Pakistan Economy - News & Updates - Archive

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Manpower shortage in re-rolling sector: EDB for hiring workforce from neighbouring states​

KARACHI (October 01 2008): To overcome the acute shortage of skilled manpower in re-rolling sector, which is heading progressively towards world level of automation and modernisation, it was decided that experts and technicians from neighbouring countries specially India may be allowed to work on work visas.

This was one of the important decisions taken at the 3rd meeting of the committee on development of steel industry, Engineering Development Board (EDB), Ministry of Industries, Production & Special Initiatives held last month in Islamabad. Recommendation of EDB and respective association would be required for seeking visas.

The non-availability of skilled manpower is adversely affecting this import sector of industry. To put new technologies in practice, the industry desired to have skilled personnel for trouble shooting of day to day problems. The meeting, therefore, considered it appropriate and in the best interest of this sector and the country if the government approved the EDB decision.

The immediate hurdle being faced by re-rollers is the uncertainty and slow down of economic activity in the country. The sale of finished products of steel has considerably gone down resulting in idle capacity of re-rolling industry at the moment. In order to fully utilise the available capacity in re-rolling industry its exports should be encouraged through reduction or removal of 25 per cent RD on export of steel products. This will help bring precious foreign exchange to the country as well.

Re-rolling mills association desired that EDB take up the issue of unscheduled breakdown and tripping of power due to poor maintenance of supply system with the concerned authorities.

Since most of the steel melting units are fragmented with small capacities, continuous casting machines and refining facilities can not be installed. PEPCO supplies only 5,000 KW load on B-3 tariff to these furnaces. Therefore, to meet the requirements of extra load a separate grid station is required to be installed. The cost of grid stations varies between Rs 70 million to Rs 150 million depending upon the capacity, which is very difficult for the entrepreneurs to invest from their own resources or through normal banking channels. The meeting, therefore, recommended that both steel smelters and steel re-rolling associations should qualify for availing LMM facility on recommendation of EDB for setting up of grid stations.

Steel smelting industry is also confronted with severe dearth of skilled and qualified smelters to identify the use of proper scrap and produce quality steel. Steel melters, therefore, desired to seek the help of EDB to arrange experts for training and knowledge sharing initially through workshops and seminars. Further it was also recommended that work visa may also be arranged on the recommendations of EDB and melters association for experts to be arranged from neighbouring countries to immediately overcome this problem in the short run.

Industry desired to improve environmental problems and control the menace of pollution. But no organisation in Pakistan has adequate knowledge to guide the industry to achieve this goal. India has effectively overcome this problem and EDB should arrange a seminar for the local industrialists to appraise them of the strides made by India in this field.

The steel melting units consume more than 600-700 Mega Watts of power alone. The meeting was of the opinion that this sector could and should shift to captive power generation based on local coal, which would not only reduce the burden on the existing PEPCO system but would also reduce the cost of production. EDB should arrange a workshop initially with the most renowned manufacturers of power plants from countries like China and India to appraise the local industrialists and if found feasible LMM facility should also be extended on long-term basis to set up such power generating units along with the permission of synchronisation with national grid.

The melting industry desired that import of DRI as a replacement of normal steel scrap should be allowed immediately at zero-rated sales tax and import duty through land route from India. This would enable the industry to produce better quality of steel and shall also induce interest among the local steel smelters to set-up their DRI plants based on local ores in the long run.

 

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Economic development and terrorism: Pakistan, US discuss advancing cooperation​

WASHINGTON (September 30 2008): Pakistan and the United States on Monday discussed advancing co-operation in wide-ranging fields including economic development, counter terrorism, education, energy, and agriculture as Foreign Minister Shah Mahmood Qureshi and Deputy Secretary of State John Negroponte co-chaired the strategic partnership dialogue.

Senior Pakistani officials including Foreign Secretary Salman Bashir, National Security Council Adviser Mahmud Ali Durrani, Ambassador Husain Haqqani assisted the Foreign Minister in the third round of dialogue at the State Department, which called it a "symbol of US long-term commitment" to the South Asian anti-terrorism partner.

The dialogue, following a meeting between President Asif Ali Zardari and President George W Bush last week on the sidelines of the UN General Assembly in New York, also focused on security co-operation including anti-terrorism efforts, defence supplies and coalition support fund. The two sides looked at ways to further enhance co-operation for socio-economic development in tribal areas and progress towards establishing preferential trade programme of reconstruction opportunity zones, legislation on which is pending before US Congress.

