Tuesday, 11 September, 2012

Islamabad

OnlinE

PRESIDENT Asif Ali Zardarisigned the Special EconomicZones (SEZ) Bill and with thepresidential approval the SEZBill has become Special Eco-

nomic Zone (SEZ) Act 2012 from Mon-day.

The incentives announced throughthe SEZ Bill, exemption from customs du-ties and taxes for all capital goods im-ported into Pakistan for the development,operations and maintenance of a SEZ; ex-emption from all taxes on income accru-able in relation to the development andoperations of the SEZ for a period of 10years, starting from the date of signing ofthe development agreement will becomeaffective for the investors.

The National Assembly had approvedthe SEZ Bill 2012 on July 13, 2012. Thebill took more than three years for its pro-cessing as it involved large consultativeprocess with the provinces stakeholders.The incentive package was approved in2008 by the Economic CoordinationCommittee of the Cabinet (ECC) but itremained under discussion. The cab-inet accorded approval in principlefor initiation of legislation in 2010.

The Council of Common In-terests (CCI) also consideredthis bill due to introduction of18th Amendment. After hec-tic efforts, CCI approved thebill in August 2011. The bill

had further undergone the microscopicexamination by the Standing Committeeon Law, Justice, Human Rights and Par-liamentary Affairs. The Upper House(Senate) approved this bill in January2012 and National Assembly accorded itsapproval on July 13, 2012.

The law had been made to meet theglobal challenges of competitiveness toattract foreign direct investment. The lawor bill will allow creation of industrialcluster with liberal incentives, infra-structure, investor facilitation serv-ices to enhance productivity andreduce cost of doing business foreconomic development andpoverty reduction.

The law further envisages toreduce processes through SEZin Pakistan. The law will en-sure consistency and trans-parency in economic policiesbeyond political divide and re-store investor confidence. Thebill will provide guaranty that in-centive once grantedw o u l d

not be withdrawn due to conflict of inter-ests.

Salient features of the draft SEZ Act2012 include, extending to the whole ofPakistan and override other laws, all SEZwhether public, public-private or private-private to be governed under this act; theBoard of Approval (BoA) headed by the

prime minister withthe minister

for financeas the

v i c e

chairman shall meet as frequently as re-quired but not less than twice a year anddecisions shall be taken by a majority ofthe total membership present and voting;SEZs will have exemption from customsduties and taxes for all capital goods im-ported into Pakistan for the development,operations and maintenance of a SEZ; ex-emption from all taxes on income accru-able in relation to the development andoperations of the SEZ for a period of 10years, starting from the date of signing ofthe development agreement.

Zone enterprises have exemption fromcustom duties, etc, on imports of capitalgoods; exemption from taxes on incomefor a period of 10 years starting from thedate the development certifies that thezone enterprise has commenced commer-cial operations in the relevant SEZ. BoIwith the approval of the BoA and after con-sultations with the provincial governmentsand concerned SEZ authorities shall framerules and regulations necessary for imple-mentation of this act. The establishment ofSEZs will attract both domestic as well asinternational investors. Some of the in-vestor countries like Korea, China and

Japan are expecting to benefit fromthis scheme as soon as it be-

comes operational. Theprovincial govern-ments would berequested to startthe process assoon as rules areframed.

President signs Special

Economic Zone Bill 2012

Islamabad

OnlinE

While expressing deep concern over risingtrend of petroleum products, the SenateStanding Committee on Petroleum hassought the details of revenue collectedunder levies imposed on various petroleumproducts in last three months.

Meeting of Senate Standing Committeeon Petroleum and Natural Resources washeld under the chair of Senator Muham-mad Yousaf here on Monday for detailedbriefing over recent increase in the petro-leum prices and CNG.

Standing committee said that onceprices increased have not decreased andgovernment put burden on price strickenmasses. Senator Osman said that increase

in petroleum prices should not be passedon to masses as country’s economy is weakand can not afford such massive hike.Standing committee said that governmentshould provide subsidy in the petroleumproducts and reduces taxes to providemaxim relief to masses.

Petroleum Federal Secretary Dr WaqarMasood said that government was takingRs 24.42 tax on petroleum prices whichwas lower in the world. He said that weeklyprices determination formula was on threemonth trials basis adding that, if price de-termination would be on monthly basisthen it would cause extra burden on masseswhich will lead massive hike in basic com-modities. He said that ministry alone cannot remove GST and petroleum levy fromproducts therefore legislation is required in

this regard. Committee resented the pur-chase of petroleum products on credit basisinstead of cash.

