Pakistan Economy - News & Updates - Archive

[Owais]

SBP amends rule regarding remittances

KARACHI (July 15 2006): The State Bank (SBP) on Friday amended the para 15 of Chapter XVI of FE Manual (8th Edition 2002) to benefit local business/professional entity with principals abroad for remittances on account of membership/affiliation fees.

Under the already existing regulations, authorised dealers are allowed to make remittances on behalf of individuals covering subscriptions or membership fee at actual to bona fide scientific, technical, professional and educational institutions aboard.

Now in addition to individuals, this facility will also be available to institutions/professional bodies in Pakistan with international affiliations.

"Consequently, authorised dealers may allow remittances on account of membership/affiliation fees payable by a local business/professional entity to principals abroad in line with the instructions contained in above-mentioned para of FE Manual".

 

[Owais]

KSE finishes above 10,000 mark

KARACHI (July 15 2006): After hectic bouts of buying and selling during the last session of the week, the index finally closed above 10,000 level, which appeared to be a healthy sign for the trends to come. The benchmark Karachi Stock Exchange's 100-share index closed at 10,027 levels up 12 points from the previous closing of 10,015.

Volumes in the ready market were 190 million shares against 245 million shares recorded a day earlier. Whereas, volumes in future market were 38 million shares against 60 million shares recorded in the previous trading session.

The market opened on a positive note and moved in an index range of 9,953 and 10,080-point level yet for another day market witnessed strong resistance above 10,000 index levels. As volatility continued at local bourses as investors continued to remain cautious.

"Positive activity was observed in National Bank of Pakistan. The main reason behind this activity was news on a local channel regarding NBP expected sale of its investments in shares of Bank AlJazira in the coming next two months", Faiza Naz, research analyst at Jahangir Siddiqui Capital Markets Ltd, in Karachi said.

Ahsan Mehanti, chief executive officer of Shahzad Chamdia & Co, said oil stocks were in higher demand because of rise in crude prices internationally, moreover, market men expect that the OGRA might review prices on Saturday, resulting in sharp appreciation in PSO and PPL.

The market closed above 10,000 level and buying was observed in patches. Most of the investors are sitting with their portfolios amid the hope that the companies to announce healthy dividend for the fiscal year ended June 30.

A dreary trading session was witnessed, as the index remained range bound. The KSE-100 index closed marginally higher and managed to sustain the 10000 points mark. The market started on a positive note following the firming trend in international oil price to mark 10080 points intra-day high. Overall, the KSE-100 index gained 689 points during the week. Swings were evident during the entire session amidst low volumes. Fauji Cement was the star performer of the day as it closed limit up and remained the volume leader. Maple Leaf Cement also closed at the upper lock while Lucky Cement depicted 1.5 percent decline to Rs 108.50.

The banking sector too remained in the limelight led by MCB which rose by Rs 1.35 after its positive reception on being awarded the Euro Money best bank award. The apparent optimism was much sidelined later through the day and the market made an intra-day low of 9952.63. The rationale could be directed towards the veiled suspicions over Pakistan's involvement in the recent Indian bombings.

This underpinned the see saw movement in the market, which included FFC and LUCK losing PRs0.95 and PRs1.4 respectively. The depreciation in the fertiliser industry could also be on the basis of the introduction of 15 percent GST on value added pesticide imports.

Hasanin Asghar from Aziz Fidahusein said that technically, although the index has successfully registered a closing above 10000. The index to make a strong base at 10000 right away as consolidation is needed, while major resistance stays at 10250-10257. The changing geo-political environment would however have an impact on the local bourses, as further suspense would add to the built in nervousness. It is therefore recommended to keep in view the developments on international issues, while availability of main stocks at discounted levels continues to stay

 

[Owais]

Lahore stocks range-bound

LAHORE (July 15 2006): There was a range-bound activity on Lahore Stock Exchange (LSE) on last trading day of the week, however, the market closed above 4400 mark, gaining 24 points. The LSE-25 index reached 4406.28 points compared with previous day's 4382.07, posting a rise of 24.21 points.

Overall turnover declined to 38.728 million shares from 46.826 million of the preceding session, descending by 8.098 million shares.