The Strategic Dialogue trades working groups on education, economic growth, energy, science and technology, and the new agriculture working group, deliberated on developing specific proposals for joint action by the US and Pakistan to achieve the shared development objectives. "The Strategic Dialogue is a symbol of our commitment to a stable, broad-based and long-term relationship serving the interests of both the United States and Pakistan," Spokesman Sean McCormack said in a statement over the weekend.

The US side included Richard Boucher, Assistant Secretary of State for South Asia, Donald Camp, Principal Deputy Assistant Secretary for South Asian Affairs, Ruben Jeffrey, Under-secretary of State for economic, energy and agricultural affairs and senior State Department counterterrorism adviser. At the conclusion of the meeting, the two sides will release a joint statement.

 

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'Hydel power potential of NWFP enough to overcome energy crisis'​

PESHAWAR (October 01 2008): The country is blessed with an enormous hydropower and the prevailing energy crisis could be overcome by exploiting the resources properly. Managing Director Sarhad Hydel Development Organisation (SHYDO), Engr S Ishtiaq Hussain Shah expressed his views here on Tuesday.

The country at the moment is facing worst power crisis of its history and there is an urgent need to focus on initiating both small and large size hydel power projects, besides developing alternative means of energy in view of the growing power demand.

Although the current electricity crisis has badly affected every sector of life including the domestic consumers yet the business sector was the badly hit which was ultimately affecting the economy of the country besides being a major contributing factor for price hike and inflation, he said.

Moreover, he maintained that with a view to explore and develop the hydropower potential in the Province, the NWFP Government set-up Sarhad Hydel Development Organisation (SHYDO) in 1986 that work under the administrative control of Irrigation and Power Department NWFP.

In line with its objectives, SHYDO has completed the feasibility report of several hydel projects, including Daral Khwar, Batal Khwar in district Swat, Ranolia and Summar Gah in district Kohistan, besides identifying 12 sites for small hydel projects with the capacity of 80 MW power generation in district Chitral.

Moreover, several large hydropower projects, including Khan Khwar, Allai Khwar, Duber Khwar were under implementation by Wapda whereas the feasibility study of Chor Nala, Spat Gah, Keyal Khwar and Kandiah was in process.

Engr S Ishtiaq Hussain Shah said that Pakistan is blessed with a hydel potential of approximately 40,000 MW out of which 70 per cent is located in NWFP adding that the total installed capacity of hydropower stations in the country was about 6595 MW with 50 per cent share of NWFP that produce 3767 MW.

He informed that a number of hydel projects with the total capacity of about 700MW in NWFP are under implementation adding that 6000 MW of hydel potential has been identified by the organisation so far that was under various stages of planning.

He said that SHYDO could issue Letter of Intent (LOI) up to 50 per cent Megawatt capacity hydel projects to private investors as per the revised Hydel Power Policy NWFP, while the Private Power and Infrastructure Board (PPIB) and Wapda could issue the LOI for more than 50 MW capacities.

Ishtiaq Hussain Shah said that Malakand-III project has been completed that could produce 81 MW. Power generation from the project has been started which would earn two billion rupees in the head of the net hydel for the Province annually as compared to the six billion rupees earned by other hydel projects of Tarbela, Jaban, Warsak and Dargai.

Giving details about the on-going hydel projects, he said that Pehur hydropower project with the capacity of 18MW power generation would be completed by the end of the current year whereas Reshun and Shishi hydel projects with the total capacity of 4.2 and 1.8 MWs respectively have been completed in Chitral.

He said that the present government has realised the hydel potential of the province and has not only financially supported SHYDO but has also assured to authorise the organisation to issue LOI of up to 200 MW to private investors.

In reply to a question about the current shortfall of electricity in the Province, he said that NWFP was facing the shortage of 400 MW, as the total requirement of the Province was 2100 MW whereas it was receiving 1,700 MW.

Furthermore, he added that the total power requirement of the country stand at 17,000 Megawatt whereas the current power production was 13,000 MW taking the shortage to 4,000 MW.

The feasibility report of Daral Khwar, Ranolia Machai hydel projects were completed with the assistance of Asian Development Bank (ADB) and the construction work on these projects would be started by the end of the current year, he added. Similarly, mega hydel projects costing millions of US dollars were under construction by Wapda, he said, adding that these projects include Allai Khwar (121 MW), Duber khwar (130MW), Kheyal Khwar (130MW), Khan Khwar (72 MW), Golen Gol (106MW) and Gomal Zam Dam (17.4MW).

He said that NWFP could produce 864 MW of electricity if only the feasible hydel projects in Swat valley were completed that would help in overcoming the power shortage that has badly crippled different activities of life.