During the meeting Chairman OGRAinformed the Senators that authority com-pute the petroleum prices according to theformula given by the ministry. He said thatOGRA informs government before pricedetermination and final decision comesfrom federal government.

Secretary Finance Abdul Wajid Ranatold that government was already giving Rs2.25 billion subsidy weekly on petroleumprices and if prices were decreased by fiftypercent then government would have tobear burden of extra burden of Rs 9 billion.

He said that if petroleum levy de-creased then GDP would increase by 0.4and result to inflation in the country. He

suggested that federal government shouldtake provinces on board and provincesshould share tax collection with federalgovernment to reduce prices. Officials ofPSO told the committee that PSO imports93% of crude oil and while rest 13 % hasbeen imported by other 12 oil marketingcompanies. He said that major volume ofcrude oil has been imported from Kuwaitand trade is on government level. He saidthat in case of shortage of any petroleumproduct in the country PSO floats tender inthe market and ensures availability ofproduct in the market. Standing committeeasked the Secretary petroleum to give de-tails of appointments made under provin-cial quota in the ministry of petroleum andnatural resources and also give the detailsof provincial quota.

So where did the revenue go?g Senate body seeks details of revenue collected on various petroleum products

KaRaCHI

STAFF REPORT

Morgan Stanley Capital International(MSCI) would take a feedback fromthe end users as Pakistan wants theworld’s leading provider of market in-dices to restore its status as an emerg-ing market in the wake ofcomprehensive reforms Islamabadhas recently introduced.

Karachi Stock Exchange (KSE),Managing Director, Nadeem Naqviontold the reporters here at KSE that aKSE delegation was due to meet theMSCI Board of Directors on Septem-ber 3 in London to upgrade Pakistan’scapital market’s status from frontier

to emerging marketsThe said meeting was held as per

schedule at the MSCI London-basedoffice and concluded on a positivenote.

Led by KSE Chairman MunirKamal, the KSE delegation comprisedMD Nadeem Naqvi Central Deposi-tory Company of Pakistan, CEO,Muhammad Hanif Jhakura, KSEDeputy Managing Director HaroonAskari and other market participants.

According to the KSE, the delega-tion updated the MSCI on the demu-tualization of the stock exchanges inPakistan, structural changes andcomprehensive reforms in regulatoryframework, risk management and op-

erations of the exchange.The delegation also highlighted

underlying signs of economic stabi-lization in Pakistan, change in mone-tary policy stance, centralization ofCapital Gain Tax (CGT) at NationalClearing Company of Pakistan andimplementation of KYC and anti-money laundering regulations in thestock brokerage industry.

It specifically accentuated thesteps taken by the government in-cluding the 18th Amendment and theimprovement in trade relations be-tween Pakistan and India to acceler-ate development of bilateral businessand investment between the twocountries.

Dr Asim to meetKuwait oil minister

Islamabad

OnlinE

Advisor to the Prime Minister on Petroleum& Natural Resources Dr. Asim Hussain hasbeen invited by State of Kuwait Oil MinisterHani Hussain to discuss opportunitiesregarding investment in the Oil and Gassector of Pakistan by Kuwait ForeignPetroleum Exploration Company(KUFPEC). Dr. Asim Hussain along with adelegation of Senior Officers from theMinistry of Petroleum, Pakistan PetroleumLimited, OGDCL and Pakistan State Oil willhold meetings on Tuesday (Today)withKuwait’s Oil Minister, CEO of KuwaitPetroleum Corporation (KPC) and otherSenior Executives of the Oil Industry. Themeetings would focus on possibleinvestment opportunities available in theOil and Gas Sector of Pakistan, particularlywith regards to avenues created afterannouncement of newPetroleum(Exploration &Production)Policy 2012.It may benoted thatKUFPEChas beenoperating inPakistan since1987 and hasinvested overUS $ 1 billionin the Oil andGas Sector withplans of makingadditionalinvestments.

