Pakistan Economy - News & Updates

[ajpirzada]

There seems to be such good levels of investment in Pakistani economy by foreign companies.. but could someone here highlight as to why the inflation rate in your country is so exceptionally dangerous (was sometime back) while the currency and economy have till now gone down so badly in the middle?

Thanks.

increase in gov spendin due to terrorism has made it difficult for the gov to afford subsidies and is now withdrawing it, therefore leading to inflationary pressure.
previous gov did not invest in power sector leading to massive load shedding over last two years. this has affected production as well.
then terrorism has also affected our economy. over all loss due to terrorism stands at 35$ bn.

 

[alirulesall123]

I don't understand why the upper class of Pakistan doesn't try and actually expand the economy. They'll get re-elected, not to mention that they'll make more money through bribes and kickbacks, and all that other BS. everybody wins!

sort of.

 

[ejaz007]

EDB seeks establishment of Exim Bank in Pakistan
Staff Report

ISLAMABAD: Stakeholders of engineering sector on Monday have underlined the need of establishment of Exim Bank in Pakistan for increasing export of their products.

This was suggested in a meeting held Monday at Engineering Development Board (EDB) in connection with formulation of National Engineering Export Development Strategy (NEEDS). It was presided over by Mian Sohail a leading exporter of engineering goods and convener of the group.

In his opening remarks, he emphasized availability of cheap financing for improving the export of the sector. It was observed that most of countries including competing economies had established Exim banks to support and facilitate the trade.

Being specialized in this domain Exim banks provide fast tract services and address various problems of the trade including financing project expertise and export refinance etc. It was noted that exporters in engineering industry were essentially small and medium.

A number of companies fall in the micro domain. Majority of vendors including automotive industry, oil and gas sector, surgical and cutlery sectors have no access to formal financing due to lack of substantial collateral or acceptable securities. It was also discussed that the SME bank may be restructured to provide soft terms loans with easier financial cost to small vendors and to support the industry for making them export competitive.

The stakeholders also suggested to take steps for restoring existing and potential investors’ confidence for easy supply of money through investment corporations. The industry demanded that capital goods leasing might be provided on concessionary basis. A separate pool of “LMM” for heavy engineering sector and review of bankruptcy laws were also recommended. Other suggestions included alternate instruments of financing like venture capital and private equity funds.

The meeting was attended by senior officials of State Bank of Pakistan, Securities Exchange Commission of Pakistan, Pakistan Business Council, Engineering Development Board including Asad Elahi CEO and leading exporters of engineering industry.

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

IMC announces 50% dividend

KARACHI: Indus Motors Company (IMC)) has posted a higher profit after tax of Rs 1.366 billion during the second half of the year ending 31st December 2009 and announced an interim cash dividend of Rs 5 per share. According to the results despatched to Karachi Stock Exchange (KSE) here Tuesday, pre-tax profit of the company has surged to Rs 2.102 billion as earning per share also jumped to Rs 17.38 compared to Rs 2.07 same period last year. app

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

Pakistan, GE sign MoU to produce 54,000 megawatts by 2020

ISLAMABAD: The government has signed a Memorandum of Understanding (MoU) with General Electric (GE) in the Prime Minister House to help promote the modernisation of Pakistan’s infrastructure and economy.

Saleem H. Mandviwala, Chairman Board of Investment and Nani Beccalli-Falco, President and Chief Executive Officer of GE International singed the MOU on behalf of the government of Pakistan and General Electric Company respectively.

The prime minister welcomed the initiatives of General Electric to support Pakistan’s national objective for development. He expressed the democratic government’s commitment of making Pakistan a trade, investment and financial hub.

“This is a landmark day that we have signed the MoU with one of the most renowned conglomerates of the USA, and this will certainly open another productive era of economic ties and people to people contacts,” the Prime Minister said.

The agreement focuses on the development of Pakistan’s energy resources to meet projected demand of 54,000 megawatts by the year 2020. “General Electric is helping build the energy, water, transportation and technology infrastructure of the new century,” says Nani Beccalli-Falco, President and Chief Executive Officer of GE International. “There are huge synergies between the products and services GE businesses provide in energy and infrastructure and the needs and goals of Pakistan to modernize its economy with cleaner, more efficient and better infrastructure technologies.” GE has similar agreements with a number of other governments, including Kazakhstan, Nigeria, Qatar and the province of Ontario, Canada.