Although, the market sentiment was bullish, but activity was low due to main players' staying at distance. Analysts said the market remained bullish for three consecutive sessions, therefore, activity turned slow as investors distanced themselves, avoiding taking risk on the weekend. However, despite sluggish activity, oil sector kept rallying up following rising crude oil prices in the international market, they added. Banks and some cement stocks also performed better and gained strength. PSO and National Bank stayed on top in gainers column while UBL and PPL were the prime losers of the day.

The market gained around 200 points during the week, but on Friday the market remained range-bound, Ahmed Nabeel, head of operations, Invest and Finance Securities Ltd, said. There were few positive factors which contributed to the market sentiment and helped it stay stable. First of all, he added, rising trend of oil in the international market which touched $78 per barrel on Friday contributed to the petroleum sector, secondly President Musharraf's statement accusing ex-SECP chairman Dr Tariq Hassan for the KSE crash, which shows the government has managed to find out a scapegoat. "But in my opinion no doubt pressure is on one man but who were the beneficiaries of the poor management of ex-chairman of the SECP, is the question which needs to be answered."

There are numerous negative factors like trade deficit, high interest rate, law and order situation, political situation and above all "possible cracks in Pak-India relations after Mumbai train blasts, which could disturb the 'ECG and blood pressure' of the market." Attack on Lebanon by Israel may affect our market directly or indirectly, he viewed. Traders, therefore, must avoid trading while investors may go for investment cum trading as the market lacks confidence and is likely to remain jittery with fundamentals getting weaker gradually, he stated.

Out of a total of 89 traded scrips, 20 were up, 29 stayed in red zone while 40 were intact to their previous levels. Among prime gainers, PSO gained Rs 3.45, National Bank Rs 3.35, Nishat Mills Rs 3.25, Pakistan Industrial Credit Rs 2.50 and Pakistan Oilfields Rs 1.95. In negative column, UBL sunk by Rs 4.50, PPL Rs 3.25, Adamjee Insurance Rs 2.00, Kohat Cement Rs 1.45 and Lucky Cement Rs 1.35. Fauji Cement Company and National Bank were the volume leaders with 9.479 million shares and 5.353 million shares, respectively.

 

[Neo]

LAHORE (July 15 2006): Punjab Chief Secretary Salman Siddique has said that the province has become a hub of economic activities and the most attractive place for foreign investment. He was talking to a delegation from UK that called on him here on Friday, disclosed an official.

British MP Chaudhry Muhammad Sarwar headed the delegation. The Provincial Secretary Commerce, Communication and Works and Chairman PITB were also present during the meeting.

The Chief Secretary briefed the delegation about the mega development projects of Lahore and its future development plans. He said that Lahore was important being the provincial capital and besides that 50 percent of the total population of the province resides in its surrounding cities. The whole cluster was thus developing simultaneously, he added.

He said that the master plan of the city was on the anvil, keeping in view its 50 years' needs. He further said that since Lahore had become a centre of foreign investment, the hotel industry had, thus, very bright chances to flourish in the city.

The delegation members showed their interest in developing a 'theme park' in or around Lahore. The delegation also briefed the Chief Secretary about various aspects of the proposed park. The Chief Secretary assured the delegation to provide all out assistance in that regard.

 

[Neo]

ISLAMABAD (July 15 2006): Prime Minister Shaukat Aziz has rejected Commerce Ministry's projections showing only 8 percent increase over the last fiscal year, and directed the officials to fix a reasonable exports target for 2006-07.

Sources said that the Prime Minister was disturbed over Commerce Ministry's exports estimates and visibly expressed it during a meeting the other day to give him a presentation on upcoming trade policy to be announced on July 17.

The Prime Minister asked of Commerce Ministry's officials on what basis they were projecting only 8 percent increase in exports for 2006-07, when all other economic indicators were showing healthy trend. He counted overall economic growth, increase in remittances FDI, enhanced revenue target and several other factors.

He said that the Ministry should take into account all these factors before finalising the exports target for the current fiscal year.

Sources said that Commerce Ministry supported textile industry's demand for a special package of incentives, and strongly argued that such a treatment was inevitable for enhancing textile related items exports to subsequently push the net exports to the new height in 2006-07.

Sources said Commerce Ministry officials took the same position during the presentation and tried to persuade the Prime Minister that he should grant some special incentives for the textile industry.

