts claiming scores of life and injuring many, and the Mumbai market ended with a gain of 315 points, he added.

"As we all know whenever the Indian markets underwent crisis, its impact was also seen over the KSE," he pointed out. Explaining reasons for the ongoing rally, he said due to high expectations of NIT and other corporate sector results sentiment was already bullish, but the SECP inquires against brokers and then allegations levelled by Dr Tariq Hassan against the high ups of government disturbed the pace.

On Wednesday petroleum sector led the market proceedings supported by cement stock and banking sector, he further said, adding fresh buying was also seen on low levels that helped the index propel up. Buying in petroleum sector, which was dead since many weeks, has started recovering.

On Wednesday OGDC ended with upper cap limits while Attock Refinery and PPL finished with upward locks on KSE, which is a very positive sign. About the possible impact of rising crude oil prices in international market Mirza Muhammad Irfan said because of recent heavy battering, the market on the whole was in positive mood and the current levels were attracting institutional investors.

Out of a total of 91 traded scrips, 45 were up, 7 stayed in red zone while 39 were intact to their previous levels. In positive column, PPL gained Rs 11.25, PSO Rs 10.00, Pakistan Oilfields Rs 9.10, OGDC Rs 6.50 and Lucky Cement Rs 4.90.

In minus zone, Prime Commercial Bank shed Rs 1.35, Worldcall Telecom and Askari Commercial Bank Rs 0.20 each and PICIC Energy Fund and Dewan Farooq Motors Rs 0.05 each. National Bank was the volume leader with 6.809 million shares followed by MCB Bank with 5.270 million shares.

 

[Owais]

ISE equities show healthy signs

ISLAMABAD (July 13 2006): Equities showed healthy signs at the Islamabad Stock Exchange (ISE) where bulls strengthened their positions amid increase in index. ISE Ten index was plus by 103.34 points, as the index moved from 2,466.60 to 2,569.94 points.

Total 115 companies were quoted on the ready-board. Majority of stocks (87) closed in positive territory, 28 landed in minus column, whereas zero companies remained pegged to its overnight levels.

The turnover of OGDCL was 68,200 shares as compared to previous volume of 34,800 shares. The volume of Fauji Cement was 55,000 shares. The turnover of Pakistan Petroleum was 34,400 shares as compared to previous volume of 18,800 shares.

 

[Owais]

28% of the revenue utilized for payment of foreign loans RAWALPINDI: CBR acting chairman, Salman Nabi has said that 28 percent of the previous fiscal year’s revenue was utilized for the payment of foreign loans.

In a meeting with the office-bearers of Rawalpindi Chamber of Commerce and Industry, he said that the income tax recovery previous year was higher by 22 percent. He told that 24000 cases were sent for audit in the previous year, out of which, 12000 were settled through negotiations, while 6000 cases were shelved after the recovery of 20 percent additional taxes

 

[Owais]

Motorola’s Pakistan market share surges KARACHI: Mobile phone manufacturing company in Pakistan, Motorola’s market share has increased to 15 percent from 2 percent in a brief period of two years.

Motorola Marketing chief, Hashim Sheikh made this disclosure in a press conference here. He told that the cellular phone market in Pakistan has swelled from mere 2 million to a sizeable 20 million.

He told that Motorola Pakistan has decided to provide customer care facilities, repair, maintenance and necessary information about the use of cell phones to the people residing in the rural area of Sindh and Punjab and two Moto-buses were being run in this regard. He told that one more Moto-bus would be sent to the Northern Areas next month in the second phase of this campaign.

 

[Owais]

State Bank to reduce export refinance rate by 1.5 percent

KARACHI (July 14 2006): The State Bank of Pakistan will reduce the export refinance rate by 1.5 percent to counter the slowdown in export growth. At present, the SBP provides credit line to banks at 7.5 percent under its export refinance scheme. Banks lent to exporters at nine percent or less.

All indicators are showing a slowdown in Pakistan's textile exports due to stiff competition from India and Bangladesh. Both these countries are indirectly helping exports of various textile items through lowering of interest rate on machinery import, cash compensatory rebates and low tariff for fuel.