New strategies, new categories

SBP cuts refinancerate by 1.5pc underfinancing schemesKARACHI: The State Bank of Pakistan(SBP) has with immediate effect reducedthe refinance rate under the ExportFinance Scheme (EFS) and the servicecharges under the Long Term FinancingFacility (LTFF) and the Scheme forFinancing Power Plants using renewableenergy by 1.5 percent. Now the exporterscan get financing from the banks underEFS at 9.5 percent per annum (p.a.).Earlier, the exporters were getting thefinancing under this scheme at 11 percent.It had been decided that rate of refinanceunder the EFS applicable from September10 this year and onward till furtherinstructions shall be 8.50 percent peryear. The central bank through issuingIH&SMEFD circular No. 4 on Monday,asked the commercial banks to ensurethat where financing facilities areextended by them to the exporters foravailing refinance facilities under the EFS,their maximum margin/spread does notexceed 1 percent. The reimbursement ofmark-up rate benefit to exporters, onexcess performance under Part-II of thescheme, as specified in SMEFD circularno.15 would be adjusted accordinglykeeping in view the revised mark-up rates,the bank added. STAFF REPORT

HSBC says agrees tosell bankingbusiness in PakistanLONDON: Banking giant HSBC onMonday said it had agreed to sell itsoperations in Pakistan comprising 10branches to the Asian country’s JS BankLimited for an undisclosed sum. The Britishlender said the sale, which it expects tocomplete in the final quarter of the year,represented further progress in its strategyto shed non-core assets to slash groupcosts. “HSBC Bank Middle East Limited(HBME), an indirect wholly-ownedsubsidiary of HSBC Holdings plc, hasentered into an agreement to sell itsbanking business in Pakistan to JS BankLimited,” it said in a statement. “Thetransaction, which is subject to regulatoryapproval and the approval of the directshareholders in HBME and JS BankLimited, is expected to complete in the finalquarter of 2012. “It represents furtherprogress in the execution of the HSBCGroup strategy.” HSBC said that as of June30, the bank’s Pakistan business had grossassets of about $635 million (496 millioneuros). HSBC is Europe’s biggest bank byassets, was founded in Hong Kong, andsees Asia as its main market despite beingheadquartered in London. AFP

PRO 11-09-2012_Layout 1 9/11/2012 12:01 AM Page 1

02

Tuesday, 11 September, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERNestle Pakistan Ltd. 4000.00 4175.00 4175.00 4175.00 175.00 20Pak Gum & Chemical 245.95 257.00 250.00 251.40 5.45 12,700Indus Dyeing 400.70 405.00 397.99 405.00 4.30 5,000Gatron Ind. 101.97 106.00 106.00 106.00 4.03 500EFU Life AssuR.SPOT 77.28 81.14 79.15 81.14 3.86 18,000

Major LosersService Industries 193.24 195.00 183.65 185.15 -8.09 17,000Shield Corpor 153.68 146.00 146.00 146.00 -7.68 300AL-Ghazi TractorXD 214.00 214.00 208.00 209.00 -5.00 1,100Mithchells Fruit 349.00 350.00 345.00 345.00 -4.00 500MCB BankXD 182.81 183.00 178.00 178.87 -3.94 173,900

Volume Leaders

K.E.S.C. 6.45 7.45 6.43 7.45 1.00 23,658,000P.T.C.L.A 20.57 20.99 19.55 19.61 -0.96 19,115,500JS Bank Ltd 5.76 6.35 5.85 6.20 0.44 15,507,000Sui South Gas 21.38 22.44 21.40 22.43 1.05 13,534,000D.G.K.Cement 49.53 49.99 48.60 48.75 -0.78 10,518,500

Interbank RatesUS Dollar 94.7210UK Pound 151.5441Japanese Yen 1.2093Euro 121.0155

Dollar EastBUY SELL

US Dollar 94.50 95.00Euro 119.61 121.22Great Britain Pound 149.71 151.68Japanese Yen 1.1911 1.2066Canadian Dollar 95.56 97.32Hong Kong Dollar 11.96 12.18UAE Dirham 25.53 25.84Saudi Riyal 25.01 25.29Australian Dollar 96.55 99.27

Business

Renowned industrialist and PIA former Chairman

Ahmed Saeed inaugurated Link International

Exchange Company at M.M. Alam Road, Gulberg.

NADRA chief strengthensinformation security system ISLAMABAD: National Database and RegistrationAuthority (NADRA) has assured the citizens ofPakistan that their data is fully secure, and noincidents of data breach have ever been recorded todate, NADRA spokesperson said this in a statementissued yesterday.