Sources said the Prime Minister did not agree that the textile industry only could help the government achieve a reasonable exports target for 2006-07, if it got some special treatment in terms of incentives. He said the government would provide all possible measures to facilitate all sectors engaged in exports, but it was difficult for it to single out anyone of them for incentives.

It may be noted that the textile industry has been demanding a Rs 50 billion package. The government is yet to respond to the industry for the demand.

 

[Neo]

ISLAMABAD (July 15 2006): A delegation of the World Bank officials held a meeting with Dr Salman Shah, Adviser to the Prime Minster for Finance, to discuss the Bank's Support for National Trade Corridor Improvement programme, here on Friday.

The delegation expressed appreciation for the quality of the programme. The Bank will provide $300 million a year as support to the programme besides funding for investment.

The integrated programme is indigenously designed and will cover different sectors like railways, ports, trucking industry, highways, trade logistics and civil aviation.

 

[Neo]

ISLAMABAD (July 15 2006): Minister for Commerce Humayun Akhtar Khan has said the country will be able to achieve the exports target of 17 billion dollars set for the 2006-07 fiscal year. The minister stated this in an interview with a private business television channel.

He disclosed that Pakistan would sign a free trade agreement (FTA) with "Mercusor" countries on July 20, which, he hoped, would further increase the exports.

Humayun hoped that the trade deficit in the 2006-07 financial year would be reduced, adding the balance of payment position had also improved.

He said prosperity in the country led to the increase of import of vehicles, adding that under the scheme, 40,000 vehicles were imported and as a result, there was a significant reduction in the premium of vehicles. The minister said cellular phone industry also witnessed a significant growth in the country.

He said that Pakistan had also rectified South Asian Free Trade Agreement (Safta).

The Commerce Minister said that European Union (EU) imposed anti-dumping duties on Pakistan in March 2004, and due to the efforts of the government, those duties were reduced to 5.8 percent in 2006. The European countries were giving preference to Pakistani goods, he added.

He said his ministry was a trade promotion organisation and would exports those goods, which were produced in the country. "We are planning to enhance our production in collaboration with the related ministries to propel our exports into international markets", he added.

Besides other sectors, he also called for promoting agriculture and services sectors for boosting the exports of the country. He also stressed the need for promoting domestic commerce and utilisation of state land owned by various departments, including Pakistan Railways. Replying to another question, he said there was no duty on the import of cement except only the sales tax.

Humayun Akhtar Khan said that Pakistan could achieve prosperity and higher growth by increasing production and boosting exports. He said the government was making efforts to enhance market access to Pakistani goods at international and regional markets, adding that it had huge potential for its exports in regional and international markets and "we will tap them".

He said that Pakistan had already started dialogues for trade with Association of South East Asian Nations (Asean) countries. The Commerce Minister lauded President General Pervez Musharraf and Prime Minister Shaukat Aziz for their valuable contribution and guidance in the improvement of overall sectors and formulation of trade policy in the country.

 

[Neo]

ISLAMABAD (July 15 2006): President General Pervez Musharraf asserted on Friday that the government would continue to make all-out efforts for accelerating pace of development activities in the whole of Balochistan province.

He categorically stated that no leniency would be shown towards such few miscreants who try to disrupt these development activities by creating law and order situation.

The President made these remarks during a meeting to review law and order situation and the ongoing development projects in Balochistan. Prime Minister Shaukat Aziz was also present on the occasion.

The President said that efforts would continue for accelerating development activities, mega and micro schemes in Balochistan, whether under the Federal Government, Khushal Pakistan Programme, or planned by senators, MNAs or district governments. During this review meeting, both the President and the Prime Minister were updated on matters pertaining to security of foreign workers and government installations, foreign direct investment (FDI) and status of ongoing development projects.

They were also informed that the government's timely and appropriate steps in parts of the two affected districts of Kohlu and Dera Bugti had started showing positive signs.

The residents of the affected areas have shown full support and confidence in government's commitment to develop the backward areas of Balochistan.

The President and the Prime Minister were also apprised of a number of projects that are being implemented in Balochistan for the prosperity of the people and to bring the province at par with other parts of the country.

These projects will bring about a quantum change in the lives of the people resulting in their socio-economic uplift through creation of greater job opportunities.