The government of Pakistan aimed to meet projected energy demands using diverse sources and tactics. Possible solutions include renewable sources, such as, wind, solar, geothermal, biomass, coal, hydro and conventional thermal through gas and steam turbines, rehabilitation of existing power generation facilities, along with transfer of technology for manufacture and repair of turbines, developing more efficient and environmentally sound rail transport systems, developing water purification and reuse, wastewater treatment, and process system programs.

According to the MOU’s terms, GE would assist Pakistan in achieving its goals by engaging in Pakistan’s energy, transportation and water sectors and would work to identify potential sources of funding and explore potential investment opportunities in those sectors. Pakistan has committed to meeting with GE regularly to facilitate the goals of the MoU and provide support to the establishment and operation of the GE facilities in Pakistan, transparently and consistent with the laws and regulations of Pakistan. Pakistan would also facilitate the issuance of work permits and visas for the GE employees and contractors as needed in order to support the objectives of the signed MOU. staff report

Daily Times - Leading News Resource of Pakistan

 

[Hyde]

Pakistan, GE sign MoU to produce 54,000 megawatts by 2020

hahaha hamari Government bhi chorne main Indian media se kam nahi hai

 

[ejaz007]

220MW KESC project to be opened tomorrow
By Ijaz Kakakhel

ISLAMABAD: The government is going to inaugurate the first ever power addition of 220 MW to Karachi Electric Supply Corporation Limited (KESC) tomorrow (Friday).

The addition will be made through Combined Cycle Power Plant, located in Korangi, owned and operated by the KESC. The plant will be run by both furnace oil as well as natural gas, subject to availability of either. However, preference will be given to gas.

Abraaj has now taken over the project from Siemens, which signed the contract for it in January 2007 against $185 million. The plant consists of four high efficiency gas turbines, one steam turbine and other equipment. All equipment is brand new and mostly imported, official in the Ministry for Water and Power told Daily Times on Wednesday.

According to the contract, plant was to be completed in various phases. Target for commercial operation for the plant was December 2008. The officials claimed that the installed gas turbines ‘LM6000’ were one of the highest efficiency gas turbines available. The first two gas turbines were commissioned in November 2008 and the other two in March 2009.

They said that the steam turbine was commissioned in July 2009 and almost 88 Pakistani engineers, technicians and plant operators trained on the latest technology.

They said power was lifeline for development and the government was focusing on this sector on priority bases. Karachi being the economic and commercial hub of the country was playing a very special role in industrial growth and economic boom overall, they said.

The theft of electricity and nonpayment of dues were the biggest reason for bringing the KESC and other utilities under crises, they said. “It’s a vicious cycle. Theft or nonpayment resulted in lack of resources, which affect investment in the system,” they said.

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

OGDCL records Rs 28.493bn profit in 1HFY10


KARACHI: Oil & Gas Development Company Limited (OGDLC) recorded Rs 28.493 billion net profit in first half of the current fiscal year, down 11 percent from Rs 31.781 billion in the same period of last year. The net profit translated into Rs 6.62 earnings per share against Rs 7.39 in the same period last year, a decline of 10 percent YoY, company announced at Karachi Stock Exchange (KSE) on Wednesday. Company’s net sales remained flat to Rs 72.633 billion in July-December 2009-10 against Rs 71.940 billion in the corresponding period of previous year. Analysts said top line growth came in flat despite a period of tapered pricing and volume slippage mainly due to retrospective inclusion of Qadirpur Wellhead prices for 2008-2009. Surge in exploration expenditure clocked in at 35 percent YoY due to a series of dry hole write-offs for the review period. Other income dropped 61 percent YoY due to lower returns on cash balances as well as exchange gains recorded last year. The company also announced an interim an interim cash dividend for the quarter ended December 31, 2009 at Rs 1.50 per share i.e.15 percent. This is in addition to interim dividend already paid at Rs 1.00 per i.e.10 percent. staff report

Daily Times - Leading News Resource of Pakistan

 

[Rank]

Istarhan kay projects ke opening ka may apnay bachpan say sun raha ho aaj tak bas sun he rahay hain ....

Aur ye baat meray baray bhi mujhe kahchukay howay hain lol

 

[ajpirzada]

well to be honest two three new powerplants became functional last year. so probably you are not following such projects

 

[ajpirzada]

220 MW KESC project to reduce crisis in Karachi



Friday, February 26, 2010
ISLAMABAD: Federal Minister for Water and Power Raja Pervez Ashraf has said addition of 220 MW power plant to the Karachi Electric Supply Company (KESC) system will help reduce the gap between demand and supply in Karachi.

The government is going to inaugurate the first ever power addition of 220 MW to the KESC today (Friday). The federal government had over two years ago asked the KESC to invest in the company and install new power plants to bridge the gap between demand and supply.

