Stock Exchange Info - Pakistan

Stocks & Bonds

2009-06-24T20:18:00.000-07:00

Stock market rangebound.

KARACHI (June 25, 2009): Karachi Stock Exchange witnessed a rangebound session with the benchmark KSE-100 index oscillating between 7,023.48 points intra-day high and 6,988.71 points intra-day low on Wednesday due to uncertainty over the imposition of new tax and absence of any leverage product, analysts said. Finally, the index managed to close in positive zone at 7,025.89 level, with a meagre gain of 2.41 points.

LSE index marginally up by 3.80 points.

LAHORE (June 25, 2009): Depressed sentiment dominated on the Lahore Stock Exchange on Wednesday and the equities registered declines amid low trading activity on account of lack of buying interest while most investors stayed on the sidelines. The LSE-24 index was up marginally by 3.80 points, closing at 2082.94 against 2079.14 of Tuesday. The volume reduced to 6.582 million as compared to 8.219 million shares.

Bulls command proceedings on ISE.

ISLAMABAD (June 25, 2009): Bulls commanded the proceedings at the Islamabad Stock Exchange (ISE) where bears remained in the front seat amid increase in the index. ISE Ten Index was down by 7.87 points, as it moved from 1,662.26 to 1,670.13 points. The volume of trade amounted to 731,564 shares, as compared to previous turnover of 756,205 shares.

BRIndex30 down 19.47 points.

KARACHI (June 25, 2009): On Wednesday, the BRIndex30 opened at 6,473.03, and closed at 6,444.37 with a net negative change of -19.47 points and percentage change of -0.30. It experienced intra-day high of 6,512.55 and low of 6,423.99. The volume amounted to 44,317,300 shares, which was 42.95 percent of total market and 86.20 percent of KSE-100 index.

Head of Research Ismail Iqbal Securities

2009-06-24T20:17:00.000-07:00

Market looks range-bound in the short-term as investors' interest is not developing. However, outlook of the market is bullish in the long-term because 10-year PIB is 11.75 per cent currently and according to it market justified levels is 8,600 points. The market is coming down with low volumes, therefore, if it goes down further than market will be attractive. Investors should start gradual accumulation across the board especially in cement, fertiliser, major banks and side stocks of good manufacturing companies.

Research Analyst NAMCO

2009-06-24T20:15:00.000-07:00

Market would show dull activities in the coming days moving in a range because of uncertainty regarding federal excise duty (FED). Therefore, until a positive outcome arrives on the issue, investors' confidence may not restore. But if any positive news comes regarding the FED then index can show a closing of 7,500 points by end June. Investors are advised to invest in high value dividend yield and blue chip stocks. Solution of tax related issues would support the market. Market would be dull today (Thursday).

Market remains dull as investors stay away

2009-06-24T20:14:00.000-07:00

Karachi Stock Exchange (KSE) saw a dull session on Wednesday as its main index ended flat, mainly because investors preferred to stay away from the market due to uncertainty regarding the results of general body meeting and delay in launch of new leverage product.
The benchmark KSE 100-index was up only by 2 points to close at 7,025 points.
"Mixed activity was witnessed at the market as investors were waiting the outcome of stock members meeting on FED collection on broker commissions," said a market expert while talking to The Financial Daily.
He added that support from state-run funds, strong investor interest in cement scrips, and merger news of Mybank/Askari Bank supported the oversold market throughout the trading session.
Trading stated with a minor gain of 1 point. Thereafter, the market witnessed range-bound activity throughout the day with low participation by investors.
Index moved in a narrow range, giving a number of visits to both red and green zones where during early moments of the session it touched an intraday high of 7,048 points (+ve 24 points) while 6,988 points (-ve 34 points) was its lowest level of the day which it touched around the mid-day.
Santosh Kumar, a research analyst at Darson Securities, said market participants are waiting patiently for an encouraging decision regarding the new tax mechanism on the local bourses and introduction of a new leverage product before taking any major positions in the market.
KSE 30-index lost 16 points to close at 7,450 points and KSE all share index increased by 2 points to close at 5,035 points.
Volumes saw a little improvement as 103 million shares traded during the day which is 17 million shares more as compared to a turnover of 86 million shares a day earlier. Out of total 297 active issues, 156 declined and 119 advanced while 22 issues remained unchanged.

Company News

2009-06-22T01:20:00.000-07:00

PAKISTAN SERVICES LIMITED - Analysis of Financial Statements June 2002 - June 2008

OVERVIEW (June 22, 2009): Pakistan Services Limited, is an international public company, incorporated in 1958 in Karachi under the Companies Act, 1913 now Companies Ordinance, 1984 as a public limited company and is quoted on Karachi Stock Exchange. The company is principally engaged in hotel business and owns and operates the chain of 5 Pearl Continental Hotels in Pakistan at Karachi, Lahore, Rawalpindi, Peshawar and Bhurban.

Cement: BESTWAY CEMENT COMPANY LIMITED - Analysis of Financial Statements Financial Year 2003-3Q'09

OVERVIEW (June 20, 2009): Bestway Cement Company Ltd (BWCL) is a subsidiary of Bestway Group of United Kingdom. It was listed on Karachi Stock Exchange in February 2001. The company is a major manufacturer and seller of cement. It has a domestic market share of 8%.

BALUCHISTAN WHEELS LIMITED - Analysis of Financial Statements Financial Year 2005 - 2003 Q 2009

OVERVIEW (June 19, 2009): Baluchistan Wheels Limited was incorporated in Pakistan on June 16, 1980. It is engaged in manufacturing and marketing of automotive wheel rims for trucks, buses, tractors, cars and mini commercial vehicles. It is a vendor participating in import substitution, supplying wheels to Original Equipment Manufacturers (OEMs) and is associated with world renowned OEMs.

Insurance: PAKISTAN REINSURANCE COMPANY LIMITED - Analysis of Financial Statements C Year 2003 - 2001 Q C Year 2009

OVERVIEW (June 18, 2009): Formerly called the "Pakistan Insurance Corporation", PRCL is the only professional reinsurance organization operating in Pakistan. The principal business of the company is provision of insurance and reinsurance services in all classes except life. The organization became a company in 2001.

