Pakistan Economy - News & Updates - Archive

[Neo]

Pakistan's Lucky Cement raises $109 mln via GDRs​

KARACHI, May 8 - Lucky Cement , Pakistan's biggest cement maker, said on Thursday it raised $109.3 million through the issue of global depositary receipts to be listed on the London Stock Exchange.

Lucky said it sold 15 million GDRs at $7.28, or 480 Pakistani rupees, each. Each GDR is equivalent to four shares of Lucky.

"An overwhelming response was received from the international investors and the issue was oversubscribed more than 2.5 times," the company said in a statement to the Karachi Stock Exchange.

Lucky had said in July last year it would use the funds raised through the global listing for expansion.

It plans to raise its cement manufacturing capacity by 2.5 million tonnes a year by building two additional lines in Karachi.

Lucky has about an 18 percent share of the Pakistani cement market and an installed production capacity of 6.55 million tonnes a year.

Lucky's GDR issue was managed by Merrill Lynch and Pakistan's KASB Capital

Pakistan's Lucky Cement raises $109 mln via GDRs - Yahoo! Singapore News

 

[PakistaniPatriot]

More strict measures to save rupee likely: foreign exchange companies meeting in SBP today.


KARACHI (May 08 2008): The State Bank of Pakistan (SBP) has disbursed about $6 million to 'A' category exchange companies to maintain the rupee value versus dollar at a reasonable level. However, due to the declining value of the rupee the SBP has decided to take more strict measures to control the declining the rupee value and has called a meeting of exchange companies on Thursday, sources in banking industry said.

They said that disbursement of some $6 million to exchange companies did not help the rupee in retaining its value at earlier level and it remains under pressure, touching the record lowest level of Rs 67 to a dollar.

They said that despite disbursement of this amount, the rupee value is continuously declining in the interbank and open markets which makes the State Bank of Pakistan (SBP) take more strict measures aimed to control the declining Pak rupee value.

Sources said that the Thursday meeting will be chaired by SBP Governor and will be attended by representatives of 'A' category exchange companies, and some new strict measures or a combined strategy for the stability of Pak rupee is expected.

"Some 24 foreign exchange companies of 'A' category licence holders have received around six million dollars from SBP during the last two weeks to improve the supply of dollars in the open market," they said. These funds have been disbursed directly by SBP at fixed rate of Rs 64.50 per dollar. However, these exchange companies will be required to retire this amount by May 15, 2008.


Business Recorder [Pakistan's First Financial Daily]

 

[Flintlock]

Pakistan stock market has huge potential: US ambassador

Staff Report

KARACHI: US Ambassador to Pakistan, Anne W Patterson, Thursday visited Karachi Stock Exchange (KSE) and held a meeting with its management and board of directors.

US Consul General Kay L Anske and Press Attache Elizabeth O Colton were also present on the occasion.

Speaking on this occasion, she said that Pakistan stock market has a ‘huge’ upside potential and she was keen to be at the premier stock exchange of Pakistan.

“I was preparing for the job and I picked up the Wall Street Journal one day and there was a front page article on ‘terrorism in Pakistan’ and on the business page there was a story on KSE being the most successful stock exchange in the world. So I wanted to visit this stock exchange (KSE) which is the symbol of Pakistan’s growth and of hopefulness in the economy”, she said.

“I had also heard a lot about the distinguished and impressive management the stock market had here,” she said. Earlier, Managing Director KSE, Adnan Afridi, gave a presentation on country’s economy, stock market and performance of Pakistan’s premier bourse.

He said Pakistan has experienced a sustainable growth and can continue on the path provided there is continuity and longevity of economy policies. “It is one of the most open investment regimes in the world with 100 percent repatriation of profits that has helped in attracting investment,” he said.

Adnan pointed out that financial services and telecom sector were deregulated with the help of strong, professional regulators adopting global practices and benefiting from favourable demographics.