 

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'Pakistan may address energy crisis through Chinese technology'​

BEIJING (October 01 2008): Pakistan can address to a large extent its power crisis through Chinese innovative hydro power generating technology, said a senior official at Pakistan Embassy in an interview. "China has advance technology of generating electricity through small and medium size hydro power plants and Pakistan can greatly benefit from it", Counsellor Technical Affairs Syed Ali Tallae told APP after a visit to Hanzhou Province where these plants were functioning successfully.

He said during the visit, the Chinese side showed one of the demonstration projects that could conveniently generate 2-MW electricity. Through this most modern technology, a 40-meter deep tunnel is excavated and with the thrust of pouring water on the turbine through the tunnel it starts generating 2-MW electricity.

He further explained that the tunnel for passing water was excavated at water level of a lake, similar to the Rawal Lake in Islamabad. Tallae pointed out that the Hanzhou Provincial Government had informed that generating electricity through this technology could greatly benefit Pakistan to address its energy problem.

He further said the Chinese side also indicated their willingness to lay a network of such kind of small hydro power plants in Pakistan on turnkey basis. The Chinese side, he said, had also indicated the possibility of setting up a demo-plant at Gulberg Canal in Lahore with specifically construction design.

Tallae said that in China, the definition of small Hydro Power station ranges from 100KW to 50MW, while below 100KW was called Micro-Hydro Power Station. The Dam on lake could also be constructed to control the flood, he said.

 

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Barnai Area Development Programme: household income of beneficiaries will increase to $147-724 by 2016​

FAISALABAD (October 01 2008): Improved household income and health in four Barani area districts of Punjab province would increase household income of beneficiaries of Barnai Area Development Programme to $147 and $7,724 per annum by 2016, depending on land tenure and farm size.

According to project review report of Barnai Area Development Programme by Punjab Government, by 2013 the promgramme will convert 11,500 hectare of rain-fed agriculture to irrigated agriculture and will improve irrigation of 10,000 hectare on existing small dams.

Punjab Government hoped that 100 per cent increase in crop yields and 35 per cent increase in livestock production for 22,000 beneficiary farms. Also 65 metric ton increase in fish production in Barani Areas, increased access to domestic water (90 liters per capita per day) for 9,050 rural households, at least 3 per cent of the incremental stored water released in bulk to nearby rural towns, after completion of this project with the financial assistance of Asian Development Bank.

Punjab Government sources stated that Agriculture and livestock have been the traditional sources of revenue for people in Barani areas, still account for 40 per cent of their income in Punjab.

Improvement in livelihood for Barani residents, especially for a large majority of small landholders and tenants, will depend to a large extent on gains in agriculture and livestock productivity and growth in the local non-farm sector. Improvement in both on-farm and non-farm sectors is constrained by several factors common to rural areas of Pakistan.

Among the constraints are (i) impeded access to markets, inputs, and services due to inadequate or non-existent transportation infrastructure; (ii) lack of access to electricity, with negative consequences for the productive potential of both the agriculture and non-farm sectors; (iii) productivity constraints arising from the lack of access to and inadequate social services; (iv) lack of access to finance and business development services; and (v) poor access to agriculture and livestock advisory and support services.

The Government with external support is currently giving considerable emphasis and committing significant resources to address those constraints. The constraint that most significantly affects Barani areas and agricultural and livestock productivity is shortage of water.

With no or limited secure water sources, farming depends on rainfall, which is irregular in both annual and seasonal amounts as well as intensity in any given storm event. Farmers have developed farming systems with very low input requirements to keep the financial risk of crop failures manageable. This practice results in low productivity. The primary crops grown and their average yields are wheat (0.5 tons/ha [t/ha]), maize (0.7 t/ha), and groundnuts (0.4 t/ha).

In contrast, irrigated yields are as follows: wheat (3.1 t/ha), maize (1.7 t/ha), and groundnuts (1.5 t/ha). In addition to lower average yields, Barani areas are highly susceptible to prolonged drought and associated poverty shocks due to the absence of reliable surface or ground water sources. The most recent 2001-2003 drought had a devastating effect, especially on the more arid parts of Barani areas, and forced many families to migrate to urban areas, sell off productive assets, and face serious indebtedness.

The scarcity of reliable perennial water sources, including groundwater, also poses serious challenges to the provision of municipal water to the quickly growing rural communities and small towns in Barani areas. It constitutes a serious impediment to the sustainable development of local industrial and service activities, and represents a tremendous burden and loss of productive potential on families, mainly women, who may spend hours collecting water on daily basis.