Pakistani textiles are priced 15 percent higher than India and 22 percent more than Bangladesh. In order to remain competitive, Pakistani exporters are demanding 3.75 percent reduction in export refinance rate and 10 percent subsidy on import of capital goods. The net impact of these two amounts to 2.75 percent cut in debt services cost.

Local exporters are pressing for 5 percent of f.o.b. value of export items as compensatory rebate to overcome denial of market access in North America and Europe and special tariff for natural gas usage of around 21 percent. This will lower the import cost by 3 percent.

Further, they want the scope of R&D presently available to knitted fabrics only to be expanded to all kinds of process fabrics. The SBP can only provide help in lowering of lending rates, the other issues relate to fiscal side and Islamabad has to act on them.

KNITTING: All of the above measures, say experts, will be of little help to the closed down knitting units. Six of the largest knitting establishments have reportedly closed down and unless banks restructure their outstanding, it would be difficult to restart them.

The SBP is collecting data from various textile associations and banks regarding import of machinery since 2004. Textile sector is asking for a concessional rate of 7 percent to import machinery between now and 2010 and also want the machinery imported after 2004 to be swapped into SBP's Long Term Finance-Export Oriented Industry (LTF-EOI) scheme.

Few exporters imported machinery worth Rs 6 billion under LTF-EOI scheme. Somehow bad communication between the SBP and banks led to discontinuation even though the allocation were set to be around Rs 24 billion for LTF-EOI.

 

[Owais]

Gold imports halt after imposition of withholding tax


KARACHI (July 14 2006): Gold importers have stopped buying the yellow metal from the international market due to sudden imposition of one percent withholding tax at the import stage by the federal government and higher international gold rates, bullion traders said.

They said that that the commercial importers of gold have immediately cancelled the already booked orders and halted the import process from different countries with immediate effect from 1st of this month.

Senior traders said that even a single ounce has not been brought into the country during the current month, which has put the local and export-oriented industries in jeopardy.

"Not a single fresh order and import from July 1," said Haroon Rashid Chand, President All-Karachi Jewellers Association, adding that one could not place orders for such a commodity whose price varies by Rs 400 per 10-grams everyday.

He said that the gold is currently being tagged at around $654 per ounce on the international front and 1-tola gold is locally available at nearly Rs 15,000, showing that the trade is not viable any more.

Bullion market sources have commented that the sudden imposition of WHT would definitely hit the jewellery exports of the country, which they say, would remain 50 percent in the current fiscal (2006-07).

"The country had been importing around 50,000 tola per day about six month ago, however, the figure dropped to 20,000 tola per day since January this year," Haroon Chand remarked. He said that the yellow metal import has been halted despite a little demand in the country.

Traders highlighted that the investors who had earlier bought 24-caret gold biscuits are now offloading their holdings, as they are unable to predict the future of this commodity.

The gold traders have been moaning over the price spike of gold from the day it had started hitting its upper levels and now they are uncertain about their businesses as they have lost 50 percent of their customers.

"The rising gold prices have broken the backbone of a common man," one trader said, adding that people usually avoid making jewellery and giving away gold gifts. He said that the local scenario would further be worsened when the old stocks would be sold out.

Senior bullion traders said that they had been paid $1 per tola as tax which they government had decreased to 50 cents prior to one percent WHT imposition.

They have also anticipated that the recent imposition of WHT would encourage gold imports from illegal channels and the domestic demand of jewellery would be filled through smuggled metal.

The prices of gold reached new records and breached previous ones during the past nine months mainly due to rising international gold prices, increased genuine demand, heavy speculation, mistrust of investors in dollar and geo-political uncertainty across the globe mainly in the Central Asian region. It may be mentioned here that the private importers, prior to WHT imposition, used to import precious yellow metal mainly from London and Switzerland via Dubai.

 

[Owais]

Prime Minister clears new Trade Policy sans exports target

ISLAMABAD (July 14 2006): Prime Minister Shaukat Aziz has cleared the Trade Policy, 2006-07 with certain directions to encourage free trade and diversify exports, but did not fix exports target. Sources privy to the meeting told Business Recorder that Commerce Minister Humayun Akhtar Khan told the meeting that exports for the FY06 stood at $16.5 billion, $500 million below the target.

