iMF applauds steps to bolsterindo-pak tradeWASHINGTON: The recent Pakistani

and Indian steps to bolster bilateral

trade will positively affect growth

momentum, the International

Monetary Fund. However, Laura Papi,

Assistant Director, IMF, said the move

alone would not be enough to help

New Delhi get back on high economic

growth track. “It would definitely have

some positive effects. But not

sufficient by itself to bring India back

to 8 percent,” she said. The official

noted that some trade between India

and Pakistan is probably at the

moment intermediated by other

countries. “Of course to the extent that

it becomes bilateral, the cost of trading

will be reduced and will have a positive

impact on growth, but it will not be all

new trade. Overall definitely it is a

positive move,” Papi said, when asked

about the likely impact of increased

bilateral trade on growth prospects.

She was answering a question in the

light of 2013 staff report on Indian

economic scenario, which recommends

a series of steps for India to reclaim its

robust growth momentum. According

to the Fund, India’s growth is projected

at about 5½ percent for 2012/13, but

should pick up to 6 percent in

2013/14. The outlook, she explained,

is for subdued growth and a fairly

modest recovery for this year still

accompanied by quite high inflation

and elevated current account deficit.

“The reason for this subdued outlook is

that investment has slowed

significantly and we see some supply-

side issues such as supply bottlenecks

as having played an important part in

lower investment growth and because

of this we have also revised down our

medium-term growth projections, she

said of Indian immediate growth

prospects. SPEcIAL cORRESPONdENT

tDap, caa ink leaseagreement forgems park projectKARACHI: The Trade Development

Authority of Pakistan (TDAP) signed a

“lease deed” of 16 acres of land for

Dazzle Park project with the Civil

Aviation Authority (CAA) on Friday.

The project would be located in the

vicinity of Jinnah International Airport.

Commerce Minister Makhdoom Amin

Fahim was the chief guest in a

ceremony attended by TDAP CEO Abid

Javed Akbar, CAA DG Air Marshal (r)

Khalid Chaudhry, TDAP Secretary

Abdul Kabir Kazi, FPCCI President Fazal

Kadir Shiran, KCCI President Haroon

Agar, Sindh Board of Investment

Chairman Zubair Motiwala, All Pakistan

Gems Merchant and Jewelers

Association Chairman Saeed Mazhar

Ali, high government officials and

leading private sectors representatives.

Currently, Pakistani exports of gems

and jewelry are touching $ 1 billion

during the year 2011-12. There are

huge potential to increase the exports

of Pakistan through development of

clusters or parks, as is being done in

the region. Dazzle Park is designed to

be an exclusive safe and bounded zone

for conducting multi product and multi-

dimensional activities of trading,

commercial, services and

manufacturing of colored gems,

diamonds, gold and fashion jewelry but

also dealing with fashion industry and

high value products. STAFF REPORT

01

BUSINESS

BSaturday, 9 February, 2013

A generous basic state pension is the least a civilised

society should offer those who have worked hard and

saved through their whole lives. — George Osborne

DERA GHAZI KHAN: Workers sorting chilies at Ghalla Mandi. ONLINE

KARACHI

STAFF REPORT

Terming macroeco-nomic conditions in thecountry as weakeningduring the first half ofFY13, the central bankon Friday decided to

keep the discount rate for the next couple ofmonths unchanged at 9.5 percent.

The regulator, however, has reduced theinterest rate corridor by 50 basis points (bps)from 300 bps to 250 bps.

State Bank of Pakistan (SBP) governorYaseen Anwar revealed this while unveilingthe monetary Policy Statement (mPS) afterchairing a meeting of the SBP’s CentralBoard of Directors held on Friday.

The decision to reduce the interest ratecorridor, he said, was taken with the objec-tive of improving transmission mechanismby minimising short-term volatility in inter-est rates and to bring more transparency, headded. He said the macroeconomic condi-tions had weakened during the first half (H1)of FY13 despite improvement in some keyindicators.

The CPi inflation came down quitesharply till november 2012 but has in-creased since then, he said, adding that theexternal current account posted a surplusduring H1-FY13 but the foreign exchangereserves have declined, predominantly dueto imF repayments.