Bank: ASKARI BANK LIMITED - Analysis of Financial Statements C Year 2004 - C Year 2008

OVERVIEW (June 17, 2009): Formerly known as "Askari Commercial Bank Limited", Askari Bank Limited was incorporated in Pakistan on October 09, 1991 and commenced its operations in April 1992 as a public limited company. The bank is registered on all the three stock exchanges of Pakistan. The bank has 200 branches (2007: 150 branches), 199 in Pakistan and Azad Jammu and Kashmir, including 18 Islamic banking branches.

EFU LIFE ASSURANCE LIMITED - Analysis of Financial Statements CY'04-1Q'09

OVERVIEW (June 16, 2009): EFU Life Assurance Limited (EFU Life) was incorporated as a public limited life insurance company on August 9, 1992 after the Government of Pakistan had opened up life insurance business to the private sector. The company started its operations from November 8, 1992. The company is engaged in life insurance business carrying on ordinary life business, pension fund business and accident and health business and has established following statutory funds, as required by the Insurance Ordinance, 2000.

Petroleum: SHELL PAKISTAN LIMITED - Analysis of Financial Statements June 2003 - June 2008

OVERVIEW (June 15, 2009): Shell Pakistan enjoys a 100-year history in this part of the world, dating back to 1899, when Asiatic Petroleum, the far-eastern marketing arm of two companies: Shell Transport Company and Royal Dutch Petroleum Company began to import kerosene oil from Azerbaijan into the subcontinent.

Bank: UNITED BANK LIMITED - Analysis of Financial Statements Financial Year 2003-Financial Year 2008

OVERVIEW (June 13, 2009): UBL was established on November 7, 1959. The bank has network of 1,112 domestic branches. UBL has five corporate centres, offering financing solutions to its corporate clients in all the main business centres of the country. The bank became the second largest network provider in Pakistan with 326 ATMs in 83 cities. For the convenience of its customers, UBL started the utility bills payment system facility through its vast ATM network. On the international front, the bank opened two new branches in Qatar and Yemen in 2007. With this the bank's total overseas network expanded to 17 branches.

Jute: THAL LIMITED - Analysis of Financial Statements Financial Year 2003 - Q 2003 2009

OVERVIEW (June 12, 2009): Thal Limited (formerly Thal Jute Mills Limited) enjoys the distinction of being the pioneer industrial project of the House of Habib. The company was incorporated on January 31, 1966 as a public limited company and is quoted on the Karachi and Lahore stock exchanges.

Leasing: ASKARI LEASING LIMITED - Analysis of Financial Statements Financial Year 2004 - H 2001 2009

OVERVIEW (June 11, 2009): Askari Leasing Limited (ALL) was incorporated in Pakistan as a public limited company on August 1, 1993 and was granted certificate of commencement of business on November 3, 1993 with a capital base of Rs 100 million. As of June 30, 2008, its total equity was over Rs 1.2 billion while its balance sheet was nearly Rs 12.4 billion.

Withholding tax on steel import doubled to 4pc

2009-06-22T01:13:00.000-07:00

KARACHI - The government has increased the withholding tax on the import of steel from 2 per cent to 4 per cent. This will increase the cost of production for the importers up to Rs 1000 per metric ton, The Nation learnt from sources.
“This increased cost of production will be passed on to the consumers, as previously the cost of production was Rs 1000 per metric ton, which is now hiked up to Rs 2000 per metric ton,” said the source.
“When the withholding tax was 2pc, the importers of steel were supposed to file the return and keep the record. In this budget, the government increased the withholding tax and now it is 4pc. The importers of steel had decided to protest against this increment, but, a delegation of steel importers met the Finance Ministry officials the other day, and during that meeting it was decided that the importers will be exempted from keeping the record,” he added.
The source further said that after this consideration from the government officials, the steel importers decided not to protest against this hike. But it will increase the cost of purchase for the costumers of domestic and local buyers, he added.
On the other hand, Pakistan Steel Mills (PSM) will get benefit from this step as it would increase the sales of PSM.

Money & Banking

2009-06-22T01:09:00.000-07:00

BMA signs trust deed for BECF.

KARACHI (June 22, 2009): BMA Funds signed the Trust Deed for their soon to be launched "BMA Empress Cash Fund" (BECF) at a ceremony held at BMA Funds headquarters in Karachi.

85 percent decline in CFS investment.

KARACHI (June 22, 2009): Investment under Continuous Funding System (CFS) at Karachi share market declined by 85 percent on Friday to a nominal level of Rs 10 million. The CFS rate also decreased by 20pps, falling to 30 percent on the end of the week from 50 percent recorded on the same day a week earlier.

THE RUPEE: all-round slide on money market.

KARACHI (June 21, 2009): All-round declines were seen on the currency market on Saturday as importers' rush for dollar buying increased to meet the payment requirements, dealers said. The importers were busy in dollar buying to clear the bills before the end of the out-going financial year, they said. On the interbank market the rupee lost 25 paisa against dollar in a single day fall for buying and selling at 81.35 and 81.40, they said.

EFU funds rates.

KARACHI (June 21, 2009): EFU Life Assurance Ltd announced that the Offer and Bid prices for the following funds effective from Monday June 22, 2009.

Revised Rates of Debt Securities.

KARACHI (June 21, 2009): The following were the revised rates of debt securities on Saturday (June 20, 2009).

SBP asks banks for new limits under EFS.

KARACHI (June 21, 2009): The State Bank of Pakistan, while asking the banks for new limits under Export Finance Scheme (EFS) for the next fiscal year, has extended the present limits of EFS for one month. Banks have been advised by the central bank to submit, by June 25, 2009, their requests for new limits for 2009-10.

Banks asked for 2009-10 limit requirements under LTFF.

KARACHI (June 21, 2009): The State Bank of Pakistan on Saturday announced to continue the existing limit of Long-Term Financing Facility (LTFF) Scheme. In a communication addressed to all banks, it said that LTFF limits, sanctioned in favour of banks for the year 2008-09, are due to expire on June 30, 2009.

THE RUPEE: dollar low marginally.