However, final foreign trade figures yet to be released by the Statistics Division, were already cleared by the Central Board of Revenue (CBR). Replying to a question, the sources said that export target for 2006-07 has not been discussed in the meeting in detail, but it would be in the vicinity of $18 billion, keeping in view the current pace of exports growth.

"It was proposed that exports target for 2006-07 should be $17.8 billion or $18 billion, but the prime minister said he would settle the issue with the commerce minister personally," the sources added.

Answering another question, they said that expansion of positive list to be traded with India was not part of the discussion and it would be considered by the prime minister and the commerce minister separately, adding the government may add 133 more items which have already been cleared by the ministries concerned and the private sector as well.

Asked, if any specific proposal was discussed at the meeting to give push to exports, the sources said there was nothing special to mention as it was the follow-up of previous meeting held three days earlier, in which the prime minister had given some instructions to the commerce ministry for the preparation of Trade Policy. Another official said the meeting agreed to allow import of used fire vehicles and trucks for garbage disposal, dialysis machines and milk processing units.

According to a press release, the prime minister said: "The main objective of the Trade Policy is to encourage free trade in the country and also to enhance and diversify our exports. This will result in increased foreign exchange earnings and generate income and employment opportunities."

This was the second meeting chaired by the prime minister to finalise the trade policy before it is announced on July 17. A special meeting of the Cabinet will be held on July 17 to give approval to the Trade Policy.

The participants of the meeting gave several suggestions to fine-tune the Trade Policy based on the feedback received from the private sector and other stakeholders.

The meeting was attended among others by Commerce Minister Humayun Akhtar Khan, Industries and Production Minister Jahangir Khan Tareen, Food, Agriculture and Livestock Minister Sikandar Hayat Khan Bosan, Health Minister Muhammad Nasir Khan, Textile Industry Minister Mushtaq Ali Cheema, PM's Adviser on finance Dr Salman Shah, Planning Commission Deputy Chairman Dr Akram Shaikh, EDB chairman, CBR chairman, commerce secretary, health secretary, industries and production secretary, textile industry secretary, special secretary to prime minister, and senior officials.

 

[Owais]

Body allows release of Chinese cement for sale

ISLAMABAD (July 14 2006): The prices committee on Thursday came to the importers' rescue by allowing clearance of imported Chinese cement for sale in the local market. Authorities at the Karachi Port have withheld five shipments of cement imported from China having 100,000 to 125,000 tons load after declaring it substandard. Since than importers were struggling for clearance of their shipments to avoid loss in the form of demurrage and other additional port charges.

Sources said, on the prices committee recommendations the government is going issue directive to port authorities on Friday for clearance of Chinese cement to be sold in the local market.

Talking to Business Recorder, one participant of the meeting said: "The committee considered the issue as a whole and decided to allow release of imported Chinese cement for sale in the local market."

The prices committee was informed five consignments of Chinese cement were waiting clearance at the Karachi Port for the last few weeks and further delay in their clearance will not only cause loss to importers but also reduce its quality.

The government had allowed duty-free import of cement from any destination sometimes back when locally produced cement rates went up to Rs400 per 50kg bag at retail level, hitting the construction industry very badly.

The objective was to improve supply in the open market; cut-down cement prices; and simultaneously, pressurise domestic manufacturers not to exploit the market for undue profit.

The meeting also reviewed prices of sugar and pulses in the open market. It showed satisfaction that prices of these commodities were showing downward trend. However, it considered ways and means for further reduction in their prices for.

The meeting also took stock of cultivation of sugarcane crop over the past five years and average ratio of input and output, per acre cost and benefit to growers compared with other cash crops such as cotton, wheat, sunflower and basmati paddy.
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[Owais]

Pesticides dealers to pay sales tax on 15 percent fixed value addition

ISLAMABAD (July 14 2006): Registered pesticides dealers shall be required to pay sales tax on fixed value addition of 15 percent in the sales tax return for the tax period of June 2006 to be filed by July 15.