 

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Punjab government to spend Rs 11.3 billion on irrigation system​

SIALKOT (October 01 2008): Punjab government is spending Rs 11.3 billion during current fiscal period on the improvement of irrigation system in the Province. Official sources told Business Recorder here Tuesday that under the programme 37,000 kilometres long irrigation network would be improved in Punjab. Special attention would also be accorded on minimising the chances of wastage of irrigation water throughout the Punjab Province.

The Provincial Irrigation system is one of the most important assets and is playing an important role in the promotion of agriculture sector by ensuring sufficient water for the crops.

 

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Crisis in KSE - a survey​

ARTICLE (October 01 2008): Everywhere the performance of Karachi Stock Exchange (KSE) was being lauded. The Stock Index stood at its historical peak of 15,676.It looked as if the capital from all over the world was gravitating towards Pakistan, despite the deteriorating law and order situation in the country, and investors were keen on Pakistan's equity market with unwavering confidence, even though the crude oil prices were setting new records daily in the world markets; our own economic indices were headed down and the economic fundamentals had no correlation with the stocks indices.

The only reason was that there was ample liquidity in the system at that point in time, which now no longer exists due to hike in interest rates and other domestic and external factors and threats. All this crisis is a creation of the absence of liquidity now. Secondly, speculation dominated our share markets unfortunately.

Therefore the present situation is not very much surprising. Today, only within five months, Pakistan's economy, including the stock market, is utterly in shambles for the last one month, the stock market seems to be locked to the price level of 27th August closing, or completely stagnant, reducing trading activity to almost 'nil'.

In preceding four months only, the index has fallen by nearly 41% or 6,500 points. This crisis of Pakistan Capital Market is becoming more complex with each passing day. Five months earlier, the average daily volume of trading in the stock market was 258 million shares, which has dwindled to an average of only 3.5 million shares last week. Thus a fall of 99% in the volume is evident.

"Badla" financing, five months ago, used to be capped at a limit of 55 billion rupees more or less, at an interest rate of 11 to 12%. Now the cap has descended to only 15 billion rupees at the rate of 30%, which is a 3-year record level.

Foreign exchange reserves, which stood at $16 billion last year, came down to $12 billion in April this year, and since then, there has been a further fall of $4 billion, reducing the present forex reserves to a paltry sum of $8.8 billion only, of which the commercial banks have 3.4 billion dollars, while the central bank (State Bank of Pakistan) has only 5.4 billion dollars.

For the last one month, the stock market seems to be stuck at the floor price. Movements of index are in a maximum range of 8 to 10 points. However, the figures of Foreign Investor Portfolio Investment need an explanation. Firstly, the website of National Clearing Company shows only the net result of day's transactions in Pak rupees only, without disclosing the volume of shares dealt with, even though for calculating the day's activity of foreign investors, the number of their shares (both purchased and sold) on that day, is added up to depict the volume of trading.

It is also observed that the ready market volume was only 13 million shares, while the foreign investors traded 6 million shares that same day. Also the market movements were confined to a range of 10 to 15 points only. Thus the foreigners' performance was nearly half of what the ready market achieved and that is not even being brought to public notice.

The second problem is to deciding as who is to determine that these so-called 'foreigners' are really all foreigners, or include some locals also. It is rumoured that some members, who possess dual nationality are trading by opening accounts on their foreign passports. It is hoped that SECP will take action to eliminate such irregularities if they exist. On the whole, a review of last five months' state of affairs shows that there was a fall in the market value of shares of enterprises in various sectors as follows:

=============================================
Average
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1) Commercial banks 52%
2) Insurance companies 36%
3) Textiles 66%
4) Cement 54%
5) Refineries 50%
6) Power Generation and Distribution 27%
7) Oil and Gas Marketing 43%
8) Oil and Gas Exploration 31%
9) Fertilisers 48%
=============================================
Finally, in the present tight liquidity situation it has been proposed that the companies should buy back their own shares, because most of the companies shares are being traded at less than their book value.

In the beginning this proposal created a considerable measure of optimism but later, due to the legal complications or the sponsors' fears of further fall in the market values of shares, the scheme did not attract favourable response. At the moment, the system needs an infusion of rupees 25 billion in liquid funds immediately, but there is no solution in sight.

Initially, the Ministry of Finance (MoF) tried to solve the matter very seriously and set up a fund, however till this moment the Fund has not been able to secure firm commitments from the donors.

In the beginning the regulators, SBP, MoF, banks and the brokers' community, all of them seemed to be quite active, and the action by US administration and regulators in an attempt to bail out (Wall Street) was greatly appreciated, but later, the criticism levelled by the Congressmen to support the stock market with US tax-payers money, caused voices in Pakistan also to be subdued.