Huawei reaches global Audience KARACHI: During the final of the 2012 UEFA SuperCup on Friday night, Huawei Device connected withglobal audience through its sponsorship of Atlético

Madrid. Wearing jerseys with the Huawei logo,Atlético Madrid beat rival team Chelsea by 4 to 1, towin the European Super Cup.

Second decade of Asian Forum oncorporate social responsibility LAHORE: The annual AIM Asian Forum on Corpo-rate Social Responsibility (AFCSR) enters its seconddecade with its biggest conference yet as it travels toThailand to hold the 11th AFCSR at the BangkokShangri-La Hotel on October 25 and 26, 2012.

New Pakistani social networktargets nation’s youthKARACHI: Forget Facebook and Twitter, there’s a newsocial network in town. And this one’s been conceived andcreated right here in Pakistan. Amalteam.com is a com-munity portal of Pakistan’s fastest growing social move-ment, Azme Alishan. It aims to inspire a new generationof volunteers by providing young people with real oppor-tunities to contribute to their local communities. The sitebrings charities, NGOs and civil society organizations to-gether with the largest database of volunteers in Pakistan.

CORPORATE CORNER

National Defence Universitydelegates visit NESPAK LAHORE: A delegation from the National DefenceUniversity (NDU) Islamabad led by NDU CommandantNational Security College Maj. General Noel I. Khokhar,paid a visit to the NESPAK House Lahore here today.

Islamabad

APP

THE half yearly data of fiscal year2011-12 depicts an improvement inoverall macroeconomic activity, par-ticularly in agriculture and servicesector, according to the Poverty Re-

duction Strategy Paper (PRSP) Midyear ProgressReport.

The 27th PRSP Midyear Progress Report wasreleased here on Monday by the Ministry of Fi-nance that monitors pro-poor budgetary andnon-budgetary expenditures.

According to the report stable weather con-ditions have resulted in a better yield of rice andcotton crops while services sector has also regis-tered an increase due to growth in trade andprofitability of banking sector. The risks tomacroeconomic activity during the first half ofFY2011-12 mainly stemmed from the externalsector and fiscal imbalances, it said adding theBudget deficit was limited to 2.5 percent of GDPduring H1- FY 2011-12 - lower than the 2.7 per-cent deficit registered in H1-FY 2010-11. Never-theless, strict fiscal discipline is required toachieve the targeted deficit during the latter halfof FY 2011-12, it added.

The Pro-poor expenditures substantially in-creased till the second quarter of FY 2011-12.Overall Year on Year (YoY) increase of 90.46 per-cent was recorded, from Rs 482,815 million inH1-FY 2010/11 to Rs 919,564 in H1-FY 2011/12.

A significant increase in expenditure hasbeen observed in all the sectors including MarketAccess and Community Services, Human Devel-opment, Rural Development and Governance.The maximum YoY increase was witnessed inPeoples’ Works Programme II. There was reduc-tion in expenditures in Benazir Income SupportProgram (BISP), Pakistan Bait-ul-Mal (PBM)and Natural Calamities and Disasters. The re-markable growths in subsidies however lead toan overall positive growth in Social Safety Netswhile on the provincial level, all the provinces de-picted an increase in PRSP expenditures, exceptSindh owing to decrease in education expendi-tures. The composition of expenditures changedduring the period under review while the per-centage share of development expendi-tures increased by 3.03 percentagepoints during the first half of FY2011-12 against the same period inFY2010/11.

The expenditures in education sector showeda minor growth as compared to previous trends,it said adding this obviously was a matter of con-cern since the education expenditures were al-ready limited. However, the Health sectorexpenditures increased substantially. Overalltransfers for protecting the poor and vulnerableregistered a negative growth of 13.7 percent ingrants and 21.4 percent in beneficiaries duringH1 of FY 2011/12

when compared withthe same period last

year. During H1 ofFY2011/12, Rs 24.96 bil-

lion (78 percent) of thegrants were of the budgetarymode and Rs 6.84 billion (22percent) were of the non-bud-getary mode against 86 percentand 14 percent respectivelyduring the same period of PFY.