He said KSE was the top performer in the emerging stock markets of the world with a growth of 8.73 percent during 2008. Taiwan is the second with 5.69 percent followed by Bangkok and Singapore.

He said the growth rate of KSE is over 35 percent per annum for the last ten years as its market capitalisation has grown to $75 billion.

He said KSE was heading for de-mutualization which will make it a member of developed stock markets of the world.

Responding to a question about the prospects of long-term investment in the backdrop of security concerns, Adnan pointed out that despite ups and downs and political uncertainty in the country, foreign investment has continued to flow in.

Other members of the board of directors told US Ambassador that there were big upside expectations, once the security situation is improved. What they (fund managers) are worried is the falling rupee and lack of economic road map.

US Ambassador was told that KSE has the average multiple of 10 to 11 whereas neighboring markets including India has 17 while Bangladesh 23.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

KSE a symbol of what Pakistan will be: US envoy ​

Friday, May 09, 2008

KARACHI: The Karachi Stock Exchange (KSE) has huge potential and is a symbol of Pakistan’s hope and growth in the economy.

US Ambassador Anne W Patterson stated this during her visit to the KSE on Thursday. She was accompanied by US Consul General Kay L Anske and Press Attache Elizabeth O Colton.

“I was preparing for my job and picked up the Wall Street Journal one day. There was a front page article on “terrorism in Pakistan” and on the business page there was a story on “how this (KSE) was the most successful stock exchange in the world”. So I wanted to visit this stock exchange, which is the symbol of Pakistan’s growth and hopefulness in the economy,” she said. “I had also heard a lot about the distinguished and impressive management the stock market had here.” She termed the KSE a symbol of what Pakistan can and will be.

Earlier, MD KSE Adnan Afridi gave a presentation on the country’s economy, stock market and performance of the bourse. He said Pakistan has experienced sustainable growth and can continue on the same path, provided there is continuity and longevity of economic policies. It is one of the most open investment regimes in the world, with 100 per cent repatriation of profits that has helped in attracting investment, he added according to a press statement.

He said KSE was the top performer in the emerging stock markets of the world with a growth of 8.73 per cent during 2008. Taiwan is second with 5.69 per cent, followed by Bangkok and Singapore. He said the growth rate of KSE is over 35 per cent per annum for the last ten years, as its market capitalisation has grown to $75 billion.

Other members of the board of directors told the US Ambassador that there were big upside expectations once the security situation was improved. Fund managers were, however, worried about the falling rupee and lack of economic road map.

KSE a symbol of what Pakistan will be: US envoy

 

[Neo]

Govt borrowings soar to Rs361.6bn ​

Friday, May 09, 2008

KARACHI: Net government borrowings surged to Rs361.608 billion from July 2007 to April 26, 2008 which expanded broad money (M2) growth to Rs343.671 billion and continued inflationary pressures on the economy.

Although during the corresponding period of the last fiscal year (July-April 28, 2006-07) government’s net borrowings were very low (Rs120.721 billion), M2 growth was 12.16 per cent to Rs414.415 billion.

According to State Bank of Pakistan’s statistics, the government borrowed Rs484.950 billion from the SBP during the aforesaid period, which pushed broad money growth to 8.45 per cent. However, at the same time, it retired Rs150.079 billion loans of scheduled banks.

From July-April 26, 2007-08 government borrowings for budgetary support ballooned to Rs334.871 billion as compared to Rs170.987 billion in the corresponding period of the last fiscal year. The government borrowed Rs2.459 billion for commodity operations and Rs278 million for other purposes.

It is pertinent to note that the federal government may borrow directly from the SBP either as advances or purchase of market treasury bills. Advance is extended for government borrowings up to Rs100 million at an interest rate of 4pc per annum, whereas higher amounts are borrowed through SBP purchases of six-month MTBs at the weighted average yield determined in the most recent fortnightly auction of the paper.

The provincial governments and Government of Azad Jammu & Kashmir may also borrow directly from SBP through raising their debtor balances (over drafts) within limits defined for them.