“The non tax revenues of the govern-ment received a boost after receiving Coali-tion Support Fund (CSF) of 0.7 percent ofgDP during H1-FY13, yet the fiscal deficitis expected to miss the budgeted target by awide margin,” Anwar added.

responding to a sharply declining infla-tion and, assigning a higher weight to con-tracting private investment, he said the SBPlowered its policy rate by a cumulative 450basis point over the last 18 months.

“SBP has also ensured that both moneyand foreign exchange markets remain stable.it also introduced certain measures to im-prove liquidity management and financialintermediation aspects of the banking sec-tor,” he said.

in the wake of rising risks to macroeco-nomic stability and in the absence of struc-tural reforms that could have supported pricestability and growth in the medium term, itmay be difficult to continue with the samemonetary policy stance, he said, adding that

the SBP has to be forward looking and takesteps to meet the emerging challenges.

“The two main challenges, from thepoint of view of SBP, are managing the bal-ance of payment position and containing theresurgence of inflationary pressures,” Anwarsaid. The SBP governor said the fundamen-tal weakness in the balance of payments isthe continuous decline in the net capital andfinancial flows.

“There has been a net outflow of $539million in this account during H1-FY13. inaddition, the SBP has retired $1.4 billion ofimF loans during the first seven months ofFY13. Thus, despite an external current ac-count surplus of $250 million in H1-FY13,the foreign exchange reserves of SBP havedeclined to $8.7 billion as on 31st January2013 from $10.8 billion at end-June 2012,”he added. Anwar said the surplus in the ex-ternal current account during H1-FY13 wasprimarily due to the receipt of $1.8 billion inthe CSF and added that marginal improve-ment in the trade balance and robust growthin workers’ remittances have also helped theexternal current account balance, mitigatingthe pressure onm the balance of paymentsposition. “The SBP expects the external cur-rent account deficit to remain below 1 per-cent of gDP for FY13. This is despite littleexpectation of receiving proceeds of approx-imately $850 million from the auction of 3glicence,” he added.

He observed that in view of the declin-ing trend in financial inflows and a very lowprobability of receiving the budgeted privati-sation inflows of $800 million in FY13, thechallenges on the balance of payments posi-tion are unlikely to subside. Further pay-ments of $1.6 billion of imF loan in theremaining five months of FY13 and $3.2 bil-lion in FY14 do not help the situation either.While the economy has sufficient reservesto meet its debt obligations, the real chal-lenge is to manage the market driven senti-ments, he said.

The governor viewed that volatility inthe foreign exchange market can have impli-cations for the inflation outlook due to po-tential feedback from exchange rate changesunder prevailing conditions. “This is why theSBP has intervened in the foreign exchangemarket in a calibrated manner to ensure itssmooth functioning. it is important to re-member that only a consistent increase inforeign exchange can ensure stability in themarket,” he added.

Anwar said the CPi inflation has already

risen in the past two months; from 6.9 percentin november 2012 to 8.1 percent in January2013. The core inflation measures are alsoinching towards double digit figures againafter coming down to single digit. The aver-age inflation for FY13 is projected to remainbetween 8 and 9 percent; well within the tar-get of 9.5 percent. it is the medium term in-flation outlook that needs to be assessedcarefully. “The SBP expects m2 growth forFY13 to be close to 16 percent. Similarly, dueto a weakening external position and risingdebt levels in the economy, anchoring expec-tations of inflation at low levels would be achallenging task,” he added.

He said that the year-on-year growth inm2 was 17.3 percent while that in fiscal bor-rowings from the scheduled banks was 41.3percent on 25th January 2013. He said thatover the last four years fiscal borrowingsfrom scheduled banks for budgetary supporthave grown by an average of around 60 per-cent. The average growth in credit to privatebusinesses, on the other hand, has only been4 percent during the same period.

“The end result is that the domestic debthas risen by 25.6 percent on average whileprivate fixed investment has contracted by9.4 percent in the economy,” he said.

