profit.com.pk Friday, 1 June, 2012

g Pakistan needs no emergency external aid, SBP rebuts Wall Street Journal g Pakistan does not face any risks in making IMFrepayments g Dip in dollar reserves to be offset by worker remittances g Overseas Pakistanis to remit record $ 13 billion thisyear g GDP growth to be close to 4pc in FY12, 4.3pc in FY13 g Pakistan does not need emergency external assistance

ISLAMABAD

STAFF REPORT

The public debt of the country has in-creased 12.3 percent or rs 1.315 trillionto rs 12.024 trillion during the July-March period of the current fiscal year,which will have implications for theeconomy in the shape of a greateramount of resource allocation towardsdebt servicing in the future, reveals theeconomic Survey 2011-12.

The increased amount includes rs391billion consolidated by the governmentinto public debt against outstanding pre-vious years subsidies related to the foodand energy sectors. Public debt as a per-cent of GDP stood at 58.2 percent by end-March 2012 compared to 55.5 percent ofGDP during the same period last year.

Historically, public debt stock ac-counted for almost the same burdenfrom domestic and external sources.However, government has increasinglyfocused on the domestic part over thelast few years owing to non-availabilityof sufficient external financing i.e. do-mestic borrowings inched up in sharefrom 46.6 percent in fiscal year 1990 to59.9 percent at end March, 2012.

Pakistan’s public debt position de-clined slightly in the current fiscal year.

A host of internal and external factorscontributed to the decline. Higher inter-est payments, large subsidies speciallyfood and energy, growing security spend-ing needs, narrow tax base and rising in-ternational commodity prices haveresulted in large twin account (i.e. fiscaland current account) deficits. Prudentgovernment policy will be necessary toaddress the issue of public debt.SERvICIng oF PublIC DEbT: In-creases in the outstanding stock of totalpublic debt have implications for theeconomy in the shape of a greateramount of resource allocation towardsdebt servicing in the future. In order tomeet debt servicing obligations, an extraburden is placed on limited governmentresources and might have costs in theshape of foregone public investment orexpenditure in other sectors of the econ-omy. The increase in domestic debt serv-icing is partly the result of a tightmonetary stance taken in order to arrestthe monetary overhang caused by previ-ous policies.DomESTIC DEbT: Pakistan’s domes-tic debt comprises permanent debt(medium and long-term), floating debt(short term) and unfunded debt (madeup of the various instruments availableunder the national Savings Scheme) hav-

ing shares of 21.6 percent, 54.5 percentand 23.9 percent respectively in total do-mestic debt. Banks’ preference of risk-free sovereign credit in view ofmushrooming nonperforming loans au-gured well for the government securitiesmarket and overwhelming participationwas witnessed in the auctions of T-Bills,PIBs and Government Ijara Sukuk.

Failure to issue new debt in order tomature a large amount of outstandingshort term debt may trigger a liquidityor debt rollover crisis. The increase infrequency of such operations (due totheir short term nature) coupled withany adverse rise in interest rates mayleave the government vulnerable to thehigh cost of debt.ouTSTAnDIng DomESTIC DEbT:

The total domestic debt was positioned atrs7.206 trillion at end-March 2012, rep-resenting an increase of rs1.190 trillion inthe first nine months of the current fiscalyear. This increase stems from net is-suance of market debt namely Treasurybills (rs576.4 billion) and PIBs (rs307.5billion). In relation to GDP the domesticdebt stood at 34.9 percent which is higherthan end-June 2011 level at 33.4 percent.The domestic debt grew by 19.8 percent infirst nine months of current fiscal year.The focus on deficit financing through in-ternal sources owing to lower external re-ceipts has been the major cause.

ExTERnAl DEbT & lIAbIlITIES:

Pakistan’s external debt and liabilities(eDL) include all foreign currency debtcontracted by the public and private sector,as well as foreign exchange liabilities of theState Bank. The eDL has been dominatedby Public and Publically Guaranteed Debthaving share of 76 percent owing to currentaccount deficit which is financed throughloans from multilateral and bilateraldonors. Debt obligations of the private sec-tor are fairly limited and have been a minorproportion of the eDL (6%). Borrowingfrom IMF contributed 13% in eDL Stockwhich was intended for Balance of Pay-ment (BoP) support and is reflected in for-eign currency reserves of the country.DISbuRSEmEnTS: During July-March 2010-11, disbursements of$1.660 billion were for different pur-poses like Project Aid ($1.113 billion),Programme loans/Budgetary Support($99 million) and relief ($448 million).Project aid accounted for 67percent ofthe total disbursements.ExTERnAl DEbT SERvICIng:

During fiscal year 2011, external debtservicing summed to $4.799 billion thatis 14.3 percent lower than the previousyear. A segregation of this aggregatenumber shows a payment of $2.348 bil-lion in respect of maturing eDL stockwhere interest payments were $963 mil-lion. $1.488 billion was rolled-over.