Now we have to see how the crisis will be tackled after Eid-ul-Fitr holidays, while the KSE Board of Directors have categorically stated that they will terminate the floor price in the market, come what may.

(Translated from Urdu text by Rais Ahmad Khan)

 

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Pakistan to get USD 500-mn ADB loan to accelerate economic transformation​

Islamabad, Oct 1: The Asian Development Bank (ADB) has approved a USD 500 million loan for Pakistan to help the troubled nation tackle the increasing poverty and deteriorating economic conditions in the wake of the ongoing global financial crisis, the Online news agency reported Wednesday.

The loan will help Pakistan in dealing with the current food and fuel price rise and resurrect the country's economic owes, Juan Miranda, director general of ADB's Central and West Asia Department, said while announcing the loan in Manila Tuesday.

"Addressing the impact of fuel and food price increases unleashes immediate benefits to Pakistan's people and to markets," Miranda said in a statement.

"The ADB loan will support ongoing changes in the energy and agriculture sectors, and will help lay the foundation for a radical transformation of the economy by diversifying, deepening and expanding a competitive industrial sector, and creating much-needed jobs for Pakistan’s young and growing labour force."

According to the agency, the ADB support comprises a key part of a global financing plan underpinning the Pakistan's economic stabilisation programme.

The stabilisation plan includes actions to shore up and manage foreign reserves, improve monetary policy, trim the fiscal deficit and its financing gap, and cut back on government borrowing from the State Bank of Pakistan.

The stabilisation plan is also focused on protecting the poor through special safety net programmes, and reassuring financial markets through fiscal and monetary discipline.

The stabilisation plan was formulated by the government led by Prime Minister Yusaf Raza Gilani, with technical advice from other parties.

"ADB financing takes place within the context of this stabilization framework," added Miranda. "We are one of several parties contributing to the financing of this plan; others will soon follow with their own financing and programmes."

The Manila-based bank is a major financial partner of Pakistan and focuses on the areas of infrastructure development, power, energy, financial sector intermediation and capital markets development.

 

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US to Announce $100 MLN Package for Agri-Sector of Pakistan: Envoy​

LAHORE, Oct 2 Asia Pulse - The US Ambassador to Pakistan Ms Anne W Patterson has said that the United States wants long-term, broad-based relations with Pakistan and is going to announce a US$100 million package for its agriculture sector soon.

The US Ambassador was speaking at Lahore Chamber of Commerce and Industry here on Monday. LCCI President Mohammad Ali Mian, Senior Vice President Mian Muzaffar Ali and Vice President Shafqat Saeed Piracha also spoke on the occasion. Principal Officer US Consulate Bryn D Hunt and top business community leaders, including a large number of former LCCI Presidents attended the meeting.

The US Ambassador emphasized that the United States would continue and increase bilateral trade and investment in Pakistan. She said that despite some economic difficulties the volume of trade between the two countries has been increasing and the fact remains that the US is the largest single investor and the largest single donor of Pakistan.

She said as many as 90 new US development projects in social sector are in the pipeline that would get a final shape as soon as the situation in Pakistan takes a positive turn. She said that as soon as the youngsters in troubled areas particularly in Tribal Areas get jobs there are little chances of improvement in situation there.

The US Ambassador said that the US is committed to long-term relations with Pakistan and is convinced that the present government is extending maximum cooperation in its war against terrorism and is serious about weeding out the menace. While expressing optimism about Pak-US trade relations, she said Pakistan has a huge potential in the energy and IT sectors.

Speaking on the occasion, the LCCI President Mohammad Ali Mian said that Pakistan and United States are not only partners in war against terrorism but also enjoy remarkable trade relations with each other, which is evident from the fact that more than 80 US companies are working in Pakistan. Out of which 50 plus companies are located in Punjab province alone providing employment to more than 50,000 workers directly and over one million people indirectly.

He said that being a close ally of US, Pakistan should also be benefited from US experience in the fields of commerce, industry, education, health sciences and diplomacy.

Mohammad Ali Mian said that Pakistan's economic profile has been badly affected for being an ally of the US. It is facing mass unemployment due to cancellation of export orders from buyers. And is seeing no further industrialization and foreign investment and if the present wave of terrorism continues the sustainability of present industries cannot be ensured.

He said Pakistan's textile industry is heavily dependent on the US market. Almost 60 per cent of textile products are exported to US alone. It is providing manufacturing base to large number of US brands. Therefore, Pakistan badly needs US support in shape of duty free access to its Markets to save the people of Pakistan who are fighting war against terrorism as frontline state with America.