This would be applicable to the stocks of finished pesticides held on June 5, 2006 and the stocks of active ingredients listed in SRO 645(I)/2006 held on June 21, 2006.

According to a sales tax circular issued on Thursday, the Board has issued instructions to the collectors of sales tax to ensure smooth transition of sales tax regime for pesticides envisaged under SRO 645(I)/2006 and the previous notification SRO 553(I)/2006.

Under the new procedure, the registered persons shall make the stock declarations of finished pesticides and active ingredients to the concerned Collectorate of Sales Tax and Federal Excise along with the sales tax return for June 2006.

The formula for the calculation of due tax on fixed value addition of 15 percent shall be: (a) Customs duty paid value of imported pesticide/active ingredients, (b) Value addition for sales tax purpose = a x 15 percent and (c) Sales tax on value addition = b x 15 percent.

 

[Owais]

Power Policy 2002 to be revamped

ISLAMABAD (July 14 2006): The federal government is to revamp Power Policy 2002, with more incentives for Independent Power Producers (IPPs) in the shape of reduction in performance guarantee amount by 100 percent and extension in financial close and Commercial Operation Date (COD).

Sources in the Private Power Infrastructure Board (PPIB) told Business Recorder on Thursday that a comprehensive incentives package, prepared in the light of prime minister's directives is being placed before the Economic Co-ordination Committee (ECC) of the Cabinet for approval, rescheduled to meet on Saturday (tomorrow).

The main objective of the revision was to remove bottlenecks, hindering fast track on-going and new projects to be commissioned in 2008, when power demand is believed to be unmanageable if new investment is not made, the sources added.

Sources quoted the prime minister as saying that IPPs specific problems should be addressed at the earliest and recommendations put up for approval to the competent forums.

They said there was still a dispute between the ministries of the petroleum and the water and power that which entity would bear the differential cost of alternative fuel, in case gas companies fail to supply the committed quantity of gas.

Sources said the amendments to the Power Policy - 2002 has been drafted in the light of deliberations among the ministries of the water and power, the petroleum, the Water and Power Development Authority (Wapda), National Electric Power Regulatory Authority (Nepra), Sui Northern Gas Pipeline Limited (SNGPL), PPIB, and the Prime Minister's Secretariat.

They said the PPIB has recommended that gas reservoir failure risk should be settled between the gas produce and the gas company rather than passing it on to the IPPs.

It has also been recommended that gas pipeline should be laid by the gas companies themselves and the Gas Supply Agreement (GSA) term (period) must match with the term of the PPA.

However, the impact of the cost of alternative fuel, in case adequate gas was not available after 2011, should not be borne by the gas companies as the Government of Pakistan has already reasonably covered the risk through appropriate clauses in the implementation agreement (IA).

The consequences for short supply of gas below the committed level be borne by the company concerned, ie cost differential of alternative fuel (HSD) should be borne by the gas company and commitments to IPPs must be honoured, the sources maintained.

Sources said it is proposed that minimum charge to be levied on the IPPs for gas supply contracts should be 50 percent as per the past practice, and this would be in lieu of their fixed costs, adding that it has also been agreed that the period of adjustment of over and under payment for gas supply should not exceed one year.

The tolerance in performance limits specified in the GSA should be on the pattern of the PPA as current negotiations were being conducted with IPPs based on zero tolerance.

For the fast-track projects, the PPIB has recommended that time allowed for financial close for fast-track projects should be enhanced to nine months as compared to six months and COD for fast-track projects which was June 2008 as per the ECC decision be extended to October 2008, said the sources.

As envisaged in the Policy for Power Generation Projects - 2002, the amount of bid bond may be maintained at $1,000/MW, while the amount of performance guarantee (PG) should be $5,000/MW, instead of the $10,000/MW approved by the ECC specifically, for the fast-track projects.

The ECC has already approved that an appropriate incentive through an increase in the Capacity Purchase Price (CPP) be allowed to incentivise the completion of power projects by leading business houses of Pakistan, earlier than the end of June 2008.