ECB, EU officialswarn euro’ssurvival at risk

BRUSSELS

REUTERS

The european Commission's top eco-nomic official, olli rehn, warned thatthe single currency area could disinte-grate without stronger crisis-fightingmechanisms and tough fiscal disci-pline. The twin warnings came as wor-ries about Spain's banks and Greece'ssurvival in the euro area pushed theeuro to a two-year low against the dol-lar and hastened a rush into safe-haven assets such as Austrian andFrench bonds, whose 10-year yields hita euro-era low. Spaniards alarmed bythe dire state of their banks movedmore money abroad in March fasterthan at any time since records beganin 1990, official figures showed.The 66.2 billion euros ($82.0 bil-lion) net capital flight occurred be-fore the nationalization of Spain'sfourth biggest lender, Bankia, inMay due to massive losses from aburst property bubble. Irish votersseemed set to approve in a referen-dum a european budget disciplinetreaty vital to continue receiving eUaid. But the outcome of a secondGreek general election on June 17,seen as crucial for Athens' future inthe currency zone, is too close tocall. eCB President Mario Draghiurged europe's leaders to clarifytheir vision for the single currencyquickly, warning the european Par-liament that the central bank couldnot fill the policy vacuum. "We willavoid bank runs from solvent banks.Depositors' money will be protectedif we build this european guaranteeddeposit fund. This will assure thatdepositors will be protected," Draghisaid, calling for an eU-wide bankingsupervision and resolution system.eU paymaster Germany, reluctant torisk more of its own taxpayers' moneyin support of euro zone partners, hasso far rejected any such joint depositguarantee. Chancellor Angela Merkelrefrained from comment on calls for abanking union but said europe shouldbe ready to consider all options tostem its sovereign debt crisis."There are integration steps which willrequire treaty changes. We are not atthat stage today but nevertheless thereare no taboos," she told a news confer-ence in the Baltic town of Stralsund.Another top eCB official, executiveboard member Joerg Asmussen, saidin Frankfurt that the 25 or so mostimportant banks in the euro areashould be supervised by a suprana-tional watchdog rather than just na-tional authorities. Draghi, testifyingbefore eU lawmakers, said the finan-cial crisis had "heightened risk aver-sion in a dramatic way. "I urge allgovernments to keep this in mind, be-cause it is better to err by too much inthe very beginning rather than by toolittle," he said, citing the repeated fail-ure of national regulators to correctlyassess the needs of failed Franco-Bel-gian bank Dexia and Spain's Bankia.EDIFICE AT RISK: Another eCBpolicymaker, Bank of Italy governorIgnazio visco, went further, saying po-litical inertia and bad economic deci-sions had put "the entire europeanedifice" at risk and only a clear path topolitical union could save the euro."There are now growing doubts amonginternational investors about govern-ments' cohesion in guiding the reformof european governance and eventheir ability to ensure the survival ofthe single currency," visco told theBank of Italy's annual meeting.

Cement prices under the gun Page 02

g Public debt increases to Rs 12.024 trillion

Head over heels in debt

SBP governor vies to erasethe writing on the wall

KARACHI

ISMAIL DILAWAR

Governor State Bank ofPakistan Yaseen AnwarThursday said Pakistanwould not face any risk in

making repayments to the Interna-tional Monetary Fund (IMF). Also, thegovernor said despite domestic chal-lenges, key emerging market coun-tries, like China and Turkey, are keento open bank branches in the crises-hit Pakistan. The governor also said“additional” Foreign Direct Invest-ment, including that from the US com-pany investments in the power sector,was in the pipeline and that unlike theeuropean Union, the banking systemin Pakistan had been very resilient,profitable and robust, Anwar asserted.

“We face no risk in being able tomake next year's IMF payments fromour adequate reserves,” the SBP gover-nor said in a rebuttal in response tothe misreporting of his interview tothe Wall Street Journal (WSJ) andthat was published on May 29.

In a letter published in the Ameri-can daily (WSJ) Thursday, the SBPgovernor clarified that the decline inPakistan’s projected reserves would bepartially offset by an increase in theballooning worker remittances. Thereceipts from overseas Pakistanis, hesaid, would exceed the record $13 bil-lion mark this fiscal year.

He said the entry of new foreignbanks, increased small- and medium-sizeenterprise lending to increase employ-

ment, huge potential for the agriculturesector and the export potential for dairyproducts as the fourth largest milk pro-ducer in the world, and the developmentof capital markets to support housing fi-nance are the positive developments inthe country’s economy.

He pointed out that Pakistan's cur-rent banking restructuring and success-ful branchless banking strategy wasbringing the "unbanked" into the bank-ing sector to increase financial inclusion.The central bank had stated that Pak-istan’s Gross Domestic Product (GDP)was expected to be closer to four percentthis year than the three percent as re-ported by WSJ, he explained. “It would

have been nice to see a more positivelight on these factors which will, in myview, be a positive toward alleviating themanageable stresses going forward. I seethe glass half full and am optimisticabout the year ahead,” the SBP governortold the WSJ.