In the aforementioned period, credit to the non government sector augmented to Rs413.215 billion against Rs278.002 billion in the corresponding period of the last fiscal year, whereas credit to the Public Sector Enterprises (PSEs) increased to Rs41.730 billion which stood at Rs4.068 billion in the similar point in time of the preceding fiscal year. The SBP credit to Non Banking Financial Institutions recorded Rs214 million compared to Rs373 million of the last year.

According to SBP statistics from July-April 26, 2007-08 the amount in circulation was Rs152.880 billion, contrary to that in July-April 28, 2007-08. During this period the other deposits with SBP reduced by Rs2.718 billion contrary to which, Rs1.168 billion was increased.

Govt borrowings soar to Rs361.6bn

 

[Neo]

Pakistan negotiates $500m loan with World Bank ​

Friday, May 09, 2008

ISLAMABAD: Pakistan is negotiating with the visiting mission of the World Bank (WB) for finalising a new programme to get $500 million loan before June 30, 2008, in order to curb its financial difficulties owing to higher POL and commodity prices.

Pakistani authorities are striving hard to obtain consent of the visiting WB mission for a fresh programme. However, if Islamabad remained unable to do so, they are also proposing the Bank to disburse $500 million in advance for the next fiscal year programmes, to remove its woes owing to growing imbalances on the external front.

“The WB mission has asked Pakistan to convert advance assistance by providing rupee against dollar by next year if WB extends its decision in favor of Pakistan,” said a high-level official who is involved in the negotiating process with the WB mission, while talking to The News here on Thursday.

According to the official, Pakistani authorities are reluctant to accept such demands from the WB. They are pursuing Bank authorities for approving and disbursing the desired amount under the new programme on a speedy basis before June 30, 2008.

The worries of economic managers are increasing, owing to the depleting foreign currency reserves and consistently weakening of rupee against the dollar.

The World Bank portfolio stands at less than 20 programmes, as it wants to extend its support only for those areas where it can run its operation effectively, a WB official said in a background discussion with this correspondent.

A few programmes of the WB involving millions of dollars got delayed during the current fiscal year, such as the Poverty Reduction Strategy Paper (PRSP-II), for which the Bank would extend around $500 million to Islamabad for reducing the menace of poverty.

As the finalisation of PRSP-II was delayed by Pakistani authorities, there was no approval, and subsequently no disbursements were received by Islamabad, which were actually in the pipeline on the occasion of the budget preparation process for FY 2007-08.

“Yes, the Pakistani authorities have approached us for a new programme, which also includes provision of financing for establishing social safety nets in the wake of growing POL and commodities prices,” said a WB official.

The country’s federal cabinet on Wednesday assessed that 70 per cent of the population is earning less than $2 a day. The government is finding ways and means to provide targeted subsidy, but devising a mechanism for reaching out the real needy people will be the most difficult task for the incumbent regime.

“We are discussing a conditional cash transfer programme under the social safety nets,” said the official. But the WB has raised certain questions over it by wondering how the government can provide targeted subsidy to 70 per cent of the population, who are earning less than $2 per day.

“WB has proposed the government to identify certain districts of Pakistan where the incidence of poverty is more severe and apparent,” said the official, and added that the discussions were underway. The outcome was expected with a full-fledged strategy in the next couple of weeks.

The growing food inflation has made life miserable for the common citizen, especially salaried, pensioners and low-income groups.

When a high-level official was contacted for comments on Thursday night, he confirmed that the negotiations were underway with the WB mission for obtaining a $500 million loan during the current fiscal year.

“If Pakistan is not able to get this money from the WB in the current fiscal, the inflows seem quite strong and Islamabad will be able to manage $2.5 to $3 billion before June 30, 2008,” he added.