He said there was an increasing gap in demand and supply of electricity. "Load-shedding and fuel shortages have seriously destabilized our economy, causing large-scale unemployment, which is ultimately leading to law and order problem and encouraging terrorism. In order to support Pakistan's economy, there is need for direct funding to the industrial set up through institutions like IFCs on low markup rates. It is believed that US companies can provide immediate solution to the tumbling Pakistan economy."

 

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Stocks end down, volume falls below 1m​

KARACHI, Sept 30: The trading volume on the Karachi Stock Exchange on Tuesday fell to a new all-time single-session low at 0.986m shares as investors watched the fresh massive plunge on world equity and financial markets after the rejection of Bush’s $700 billion bail-out package by the US Congress rather than making fresh commitments. The world markets have been well on the recovery path following closely the official moves about the passage of the bail-out package, but reports of its rejection by the US House of Representatives sent bearish signals the world over causing the crash of markets, analysts said.

The foreign investors who still long positions in some of the local shares were, however, worried over the rejection of the bail-out package as it will further block their moves to get out of the local market, they added.

However, being under floor, the local market was saved from any massive selling or price crash but the only victim was the daily turnover figure, which maintained its falling trend.

The prevailing turmoil on the world markets could further delay the removal of floor on the index, some analysts said, but some others said the long Eid holiday week ahead may witness some positive developments on the world financial markets and the post-Eid opening of the local market could be positive.

“The positions in MK-2 at Rs15 billion though down by 22 per cent from Rs19 billion after the index was capped on Aug 27, are not on the higher side but investors fear the CFS could be lower than it,” said a leading analyst Tabish H. Rajabali.

The KSE 100-share index shed another 3.12 points at 9,179.68 as compared to 9,182.80 a day earlier but its junior partner the KSE 30-share index was again held unchanged at the previous level of 10,064.44.

The fall of the daily volume below one million shares is the lowest in the trading history of the KSE and reflects investor apathy to take fresh positions at this stage, floor brokers said. They said the current lower levels reached by all those shares, which ensures higher capital gains, were also neglected by those who could take financial risks.

Minus signs again dominated the list in dull trading, under the lead of National Foods, which fell by Rs6.55 at Rs397.

Royal Bank, Capital Asset Leasing, Network Leasing, Habib-ADM Sugar and Al-Ghazi Tractors followed them, off by 55 paisa to Rs1.99.

Leading gainers were led by Millat Tractors and Pak Datacom, up by Rs3.90 and Rs1.70 followed by Escort Bank, Standard Chartered Modaraba and Gharibwal Cement, up by 60 paisa to 99 paisa.

Trading volume fell to record low of 0.985m shares as losers held a modest lead over the gainers at 13 to nine, with 73 shares holding on to the last levels.

Southern Electric led the list of actives, unchanged at Rs3.90 on 0.220m shares, followed by Gharibwal Cement, up by 99 paisa at Rs18.99 on 0.115m shares, Elite Capital Modaraba, lower 50 paisa at Rs3.25 on 0.102m shares, Pak Elektron, easy by 19 paisa at Rs40.80 on 0.79m shares, Standard Chartered Bank, off 31 paisa at Rs10.89 on 0.76m shares, Shakarganj Sugar, unchanged at Rs11.84 on 0.36m shares and Nishat Chunian, unchanged at Rs12.78 on 0.35m shares.

S.S. Oil also unchanged at Rs6.50 on 0.27m shares, Bosicor Pakistan, unchanged at Rs8.70 on 0.25m shares and Millat Tractors, higher by Rs3.90 at Rs229 on 0.23m shares.

FORWARD COUNTER: Engro Chemical came in for stray support and was quoted higher by five paisa at Rs181.65 on 0.232m shares followed by MCB Bank, static at Rs238.26 on 0.01m shares and OGDC, also steady at Rs95.92 on 500 shares.

DEFAULTER COMPANIES: Five shares came in for stray buying but most of them ended higher under the lead of Taxila Engineering, up by Re1 at Rs2.50 on 1,000 shares followed by National Asset Leasing, higher by 19 paisa at Rs0.60 on 500 shares and Al-Qaim Textiles, up by 25 paisa at Rs1.25 on 2,000 shares. Others were held unchanged.

DIVIDEND: Al-Khair Gadoon, cash 10 per cent, United Distributors, bonus shares 15 per cent, Buxly Paints, 10 per cent, Dawood Capital Management, bonus shares 10 per cent, Crescent Modaraba, six per cent, Goodluck Industries, cash 20 per cent, Aruj Garments, 15 per cent, Mirree Brewery, cash 50 per cent, bonus shares 10 per cent and Standard Chartered Modaraba, 16 per cent.