KARACHI (June 20, 2009): The rupee managed to recover slightly against the dollar on the interbank market on Friday as it gained three paisa in relation to dollar for buying and selling at 81.10 and 81.15, dealers said. According to some marketmen there is higher demand for dollars by the importers, but supply factor did not allow the rupee to bow down in terms of the greenback.

Business & Economy

2009-06-22T01:06:00.000-07:00

'Punjab budget to improve socio-economic condition of people'.

LAHORE (June 22, 2009): Punjab government has won the hearts of people by presenting a balanced, people-friendly and tax-free budget in difficult times. Chairman Standing Committee for Finance Punjab, Sardar Khalid Saleem Bhatti said while talking to a delegation of MPAs at his residence here on Sunday.

Federal, provincial budgets anti-poor: PEW.

ISLAMABAD (June 22, 2009): The Pakistan Economy Watch (PEW) has said that the recently presented federal and provincial budgets have proved that our leaders are least concerned about welfare of masses or stability of the economy. Rich have again escaped taxation while poor were cornered.

Demand to set up cities for sports goods, surgical instruments.

SIALKOT (June 22, 2009): Local exporters had appealed the Federal and provincial governments to set up "Sports goods and Surgical instruments cities" to facilitate the SMEs of this export-oriented city and hub of cottage industry as well as to recognise the services and importance of Sialkot, which was earning valuable foreign exchange.

KPT outlines plan for cargo village and industrial park.

KARACHI (June 22, 2009): The Karachi Port Trust plans to develop the western backwaters of the Karachi Port as a "Cargo Village and Industrial Park." This decision has been based on a feasibility study including master plan prepared for the proposed project in 2004.

Withdrawal of sales tax on diesel engines, spare parts welcomed.

Lahore (June 22, 2009): The former central chairman of Pakistan Hardware Merchants Association (PHMA) Haji Muhammad Asif has welcomed withdrawal of sales tax on diesel engines and spare parts as it would benefit the textile and sugar industries.

Rs 24 billion paper guarantees to be floated to bail out oil and power sectors.

ISLAMABAD (June 21, 2009): The government has decided to bailout budgetary imbalances of the oil and power sector due to circular debt by floating Rs 24 billion paper guarantees by the Finance Ministry next week, it is reliably learnt on Saturday. The Finance Ministry has calculated that the total accumulated impact of this paper injection would be Rs 79 billion in terms of circular debt reduction.

KSE crawls through a lustre-less week

2009-06-22T01:05:00.000-07:00

Experts think market would remain dull until liquidity, leverage product are made available
KARACHI: Karachi Stock Exchange (KSE) went through a lacklustre week as
Its benchmark KSE 100-index closed the week at a level of 7,039 points - a minor decrease of 16 points.
News regarding taxation on exports, no major incentive for the stock market in the budget, fears about capital value tax (CVT) imposition and profit-taking caused the market shed some points but hopes of leverage products, expectations of cut in T-bill yield and interest rates helped the market recover losses.
"Unfavourable budget for the stock market and budget related uncertainties kept the market under pressure while fears that CVT would be reimposed with double rate further weakened the sentiments," a market expert told The Financial Daily when asked about the market performance throughout the week that ended on Friday.
He added that market remained lacklustre as institutions didn't take part in market activities ahead of financial year closing in June coupled with foreign selling in specific stocks. Hopes of reduction in interest rates and early launch of leverage product did give some support to the market, he added.
Market started the week in a depressing way, as the index lost 103 points on Monday on selling pressure mainly due to no major announcement for the stock market in the budget and taxation on exports. Negativity continued the next day too as despite foreign buying in the market, index fell by 80 points mainly due taxation on exports while volumes reduced to a 3-month low during the day.
Bulls took an impressive comeback on Wednesday as the key index grew by near 3 per cent (202 points) mainly on expectation of decline in T-bill yield, hopes of removal of tax on exports and likely reduction in discount rates in July.
Profit-taking was witnessed during the last two days of the week as index lost 24 and 12 points respectively on Thursday and Friday.
Index touched the highest level of 7,142 points and lowest level of 6,847 points during the week.
KSE 30-index dropped 70 points to close at 7,448 points and KSE all share index lost 13 points to close at 5,047 points.
Out of total 357 active issues, 202 declined and 135 advanced while 20 issues remained unchanged.
Investors' participation remained dull almost throughout the week as 508 million shares exchanged hands during the period which are 125 million shares low as compared to a turnover of 633 million shares a week earlier.
Experts think that market would remain dull until liquidity is made available and leverage product is launched. They say introduction of new leverage product and decline in the key discount rates would be the trigger for market in the coming days.

Budget 2009-10

2009-06-19T22:56:00.000-07:00

Mega numbers, fancy accounting and tall claims — But really, I have personally come to a stage where I no longer take the budget speech very seriously, because if one analyzes the track record of the last six to eight years one realizes that during the course of any given year the actual spreads never even remotely match the laid out proposals! Quite honestly, one cannot entirely blame the government either, as due to mainly three things it is becoming increasingly difficult for any country to forecast figures and policies of one year in advance and then go on to follow them to the hilt.
These three factors are:
(1) Events (political and economic) these days often unfold quicker than any type of planning cum forecasting.
(2) In the supersonic age of globalization where communication and information flow is lightening fast, one year is being perceived as being too long a period in the context of day-to-day decision-making requirements.
(3) In case of economies such as Pakistan, which balance their budgets by way of deficit financing, there is always the risk of donor or institutional promises that either do not mature at all or simply get deferred and delayed.
So how should then one react to the once-a-year pompous budget speeches? Again, in my opinion, the real benefit of such an exercise to the general public lies in exposing the true mindset of the economic managers and that, behind the cobweb of complex figures, in which direction they want to take the nation’s economy. If the overall direction is right and the mindset is healthy (people-friendly) then great, and if otherwise, then the challenge is to somehow convince them to change course in order to avoid further economic suffering.
Presently the Pakistani military is taking on the miscreants directly, but the real reckoning will come when the fight is over, in ensuring that insurgency and terrorism do not spread again. In that, the state of economy will be crucial, because if we are unable to win the hearts and minds of our people by providing them timely jobs and economic relief, the ground gained by the good work of the armed forces will be lost in days. And it is in this light that we should be assessing this recently announced budget. Meaning, does the direction the economic leaders have adopted take us towards creating opportunities, providing jobs, encouraging domestic and foreign investment, and eradicating poverty? Measuring on such a yardstick, regrettably, the announcements fall significantly short of creating any kind of positive feelings or generating a likely stimulus in the economy.