Adding: “The article "PakistanBank Sees Financial Challenges"(World news, May 29) doesn't fullyreflect the economic story I conveyedin my interview with the Journal.”

Separately, he said despite eco-nomic challenges, Pakistan was notfacing a situation which requiredemergency external assistance. Thefiscal deficit and the lack of externalfinancing would continue to challengePakistan, especially the central bank,he said. “Let me assure you that Pak-istan will not stumble into a situationthat requires emergency external as-sistance,” he added. Dispelling the im-pression created by some foreign andlocal media reports regarding pres-sures on the country’s foreign ex-change reserves and exchange rate,the SBP Governor said it would bechallenging, but manageable.

He pointed out that the SBP, likemost other central banks, was only un-dertaking calibrated interventions todiffuse volatility as appropriate.

In recent weeks, the movement inthe exchange rate had been somewhatsentiment driven compounded by lump-ing up of some scheduled payments,rather than any excessive demand andsupply mismatches prevailing in themarket. “The State Bank is watching the

situation closely and the recent exchangerate movements have been excessivewith the market overreacting,” the gover-nor added. He said during the first 10months of FY12, worker remittances roseby 20.2 percent to $ 10.88 billion, whichhelped the Balance of Payments (BoP)despite widening of the trade deficit.

Pakistan’s fiscal challenges arewell known and documented, he said,adding this spillover to the rest of theeconomy was equally clear.

He said at the start of the year(July 2011), external conditions ap-peared daunting due to rising oilprices and lack of external financing.

Despite all odds Pakistan hadfared well in the first 11 months of thecurrent FY with not only successfullypaying back IMF obligations to thetune of $ 1.2 billion and other debt ob-ligations equaling $ 1.7 billion to date,yet the SBP’s liquid reserves were atstable levels of around $ 11.5 billion,much better and contrary to most ana-lysts’ earlier assessment at the begin-ning of the fiscal year.

Despite domestic challenges, keyemerging market countries, like Chinaand Turkey, have shown keen interestin opening bank branches in Pakistan,he said, adding unlike european Union(eU), Pakistan’s banking system hadbeen very resilient, profitable and ro-bust. As stated to the Wall Street Jour-nal and repeated: “I see the glass halffull and optimistic about the year aheadas Pakistan’s economy is projected togrow 4.3 percent in the next fiscal year(FY13)”, the SBP Governor concluded.

PRO 01-06-2012_Layout 1 6/1/2012 3:27 AM Page 1

news02Friday, 1 June, 2012

PAKISTAn ECOnOMIC SURVEY REVEALS

KARACHI

STAFF REPORT

The country’s economic health in FY12like the previous four years continuedto be marred with energy crisis, struc-tural weakness and heightened secu-rity environment.

According to the economic Survey,unveiled on Thursday by Federal Fi-nance Minister Dr Abdul Hafeez Sheikh,many challenges like floods, rising fueland commodity prices, global recession-ary trends and weak inflows restrictedcountry's economic output.

The economic Survey 2011-12 re-ported the GDP growth at 3.7 percentbelow the envisioned target of 4.2 per-cent.

“The compares unfavorably withlast 10 years average GDP growth of4.8 percent and last 65 years GDPgrowth of 5.0 percent,” said the ana-lysts at Topline research.

Furthermore, they said, last 5 years

average GDP growth stood at 3.04 per-cent which is the lowest 5-yearly aver-age economic growth in the history ofPakistan.

The survey has also adjusted previ-ous two years (FY10-11) growth rate to3.1 percent and 3.0 percent from 3.8percent and 2.4 percent. The PerCapita Income in dollar terms rose by9 percent to $1372 in FY12 versus re-vised $1258 in FY11.

Cumulatively, country's 4-year(FY09-12) average GDP growth in PPP-led government stood at a mere 2.9 per-cent as against 6.6 percent recorded inpreceding 5-years (FY04-08).

In the corresponding period (FY08-12), regional peers namely India, SirLanka and Bangladesh showed a growthof 7.8 percent, 6.8 percent and 6.1 per-cent, respectively, while developingmarket growth stood at 7.9 percent.

The impetus of growth once againresided with service sector in FY12, de-picting a growth of 4.0 percent but it

was still below the initial target of 5.0percent.

“The performance was dominatedby Finance and Insurance (6.5 per-cent), Social and Community Services(6.8 percent) and Wholesales and re-tail trade (3.6 percent),” said naumanKhan. The Topline analyst said theagricultural sector grew by 3.1 percentagainst the target of 3.4 percent on ac-count of 1.3 percent decline in minorcrop output.