E-banking on the upg Transactions registered an increase of 5.6 %: SBP

Islamabad

OnlinE

The volume of overall e-banking transactions in the countryregistered an increase of 5.6 percent to reach 74.6 millionfrom April to June 2012, State Bank revealed. However, thevalue of transactions at 6.6 trillion was 4.4 percent less thantransactions reported in the quarter ended March 31, 2012due to a 5.4 per cent decrease in Real Time Online Branches(RTOB) transactions. A State Bank official said the volume oftransactions increased slightly by 1.8 percent. In terms ofvolume of overall e-banking transactions, ATMs with a majorshare of 60.6 remained the leading channel. ATMtransactions value and volume also showed an increase of 5.9percent and 7.4 percent respectively. The average value perATM transaction stood at Rs 9,693. The volume and value oftransactions through POS terminals stood at 4.7 million andRs 21.49 billion depicting 4.5 and 2.1 percent growthrespectively as compared to the figures reported in the thirdquarter (Jan-Mar) 2012.

sINGaPORE

AFP

Crude was mixed in Asia Monday as tradersbalanced US stimulus hopes with disappoint-ing Chinese industrial output numbers, ana-lysts said

New York’s main contract, light sweetcrude for delivery in October, shed 14 centsto $96.28 a barrel while Brent North Seacrude for October delivery gained seven centsto $114.32. Traders were mulling hopes forfresh US stimulus after a disappointing jobsreport as well as data showing Chinese indus-trial output growth weakening to its slowestpace in more than three years, IG Marketssaid in a report.

“In Asia today, markets could show somevolatility with a mixed bag of US news and re-action along with China’s weak economicdata,” the report stated.

US jobs data released Friday showed theeconomy of the world’s largest oil consumeradding a meagre 96,000 jobs in August as theofficial number of jobless fell by a quarter ofa million people to 12.5 million.

But about 368,000 people gave upsearching for jobs and left the labour force,leading to a substantial net rise in the totalnumber of working-age Americans out ofwork.

In China, data released by the NationalBureau of Statistics showed industrial pro-duction increasing by 8.9 percent year-on-year last month, the lowest figure since asimilar rise of 8.9 percent in the depths of theglobal economic crisis in May 2009.

China’s economy has seen a marked eas-ing over the past year, expanding 7.6 percentin the second quarter of 2012, the worst per-formance in three years and the sixth straightquarter of easing.

Asia asked theEuropean question

Islamabad

APP

Emerging East Asia’s local currency bondmarkets have expanded to nearly $6 trillion,but policymakers in the region should bracethemselves for further shock and volatilityfrom the global financial markets, says areport published by the Asian DevelopmentBank (ADB).“Our local currency bond markets areemerging as a safe haven in the midst of thecrisis, but we should not be complacent,”said Iwan J. Azis, Head of ADB’s Office ofRegional Economic Integration, whichproduced the Asia Bond Monitor report.“Volatile markets can deter long-terminvestment and hurt the economy by makingit costlier for governments and companies toraise funds. Moreover, uncertain marketreaction to policy action is undermining thepredictability and thus the effectiveness ofconventional policymaking,” Azis said.Greater regional participation in emergingEast Asia’s bond markets and cooperationare needed to counter the volatility fromexternal shocks and to strengthen regionalfinancial safety nets.A special section in the Asia Bond Monitorshows that the spillover of the LehmanBrothers’ collapse and the ongoing eurozonecrisis in many markets has been significantand may well continue. These spillover impacts will be felt not onlyin the bond markets but in other financialmarkets in the region too, including throughforeign exchange rates.The Asia Bond Monitor notes that despitethe uncertainty and volatility in globalfinancial markets, the bond markets in theregion continue to expand, with $5.9 trillionin paper outstanding at the end of June, 1.9%more than at the end of March and 8.6%more than at the end of June 2011.Overall, corporate bond market growth isstill outpacing the expansion of thegovernment bond markets, as corporatebond yields have fallen and tighter banklending has encouraged firms to tap thecapital markets. As of the end of June, there were $2.0 trillionin corporate bonds outstanding, 15.2%higher than a year earlier, while the $3.9trillion government bond market was only5.5% bigger.

g Eurozone crisis threatens

emerging east Asia’s

booming bond markets

Macroeconomic activity improves

in 2011-12: PRSP Report

Crude mixed in Asia

Photo shows FFC, Chief Executive & Managing Director,

Lt-Gen. (Retd) Naeem Khalid Lodhi and Project Director

Brig (Retd) Tariq Izaz being briefed by senior

engineers of the project and partners from Nordex

Germany and Descon Engineering.

PRO 11-09-2012_Layout 1 9/11/2012 12:01 AM Page 2