The SBP governor said, “Although thedeposits of the banking system show a growthof 17.4 percent, however, given the substan-tial fiscal requirements, the SBP had to con-tinuously rollover significant amounts ofliquidity injections. The average amount ofthese injections, during 1st July to 7th Feb-ruary FY13 was rs 498 billion and hasbeen the driving force behind a year-on-year growth in reserve money of 15.3percent. Since inflation had beencoming down during H1-FY13,these high-level of injections did notpose an immediate risk. A rising in-flationary trend, however, wouldrequire containment in budgetaryfinancing and a gradual scale backin the size of these injections”.

Anwar said while the fiscal au-thority retired rs 399 billion in thefirst quarter of FY13, it borrowed rs183 billion in the second quarter ofFY13 from SBP. “The inability to keepthese borrowings at zero within a quar-ter is a contravention of the SBP Act andan important factor behind an imperfectcontrol over inflation expectations by theSBP,” he observed.

Anwar said the growth in credit to pri-

vate businesses has been higher during H1-FY13 compared to the corresponding periodlast year. Private businesses availed rs 154billion during H1-FY13 as opposed to onlyrs 85 billion during H1-FY12, he said,adding that this could be because of declin-ing interest rates and moderation in accumu-lation of non Performing Loans (nPLs).

“Since the beginning of FY13, the aver-age lending rate has decreased by 204 basispoints to 11.3 percent in December 2012. Sim-ilarly, the nPLs to advances ratio has declinedto 15.5 percent in September 2012 from 16.7percent in September 2011,” he said.

He said the gDP growth in Pakistan is ex-pected to remain just below 4 percent in FY13.“The fundamental reasons for this likely out-come are the prolonged and severe crisis in theenergy sector and worsening law and orderconditions in the country,” he added.

Anwar noted the main reason for largeborrowing requirements from the bankingsystem is the structurally high fiscal deficitand low level of external financing. The es-timates from the financing side of fiscal ac-counts indicate a deficit of 2.7 percent ofgDP during H1-FY13. “given a low growthof 8.8 percent in the tax collection of theFBr during the first five months of the cur-rent fiscal year, which is substantially belowtarget, and the continuation of subsidies re-lated to the energy sector, the budgeted fiscaldeficit target of 4.7 percent of gDP for FY13is projected to be missed by a wide margin,”

he added.

policy rate to stay at 9.5 %: sBp

PRO 10-02-2013_Layout 1 2/10/2013 3:19 AM Page 1

pakistani defence

companies toparticipate in iDex

ISLAMABAD: Pakistan’s 10 high profile

defence production companies along with

14 auxiliary enterprises will participate in

the largest defence exhibition IDEX 2013

in Abu Dhabi being held from February 17

to 21. IDEX is a strategically important tri-

service defence exhibition and is the only

international defence exhibition and

conference in the MENA region

demonstrating the latest technology across

land, sea and air sectors of defence.

Ambassador of Pakistan to UAE Jamil

Ahmad Khan while briefing media on

Pakistan’s participation in IDEX 2013 said

that for the first time in the history of

IDEX, Pakistan had added a new

dimension by displaying indigenously

modified and upgraded submarine called

“Khalid”. Besides the submarine, a Multi-

Purpose Auxiliary Craft (MPAC),”Jurrat”

created in Pakistan with full integration of

weaponry and Destroyer “ShahJahan”

modified as per our own requirement and

integration of warfare will be on display. APP

BUSINESSSaturday, 9 February, 2013

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERNestle Pakistan Ltd. 4905.00 5150.00 4950.00 5000.00 95.00 120Indus Dyeing 542.00 564.90 550.00 558.30 16.30 300Sapphire Textile 213.75 224.43 215.00 224.40 10.65 2,900Philip Morris Pak. 181.69 190.77 189.75 190.77 9.08 11,800Ismail Industr 140.00 147.00 147.00 147.00 7.00 500