Major crops depicted growth of 3.2percent thanks to post 2010 flood recov-ery in Punjab that more than compen-sated constrained output from Sindhdue to floods. Cotton, Sugar-cane andrice showed robust growth of 18.6 per-cent 4.9 percent and 27.7 percent, whilewheat production decline by 6.7 percent.

Manufacturing, remained victims ofunfavorable investment climate and en-ergy crisis, but managed to register agrowth of 3.6 percent that is close to itsinitial target of 3.7 percent. LSM, as perthe latest data, grew by 1.1 percent in9MFY12 as against 1.0 percent last year.

The national savings as percentageof GDP decline to 10.7 percent from 13.2percent a year ago, while investment toGDP dropped further to 12.5 percent, re-sulting increase resource gap to 1.8 per-

cent. Both the trend are of concern, asdeclining investment implies restrictedfuture growth and saving means higherreliance on external loans.

The survey puts 10MFY12 fiscaldeficit at 5 percent which is alreadyabove full year revised target of 4.7 per-cent of GDP. We believe the actualdeficit could balloon to 6.5 percent (ex-cluding electricity arrear payments).

With electricity arrears it wouldreach 8.3 percent. Though the gov't isexpected to come close to its an-nounced tax target, but higher expendi-ture due to increased subsidy were theculprits. Furthermore, we estimate 90percent of escalating deficit would be fi-nanced through domestic sources thatis excreting pressure on the domesticliquidity and keeping interest ratedownward sticky.

“Due to record high fiscal deficitPakistan's public debt according to sur-vey reached rs12tn (58 percent of GDP)by March 2012 end,” Khan said.

The survey estimates inflation to re-main close to targeted 11 percent, in linewith our estimates and down from 13.7percent last year. The decline in infla-tion was due to tight monetary policydespite sharp increase in internationaloil and domestic food prices.

GDP’s not a big fan of democracy it seems

KARACHI

STAFF REPORT

THe cement prices remainedunder immense pressure in thenorth and receded from rs 435-440 to rs 415-420 per bag during

the month of May. This was due to com-mencement of wheat harvesting, unsched-uled load-shedding, rains, shortage of laborand reduction in spending on the PSDP,said the industry sources. They said the im-mediate impact was evident by the fact thatdaily dispatches had reduced to a mere60,000 tons from about 80,000 tons.

Sharp fall in demand and resultantover supply has resulted in price decline ofrs 20 to rs 25 per bag for different brands,marketing head of one of the cement man-ufacturing company located in north of thecountry said. The current decline is fueledby excessive load shedding which hampersconstruction activities in north Zone par-ticularly, which is the major market for ce-ment consumption and has beenwitnessing massive load shedding whichhas dampened industrial and constructionactivities, he said.

Cement sector, being a process indus-try is always required to maintain adequatestock levels for smooth operations. Coalprices have dropped to US $ 95 per tonFoB South Africa, but during the currentfinancial year, average cost to the industry

has been around US $ 108 per ton, thesame price as in last financial year. The ce-ment industry did not get any benefit fromreduction in coal prices. rupee devaluationis also expected to offset reduction in FoBprice. Industry sources informed that ce-ment industry has not yet passed on theimpact of recent increases in input prices ofelectricity, gypsum, devaluation of Pakrupee and transportation of goods fromKarachi by any unit in the north zone dueto severely depressed demand.

energy, which constitutes more than60 per cent cost of production, has taken a

quantum jump in a couple of years, makingthe production cost almost double. Govern-ment of Pakistan through its power distri-bution companies is charging fuel priceadjustment and during the last month itcharged rs. 2 per Kwh. The impact of fuelprice adjustment is rs. 10 per bag which isnot yet passed on by the industry.

After the opening of Wahga border,mine owners are exporting gypsum in bulkquantity resulting in depleting scare re-sources of the country without any valueaddition resulting in increased cost of gyp-sum for local consumers by rs. 100 per ton.

If exports of gypsum increase, cost to localcement units shall also increase further,impacting cement prices. Industry sourcesquestion the prudence of allowing gypsumexports? Cement production capacity inPakistan is 44 million tons while local de-mand is only 24 million tons leaving a sur-plus of 20 million tons. Cement industry isstriving for survival and making efforts forexports of its surplus capacity. Unfortu-nately, cement exports are continuously de-clining and reason for decline in exports ismainly high incidence of transportationcost which makes export unfeasible.

g GDP growth in past 4 years averaged at 2.9pcagainst 6.6pc of Musharraf era g Pakistan’s GDPgrowth rate remains lowest in South Asia

Cement prices under the gung Low PSDP spending cuts cement prices to Rs415-420/bag

PPL wins explorationcontract in IraqKARACHI: The Pakistan Petroleum Limited (PPL) has

succeeded in wining an exploration contract in Iraq.