The President and the Prime Minister expressed satisfaction over the improvement of law and order in Balochistan and directed the officials to recruit more locals in police, Frontier Constabulary and other government departments. It was also a matter of satisfaction to view that more than 6000 personnel from Balochistan were in the army and the number was gradually increasing for which recruitment standards have been relaxed.

Minister for Information and Broadcasting Muhammad Ali Durrani, Balochistan Governor Owais Ahmed Ghani, Chief Minister Jam Muhammad Yousaf and Deputy Chairman Planning Commission Dr M. Akram Sheikh also attended the meeting.

 

[Neo]

ISLAMABAD (July 15 2006): Prime Minister Shaukat Aziz has said that the government has adopted an holistic approach for development in Balochistan, and the economic and political initiatives are being made in tandem to expedite growth and development in the province.

Talking to Balochistan Chief Minister Mohammad Yousuf, who called on him at the PM House on Friday evening the Prime Minister said that the government was trying to leverage the true potential of Balochistan, and Rs 133 billion, allocated for development of Balochistan was a manifestation of the government's commitment to the development of the province.

He observed that PSDP allocation to Balochistan, which was Rs 7.1 billion in 1999, had reached Rs 30.6 billion this year, and deferment of loans of Rs two billion would enable the provincial government to divert more funds for the development projects to usher in a new era of prosperity in the province.

The Prime Minister said that his government was particularly focusing on strengthening infrastructure, and 35 percent of NHA budget was being spent on building a network of roads and highways in the province. "Development of mineral, agricultural and fisheries are also among the priority areas," the Prime Minister added.

He said that export promotion zones were being set up to boost the trade potential of the province and the area has been opened for investment. These measures, he said, would take Balochistan to the 21st century.

The Prime Minister said these development projects were at various stages of completion, and the federal and provincial governments needed to co-ordinate for timely completion of these projects.

He said that government was particularly focusing on providing job opportunities to the youth of Balochistan. He said that 35,000 new jobs had been created for the local people, and Ph D scholarships for students of Balochistan had been doubled.

He said that the development projects initiated under PSDP would create unprecedented opportunities in Balochistan.

The Prime Minister emphasised the need for maintaining peace in the province which, he said, was critical for maintaining the tempo of growth and development in the province and for attracting more investment. The Prime Minister said the writ of the government must be maintained, and the elements disrupting peace and harmony should be dealt with an iron hand.

The Balochistan Chief Minister briefed the Prime Minister on the law & order situation, implementation of development projects and party matters.

He thanked the Prime Minister for the support from the Federal government to Balochistan and said that the provincial government would redouble its efforts for the timely implementation of the development projects.

He also apprised the Prime Minister about the ongoing enrolment drive in the province. He said the membership of PML was increasing in Balochistan, which was a sign of the increasing popularity of the party and enhanced support and faith of the people in the initiatives taken by the federal government for the betterment of Balochistan.

 

[Neo]

LAHORE (July 15 2006): The US Ambassador Ryan C Crocker has announced additional support for the marble and granite sector's Strategic Working Group (SWOG) to help set up a training centre to increase the capacities of its workforce.

He made this announcement during a meeting with the representatives of the industry concerned along with chief executive officer of Small and Medium Enterprise Development Authority (Smeda) Shahab Khawaja that was held in Peshawar, says a USAID press release issued here on Friday.

The working group, which is funded by the US Agency for International Development is upgrading facilities to make the sector more competitive in the domestic and international markets.

The Ambassador expressed hopes for the development of the marble and granite industry in order to improve the life of thousands of people working in the industry in Fata.

"US is working to ensure that Fata region develops through a range of activities that stimulate economic growth, especially through the provision of better training and worker health services," he added. "The marble and granite programme is an example how the US through USAID is focused on making Pakistani industries competitive in the international market."

 

[Neo]

ISLAMABAD (July 15 2006): Federal communications minister Shamim Siddiqui has said revival of the National Highway Council would serve as a catalyst to expand road network to the far-flung areas of the country. Talking to media men at the parliamentary lodges here on Friday, he said the council, which was revived after a lapse of 10 years, would comprise seven members headed by the Federal Minister for Communications.

The council would meet in August but it has been made mandatory that three federal secretaries, federal minister and NHA chairman should attend the meeting after two months, he added.