Citing an example of Lucky Cement’s GDR, he said that this transaction brought over $100 million. Jehangir Siddqui is planning to move ahead with a transaction which may bring $160 million. ADB has committed around $1 billion with Pakistan, which will be received before June 30, 2008. Some other transactions are also in the pipeline, which will help Islamabad to achieve its envisaged target by generating $3 billion during the current fiscal year.

Pakistan negotiates $500m loan with World Bank

 

[Neo]

Uncertainty surrounds windmill project​

KARACHI, May 8: Even though it has its reservations over the tariff approved by the National Electric Power Regulatory Authority (Nepra), a Turkish firm is reported to have started shipping equipment to Pakistan for setting up the country’s first wind energy project.

According to sources in the know of things, some of the equipment has already reached Karachi and the rest is expected to arrive in the next couple of weeks. To be put up near Jhimpir, the five units of 1.2MW each, which are only 12 per cent of the actual (50MW) project, will hopefully get functional by early August.

Zorlu is said to be one of the eight entities that had received the generation license from among the 21 potential investors who were given land allocations by the Alternative Energy development Board (AEDB) so that they could prepare feasibility studies regarding their projects. None of the investors, however, could agree to the Nepra tariff of 10.49 cents per kilowatt in addition to a raise of 1 to 1.5 cents on carbon credit account.

The Turkish firm is the only one that has re-applied so far, while two other companies, Green Power and Win Power, are in the process of filing revised applications.

Requesting anonymity, the sources said that the Turkish firm has been given a tacit understanding by the AEDB that it would somehow make Nepra see the light of reason and take a long-term view of the country’s crunching need to build alternative energy resources to offset the soaring cost of conventional energy.

The removal of AEDB CEO Shahid Hamid, which came about late on Wednesday evening through a federal government notification, may have an impact on the Zorlu deal because the change has come at a crucial time, especially for the Turkish firm which may find itself stranded.

Only a few weeks earlier, the AEDB had talked of plans to install windmills in Sindh to produce 1,200 megawatts of power. It had even talked of having acquired 34,000 acres of land for the purpose. But, insiders say, allocation of land is only the beginning of the process. Simply being a facilitator, the AEDB can only locate potential investors, convince them to take up relevant projects, and help them out in terms of technical feasibility.

The real action starts when it comes to the financial feasibility. A narrow, short-sighted vision on the part of the regulatory authorities is generally blamed for having killed many an option. Citing wind energy negotiations as a yardstick, the sources say that the time taken by the regulators in negotiation with the entrepreneurs has only allowed the prices of wind turbines to go up and their delivery times extended by up to three years.

Nepra offices in Islamabad were approached more than once, both through telephone and email, for their side of the story, but all messages left for Director Tariff Syed Insaf Ahmed remained unanswered.

Uncertainty surrounds windmill project -DAWN - Business; May 09, 2008

 

[Neo]

PSDP to be set below Rs 500 billion in 2008-09​

ISLAMABAD: Due to the financial constraints, the Public Sector Development Programme (PSDP) for the next fiscal year 2008-09 would be less than Rs 500 billion, official sources told Daily Times on Thursday.

An important meeting of the Annual Plan Coordination Committee (APCC) of the federal government has been convened on May 23, to finalise recommendations for PSDP and macro economic framework for the next fiscal year, the official added.

According to the priorities set by the new government infrastructure, health and education would be the main priorities of the PSDP for the next fiscal year 2008-09.

This revision would result into deletion of many projects in the next fiscal year for creating a space for the new government to add its own new projects in the next year’s PSDP, the official informed.

Official sources informed that for the first time in the history of the country some infrastructure development projects would be financed through private sector investment under public-private partnership (PPP). Infrastructure Projects Development Facility (IPDF) management has held a detailed meeting with infrastructure development cell of the Planning Commission to transfer some infrastructure development projects to the IPDF secretariat so these could be financed and carried out through private investment on PPP basis.

Official sources informed that due to the huge expenditures incurred during the current fiscal year, fiscal space is limited and the government would try to be realistic and would prepare the next year’s PSDP within its financial resources.