According to the energy giant, it had submitted a bid

on Thursday for the exploration Block-8 in the Middle

Eastern country. “PPL today has submitted a bid for

exploration block-8 in iraq which stood successful,” M

Mubbasshar Siddiqui, company secretary PPL, told

the company’s shareholders at three stock ex-

changes of the country in Karachi, Lahore and Islam-

abad. “Block-8 lies at about 110 kilometers east of

Baghdad,” the secretary said. Pioneer of the natural

gas industry in the country, the PPL is a major sup-

plier of natural gas and currently caters to around 25

percent of the country’s total natural gas require-

ments besides producing crude oil, Natural Gas Liq-

uid and Liquefied Petroleum Gas. STAFF REPORT

Per capita incomerises to $1,372ISLAMABAD: Pakistan's per capita income rose from

$ 582 in 2002-03 to $ 1,372 in 2011-12, according to

Economic Survey of Pakistan released here Thurs-

day.The major factors, which contributed in the rise

of per capita income, include acceleration in real

GDP growth, inflows of workers remittances and the

stable exchange rate. Per capita income is widely

used and recognized as one of the important indica-

tors of economic growth and general well-being of a

society. Per Capita Income in dollar terms grew at a

modest rate of 9.1 percent in 2011-12 compared to

17.8 percent growth last year, it added. APP

Remittances surgeby over 20pcISLAMABAD: Workers' Remittances totaled $

10,876.99 million in July-April 2011-12, as against $

9,046.61 million in the comparable period of last year,

showing an increase of 20.23 percent, according to

Economic Survey of Pakistan released here Thursday.

Remittances from Saudi Arabia recorded massive

growth of 43.25 percent, followed by U.K. (27.52 per-

cent), USA (14.57 percent), Other GCC countries

(15.34 percent) and UAE (14.10 percent). Monthly data

on remittances suggests that the monthly average

for the period of July-April (2011-12) stood at $

1,087.70 million compared to $ 904.66 million during

the corresponding period last year. APP

Pak-Afghan annual tradevolume rises to $ 2.5bISLAMABAD: The Afghan Transit Trade Agreement

(APTTA) has encouraged formal trade between Pak-

istan and Afghanistan and its volume has risen to

around $ 2.5 billion annually. According to Economic

Survey launched by Finance Minister, Dr. Abdul Hafeez

Sheikh here on Thursday, efforts are underway to for-

malize gree trade agreements and preferential trade

agreements with many countries. It will help boost-

ing the country's exports. Efforts are also underway

to normalize trade relations with India. APP

Forex reserves slip to $ 16.006bKARACHI: Country's foreign exchange reserves

have slipped by $ 305 million to around $ 16.006

billion as on May 25, 2012 on foreign payments.

According State Bank of Pakistan here Thursday,

the foreign exchange reserves held by the Central

Bank decreased to $ 11.699 billion while reserves

held by banks dropped to about $ 4.307 billion

during the week. APP

Fisheries record 1.78pc growth ISLAMABAD: The fisheries sector witnessed a growh

of 1.78 percent against the growth of 1.94 percent dur-

ing last year, according to Economic Survey of Pak-

istan 2011-12. Components of fisheries such as marine

fishing and inland fishing contributed an overall in-

crease in the value addition in the fisheries sub-sector.

The gross value addition of marine fish increased by

1.3 percent and that of inland fish by 1.96 percent. APP

Yuan closes in on becominga truly global currencyBEIJING: The Bank of China (BOC), China's third-

largest lender, announced Thursday that it has

been approved as one of the country's first market

makers in yuan-yen direct trading, which is set to

start Friday. The BOC said in a statement that it

will comply with its duties, quote both the buy and

sell prices of the yuan against the Japanese cur-

rency on the interbank foreign exchange market

and provide liquidity for the market. The BOC's an-

nouncement came after HSBC Bank (China) Co.,

Ltd. said Wednesday that it was approved as a

market maker in yuan-yen direct trading on China's

interbank market, reports Xinhua news. APP

BRIEF CORnER

KARACHI

ISMAIL DILAWAR

WITH overall payment systems infrastructurein the country moving northward, the valueof real Time Gross Settlement (rTGS) trans-

actions decreased during third quarter of the currentfiscal year, FY12. The reason for the decrease cited bythe central bank is a steep slump in the securities set-tlement value that slid from rs 18.7 trillion to rs 16.1trillion during January-March FY12.

“Although the volume of large-value paymentsthrough rTGS increased by 8.8 percent, the value oftransactions recorded a decline of 8.2 percent,” said theState Bank in a latest review.

However, the regulator said despite the 8.2 percentdip, the major portion of rTGS transactions continuedto be in respect of settlements against securities fol-

lowed by Interbank Funds Transfers and settlement ofretail cheques through multilateral clearing contribut-ing 57.7, 31.5 and 10.8 percent, respectively.

The country’s overall payment systems, the banksaid, kept growing during the quarter in review.