The minister held a number of meetings with the KESC administration and its owners and asked them to fulfil their commitment and set up their own power plants. The government facilitated the company to establish the Korangi power plant. The addition will be made through Combined Cycle Power Plant, located in Korangi, owned and operated by the KESC. The plant will be run by both furnace oil as well as natural gas, subject to availability of either.

This is the fourth power plant being inaugurated by this government. Three plants were inaugurated in the Punjab for Pepco system. The Korangi power plant will exclusively supply power to Karachi. The government is utilising all resources to overcome the power crisis.

He said new IPPs of 1,000 MWs will be added to the national grid by June next. The consumers will observe a better summer this year as compared to the previous year, he added. The theft of electricity and non-payment of dues were the biggest reason for all the power utilities, he said. Theft or non-payment resulted in lack of resources, which affect investment in the system, he added.

220 MW KESC project to reduce crisis in Karachi

 

[Hyde]

we need big Plants now..... like 1000MW each....... Nuclear plants are more preferred

these 100-200MW plants do make a difference but not much in long term considering the high demands we will be facing in 2020. Our electricity demands will increase by 200% at least by that time and it may worsen the condition if appropriate steps not taken today

 

[Spring Onion]

Pakistan eyes five billion dollars in foreign investment

ISLAMABAD: Pakistan aims to attract foreign investment worth five billion dollars this year, but needs to tackle reform, maximise anaemic growth and stem rampant violence to clinch its ambitious target.Last fiscal year, Pakistan recorded its worst economic growth in more than a decade, at two per cent, and attracted only 3.7 billion dollars in investment.

Yet Board of Investment chairman Saleem Mandviwalla is optimistic despite Pakistan's immense challenges.

“Traditionally the investment pace that we had kept — which was an average of five billion dollars a year — I think we should be able to go back to it very soon depending on if the global situation improves,” he told AFP.

“Pakistan faces the global crisis which is going on, the financial crisis, the energy crisis and then on top of these we have the security situation,” Mandviwalla, who is also a state minister, conceded.

Security has plummeted in Pakistan over the last three years with militants on the rampage, killing more than 3,000 people in bomb attacks to avenge the government's alliance with the United States in the war on Al-Qaeda.

Then there is the crippling energy crisis. Power cuts have become routine all year round, choking industry and causing misery for millions.

“With these conditions prevailing on us, which is terrorism and energy shortages, this stops us from really moving the investment the way it should come in,” Mandviwalla acknowledged.

While Pakistan languishes behind regional giants India and China, Mandviwalla takes comfort from the fact that his country, with its relatively advanced infrastructure, does better than other developing countries.

Close ally the United States has tripled non-military aid to Pakistan to 7.5 billion dollars over the next five years, spurring hopes that the cash can boost economic growth and improve security.

“We have to market Pakistan, we have to overcome the local issues,” Mandviwalla said, highlighting opportunities in energy generation, agriculture and infrastructure.

The top three countries providing foreign direct investment (FDI) so far this fiscal year are the United States, with 347.5 million dollars, Britain, 119 million dollars and the United Arab Emirates, 121.8 million dollars, according to the Board of Investment.

The biggest investments flowed into oil and gas, communications and information technology, and power generation, its documents said.

The investment board touts success stories such as investment from mobile phone operators Orascom (Egypt) and Telenor (Norway), Japan's Toyota, Citibank, Standard Chartered Bank and consumer product giant Procter & Gamble.

The board recently signed a memorandum of understanding with General Electric to identify energy, power, transport and water projects.

Azmat Ranjha, the minister for trade in the Pakistani embassy in Washington, acknowledged that investment from the United States — the country's largest trading partner — had slipped because of the security concerns.

But he said it was largely a matter of perception and pointed to fresh investment by large US companies with long experience in Pakistan such as Coca-Cola and Procter & Gamble.

“If you're a start-up, the perception you get once you read all these newspapers is that it looks fairly scary,” he said.

“But those familiar with the region know that most of the problems are in the north near Afghanistan while most industry is in the central and southern part of the country.” Economic analyst Salman Shah said the five-billion-dollar target would be achievable if the government focused more on boosting the economy's disappointing growth rate and lowered interest rates to single digits.

“To achieve the five billion dollars investment, the BOI has to work hard, conduct roadshows and accelerate the privatisation process,” he said.

“Another important thing is the economic growth. With just two percent growth rate, it is difficult to attract the investors.” Despite the 7.5 billion-dollar US aid package, Ranjha said it was crucial for the United States to lift tariff barriers. Proposals to help Pakistan by liberalising trade have been stuck in Congress.