In the current fiscal year the actual development programme of the Federal Government as well as all four provincial governments was fixed at Rs 485 billion including Rs 335 billion federal development programme and Rs 150 billion provincial annual development plan.

Some Rs 204.570 billion were projected to be spent by the public sector corporations and enterprises out of the PSDP like Water and Power Development Authority, National Highway Authority and other organisations.

Earthquake Reconstruction and Rehabilitation Programme for the current fiscal year were set at Rs 35 billion. Total development outlay of the Federal Government, provincial governments, public sector enterprises and earthquake reconstruction was estimated at Rs 725.510 billion.

However, due to the large budget deficit of Rs 956 billion as against the projected budget deficit of Rs 400 billion for the current fiscal year the government, after the mid-term review of the PSDP, had stopped the fund releases for the projects which were yet to start by end December 2007.

The development expenditure and net lending of the federal as well as provincial governments during the first half July-December period of current fiscal year stood at Rs 225.768 billion.

Punjab spent Rs 71.608 billion on development programme, province of Sindh has spent Rs 14.220 billion on development projects, NWFP has spent Rs 12.942 billion as development expenditures and development expenditures in Balochistan amounted to Rs 5.384 billion in July-December period of the current fiscal year.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Pakistan has potential to capture more of $45 billion BPO market: managing director TRG ​

KARACHI (May 09 2008): Pakistan has the potential to capture more of the $45 billion Business Process Outsourcing (BPO) market since it is still a relatively new entrant with an ample supply of high caliber labour, whereas the Indian labour pool has now reached saturation.

This was stated by Nadeem Ilahi, Managing Director and Country Manager-Pakistan The Resource Group (TRG) in his presentation at a event organised by 21st Century Business & Economic Club at a hotel here on Thursday.

He said that a viable BPO industry in Pakistan is the best solution to employ the skilled youth and significantly enhance foreign exchange earnings of the country. The BPO industry in Pakistan faces numerous challenges, which TRG has successfully mitigated in order to become the market leader.

Besides problems in infrastructure, Pakistan is also perceived as a high-risk country in international markets. He said that TRG is a multinational KSE-listed company, providing Business Process Outsourcing services to high profile, Fortune-1000 and FTSE 100 companies in North America and Europe.

He said that TRG's services portfolio consists of Contact Centre Services, Software Development, Finance back-office and Data-Entry. TRG is amongst the largest software development concern in Pakistan.

TRG began operations in 2002 with only 60 employees, and today employs over 1,000 employees in Pakistan and over 5,000 worldwide. In addition to Pakistan, TRG has large-scale operations in the USA, Canada, Brazil, UK, Senegal and the Philippines, he said and added TRG is ranked amongst the world's largest offshore-based BPO companies.

"It is the industry pioneer in Pakistan and has made a concerted effort to introduce Pakistan into the global BPO market as a viable location for such services", he added. TRG serves a variety of customers in several industries such as Telecom, Financial services, Healthcare, Consumer Goods & Media. Commitment to deliver top quality service is what differentiates TRG from other companies in the industry.

Highly skilled manpower, world-class training, state-of-the-art technology and facilities, form the backbone of the organisation. With approximately Rs 9 billion in annual revenues, TRG is well on its way to realise its vision of becoming a global leader in the BPO sector as well as the largest employer in Pakistan. With the growth of the consumer market in Pakistan, TRG is also poised to become a leading provider of services to the local market.

About the BPO industry in Pakistan, he said that the industry provides a variety of outsourced services such as Customer Care, Payroll Processing and other Business Administration functions primarily to large-scale, service-based organisations such as financial institutions and telecom companies.

The worldwide BPO market is approximately $45 billion with India holding a dominant presence with 70 percent market-share. India's IT and BPO exports are over $30 billion per annum and it employs over 500,000 skilled workers. Syed S. Haider, Founder President of 21st Century Business & Economic Club also spoke on this occasion.