SBP calls for supervision framework for conglomerates

2009-06-19T22:55:00.000-07:00

KARACHI - Governor, State Bank of Pakistan Syed Salim Raza has underlined the need for developing a consolidated supervision framework in view of the emergence of the conglomerate structure in Pakistan’s banking industry.
“There is a need for highly trained accountants and financial analysts who can help manage the risks associated with the complex financial structures of the conglomerates,’ he noted while speaking at the Excellence Awards Ceremony of CFA Association of Pakistan at a local hotel. Referring to the importance of professional experts in Pakistan’s financial industry, he observed that pursuing internationally recognized area-specific programs like the CFA, FRM, ACCA, and CMA are excellent tools to bring individuals at par with global standards.
Salim Raza said that the government and the SBP were committed to maintaining macroeconomic stability and long term economic growth in the country and the primary goal of monetary policy stance is to control inflation. Raza observed that the downward trend in domestic inflation owes to favourable international and domestic developments as well as a deceleration in domestic demand. ‘The latter, in particular, reflects the monetary tightening by the central bank as well as the complementary improvement in fiscal discipline’, he added.
Stressing the need for the development of an efficient bond and money market, the SBP Governor said the development of an organized bond market for both Corporate and Government securities is the need of hour that will help boost intra-regional trading liquidity and investment needs.
SBP Governor said that complementing the progress of the bond and money markets will be further strengthened by bringing efficiency in secondary trading platforms, liquidity, dissemination of price and volume trends and wider access to the market. He said the work is underway on these initiatives at the State Bank to create a vibrant and liquid Bond Market thus reducing the financial intermediation cost in the system. He observed that Pakistan’s financial markets have remained by and large insulated from the recent global financial market turmoil as ‘our markets did not have exposure to mortgage or other asset backed securities.’ However, he asked all stake holders to further consolidate their efforts for the deepening of financial sector including financial instruments innovation.

Govt withdraws irritant, harsh clauses of budget

2009-06-19T22:52:00.000-07:00

LAHORE - Following coun-trywide pressure by the business community, the Ministry of Finance on Friday decided to withdraw all the irritant and harsh clauses proposed in the final draft of the Finance Bill for the federal budget 2009-10.
Sources revealed that Advisor to Prime Minister on Finance Shaukat Tarin agreed to withdraw all the irritant and harsh clauses for the businessmen during a detailed meeting with a 26-member delegation of the Federation of Pakistan Chamber of Commerce and Industry (FPCCI) held in the Finance Ministry on Friday.
The Advisor agreed to withdraw the additional withholding tax on imports and said, “now the businessmen would pay as per the previous rate of two per cent at import stage.” Tarin has also agreed to reverse the decision to establish Directorate of Income Tax Intelligence and assured the businessmen that the Finance Bill would be amended, sources maintained.
Advisor to PM on Finance Shaukat Tarin chaired the meeting while Chairman FBR Sohail Ahmed, Federal Secretary Finance Salman Siddique, and Chairman Panel of Economists Dr Hafeez Pasha were also present on this occasion.
The 26-member delegation of the Federation of Pakistan Chamber of Commerce and Industry led by its President Sultan Ali Chawla, and former President Iftikhar Ali Malik, and Mian M Idrees attended the meeting to resolve the issue of irritant clauses with the top brass of the Finance Ministry.
According to the sources, Shaukat Tarin informed the delegation that the Ministry is withdrawing all irritant clauses including the proposal of provision of NTN or CNIC of a buyer on Sales Tax Invoice and withholding tax made in the Finance Bill.
“The issue of irritant clauses for the businessmen has been resolved amicably in the meeting. The Advisor to PM on Finance has fulfilled his commitment with the business community and we are very thankful to him,” Vice President SAARC Chamber of Commerce and Industry, Iftikhar Ali Malik informed this scribe, when contacted.
The Advisor assured the delegation that the Ministry has finally decided to withdraw the clauses creating troubles for them and it would be tabled in House very soon for approval in this regard. The Advisor also informed that the mandatory condition of mentioning the NIC number of Sales Tax Invoice has also been reversed. He further said that the labour laws would be amended and all the irritants of the business community would be removed.

Desperate search of ‘leverage’ for stock market

2009-06-19T22:51:00.000-07:00

KARACHI: The stock brokers are caught between the rock and a hard place! The loss of ready board leverage is shrinking volumes and since the brokers’ livelihood depends to a great extent on the speculators and day traders, the slowdown in income stream is cause for concern.

But the trouble is that 104 brokers had stood up in revolt against the age-old prevalent ‘badla’, CFS or more attractively named CFS Mk-II.

They could not possibly step back and admit that it was a mistake to discard the bad ‘badla’, before introducing an investor-friendly and acceptable alternative.

Ingeniously, the community put their heads together and found the space to wriggle out of the situation.

In all, 21 concerns or defects in the ousted badla have been discovered and with some of the stalwarts among brokers taking the lead, heated debates have produced a refined product that is believed to be shorn of the ingredients of the ‘badla’ that had spoiled the whole product. But no one is calling the proposed new product the ‘badla’ or CFS. Instead the going word is ‘Margin Financing’.

While stock brokers have sought comments and suggestions from the fraternity in regard to the proposed new product, a consultative committee formed by the Securities and Exchange Commission of Pakistan (SECP), under the chairmanship of Aftab Ahmed Diwan, the COO of Central Depository Company of Pakistan (CDC), has also feverishly worked to develop and distribute the contours of its version of a new product of ‘Margin Financing’ (MF).

A senior stock broker conceded that the dip in daily traded volume to 104 million shares (as an example) on Friday was depressing in relation to the 250 million shares traded on a good day in early 2008. But he pointed out that the loser was not just the broker. The slump in volume and trading interest that has dried up liquidity can not have done the capital market any good.