Major LosersUniLever Pak 10543.75 10570.00 10405.00 10505.00 -38.75 1,300Exide (PAK) 342.01 341.95 331.00 331.55 -10.46 1,200Pak Services 169.97 178.46 161.50 162.53 -7.44 2,800Tandlianwala Sugar 81.35 78.35 78.35 78.35 -3.00 500Millat Tractors Ltd. 630.21 633.00 625.00 627.90 -2.31 19,200

Volume Leaders

Askari Bank 18.70 19.70 18.82 19.69 0.99 24,577,000Jah.Sidd. Co. 17.04 18.04 17.15 18.04 1.00 20,238,000WorldCall Telecom 3.55 3.70 3.47 3.62 0.07 19,844,000Telecard Limited 4.69 5.05 4.63 4.97 0.28 19,497,500TRG Pakistan Ltd. 7.82 8.57 7.85 8.42 0.60 16,933,500

Interbank RatesUSD PKR 97.9478GBP PKR 153.4940JPY PKR 1.0432EURO PKR 132.8368

ForexBUY SELL

US Dollar 99.10 99.80 Euro 131.69 133.17 Great Britain Pound 155.21 156.91 Japanese Yen 1.0554 1.0663 Canadian Dollar 97.77 99.49 Hong Kong Dollar 12.56 12.77 UAE Dirham 26.85 27.10 Saudi Riyal 26.35 26.54

KARACHI: Allied Bank Commercial and Retail Banking

chief Khawaja Muhammad Almas shakes hands with

PakGulf President Sardar Tanvir Ilyas Khan after

signing an agreement to open ABL branch in

Centaurus Mall. PR

Bata pakistan gets new MD

LAHORE: Bata Pakistan Limited, the leader in Pakistan’s

footwear industry, announced a change of its executive

management team in its recently held Board of Directors’

meeting. Mr. Muhammad Imran Malik, the long-term MD

Bata Pakistan, has been transferred as MD Bata Indonesia

and Mr. Muhammad Qayyum succeeds as new MD Bata

Pakistan. Qayyum has held several senior executive level

positions in the whole Bata Shoe Organization including

Bata Pakistan, Bata South Africa and Bata Bangladesh.

The most recent position he served was MD Bata

Bangladesh. Malik demonstrated exceptional leadership

during his tenure at Bata Pakistan, taking the company

through a period of unprecedented change and growth.

We hope that Qayyum, with his leadership experience and

business acumen, will continue the legacy of Malik in

taking Bata Pakistan to achieve its future milestones. PR

CORPORATE CORNER

02

B

It is fine to celebrate success but it is

more important to heed the lessons

of failure. -Bill Gates

ISLAMABAD

APP

Prime minister raja Pervez

Ashraf on Friday said challenges

should be turned into opportuni-

ties in order to accelerate explo-

ration efforts for oil and gas in

the country. The Pm expressed

these views while presiding over a meeting on pe-

troleum issues at the Pm House on Friday.

Ashraf was briefed about the exploration proj-

ects of Oil and gas Development Corporation

Limited (OgDCL) in the oil and gas sector and

the incentives provided to attract investments.

He directed to make the oil and gas produc-

tion efficient to meet the growing energy require-

ments of the economy.He said through joint partnerships, every ef-

fort should be put in for the enhanced exploration

and drilling of oil and gas so that more energy

could become part of the system.

The Pm emphasised that locals should also be

employed from the areas of exploration activity

and the provision of education, health, sports and

sanitation facilities should be ensured in the re-

spective areas under the concept of Corporate So-

cial responsibility (CSr) so that the localities get

a boost in terms of development and amenities.

Ashraf was apprised that in compliance with

his directions, fuel supplies to power sector had

been enhanced to more than 15,000 mT.

The Pm directed the ministry of Petroleum to

build up stocks of fuel by storing additional sup-

plies in order to ensure smooth supply of electric-

ity during the ensuing months.

He directed that regular supply of oil to power

sector be ensured and arbitrary variations in the

oil supply be avoided.The meeting was attended by minister for Fi-

nance Dr Abdul Hafeez Sheikh, minister for

Water and Power Ahmed mukhtar, Advisor to Pm

on Petroleum Dr. Asim Hussein and other senior

officials of the concerned ministries.

pM For Fast explorationoF oil & gas sector

ISLAMABAD

ONLINE

The Senate was informed on Friday that daily pro-

duction of raw gas in the country at present is

4,273 million cubic feet per day against the de-

mand (mmCFD) of 5,416 mmCFD.