Business Recorder [Pakistan's First Financial Daily]

 

[A.Rahman]

Pakistan Stops Export Of Sterling, Euros, Dirhams, so much for investor confidence;

KARACHI, May 9 (Reuters) - Pakistan's central bank stopped exchange companies from sending cash abroad in sterling, euro and United Arab Emirate dirhams, the chief spokesperson told Reuters on Friday.

"Exchange companies are not allowed to export cash in UK pound sterling, euro and UAE dihrams," said Syed Wasimuddin, chief spokesman for the State Bank of Pakistan.

The rupee <PKR=PK> ended 3.5 percent lower at 69.40/60 to the dollar, compared to a previous low of 67.08/20 set on Thursday.

(Reporting by Sahar Ahmed; editing by Simon Cameron-Moore)

Pakistan stops export of sterling, euros, dirhams | Reuters

 

[A.Rahman]

Pakistan rupee falls to 70 to dollar on foreign currency export ban


May 9, 2008, 9:15 GMT


Karachi - The Pakistani rupee saw its biggest fall in five years Friday, hitting 70 to the US dollar after the central bank imposed an export ban on euros and other foreign currencies, dealers said.

'There is virtual panic everywhere in the market,' said treasury dealer Ali Kadir at Invest Cap Securities.

The rupee hit 70/70.10 (buying/selling) in an unofficial open market against the dollar, compared with 67.50/67.80 Thursday.

On the interbank market, the rupee traded at 69.60/69.80, compared with 67.08/67.20 Thursday.

The central State Bank of Pakistan on Friday imposed bans on exports of euros, pounds and United Arab Emirate dhirams by foreign exchange companies. These companies used hard currencies to buy US dollars abroad.

'We have taken this decision to stop the flight of capital,' said Wasim Ahmed, a central bank spokesman.

The move came on the heels of a meeting Thursday chaired by bank Governor Shamshad Akhtar with top executives of foreign exchange companies in which she warned them to stop speculating after the rupee's nearly 10-per-cent fall in the past two months.

Akhtar told executives that the difference between the open market rates and the interbank rates should be within 50 to 60 paisas, not about 2 rupees as has been witnessed in the past couple of weeks.

The foreign exchange export ban created panic in the market, and dealers said the US dollar was not available even at 70 rupees.

'There is a severe shortage of dollars on the market,' said Nabeel Iqbal, marketing manager at Khanani and Kalia, Pakistan's largest foreign exchange firm.

Meanwhile, the latest foreign exchange reserves position showed the central bank had lost another 400 million dollars last week on rising imports, holding 12.2 billion dollars last week, compared with 12.65 billion dollars a week earlier.

With the new figures, the central bank has so far lost more than 4.5 billion dollars during the past five months from a peak of 16.48 billion in October last year.

Rising oil import costs are considered the chief reason for eroding reserves, coupled with domestic food shortages and low exports.

 

[Neo]

Pakistan c.bank expects forex inflows of $3.5 bln​

Fri May 9, 2008

KARACHI, May 9 (Reuters) - Pakistýn should expect foreign inflows of up to $3.5 billion in the short to medium term which would help stabilize the rupee, said the central bank chief said on Friday after the currency fell 3.5 percent.

"We aren't in a crisis like situation... several measures are in place to remove macro-economic imbalances," State Bank of Pakistan Governor Shamshad Akhtar said in a statement.

The statement came after the rupee <PKR=PK> slumped to an all time closing low of 69.40/60 to the dollar, compared to a previous low of 67.08/20 set on Thursday.

In a meeting with the heads of commercial banks, the governor assured them there would be no reversal of foreign exchange liberalization measures, and said the currency market's behaviour "is totally out of line".

Governor Shamshad Akhtar said the government is taking measures to control inflation and the central bank will continue to remain in a monetary tightening phase.

She said the central bank is vigilant, will take necessary steps as the situation warrants.