‘It defeats the principal objective of the market, which is formation of capital,’ he said. It was scarcely surprising that though the SECP has been proudly revealing the growing number of companies that register themselves each month, the aggregate number now climbing to 50,000, but no more than one per cent of them have sought listing at the stock market.

‘If the capital market is able to attract no new companies to raise cheaper capital, how will that help to achieve the cherished goal of industrialisation,’ says an analyst.

Another member disputed the notion that it was just the stock brokers who were poorer by the loss of commission due to low volumes.

‘At least four other institutions are taking the heat,’ says he and identified them as government which received just Rs 1 billion in Capital Value Tax (CVT) in financial year 2008-09, compared to Rs4 billion the earlier year. The lack of interest in the equity market also frustrates government’s plan of privatisation.

Others that see their income trimmed include the CDC; the National Clearing Company of Pakistan and the KSE itself. Thus, the desperate search for a new ready board leverage product. Some are questioning the brokers’ fixed gaze on CFS.

‘Why not take a look at the ‘deliverable futures’, which also was thrown out with the badla?’ asks one.

On Friday, the SECP told stakeholders to submit comments by June 25, on the first report on ‘Margin Financing’ released by the SECP’s consultative group on capital markets.

The group had earlier this month submitted its first report.

SECP said it was making effort to develop consensus of the relevant stakeholders on recommendations of the group, which was why it had forwarded the said report for the feedback of various institutions, including State Bank of Pakistan, Mutual Funds Association of Pakistan, Pakistan Banks Association, Investment Banks Association of Pakistan Leasing Association of Pakistan, Modaraba Association of Pakistan, the three stock exchanges, National Clearing Company of Pakistan Limited and the Central Depository Company.

While issuing those directives, the SECP reiterated: ‘The said report contains purely the recommendations of the group and does not reflect the views / proposals of the SECP.’

And the apex regulator said that it would ‘review the recommendations of the group in light of the feedback received from of the stakeholders.’

A stock broker said on Friday that the overwhelming concern of the investors at the stock market was not in regard to the product that might finally find its way into the market (the one proposed by the group of brokers or that of the consultative committee or both). But the big worry was, whether a consensus could be achieved of all stakeholders and more importantly by when?

Some demands of business and industry accepted

2009-06-19T22:50:00.001-07:00

ISLAMABAD: The finance ministry on Friday agreed to make 125 amendments to the finance bill, including a reduction in withholding tax on industrial importers to help revive the ailing industrial sector.

‘The amendments will be tabled next week,’ a finance ministry official said.

The government also constituted a committee to find anomalies in the budget and to remove them in two months to help revive industrial growth.

The decisions were taken during a meeting of representatives of the Federation of Pakistan Chambers of Commerce and Industry (FPCCI) with Finance Adviser Shaukat Tarin.

According to the official, industrial importers will now have to pay two per cent withholding tax instead of four cent. Although investors would pay the tax at an adjustable rate, commercial importers would pay four per cent.

Final tax on export proceeds would be paid at the rate of one per cent.

Earlier, the government had withdrawn the presumptive taxation on exporters, a move which was strongly opposed.

The ‘anomaly committee’ would be headed by Mr Tarin and its members will be the governor of the State Bank, chairman of the Federal Board of Revenue, federal secretaries of economic ministries and an FPCCI representative.

The finance ministry official said the business community was informed that the interest rate would be cut by one per cent and additional measures would be taken for lowering inflation.

The meeting agreed to do away with the judicial powers proposed to be given to FBR authorities, Section 40B would be used in a useful manner and not be used in any way that might put the business community in any difficulty.

It was also agreed that proposed amendment to Section 38 would be subjected to some conditions as tax authorities would not be allowed to enter business premises or carry out a search and prior approval would be required from FBR chairman. Private auditors would be required to place records and computers impounded from taxpayers’ offices in FBR offices and not anywhere else.

Participants of the meeting decided that there would be no requirement to mention the NTN or Computerised National Identity Card on sale invoices. The meeting was informed that audit under the Universal Self-Assessment Scheme would cover accounts of only past year. Previously taxpayers were required to furnish records spanning over four to five years.

The government also agreed not to set up an income tax intelligence directorate. The government said it would provide business community with an environment conducive to enhancing exports and allow imports without harassment.

A statement issued by the FPCCI said that the federal government had agreed to rectify what it called massive anomalies in the budget.

Mr Tarin, it said, had assured leaders of the business community to amend labour laws and remove irritants.

Karachi Chamber of Commerce and Industry president Anjum Nisar said that the finance ministry had accepted 90 per cent of the demands of his chamber.

Stocks & Bonds

2009-06-19T22:46:00.000-07:00

Dull session on KSE.

KARACHI (June 20, 2009): Karachi share market on Friday witnessed another dull session amid thin volumes and the benchmark KSE-100 index, after moving both sides, finally closed in the negative at 7,039.73, with a net loss of 12.04 points. The market opened on a positive note and the index hit 7,076.79 points intra-day high level, up by 25.02 points.

Equities move both ways on LSE.

LAHORE (June 20, 2009): Equities moved both the ways on the Lahore Stock Exchange (LSE) on Friday and finally stayed in red zone amid descending transaction volume on account of lacking interest on the part of investors who remained on the sideline. The LSE-25 index marginally increased by 10.77 points and ended at 2073.16 against the Thursday's closing at 2062.39 while trading turnover restricted to 9.098 million shares as compared to 15.737 million shares traded a day earlier.

Mixed trend observed on ISE.

ISLAMABAD (June 20, 2009): Mixed trend was observed at the Islamabad Stock Exchange (ISE) where equities showed healthy signs under the lead of hot favourite amid increase in index. ISE Ten Index was plus by 4.74 points, as the Index moved from 1,654.02 to 1,658.76 points. The volume of trade amounted to 1,093,100 shares as compared to previous turnover of 1,544,190 shares.