It said a total of 203 more ATMs were added bring-ing the total number of ATMs in the country to 5,612whereas 269 more bank branches were up-graded toreal-Time online Branches (rToB).

Currently, 9,174 bank branches are offeringrToB services out of total of 10,009 bank branchesacross country. The number of plastic cards also in-creased by 9.47 percent compared to the numbersrecorded in the preceding quarter. By the end ofquarter under review, there were 16.7 million plasticcards circulating in the country. The volume of over-all e-banking transactions in the country during thequarter under review registered an increase of 5.9

percent to 70.9 million. At this level, the value ofthese transactions also depicted a growth of 6.47 per-cent compared to the preceding quarter ended De-cember, 2011. The overall number of ATMtransactions also showed an increase of 5.6 percentand the value increased by 8.6 percent. The averagevalue per ATM transaction stands at rs 9,828.

The share of ATM transactions in total e-bankingtransactions in terms of volume and value worked outto 59.6 percent and 6.0 percent respectively.

Compared to the figures reported in previous quar-ter, the number of real Time online Branches (rToB)transactions also increased by 6.15 percent whereas thevalue of transactions increased by 6.14 percent.

The volume and value of transactions through PoSterminals stood at 4.5 million and rs 21.2 billion de-picting 7.0 and 8.3 percent growth, respectively, com-pared to the figures reported in the previous quarter.

Honey, I shrunk the security settlement valueg RTGS transactions down as securities settlement value shrinks to Rs16tn

PRO 01-06-2012_Layout 1 6/1/2012 3:27 AM Page 2

news

Friday, 1 June, 2012

03

PTCL holds Retailers’Conference 2012 in Lahore

lAHoRE: Pakistan Telecommunication Com-pany Limited (PTCL) held a rigorous retailers’Conference 2012 in Lahore, which was attendedby a large number of PTCL’s retailers, businesspartners and national distributors. PTCL SevPCommercial, naveed Saeed; SevP BusinessZone Central, Jamal Abdalla Saleem Hussain AlSuwaidi; and other senior PTCL officials alsoparticipated in the event held at a local hotel.Comprised of team-building sessions, the con-ference gave participants an exciting opportu-nity to share their observations, experiences andsuccesses regarding PTCL’s product sales &services, initiatives & promotions, and distribu-tion & revenue streams. A lucky draw for evonitro, evodriod and bumper prize of evo TABwas held amid cheers of retailers, and gift ham-pers were also distributed. In addition, a signa-ture wall and media wall was created to registerparticipants’ feedback and comments.

Transforming futures

lAHoRE: It’s that time of the year whenleading universities of Pakistan schedule re-cruitment fairs and networking nights forgraduating students. In order to guide themabout possible career opportunities in the com-pany, the recruitment & Staffing team from

Warid Telecom participated in engaging careerfairs at leading Business & Technical Institutesof the country. These sessions were held atU.e.T (University of engineering and Technol-ogy) LUMS (Lahore University of ManagementSciences) , LSe (Lahore School of economics), Bahria University and IBA Karachi. Under thesame flagship Warid also attended a network-ing night at LUMS. Senior technical and man-agement employees facilitated students asmentors and provided thorough career advicethat will be instrumental in shaping their fu-ture and strengthening Warid’s bond and com-mitment towards society.

Etisalat Group to adopt ISO26000, GRI Standards ISlAmAbAD: etisalat has announced itsambition to deploy international social respon-sibility and sustainability reporting standardsincluding Global reporting Initiative (GrI)and ISo 26000 across Asia, the Middle eastand Africa. The Global reporting Initiative(GrI) works towards a sustainable economy byproviding organisations with reporting guid-ance. It has pioneered and developed a com-prehensive Sustainability reportingFramework that is widely used around theworld. ISo 26000 is an ISo InternationalStandard giving guidance on Social responsi-bility and assisting companies in their effortsto operate in a socially responsible mannerthat society increasingly demands.

SME Financial Expo 2012lAHoRE: SMe Business Support Fund (BSF), Ministry of Finance, Government of Pakistanis arranging SMe FInAnCIAL eXPo 2012 incollaboration with State Bank of Pakistan on31st May 2012 at Pearl Continental Hotel, La-hore. This event is planned with respect to thelaunch of our first SMe Development Centre atSundar Industrial estate, which is an initiativetaken by BSF to foster private sector develop-ment in Pakistan by providing high quality in-formation support, competent policy advice andresearch, ensuring a wide dissemination of bestpractices of SMe support in business commu-nity and providing effective professional serv-ices to the Industrial estate. While taking to themedia before the inauguration of the event,Syed Saquib Mohyuddin, Ceo SMe BusinessSupport Fund said that SMe sector is the back-bone of Pakistan’s economy in terms of theircontribution towards GDP, employment Gen-eration and export Development.