Some of the inflows that are expected include $2.1 billion from multilateral banks, $500 million from friendly countries, $200 million from earthquake relief, $100 million from Britain, $700 million from MCB Bank's stake (MCB.KA: Quote, Profile, Research) sale to a Malaysian bank, $100 million investment by Barclays Bank and the rest through private sector GDRs (global depository receipts) and other regular sources, the statement said.

The pressure on the rupee is a largely a result of Pakistan's ballooning oil import bill and fears that the country was mired in political and economic instability.

UPDATE 1-Pakistan c.bank expects forex inflows of $3.5 bln | Reuters

 

[ejaz007]

Manora Cantt Board going to Dubai-based firm

* Initial investment of $20b for development, hotels,
apartments
* Shaukat Aziz signed MoU in 2006

By Shahzad Shah Jillani

KARACHI: The Manora Cantonment Board (MCB) is soon going to be handed over to a Dubai-based firm for development, Daily Times has learnt.

The board’s spokesman has told Daily Times that Pakistan’s Ministry for Ports and Shipping signed a Memorandum of Understanding (MoU) in 2006 with Dubai World, M/s Limitless and Dubai Islamic Bank (DIB) for the redevelopment of Manora Island. “Former prime minister Shaukat Aziz brought the companies in as part of the plan to attract direct foreign investment for beach front projects at Sea View and Gwadar,” he said.

The Karachi Port Trust (KPT) and all military establishments will vacate the island and hand it over to the companies.

The development will comprise high-rise hotels and apartment buildings in addition to beach huts for foreigners, the spokesman said, adding that according to the design, the island would be turned into a tourist resort with a water sports arena on the shore.

M/S Limitless is the same company behind The Palm Jumeirah and Jumeirah Islands and is known for its master planned communities.

Sheikh Mohammed of Dubai signed the MoU with the Government of Pakistan, according to a spokesman for the Ministry of Ports and Shipping. “The Manora Island project was named Sugar Land City with an initial investment of $20 billion,” he said. “It is very disappointing that the project was unnecessarily halted due to resistance from the fishermen community. A total investment of forty billion US dollars will be made soon by addressing all the apprehensions of those opposing the project,” said the spokesman. He added that investors had already suffered as they spent millions of dollars on the design. “It would have been easier for people associated with the shipping business and also the picnickers if the Manora-Clifton bridge was made with seven billion rupees.”

Manora is a small 2.5-square-kilometre island located just south of the port of Karachi. It is connected to the mainland by a 12-kilometer long causeway called Sandspit and a 13.4 km one from Mauripur Town. Manora and neighboring islands form a protective barrier between the Karachi harbor to the north and the Arabian Sea to the south. The western bay of the harbor contains endangered mangrove forests which border Sandspit and Manora island. To the east are the Karachi Bay and the beach towns of Keamari and Clifton. According to the 1998 census, Manora’s population was 9,987 and has since dropped by half.

Three types of civilians are residents of the Manora Cantonment Board: leaseholders, employees of federal departments including KPT and fishermen. “Most of the KPT employees left Manora after receiving a golden handshake from the trust and have now moved to other parts of the city, leading to a drop in the population,” explained the board’s spokesman. The fishing community has said that it comes under the City District Government Karachi (CDGK). “The fishermen were at a distance from the board and were located in Salehabad that comes under the CDGK administration,” the spokesman said. “The CDGK was responsible for providing them basic civic facilities and not us.”

The former chief executive officer of the Manora Cantonment Board, S.M Shaukat Najmi, retired in February. Irfan Asghar, the CEO of the Korangi Cantonment Board (KCB), has been given the additional charge of the Manora Cantonment Board.

Daily Times - Leading News Resource of Pakistan

 

[Neo]

Rupee tumbles 3.5pc ​

Saturday, May 10, 2008

KARACHI: The Pakistani rupee slumped 3.5 per cent against the dollar on Friday, under pressure from a rising oil import bill and fears that the country was mired in political and economic instability.