To a question, Siddiqui said the Chinese President is likely to inaugurate Karakoram Highway (KKH) and Gwadar port in November during his visit to Pakistan. Citing corruption as one of the challenges of the ministry, Siddiqui said although it is a difficult job but he would try his best to root out this menace by making award of contract transparent and fair.

"I have written to the National Accountability Bureau (NAB), Public Accounts Committee (PAC), parliamentary standing committees, Prime Minister and President's secretariats about corruption in the National Highway Authority (NHA), but received no affirmative response," the minister said. "It is not an easy job and we cannot root out corruption single-handedly and we are trying to keep most of the things right and transparent," Siddiqui vowed.

When asked about promotion of one of the members, the minister said a notification of his promotion to grade 21 would be issued within a couple of days as his ACR was written with mala fide intention, but seeing his service record all adverse remarks were expunged, he added.

 

[Neo]

SATURDAY, JULY 15

ISLAMABAD: The World Bank has agreed to provide $1.8 billion to Pakistan for a $6 billion programme to meet domestic transportation needs and provide transit facilities to Central Asia, western China, Afghanistan and Iran.

A World Bank team met Salman Shah, adviser to the prime minister on finance, and committed that the bank would provide $300 million a year as support to the National Trade Corridor (NTC), reported the Dawn Saturday.

The programme is the result of year-long consultations with various ministries, corporations and key international lenders including the World Bank, Asian Development Bank (ADB) and Japan Bank for International Cooperation (JBIC).

It covers core areas like ports and shipping, trade facilitation, highways and modernizing of trucks, aviation and air transport, and railway network.

According to an official statement, Shah said Pakistan attached high priority to the programme to bring a paradigm improvement in the country's competitiveness.

The programme is spread over a period of six years and would be supported by other donors.

The investment plan will be fully implemented in about five years, said Asad Shah, the Planning Commission member on infrastructure.

"The existing infrastructure capacity cannot support 7-8 percent of sustained economic growth," said a Planning Commission report.

The plan aims at improving Pakistan's share of world trade from 0.2 percent to 1 percent by 2030 and increase Pakistan's exports from $17 billion in 2006 to around $250 billion by 2030.

It will "enhance regional connectivity through trade links, energy and transport corridors with China, Central Asian Republics, Afghanistan and Iran", said Shah.

 

[Neo]

ISLAMABAD, July 14: The World Bank has agreed to provide $1.8bn to Pakistan for its $6bn National Trade Corridor (NTC) improvement programme to meet domestic transportation requirements and provide transit facilities to Central Asia, Western China, Afghanistan and Iran.

A World Bank team that had a meeting with Adviser to the Prime Minister on Finance Dr Salman Shah here on Friday committed that the bank would provide $300m a year as support to the programme.

The programme has been prepared through a year-long consultation process with various ministries and corporations and key international lenders including the World Bank, Asian Development Bank and Japan Bank for International Cooperation (JBIC).

It covers six core areas like ports and shipping, trade facilitation, highways and trucking modernisation, railway improvement and aviation and air transport modernisation.

According to an official statement Dr Salman Shah during the meeting said the government attached high priority to the programme to bring a paradigm improvement in the country’s competitiveness. The programme is spread over a period of six years and would be supported by other donors.

The investment plan will be fully implemented in about five years. This is estimated to save $5 to $7.5bn per annum to the country which is currently being lost due to low performance of railways, highways, trucking and ports and airports, says Dr Asad Shah, Planning Commission’s member on infrastructure.

"The existing infrastructure capacity cannot support 7-8pc of sustained economic growth," says a Planning Commission report on the NTC improvement plan. "Investments estimated at over $6bn (next five to six years) will be sequenced strategically and kick-started through high priority projects".

A comprehensive incentive package has already been announced in the federal budget 2006-07 for the trucking industry through tax and duty free import of large trucks for replacing obsolete 2-axle and 3-axle rigid trucks with introduction of modern prime movers, multi-axle and Euro standard trucks to turn Pakistan into a regional hub for international trade.

The government plans to shortly start roadshows in major international cities to attract investments in these sectors. A door-to-door truck service would also be launched for delivery of goods from ports, airports and railway stations.