The Senate resumed its session with Chair-

man Syed nayyar Hussain Bukhari in the chair

Advisor for Petroleum and natural resources

Dr Asim Hussain told the House during the ques-

tion hour that currently one hundred and thirty

two exploration licenses for exploration of oil and

gas reservoirs are being operated by various ex-

ploration and production companies.

He said sixty blocks for exploration of oil and

gas reservoirs have been advertised for award of

exploration licenses on competitive terms. For fis-

cal year 2012-13 forty four exploration wells have

been planned for exploration of oil and gas re-

serves.

Asim Hussain said Council of Common in-

terest (CCi) has approved ‘Tight gas exploration

Policy‚ 2011’ which offers forty to fifty percent

premium over the respective zonal price of Petro-

leum Policy 2009.He said economic Coordination Committee

(eCC) has approved Low BTU gas Pricing Pol-

icy 2012 wherein additional incentives to the in-

vestors have been given to develop Low BTU

fields as soon as possible. He further said in off-

shore, fourteen exploration licenses have been

awarded for exploration of oil and gas reservoirs.

He said the government is taking a number of

steps to overcome the shortage of gas in the coun-

try including enhancement of indigenous gas pro-

duction‚ import of Lng and promotion of LPg

air mix.To a question‚ he said it is the Pm’s preroga-

tive to announce the supply of gas to any area.

Jahangir Badar presented before the House

the Annual report for the year 2011-12 of the

Central Board of Directors of State Bank of Pak-

istan on the state of Pakistan’s economy.

Law minister Farooq H naek introduced be-

fore the House “The Constitution of islamic re-

public of Pakistan 24th (Amendment) Bill‚ 2013”.

The chair referred the bill to the Standing

Committee concerned.

132 oil, gas exploration licenses operatedby various companies, Senate told

KARACHI

NNI

The Sindh Judicial Academy and the Securities and

exchange Commission of Pakistan (SeCP) on Fri-

day jointly organised a symposium on the ‘role and

Jurisdiction of Courts under Laws governing Cor-

porate Sector, Capital market and nonbanking Fi-

nancial Companies’.The event held on Friday was chaired by Chief

Justice of Sindh High Court mushir Alam. The

symposium was aimed at providing basis for better

institutional interaction and provides much needed

feedback, especially from judicial circles on legal

matters pertaining to corporate sector.

SeCP Chairman muhammad Ali appreciated

the Sindh Judicial Academy for giving SeCP an op-

portunity to share its role and responsibilities with

the judiciary and ensured to work together for better

protection of the rights of the investing public. He

also thanked the Chief Justice Sindh High Court

(SHC) for gracing the occasion and for giving his

time to the event.He apprised the audience of the role, achieve-

ments and challenges of the SeCP, and said the

SeCP was mindful of the Herculean task of re-

vamping the financial sector that lay ahead given

the peculiar socio-political and security challenges

which exist in the country.He said the SeCP has adopted a cohesive ap-

proach to build a legal framework that provides

congenial business atmosphere for growth of cor-

porate sector. Ali said, “The SeCP is not only en-

trusted with the responsibility of being the

corporate regulator but it also functions as a facili-

tator of corporate growth in Pakistan. it also takes

measures to ensure transparency in the financial

system”.The SeCP chairman informed the audience that

being the apex regulator of the corporate sector, the

SeCP also heads a special committee that is meant

for cooperating and sharing of information among

the regulatory bodies and investigation agencies. A

high-level committee has been formed to combat

financial crimes. it comprises of representatives of

the State Bank of Pakistan (SBP), Financial moni-

toring Unit (FmU), national Accountability Bureau

(nAB), Federal investigation Agency (FiA) and

senior officers of federal and provincial police de-

partments, he added.

Speakers at symposium stressneed for a corporate tribunal

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