Since the start of the year the rupee has fallen 12.7 per cent against the dollar.

Critics fear divisions within the month-old coalition over how to reinstate judges dismissed by President Pervez Musharraf during a brief period of emergency rule last November, have diverted Prime Minister Yusuf Raza Gilani’s government from addressing pressing economic problems.

“We need greater leadership on the ground,” said a currency trader, who requested anonymity because of the sensitivity of the subject in a market closely shepherded by the central bank.

Amid these worries, rupee closed at 69.40/60 on Friday, compared with Thursday’s close of 67.08/20.

The central bank has been intervening to curb volatility, but its reserves are dwindling.

“When the State Bank reserves are less than $10 billion, how much can they possibly intervene,” said a treasury head of a local bank.

Reserves held by the State Bank of Pakistan fell to $9.926 billion in the week ended on May 3 from $10.367 billion a week earlier, while those held by commercial banks rose marginally.

One senior banker said earlier this week the rupee could recover if Pakistan managed to secure funding from multilateral lenders and friendly governments.

Inherited debacle: Soon after taking office Finance Minister Ishaq Dar spoke of the dire state of the economy taken over from the caretaker government and the previous government led by Musharraf’s allies.

Inflation is running at a 13-year high, while the new coalition has inherited burgeoning trade and fiscal deficits.

Yet, Musharraf had insisted the economy was a success story.

Pakistan was on the brink of bankruptcy when he came to power as a general in a coup in 1999, but it turned into one of the region’s fastest growing economies after Musharraf became a US ally in the war on terror in 2001 and billions of dollars of financial support flowed in.

This funding, however, delayed much needed economic reforms and the rupee’s fall was overdue, according to some analysts.

“The impact of dollar increase is going to be good for exports and, of course bad, for imports. So it is better for the domestic industry,” Zubair Khan, a former commerce minister, said. “But, of course, it has an inflationary impact,” he added.

Economic growth is seen slowing to 6 per cent in the year ending June 30, after averaging at 7 per cent in the past four years.

The Pakistani stock market has long appeared immune to poor economic data, but sentiment turned just over two weeks ago.

The Karachi Stock Exchange (KSE) index hit a three-month low on Thursday, though it inched up on Friday to end the morning session at 14,433.99 points.

Money changers selling foreign currency to ordinary people said their supplies were running dry.

“There is very little supply of dollars now,” said one Karachi-based money changer. “People have been coming and buying dollars as if they’re for free.”

Rupee tumbles 3.5pc

 

[Neo]

Govt has ordered public spending cuts: Dar ​

Saturday, May 10, 2008

LONDON: Pakistan’s new coalition government has ordered a “massive cut” in budget expenditure across the board, including military spending, to cope with the rising cost of fuel and food subsidies, Federal Finance Minister Ishaq Dar, told the influential Financial Times.

In his interview with the daily, he said the country is also seeking to raise $3bn or more from international lenders and foreign investors to bolster its foreign exchange reserves, because of a sharp deterioration on the current account of its balance of payments.

Speaking on a day when the rupee dropped in value against the dollar to Rs67.15 in Karachi, close to its lowest-ever level of Rs68, Dar said, Pakistan’s current account deficit had ballooned to about $11.5bn, against a target of $7.9bn, after a $3.5bn rise in the cost of oil imports.

Dar said he had also held talks on further loans in Washington, at the annual meetings of the World Bank and the International Monetary Fund, and at this week’s meeting of the Asian Development Bank in Madrid. The target was to boost reserves to $13.5bn, or some four-and-a-half months’ import cover.

In the medium term, it was intent on redirecting investments to agriculture, to boost domestic production and curb net imports.

The budget cuts had been ordered from the government’s first day in office last month, he said, and included military spending, development expenditure and non-development spending. “We are tightening our belt. Everybody is sharing happily the burden. It is the only way to survive,” Dar told the newspaper.

Govt has ordered public spending cuts: Dar