Bank of Punjab 21st annualgeneral meeting

lAHoRE: Mr. Ghafoor Mirza Chairman BoPchaired the meeting and presented the salient fea-tures of the achievements of the Bank over thepast 3 years. He appreciated the efforts of themanagement and Staff coupled with the patron-age of the Government of Punjab, State Bank ofPakistan which also assisted in the Bank’s remark-able recovery. The President, Mr. naeemuddinKhan made a detailed presentation of the achieve-ments and fielded questions of the attendees sat-isfying them, in the knowledge that the figures forthe current year were showing even better im-provement. The meeting ended with the appoint-ment of M/s M Yusuf Adil Saleem & Co. a memberof M/s Delloite Touche Tohmatsu Limited.

Pakistan inks 1000 MW electricityimport agreement with Iran lAHoRE: The spokesman of national Trans-mission and Despatch Company Limited(nTDCL) has said that the Govt of Pakistan hassigned the agreement of 1000 MW import ofelectricity with Iran today. The agreement wassigned between the delegation of Pakistan,headed by Managing Director nTDCL Mrrasul Khan Mahsud and deputy Iranian Min-ister for energy Mr Muhammad Behzad.

CORPORATE CORNER

Major Gainers

Company Open High Low Close Change Turnover

Rafhan MaizeXD 2715.00 2850.75 2700.00 2735.70 20.70 271Mithchells Fruit 316.14 331.94 325.00 331.93 15.79 3,570Island Textile 197.21 206.75 187.35 203.31 6.10 309Attock Refinery Ltd 125.99 131.90 125.50 130.98 4.99 2,961,997Ismail Industr 99.98 104.97 95.02 104.70 4.72 3,350

Major Losers

UniLever PakXD 7239.18 7499.00 7151.00 7170.57 -68.61 47Nestle Pakistan Ltd. 3878.44 3975.00 3755.00 3858.00 -20.44 41Shezan Inter. 219.23 219.75 210.02 210.18 -9.05 134Attock PetroleumXD 453.32 458.00 445.00 446.61 -6.71 39,369Habib Bank Limited 109.98 110.00 105.00 105.26 -4.72 405,226

Volume Leaders

D.G.K.Cement 41.49 42.53 40.50 41.14 -0.35 12,394,731Jah.Sidd. Co. 15.62 15.95 14.70 14.85 -0.77 11,123,280Engro Corporation 108.50 110.20 105.50 107.60 -0.90 9,459,363Lucky Cement 126.38 132.00 125.25 126.29 -0.09 7,987,901Engro Foods Ltd. 68.20 69.90 64.81 65.19 -3.01 5,753,448

Interbank RatesUS Dollar 93.9193UK Pound 145.7910Japanese Yen 1.1910euro 116.6948

Dollar EastBuy Sell

US Dollar 93.40 94.00Euro 114.44 116.68Great Britain Pound 142.79 145.54Japanese Yen 1.1777 1.2003Canadian Dollar 89.37 91.60Hong Kong Dollar 11.84 12.13UAE Dirham 25.27 25.73Saudi Riyal 24.76 25.20

Australian Dollar 89.73 92.92

KARACHI

STAFF REPORT

SToCKS closed lower amid thintrades at KSe as investor re-mained cautious ahead of federalbudget announcements due to-

morrow. viewed by Ahsan Mehanti, Di-rector at Arif Habib Investments Limited.

The Karachi Stock exchange (KSe)100-share index declined 85.14 points or0.61 percent to close at 13,786.62 pointsas compared to 13,871.76 points of theprevious session. The KSe 30-shareindex shed 70.28 points to close at11,951.07 points as compared with12,021.35 points. The market turnoverwas down to 124.763 million shares afteropening at 129.271 million shares. Theoverall market capitalization declined0.04 percent and traded rs 3.527 trillionas against rs 3.548 trillion. Losers out-numbered gainers 106 to 185, while 74stocks were unchanged.

Mehanti added “Uncertain globalstocks and commodities, concerns overfall in rupee dollar parity amid macroeco-nomic instability and uncertainty overPak-US relations on nATo supply issueplayed catalyst role in bearish sentiments

despite support in cement and power sec-tor on pre-budget speculations.”

The KMI 30-share was plunged by117.17 points to close at 23,976.43 pointsfrom its opening at 24,093.60 points. TheKSe all-share index closed with a loss of56.97 points to 9,714.33 points as against9,771.30 points. D.G.K Cement was the vol-ume leader in the share market with 12.394million shares as it closed at rs 41.14 afteropening at rs 41.49. Jahangir Siddiqi Com-pany traded 11.123 million shares as itclosed at rs 14.85 after opening rs 15.62engro Corporation traded 9.459 millionshares as it closed at rs 107.60 from itsopening at rs 108.50. Lucky Cementtraded 7.987 million shares and closed atrs 126.29 as against its opening at rs126.38. engro Foods Limited traded 5.753million shares as it closed at rs 65.19 ascompared to its opening at rs 68.20.

on the future market, the turnoverrecovered remarkably to 13.488 millionagainst 11.403 million shares of Wednes-day. The rafhan Maize XD andMithchells Fruit, up rs 20.70 and rs15.79, led highest price gainers while,Unilever Pakistan XD and nestle Pak-istan Limited down rs 68.61 and rs20.44 respectively, led the losers.