Apex index stays stuck on panic, profit-taking

2009-06-19T22:44:00.001-07:00

Karachi Stock Exchange (KSE) ended in the red zone on Friday - last trading day of the week - as the benchmark KSE 100-index shed 12 points to close at 7,039 points due to day-end profit-taking, and fears regarding capital value tax (CVT) imposition.
"Premonitions gripped the market and it closed in the red zone on profit-booking," market expert told The Financial Daily.
He said negative activities in the first session were due to the apprehensions that CVT would be imposed again also there was no support in the market.
However, the second session witnessed some positive activities due to the hopes that a new leverage product would be launched soon but the day-end profit-taking let the index close negative.
Earlier, the market started with a gain of 8 points but could not sustain its position and soon plunged into the red zone and remained there throughout the first session. During this session, the index breached 7,000 level and touched an intraday low of 6,980 points (-ve 71 points).
In second session, the index gave visits to both negative and positive zones - moving in a narrow range. At about 3:13pm, index managed to touch an intraday high of 7,076 points (+ve 25 points) but selling pressure at the end didn't allow the green numbers to stay and market closed in the negative zone.
Despite negative end, foreign investors were the net buyers.
Data released by National Clearing Company of Pakistan Limited (NCCPL) showed there was net foreign buying of $2.6 million during the day.
KSE 30-Index dropped 44 points to close at 7,448 points and KSE all share index lost 8 points to close at 5,047 points.
Out of total 256 active issues, 131 declined and 98 advanced while 27 issues remained unchanged. Investor participation remained low throughout the day as volumes reduced to around 97 million shares which are 48 million shares less as compared to a turnover of 145 million shares a day earlier.

Austria to invest in water and power sector

2009-06-18T22:42:00.001-07:00

Austrian Ambassador, Dr Michael Stigelbauer on Thursday called on the Minister for Water and Power, Raja Pervez Ashraf and discussed various matters of mutual interest and possibilities of investment and technical co-operation in water and power sector.

Zardari invites Belgian businessmen

2009-06-18T22:41:00.001-07:00

President Asif Ali Zardari on Wednesday invited Belgian businessmen to come to Pakistan and explore a market that boasts of over 170 million people. Addressing leading Belgian businessmen at a dinner meeting, the President said just like Belgium, which is gateway to Europe, Pakistan was a gateway to the Central Asian states. "Lets take advantage of each other's markets," he added.

Index loses 24.16 points

2009-06-18T22:39:00.002-07:00

Profit taking in late hours eroded the intra-day gains and the benchmark KSE-100 index finally closed at 7,051.77 points level with a net loss of 24.16 points on Thursday. The market opened on a positive note and the index hit 7,142.97 points at intra-day high level, up by 67.04 points, however, the index could not sustain that level due to profit taking.

Mixed trend prevails on LSE

2009-06-18T22:39:00.001-07:00

Mixed trend prevailed on the Lahore Stock Exchange (LSE) on Thursday and the equities after moving up and downward, finally settled in red zone on account of selling pressure that resulted considerable increase in trading turnover. The LSE-25 index marginally declined by 5.21 percent and closed at 2062.44 against 2067.55 of Wednesday while transaction volume increased to 15.737 million shares as compared to day earlier volume of 9.293 million shares.

Gainers outnumber losers on ISE

2009-06-18T22:35:00.000-07:00

Gainers outclassed losers at the Islamabad Stock Exchange (ISE) where equities showed healthy signs under the lead of hot favourite amid increase in index. ISE Ten Index showed an increase of 12.40 points, as the Index moved from 1,641.62 to 1,654.02 points. The overall turnover amounted to 1,544,190 shares as compared to previous volume of 764,976 shares.

KSE makes no impression

2009-06-18T22:34:00.000-07:00

Shares on Thursday ended flat as the benchmark KSE 100-index fell by just 24 points to close at 7,051 points due to profit booking by investors after a rangebound day.
"The market fell because of the proposal of National Assembly Standing Committee on Finance to impose Capital Value Tax (CVT) on stock market transactions," a leading analyst told The Financial Daily.
He, however, said commitment of aid by European Commission would bring some positive news in the coming days. The European Commission - the EU's executive arm - on Wednesday said it would give an additional 72 million euros in emergency humanitarian assistance to Pakistan for relief of Internally Displaced Persons (IDPs) of Swat and adjoining areas.
"Online server was not operating at the market owing to prolong power failure in the city that also affected activities at the market," another analyst told TFD by phone.
However, above expectation cut in T-bill rates and commitment by the Finance Advisor of at least 100bps decline in upcoming monetary policy and further incentives for industries in the trade policy kept the optimism alive during the session.
The day-end offloading by traders pushed the bench mark to red zone, despite strong resistance, offered by placing big quantity bids in the stocks having heavy weight in the benchmark, said the analyst.
Trading started with a gain of 18 points, thereafter market witnessed some range-bound activities throughout the day but most of the time it stayed in the positive zone where at about 12pm index touched an intraday high of 7,142 points (+ve 67 points). Index gave certain visits to both the territories but finally day-end selling let the index close in the negative zone where during the last minute of the session index touched its lowest level of the day of 7,026 points (-ve 49 points).
Data released by National Clearing Company of Pakistan (NCCPL) showed that foreigners too were the net sellers as there was net foreign selling of $1.15 million during the day.
KSE 30-index dropped 46 points to close at 7,492 points and KSE all share index lost 17 points to close at 5,055 points.
Volumes saw a significant improvement as 145 million shares traded during the day which is 50 million shares more as compared to a turnover of around 95 million shares a day earlier.
Out of total 291 active issues, 174 declined and 100 advanced while 17 issues remained unchanged.