 

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ADB releases $500 million from $1.5 billion loans​

KARACHI (October 01 2008): Asian Development Bank will provide $1.5 billion in three tranches under the Accelerated Economic Transformation Programme. The first tranche of $500 million was released on Tuesday, under a formula based approach, after the Federal Cabinet approved.

(A) Consolidated supervision law whereby State Bank of Pakistan will regulate all kinds of deposit taking in the country; thereby transferring leasing companies, investment banks and Development Financial Institutions (DFIs) from supervision of Securities and Exchange Commission of Pakistan (SECP) to SBP;

(B) Cabinet has approved the Draft of Anti-Money Laundering Law and approval of Ministry of Law for issuance of an Ordinance or passage of law by Parliament is awaited; and;

(C) Raising the minimum capital for banking companies to $300 million already in offing. The next tranche of $500 million is expected to be released after Pakistan complies with Basel-II requirements; establishes a deposit protection scheme and modernises the SBP Act to effectively become the lender of the last resort.

The programme for the third tranche of $500 million will be drawn up for compliance later by SBP. The ADB loan basically uses this vehicle for easing Pakistan's balance of payments difficulty.

According to reliable sources the full amount of $500 million (Rs 39 billion) will be utilised to retire the SBP debt. Government had committed not to borrow from SBP after July 1st, 2008 and retire Rs 22 billion of existing borrowing by 30th September 2008. Contrary to the commitment over Rs 160 billion were borrowed during the first seven weeks of the first quarter. With last date for tax return extended to October 31st, it would be difficult for the government to meet its commitment.

A press release issued by ADB from Manila says: The Asian Development Bank (ADB) has approved a $500 million loan to support Pakistan's efforts to address harm done to poor families and the country's economy by unprecedented international food and fuel price hikes.

The ADB loan will support ongoing changes in the energy and agriculture sectors, and will help lay the foundation for a radical transformation of the economy by diversifying, deepening and expanding a competitive industrial sector, and creating much-needed jobs for Pakistan's young and growing labour force.

ADB support comprises a key part of a global financing plan underpinning the government's economic stabilisation program. The stabilisation plan includes actions to shore up and manage foreign reserves, improve monetary policy, trim the fiscal deficit and, its financing gap, and cut back on government borrowing from the State Bank of Pakistan. The stabilisation plan is focused on protecting the poor through special safety net programs, and reassuring financial markets through fiscal and monetary discipline.

"Addressing the impact of fuel and food price increases unleashes immediate benefits to Pakistan's people and to markets," said Juan Miranda, Director General of ADB's Central and West Asia Department. "The fiscal space created by reforms will cut financing gaps, generate conditions for a better deal in the sectors down the road, and provide much-needed cash flow to pay for safety net programs that protect the most vulnerable. ADB's support balances the need for addressing the needs of Pakistan's people while reassuring markets that the government is on the right track with its ongoing economic stabilisation program."

The stabilisation plan was formulated by the Government, with technical advice from other parties. "ADB financing takes place within the context of this stabilisation framework," added Mr Miranda. "We are one of several parties contributing to the financing of this plan; others will soon follow with their own financing and programs."

Pakistan will strengthen the legal and regulatory framework of its financial sector through the ADB program. The State Bank of Pakistan, working closely with the government, has undertaken a series of actions to improve risk management in the sector, strengthen payment systems and protect consumers. This will create stability at a time when international markets are in turmoil.

"The measures supported by ADB's program will benefit ordinary Pakistanis, directly as well as indirectly," said Mr Miranda. "Timing is of the essence here." ADB is a major financing partner of Pakistan. Its strategy focuses on three areas: infrastructure (roads, irrigation and logistics), utilities (power, energy, urban services) and reforms (including social service provision and finance, public financial resource management, financial sector intermediation and capital markets development).

 

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Canada offers 750,000 tons of wheat on deferred payment​

ISLAMABAD, Sept 30: The ministry of food, agriculture and livestock informed the Economy Monitoring Committee on Tuesday that Canada has offered 750,000 tons of wheat on deferred payment.

The EMC, which met with Federal Minister for Finance, Privatisation and Investment Syed Naveed Qamar in the chair, advised the agriculture ministry to work out financial terms and conditions by seeking extension in validation period so that an assessment of the offer and decisions could be made.

The agriculture ministry gave a presentation on stocks and release of wheat. The committee was informed that import of 1.7 million tons of wheat had been finalised and some of it had already arrived.

The ministry said additional consignments of one million tons (250,000 tons from the US and 750,000 from Canada ) under deferred payment were in the pipeline.