In view of the recommendations to extend COD to October 2008 for the fast - track projects, similar incentives would be given to all IPPs, which could be commissioned, wholly or partially before October 2008.

In case of delay in achieving the COD, the performance guarantee would be encashed on pro-rata basis - over a period of 90 days - depending upon the actual delay in the COD, the sources added.

Sources said the petroleum ministry does not support the proposal that fuel differential cost should be borne by the gas companies, saying that risk of cost differential of alternative fuel (HSD) for short supply of gas may be shared by Wapda and the gas company in the ratio of 50:50.

However, the water and power ministry is of the view that it should go entirely to the gas companies, as the IPPs were not in a position to control this risk, the sources said.

Furthermore, any risk taken by the power utility ie National Transmission and Dispatch Company (NTDC) and Central Power Purchase Agency (CPPA) would be absorbed by the GoP in the form of subsidy or passed on to the consumer, they also elaborated. "Such an arrangement will dilute 'pressure to perform' on the gas company and the water and power ministry does not agree with the petroleum ministry," the sources said.

 

[Owais]

Oil hits record over $77 NEW YORK (July 14 2006): Oil surged more than 2 percent to a record high near $77 a barrel on Thursday on renewed worries over supply from major exporter Nigeria and as conflict between Israel and Lebanon heightened international tensions.

Prices also rose as the Iran nuclear dispute headed back to the UN Security Council, North Korea walked out of talks with South Korea and crude inventories in top consumer the United States fell more than expected.

"Geopolitical tensions have stepped up - we are moving on to a new phase in Iran and Israel," said Mike Wittner of investment bank Calyon. "In the end, geopolitical risk is about a current supply disruption getting worse or a new one happening."

Front-month US crude settled up $1.75 at $76.70 a barrel after hitting a record $76.85, while crude for March 2007 hit $80 a barrel. London Brent settled $2.30 higher at $76.69 after reaching a record $76.95.

In Nigeria, two suspected explosions at a crude pipeline operated by Agip, a unit of Italy's Eni, caused oil spills, Nigerian officials said. Eni denied reports of sabotage and extensive oil spills and said damage would be repaired soon. Royal Dutch Shell Plc has already had to shut down 473,000 barrels per day of Nigerian supply, almost a quarter of output in Africa's top oil supplier, due to attacks by rebels.

Adding to Middle East tension, Israel blockaded Lebanese ports and struck Beirut airport Thursday, expanding reprisals that have killed 53 civilians in Lebanon since Hizbollah guerrillas captured two Israeli soldiers a day earlier.

Later on Thursday, the Israeli army said a rocket fired by Hizbollah hit Israel's third-largest city, Haifa.

Israel's ambassador to the United States called the attack a "major, major escalation" but a Hizbollah spokesman denied the group was responsible. Israeli naval vessels also fired on fuel tanks at Beirut's international airport, according to airport sources.

Supply breaks and growing Middle East tension mean oil prices may rise further, investors say. The Middle East pumps about a quarter of world output, although neither Israel nor Lebanon are producers.

"The next stop is $80," said Mark Matthias, chief executive of investment specialist Dawnay Day Quantum. "That's what the market is looking at now."

NO SHORTAGE:

Qatari Oil Minister Abdullah al-Attiyah said there was no shortage of crude oil in world markets, blaming geopolitical tensions for the surge to record-high prices.

"The main thing is that we see that there is no shortage in the market at all," he told reporters. "Speculators are using the geopolitical situation to their benefit and we are seeing how the oil prices are reacting."

Qatar is the smallest producer in Opec. The 11-member group has been powerless to stem oil's rally as rising world demand has used up much of the group's reserve production capacity.

Oil in New York is up 25 percent in 2006 because of supply cuts in Nigeria, the dispute over Iran's nuclear work and a flow of investment money into commodities. North Korea's missile tests have added to global tensions.

Iranian President Mahmoud Ahmadinejad said Thursday the world's fourth-largest oil exporter would not abandon its right to nuclear technology after Tehran's case was referred back to the UN Security Council.