Shares gain little ahead of budget

2009-06-11T22:53:00.000-07:00

Shares at Karachi Stock Exchange (KSE) ended with limited gains on Thursday as investors' participation remained low ahead of the budget for the fiscal year 2009-10.
The benchmark KSE 100-Index gained 44 points to close at 7,091 points.
"Rise in foreign remittances and declining trend of inflation supported the economic end for the local investors," Hasnain Asghar Ali of Aziz Fidahusein & Co told The Financial Daily.
The market started with a little gain of 16 points and reduced activity of the investors. Positive activities were witnessed almost throughout the day with limited gains. At about 12:41pm, the index touched an intra-day high of 7,125 points (+ve 78 points). Buying was mainly in the banking sector.
However, there was some profit booking at higher levels sending the index into negative zone for a few minutes where it touched its lowest level of the day - 7,035 points (-ve 11 points) - but support at lower levels called back the green numbers and then market remained in the positive territory till the closing bells to end with little gains.
Despite positive closing, foreigners were the net sellers.
According to National Clearing Company of Pakistan Limited (NCCPL), net foreign selling of $1.65 million was witnessed during the day.
Meanwhile, KSE 30-Index jumped by 75 points to close at 7,564 points and KSE all-share index increased by 29 points to close at 5,084 points.
Talking to TFD, Mohammad Sohail of Topline Securities said it was another dull day ahead of the federal budget. However, he expressed his optimism that market is likely to post a small rally after the budget in case there are no direct taxes on share trading.
Volumes further reduced as 114 million shares traded during the day which is 27 million shares less as compared to a turnover of around 141 million shares a day earlier.
Out of total 311 active issues, 151 advanced and 142 declined while 18 issues remained unchanged.

Stocks & Bonds

2009-06-08T01:12:00.000-07:00

Bearish sentiment persists on KSE.

KARACHI (June 08, 2009): Bearish sentiment prevailed at Karachi share market during the week ended on June 6, 2009 due to investors' concerns over the coming budget and absence of any leverage product. The KSE-100 index declined by 381.99 points, or 5 percent, and closed at 6,894.62 points.

New listing companies: SECP seeks reduced corporate tax rate.

ISLAMABAD (June 08, 2009): The Securities and Exchange Commission of Pakistan (SECP) has asked the Federal Board of Revenue (FBR) to apply reduced corporate tax rate on new listing of companies on stock exchanges in the 2009-10 budget. It is learnt that the SECP has proposed tax slabs for new listing of companies through amendment in the Schedule-I, Part I, Division II of Income Tax Ordinance, 2001.

25 percent decline in CFS investment.

KARACHI (June 08, 2009): Investment from CFS at Karachi share market declined by Rs 26 million, or 25 percent, to Rs 78 million on Friday. "With phase-out of the CFS Mk-II since April 8, 2009, the investment level has been falling by every day as investments made earlier are being released", Muniba Saeed, an analyst at Invest Capital and Securities said.

KSE in bear country - Weekly Report

2009-06-08T01:10:00.000-07:00

KARACHI: Fears of taxation on the capital market called the bears back to the exchange as due to the selling by both foreign and local investors key index of the exchange shed more than 5 per cent during the week ending below 7,000 levels.
The benchmark KSE 100-Index dropped 382 points - 5.25 per cent -- to end at a level of 6,894 points.
"Issues regarding the budget was the main factor for the negative activities; difficulties faced by members for funding and no decisive victory achieved by the government in Swat also were the reasons for the bearish spell," said Tanvir Abid, SVP Elixir Securities.
Tanvir added that lackluster activities would continue in the market and the Index could go down to 6,700 levels, however bulls might come back if the budget is investor friendly.
Bears were there since the start of the week as on Monday Index ended 66 points down mainly due to the taxation fears however there were some positive activities during intra-day trading due to foreign buying, hopes that military action would end soon and inclusion in MSCI index therefore at a moment Index touched its highest level of the week of 7,328 points.
Tax worries didn't stop to hurt the market and the Index dropped another 85, 135 and 111 points respectively during the next three days. Adding to the pressure was the absence of leverage tools, foreign selling, downward revision of the growth numbers etc.
However week ended with some improved performance as on Friday despite heavy selling by foreign investors market closed with little gains mainly on buying by local investors in an oversold market. There were also some negative activities in the market during intra-day trading where at a moment Index touched its lowest level of the week of 6,850 points. Foreigners too preferred to take an exit from the market as there was a net foreign selling of $11.9 million during the week.
KSE 30-Index fell by 548 points - 6.98 per cent -- to close at 7,314 points and KSE all-share index lost 263 points - 5.05 per cent -- to close at 4,953 points.
Investors' participation remained low throughout the week as around 555 million shares traded in the market which is 201 million shares less as compared to a turnover of 756 million shares a week earlier.
Out of total 368 active issues, 282 declined and 75 advanced while 11 issues remained unchanged.

KSE sees 4th consecutive day of losses

2009-06-04T23:07:00.000-07:00

KARACHI (APP) - The unending selling pressure further eroded values of leading scrips at Karachi Stock Exchange (KSE) Thursday as 100-Index lost 111.80 points to close at 6,878.14, dealers said.
The turnover volume was low at 93.595 million shares as prices of only 79 scrips recorded gains while 210 sustained losses and 14 remained unchanged.
A dealer at a leading brokerage house said that market opened on a positive note and 100-Index climbed to above 7000 level on fresh buying. However, bears entered the market and pulled down prices by heaving selling and Index went below 6900 level. The market capitalisation eroded by about Rs 32 billion to Rs 2.040 trillion.
Jahangir Siddiqui Co was the volume leader with a turnover of 12.081 million shares followed by Pak PTA 5.877 million shares, NBP 4.795 million shares, Dewan Cement 4.615 million shares and D G Khan Cement 4.505 million shares.
MCB Bank closed at 142.42, Adamjee Insurance 82.73, Saudi Pak Bank 6.88, Pak PTA 3.10, Jahangir Siddiqui Co 24, D G Khan Cement 23, OGDC 74.31 and NBP 62.76.
Siemens Pak recorded the highest gain of Rs 14 to close at 984 followed by Dreamworld which moved up by Rs 11 to 245 while Nestle Pak dipped by Rs 48.58 to 923.17 and Treet Corp went down by Rs 12.25 to 232.75.
Meanwhile, Lahore stock market on Thursday witnessed bearish trend as LSE-25 Index lost 35.73 points to close at 2023.36 points as against 2059.09 points on Wednesday. Total turnover also decreased to 9.076 million on the day against 12.397 million shares on Wednesday.