Bears hold on tightto the honey jar

PESHAWAR: Mr Bilal Mustafa MD Bank of Khyberpresiding over the BoK EOGM at Bank Head Office.

THE JAR LID OPEnS TODAYIt’s samba time!g Pakistan, Brazil to sign pact

to promote trade and economicactivities: Brazilian envoy

ISLAMABAD

APP

Pakistan and Brazil will sign a number of agreements andmemorandum of understandings to promote trade andeconomic activities and strengthen bilateral ties duringthe forthcoming visit of Prime Minister Syed Yusuf razaGilani to rio de Janeiro in second week of June.Talking to newsmen informally here at Brazilian em-bassy after donating US# 250,000 to Pakistan for therepatriation of Afghan refugees, the Brazilian ambassa-dor to Pakistan Alfredo Leoni said, although Prime Min-ister Gilani will visit Brazil to attend the United nationsSustainable Development Conference but there will bebilateral talks between Pakistani and Brazilian leader-ship during this visit. He said the expected agreementsand MoUs to be signed between Pakistan and Brazil dur-ing this visit will be related to technical cooperation inagriculture, health and education sectors, sugar caneproduction, sports cooperation, eradication of poverty,visa regime that include visa to Pakistani business com-munity and establishing Joint Ministerial economicCommission. The Brazilian ambassador said Pakistan'sexport to Brazil have been doubled in the last two yearsfrom US$ 39 million to US$ 80 million and there aremore prospects for further increase in trade and eco-nomic cooperation between the two countries while thetrade volume between the two countries is US$ 260 mil-lions. Welcoming the visit of Prime Minister Gilani toBrazil, the ambassador said it will promote bilateral rela-tions and strengthen the ties. He said the visit will alsoprovide a chance to Prime Minister Gilani to meet worldleaders, as 120 heads of governments will be in Brazil onthe occasion of Sustainable Development Conference ofUnited nations being held from June 20 to 22.

HAnDS FULL

Oh the liabilities!g Govt’s contingent liabilities increase by Rs 146.6bg Out of Rs 487b, total outstanding guarantees

extended to PSEs, liabilities amounting toRs256b are in local currency, guaranteesequivalent to Rs231b are in foreign currency

ISLAMABAD

AMER SIAL

The government’s contingent liabilities have increased by rs146.6 billion which is around 0.7 percent of GDP, during thecurrent fiscal year from rs 62.4 billion in the last fiscal year,says the economic Survey.The major jump in contingent liabilities came from the newguarantees issued by the government in March 2012. The surveysays that the explicit and implicit guarantees issued to PublicSector enterprises (PSes) and unfunded losses of State ownedentities, pushed the total outstanding stock of government con-tingent liabilities to rs 487 billion by March 2012.Contingent liabilities are a kind of guarantee by the governmentdue to the possibility of an obligation to pay dependent on fu-ture events. These are the secured loans obtained mainly for thepublic sector enterprises, with the defined obligations that thecompany must meet, but in case of any probability the loans areguaranteed by the government.The survey has pointed out that out of rs 487 billion, the totaloutstanding guarantees extended to the PSes, liabilitiesamounting to rs256 billion are in local currency and guaranteesequivalent to rs231 billion are in foreign currency. When trans-lated into greenback the total contingent liability of the countrystands at $2.544 billion.Under the Fiscal responsibility and Debt Limitation (FrDL) Act2005, the government guarantees, including those for rupeelending, bonds, rates of return, output purchase agreements andall other claims / commitments as well as renewal of existingguarantees, should not exceed 2.0 percent of the gross domesticproduct (GDP) in any financial year.However, the guarantees issued against commodity operationsare not included in the stipulated limit of 2 percent of GDP.“This is because the loans for commodity operations are securedagainst the underlying commodity and self liquidating which donot create a long term liability for the government,” the surveynotes.It highlights that the quantum of these guarantees depends onthe supply-demand gap of various commodities, their price sta-bilization objectives, volume procured, and domestic and inter-national prices. The guarantees were issued against thecommodity financing operations by TCP, PASSCo, and provin-cial governments which were reduced.The survey notes that by June 2011, stock guarantee positionwas rs397.5 billion but after ten months in April 2012 the out-standing stock remained at rs303.9 billion, due to retirement ofrs93.6 billion on behalf of commodity financing operations.

g KSE sheds 85 points as investors remain cautiousahead of the budget announcement

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