The plan aims at improving Pakistan’s share of world trade from 0.2pc to 1pc by 2030 and increase Pakistan’s exports from $17bn in 2006 to around $250bn by 2030. It will "enhance regional connectivity through trade links and energy and transport corridors with China, Central Asian Republics, Afghanistan and Iran," said Mr Shah.

To reduce port costs and improve logistics, the berth draft of Karachi Port and Port Qasim would be deepened to attract larger capacity vessels and vessel charges and terminal handling charges would be drastically reduced. This will save Pakistan about $450m per year.

The banking and insurance sectors would support trade logistics and freight forwarding would be developed to meet the requirements of World Trade Organisation, South Asia Free Trade Arrangement and Economic Cooperation Organisation. The trade facilitation is estimated to provide a saving of $1.3bn per annum.

Similarly, the capacity of North-South transportation and allied national highways would be improved through commercial management and introduction of electronic tolling system. The highways modernisation is estimated to save $2bn annually.

Likewise, the railway system would be restructured through creation of a freight business unit with dedicated locomotives and rolling stock to reduce travel time for Karachi-Lahore container service to 28 hours against existing 56 hours. For this purpose, 75 transportation locomotives and 150 passenger coaches would be procured next year. This is estimated to save $1bn per year.

For aviation and air-transport, the regulatory, commercial and operating functions would be bifurcated and private sector airlines would be encouraged to operate on international routes.

 

[Neo]

Saturday, July 15, 2006

ISLAMABAD: The World Bank will provide $300 million a year for the $6 billion National Trade Corridor Improvement (NTCI) Program to be completed in the next six years.

A delegation of World Bank held a meeting with Dr Salman Shah, Adviser to the Prime Minister on Finance, to discuss the World Bank support for the National Trade Corridor Improvement Program here on Friday. They expressed appreciation for the quality of the programme. The Bank will provide $300 million a year as support to the programme besides funding for investment. The integrated programme is indigenously designed and will cover different sectors such as railways, ports, trucking industry, highways, trade logistics and civil aviation.

The adviser emphasized that the government’s commitment to this high priority programme would bring a paradigm improvement in the country’s competitiveness. The programme is spread over six years and would be supported by other donors. The total cost of the programme is estimated at six billion dollars.

The Prime Minister’s Task Force on National Trade Corridor Development Program had assessed that Pakistan would be able to save losses of $2.5 billion annually by improving railways, highways and by modernizing road transport only. The National Trade Corridor Development project also includes construction and improvement of 1,729 kilometers of national highways of N-5, construction and improvement of 1,265 kilometers of National Highways of N-55 and construction and improvement of 1840 kilometers of motorways and expressways’ network of the country.

 

[Neo]

Saturday, July 15, 2006

ISLAMABAD: Pakistan was interested in international and in particular German expertise and assistance in improving the railway system, said Minister for Railways Sheikh Rashid Ahmed while talking to his German counterpart Dietrich Austermann.

The minister along with Railways General Manager (Operations) Saleem Akhund and other ministry officials is on a four-day tour of Germany, said a press release issued on Friday.

Pakistan Railways was interested in acquiring German expertise in locomotives, signalling system, passenger and freight coaches and laying down rail tracks, Ahmed said. He said that Pakistan wanted to enter into joint ventures with Germany to improve its railway network and operations across the country.

Ahmed briefed Austermann on the projects undertaken by Pakistan Railways and said that work on the expansion of the track from Khanewal to Rawalpindi had begun. “The expansion will not only help trains arrive on time but also encourage people to rely more on train travel because of their increased efficiency,” he added.

Ahmed said that a project to install a Mass Transit Rail System had been initiated in eight major cities of Pakistan and asked the German minister to invest in the revival of the Karachi circular rail system. Special emphasis had been given to freight trains since they were a major source of revenue for the railways, the minister said.

“Presently, 900 freight coaches are operating which we plan to increase to 1,000 while freight trains would be increased to 14 from eight,” Ahmed said. The delegates also visited Voith and DWK factories which manufacture locomotives and passenger and freight coaches.

The minister praised the quality of the coaches and expressed his interest in their procurement. The demand for freight trains has increased because of the economic growth in the country, Ahmed said.

Pakistan Railway needs locomotives, freight coaches and new rail tracks, he added.