In Asia, North Korea blamed the South for the collapse of their first high-level talks since Pyongyang's missile tests sparked a regional crisis, saying Seoul would "pay a price" for the failure.

Oil has rallied from below $20 in January 2002 driven by rising demand led by the United States and China, the second-largest oil consumer. Robust US demand and falling inventories also supported oil's gain Thursday.

US crude inventories slid 6 million barrels last week as imports fell, a government report said Wednesday. The drop was five times larger than the 1.2 million barrels forecast among analysts polled by Reuters.

US motorists, who use over 40 percent of the world's gasoline, bought 1.7 percent more fuel in the past four weeks compared with a year ago. The data covered the Independence Day holiday weekend when annual gasoline demand peaks.

 

[Owais]

Oil tanker loaded with poisonous chemicals being sold to local ship breakers

KARACHI (July 14 2006): An old oil tanker 'Alpha' loaded with poisonous chemicals is near Pakistani waters and its owners are negotiating with Pakistani ship breakers for sale of this ship for scrap, sources said.

According to details, MT Alpha is presently in the international waters near the Pakistan border and its owners, M/s Polembros Shipping Ltd are negotiating with Pakistani ship breakers.

The oil tanker is loaded with poisonous chemicals and is on the watch list of Greenpeace, which requires decontamination before scrapping.

Sources said that the same ship was sold to JV Bangladesh Limited, a Bangladeshi ship breaker, this year and arrived at Chittagong Port in April 2006. However, under heavy pressure from NGO's and on their litigation, High Court in Bangladesh in the light of the report of an inquiry commission barred its entry in Chittagong port.

The Bangladesh Environmental Lawyers Association (BELA) had filed a writ petition before the High Court for preventing the entry of scrap ship named MT Alpha loaded with poisonous chemicals at the outer anchorage of Chittagong port.

It may be mentioned here that there are five centres of ship breaking in the world, ie India, Pakistan, Bangladesh, China and Turkey.

The ship has sailed from Bangladesh and is now in international waters outside Pakistan. The owner of the ship is the same owner of the famous 'Tasman Spirit' oil tanker, which had polluted Pakistani beaches and is under sentence in Pakistan.

Alpha was constructed in 1979 having weight of 87,368 DWT and is a Bahamas flag bearer. Lundqvist Rederierna in Finland sold Alfa America in the year 2002. She was also renamed Alfaship. Lundqvist controls 11 vessels, most of them are oil tankers. Alfaship was built at Nagasaki, Japan. The new owner Polembros operates 34 vessels and has a large scrap record and it may be mentioned here that Polembros has sold 10 ships for scrap to Asian breakers since 2001.

Sources in the shipping industry added that Polembros Shipping was reportedly trying to change ownership papers and ship's name to hide from local authorities.

Sources said that if this ship is bought by any of Pakistani ship breakers, it will not only cause enormous damage to the beach environment but will also damage the ship breaking industry's reputation, which has recently started picking up pace.

It is pertinent to note here that there is no provision in the ship breaking rules regarding inspection of contamination of the ship brought for scrapping.

 

[Owais]

MCB Bank's winning streak continues


KARACHI (July 14 2006): The MCB Bank has yet again received the esteemed European Award for the "Best Bank in Pakistan". It is the only bank to receive the European Award for Excellence for the sixth time in the past seven years.

According to a press release issued here on Thursday this has only been possible because of the confidence and trust reposed in the bank by million of its customers.

The prestigious banking award was conferred on MCB in a ceremony held in London, attended by distinguished representatives of leading banks and financial institutions of the world. MCB's chairman, Mian Muhammad Mansha was present on the occasion while Muhammad Aftab Manzoor, President and Chief Executive of the MCB Bank Limited received the award.

MCB continues to expand its retail and wholesale banking with diversified products and services portfolio. The bank continuously endeavours to achieve leadership in innovation and customer convenience. Its emphasis has always been on multi delivery channels. Along with its easily accessible branches, MCB provides the largest network of ATMs and the most comprehensive Internet banking solution. It is the leading issuer of plastic in the country and also has the largest share in ATM transactions.