The committee expressed satisfaction over wheat stock position and progressive releases to provinces. Wheat production for 2007-08 stood at 23.3 million tons. Earlier, the government had allowed import of 2.5 million tons to supplement existing stocks.

The ministry of commerce briefed the committee on unloading and transportation of 150,000 tons of imported wheat, adding that the matter needed referral to the economic coordination committee of the cabinet for decision on transportation from Karachi/Gwadar up north.

The ministry of commerce was directed to submit a proposal to the ECC on unloading of imported wheat at ports.The EMC was briefed on the supply of flour in all provinces and in Utility Stores.

The agriculture ministry said prices of urea ranged between Rs650 and Rs700 and briefed the committee on its availability. The import of urea under a Saudi facility of $125 million was on track, it added.

The EMC directed that the Saudi facility should be “tracked fast” to ensure adequate availability of urea in the coming months.

The committee was informed that the availability of urea and DAP fertiliser, coupled with imports, was satisfactory and would meet the demand.

 

[Neo]

Pakistan PM eyes nuclear deal after India-U.S. pact​

Thu Oct 2, 2008

MULTAN, Pakistan (Reuters) - India's landmark nuclear trade agreement with the United States should open the way for a similar deal for Pakistan, the country's prime minister said on Thursday.

The U.S. Congress approved the deal late on Wednesday ending a three-decade ban on U.S. nuclear trade with India, unleashing billions of dollars of investment and drawing the world's biggest democracy closer to the West.

Critics say the deal does grave damage to global efforts to contain the spread of nuclear weapons, by letting India import nuclear fuel and technology even though it has tested nuclear weapons and never signed the Non-Proliferation Treaty (NPT).

In nuclear-armed Pakistan, Prime Minister Yousaf Raza Gilani said the deal should not be seen as a cause for concern.

"You don't have to be worried about it," Gilani told reporters in his home town of Multan when asked about the deal.

Pakistan has fought three wars with India since their independence in 1947 and nearly went to war a fourth time in 2002. Their relations have improved since they began a peace process in early 2004.

"Pakistan will now be justified to also make a demand for a similar deal as we don't want discrimination," Gilani said.

"Pakistan will also now make efforts for a civil nuclear (deal) and they will have to accommodate us," he said.Pakistan tested nuclear weapons in May 1998 in a tit-for-tat response to tests by India. Pakistan has also never signed up to the NPT.

Pakistan is one of the biggest recipients of U.S. aid and is a major ally in the U.S.-led campaign against militancy.

But in U.S. eyes, Pakistan cannot be treated like India because it lacks a long track record of democracy and nuclear non-proliferation.

A ring led by the scientist seen as the father of Pakistan's nuclear bomb, Abdul Qadeer Khan, smuggled bomb-suitable nuclear technology to unstable regions before it was smashed in 2004.

 

[Neo]

Overseas Pakistanis should send foreign exchange through banks: Khalid Shaheen ​

Thursday, October 02, 2008

JEDDAH: The Executive Vice President of Habib Bank, Khalid Bin Shaheen has said that overseas Pakistanis should transfer their money through banking channels in order to increase foreign exchange reserves in country.

This, he said while talking to media in Jeddah on Thursday.

Shaheen said Pakistan is passing through difficult phase and advised the Pakistani people settled in Saudi Arabia to send their money through banking channels so that foreign exchange reserves could be increased to over US$9 billions.

Talking to Geo News, he said Pakistan is in dire need of foreign exchange, adding overseas Pakistanis sent a huge amount of money to Pakistan.

 

[mumtazapiracha]

'Friends of Pakistan' are examining the proposal to lend US$ 15 billions to bail out Pakistan's economy from near-collapse. The question is: who is going to pay back, how and when?

Our economic indicators are just miserable. We have estimated annual revenue Rs. 1000 billion as compared to our domestic debt of Rs. 3000 billion. Our foreign exchange reserves have fallen to US$ 8.80 billion against our imports of US$ 40 billion and export of US$ 19 billion. Foreign direct investment and home remittances account for US$ 5 billion each. Our rupee-dollar parity has escalated to Rs. 78 per dollar as compared to India's Rs. 46. Since Dec 2007, our rupee depreciated by 28% as compared to India's 18%. Our democratically-elected government borrowed from SBP Rs. 162.5 billion during the first 66 days of the current fiscal year as compared to Rs. 73 billion during the same period last year.

Our foreign debt stood at US$ 46 billion as on 31-3-2008. Adding another US$ 15 billion will only add to our economic sickness. It may prove to be a poison than cure.