“If the United States wants to hold our hand on the path to the development, there is no better way than by providing market access and that hasn't really happened,” he said.— AFP

 

[ejaz007]

Expo Pak receives orders worth $80 million
Staff Report

KARACHI: Expo Pakistan, which concluded on February 28, 2010 has generated $80 million worth of business orders for the domestic entrepreneurs with most of the orders coming from Yemen, South Korea, Hong Kong, Malaysia and Kenya.

Besides, some delegates from other countries have indicated willingness for joint ventures with Pakistani entrepreneurs, Trade Development Authority of Pakistan (TDAP) claimed on the conclusion of the mega trade event.

Chief Executive TDAP, Syed Mohibullah Shah met with various delegations from foreign countries at Karachi Expo Centre and said Yemeni delegation has signed 19 contracts worth $20 million for the purchase of rice, petroleum products, textiles and garments and surgical items. Similarly, negotiations for four more contracts are in progress, he added

He said Hong Kong delegation has also signed four contracts, while six orders are in the final stage of negotiation. Kenyan delegation has finalised four contracts with Pakistani exhibitors while four agreements are being negotiated.

Shah said Malaysian delegation has shown keen interest in enlarging free trade agreement (FTA) with Pakistan and expand number of items under trade. He said Brazilian delegation has also expressed keen desire to have joint ventures with Pakistani partners in chicken based food items.

Moreover, South Korean delegations are negotiating contracts for the purchase of cosmetic items, hand knotted carpets, cotton yarn and surgical items. They are also interested in having joint ventures to have biogas and bio fuel facility in Karachi.

He said foreign buyers have shown keen interest in the handicrafts of Pakistan, which are being displayed for the first time at Expo Pakistan 2010. “A very large buying house from France for various super markets has told me to make a bulk purchase of some handicraft items which are being displayed at Expo Pakistan”, he added. He said TDAP would hold seminars for these exhibitors in the near future to further expand their production capacity and designing expertise so that they can be able to meet export targets.

Shah said these exhibitors have been given the space free of cost at Expo Pakistan and also an allowance to encourage them to come to this mega exhibition.

He said trade delegations from Argentine, Japan, USA, Malaysia, Sweden and South Korea have met him on the second day.

Shah said Expo Pakistan was the outstanding success in the backdrop of global recession, disturbed law and order situation in the country and reluctance of foreign buyers to visit Pakistan in the presence of travel advisories from their countries.

He pointed out that top bosses and senior executives of large companies with huge turnovers and suppliers of 400 super stores have come to Expo Pakistan this year.

He added handicraft sector has attracted a lot of attention from foreign buyers and generated sufficient orders. This sector needs support, he added.

Daily Times - Leading News Resource of Pakistan

 

[ejaz007]

Car assemblers’ earnings rebound in 4Q 2009
By Moonis Ahmed


KARACHI: One sector in Pakistan that has recovered sharply from the economic downturn is Auto sector, as car manufacturers after facing tough times, have posted recent recovery; thanks to gradual restoration of consumer confidence as local economy is slowly recovering.

Compared to 4Q2008, where all car assemblers posted losses (except for Indus), 4Q2009 was far better in terms of profitability, as total earnings of the sector stood at Rs 490 million compared to profit of Rs 1 million last year. The turnaround in earnings is primarily caused by 27 percent rise in sales to Rs 23.7 billion driven by 34 percent growth in car sales, Muhammad Sohail analyst at Topline Research said.

Gross margin of the sector stood at 4 percent compared to gross losses last year. Previous year gross margins were affected, as car assemblers were hesitant to increase car prices amid downturn in economy and weak consumer confidence. However, car prices are relatively higher by an average of 3 percent compared to last year despite 5 percent cut in excise duty (on cars above 850cc). Thus, companies some how passed on the impact of steel prices (up 9 percent in YoY) and rupee devaluation (up 9 percent).

Honda’s (9 percent share in car sales) earnings remained in red due to higher financial cost and lesser margins. Pak Suzuki on the other hand, posted rebound in earnings to Rs 43 million versus loss of Rs 12 million last year. Though, gross margins stood positive at 2 percent compared to gross loss last year, they are still lower than historical trend where average margins were 9-12 percent in last 5 years.

Indus Motors was the star performer with 429 percent growth in earnings in 4Q2009 led by higher volumetric sales (up 16 percent), better gross margins (up 425bps) and higher other income (up 240 percent).

Daily Times - Leading News Resource of Pakistan