MCB has made strong inroads in the corporate banking arena by materialised considerably large deals and transactions including advisory business apart from actively participating in various syndicated arrangements. It has also provided improvised cash management solutions and structured financing activities to almost all-reputable corporations in the country. It has ended the monopoly of select foreign banks in the areas of hedging and derivative products by offering innovative solutions to the corporate clients.

Along with the traditional mode of banking, MCB has not only been expanding its Islamic banking operations across the country but has also been active in debt and equity markets, contributing significantly in its profit growth.

The consistency with which MCB has been receiving international accolades shows that its banking stands parallel to international standards and makes it truly the best bank in Pakistan.-PR

 

[Owais]

PPL starts drilling of Sarang Well

LAHORE (July 14 2006): Pakistan Petroleum Limited (PPL) has begun drilling of an exploratory well at Kot Sarang in Chakwal District of Punjab and planned to complete the work in 210 days, sources told Business Recorder. The civil construction work at the site has already been completed and spudding is in progress from the first week of this month, official sources said.

The contract for drilling of the well has been awarded to a French company Schulumberger which, according to the contract, will complete the work in seven months ie by December this year, the sources added. About the cost, the sources said that according to the contract the French firm will charge US $6,000 per day from PPL, the operator of the said block.

Kot Sarang, located in village Bhagwal in district Chakwal of Punjab in the prolific oil province of Potohar plateau, had been awarded to PPL in November 2002 with 100 percent working interest, covering an area of 665sq km. PPL later gave 25 percent working interest to MGCL last year while retaining 75 percent shares in the said block.

Earlier two wells Kot Sarang-1 and Kot Sarnag-2 had been drilled in the block by OGDC in 1966 and 1985, respectively. According to a report, the recent seismic interpretations indicated that that the well was off the structure. In Kot Sarang-2 potential reservoirs were tested but failed to produce any hydrocarbon and it was plugged and finally abandoned.

According to the report, based on interpretations of reprocessed seismic data, two leads were identified within the Kot Sarang Block at the Eocene level and 2D seismic of 144 line km was acquired over the larger eastern lead.

Based on the interpretation of seismic data and its integration with surrounding wells data the lead appeared as an economically viable project. So finding bright prospects of discovery, the joint venture partners resolved to drill an exploratory well namely "Kot Sarang X-1".

It may be pointed out that the joint venture has established a 25-bed hospital in the block costing Rs 5.18 million including Rs 1.18 million contributed by the Punjab government.

 

[Owais]

SCRAs surge by $15 million

KARACHI (July 14 2006): The financial year 2007 is said to have begun on a positive note as far as Special Convertible Rupee Accounts (SCRAs) are concerned. The SCRAs, which is an indicator reflecting on foreigners' perception about portfolio investment in Pakistan, surged by $15 million during the first 12 days of FY2007 (July 01-July 12, 2006) as per data released by the SBP on July 12.

The surge occurred gradually rising from $1.6 million (USA up $2.7 million) on July 5 to $8 million (USA and Singapore up $5.3 million each) on July 7 and then to $9 million on July 10 with Singapore at $7.2 million leaving behind USA, whose accounts still indicated a balance of $5.3 million.

The overall surge of $15 million in 12 days was also led by Singapore, whose investors brought in over $11 million for investment in Pakistani equity and debt securities.

Relegated rather surprisingly to the second position for the period under report, USA brought in nearly $6 million. Funds originating from UK, which occupied the third position, amounted to some $2.4 million. Liberia, which exhausted its accounts by $0.3 million during FY2006, brought in fresh funds amounting to less than $0.1 million during the same period.

Switzerland made the largest withdrawal and drew back about $5 million between July 01 and July 12. Other negligible to minor withdrawals took place in the case of Hong Kong and Qatar. All in all, there were fresh arrivals of some $19.5 million while total withdrawals during the period amounted to some $4.8 million.

Other 15 countries including BV Island, Bahamas, Bahrain, Germany, Guernsey, France, Japan, Kuwait, Luxembourg, Oman, Philippine, Saudi Arabia, Sri Lanka, Netherlands and UAE did not disturb their accounts during the period.