200,000 tons wheat products to be exported

2009-06-04T23:06:00.000-07:00

ISLAMABAD- Pakistan will export 200,000 tonnes of wheat products on expectations of a bumper wheat crop this year, a top Food Ministry official said on Thursday.
Asia’s third-largest wheat producer expects output of 24m tonnes this year, or 2m in excess of domestic requirements. Pakistan imposed a ban on wheat exports in 2007 because of shortages and higher prices at home but the curbs are being eased because of prospects of a good crop.
“The cabinet has given the go-ahead to export 200,000 tonnes of wheat products,” ministry secretary Mohammad Zia-ur-Rehman told Reuters.
“If there’s more demand, they’ll be given permission for more exports,” he said. The 200,000 was in addition to 600,000 tonnes of flour being exported to neighbouring Afghanistan, he said.
Pakistan sees the Middle East and Gulf as good markets for its wheat products. Rehman said the permission to export wheat products would help domestic flour mills get rid of surpluses.
“This needs to be liquidated otherwise it will become a headache,” he said. “Look at storage capacity. Eighty percent of wheat is lying out in the open and if heavy rain comes tomorrow, there will be massive damage,” he said.
Wheat stocks were at one million tonnes, which Rehman said was the highest stock level in Pakistan’s history. The harvest was due to be completed by June 30. Qadir Bukhsh Baluch, wheat commissioner at the Food Ministry, said there might be more wheat product exports when the final figure for the harvest came in.
But the ministry was not seeking the lifting of the ban on wheat exports, he said.

Stocks & Bonds-JUNE 03, 2009

2009-06-03T00:04:00.000-07:00

Index declines.

KARACHI (June 03, 2009): Bearish trend prevailed at Karachi share market and the benchmark KSE-100 index declined by 85.23 points to close at 7,125.11 points level on Tuesday. "Despite confirmation by FBR and finance authorities that no new taxes will be imposed on the share business in the new budget and positive developments on Swat operation, the local equity market continued to give a deserted look and the bourses continued to stay indifferent to the positive developments", analysts said.

LSE index down 29.82 points.

LAHORE (June 03, 2009): Equities under the lead of banking sector extended further losses on the Lahore Stock Exchange (LSE) on Tuesday on account a news regarding 23 percent decline in the banks' profit during first quarter. The LSE-25 index continued to decline for the second day and slide down by 29.82 to close at 2115.50 against 2145.32 of Monday.

ISE index down 20.53 points.

ISLAMABAD (June 03, 2009): Bears strengthened their positions at Islamabad Stock Exchange (ISE) where equities showed negative signs under the lead of hot favourite amid decrease in index. ISE Ten Index showed a decrease of 20.53 points, as the Index moved from 1,683.03 to 1,662.50 points.

Rs620bln development budget proposed

2009-06-03T00:00:00.000-07:00

ISLAMABAD: The total development budget of the country for next fiscal year has been recommended Rs620 billion to the National Economic Council, which includes Rs190 billion to develop Chashma –III and Chashma –IV nuclear energy plants.

The recommendations have been forwarded by the Annual Plans Coordination committee (APCC) on Tuesday for the NEC, scheduled to be held in Islamabad on June 4, the NEC would be chaired by the prime minister.

The APCC has recommended Rs262 billion for federal ministries in the Public Sector Development Program (PSDP) for 2009-10, the recommendations includes Rs38 billion for special areas including AJK, FATA and northern areas, Rs35 billion have been recommended for special programs and Rs60 billion have been recommended for corporations.

The APCC has recommended Rs200 billion for the development budget of provinces, and Rs25 billion for the earthquake reconstruction.

The APCC papers for the NEC said that the broad sectoral distribution of federal PSDP includes Rs195 billion for infrastructure, Rs164 billion for social sector, Rs18 billion for agriculture, industries, minerals, Rs12 billion for science and technology and Rs6 billion for environment.

APCC has proposed that Rs190 billion for the development of nuclear plants C-3 and C-4 to generate 600 megawatt electricity by 2016.

Another important aspect of the proposals is that the allocations for health sector has been suggested to be raised by 82 per cent to Rs26 billion in the fiscal 2009-10.

Major programs in the federal health sector includes Rs6 billion for EPI, Rs3 billion for mother and child health, Rs7 billon for primary health care.

While the allocations for education and training has been increased by 60 per cent to Rs32 billion for the next fiscal year.

The paper said that water sector allocations has been proposed at Rs58 billion, that accounts to almost 14 per cent of the total federal program. It said that 32 small and medium dams, eight in each province are being financed in the next fiscal year.

Rs12 billion have been proposed to complete the Mangla dam raising project, as a result 2.88 million acre feet additional water could be stored in the dam in next monsoon season.

Rs139 billion have been proposed for energy sector including electricity generation and conservation projects.

Transportation and communication sector has been allocated Rs70 billion in the APCC proposals and Rs12 billion for improvement of railways.

To save the agriculture produce modern grain storage facilities are proposed at Rs27 billion and Rs3.5 billion has been proposed for public private partnership in the field of dairy development.

For the continuation of housing program for poor and government officials that was initiated in the current fiscal year, the APCC has proposed RS1 billion to continue the project.

The APCC in its proposals to the NEC has said that Thar coal infrastructure will be developed in the next fiscal and the World Bank has pledged grant assistance for preparation of the project.

‘The government of Sindh is allowed to negotiate loans with the world bank,’ the paper said.

The recommendations for the NEC said that to sharpen the skills of labour force ‘Hunarmand Pakistan Programme’ would be launched to improve skills of the labour which will create demand for Pakistani workforce abroad also.

Pakistan had requested the IMF to increase the fiscal deficit limit from 3.4 per cent to 4.6 per cent to accommodate the additional amount of around Rs160 billion in the development budget for the next fiscal.

Deputy chairman planning commission Sardar Aseff Ahmed Ali said that increased allocations for development budget would help the government fight poverty.

‘This would be a support the government to fight terrorism reducing joblessness,’ he said. The National Economic Council is expected to consider enhance the powers of Central Development Working Party (CDWP) for sanctioning development schemes.

The CDWP, currently, is authorised to sanction projects up to Rs 500 million for the federal government and projects exceeding this limit are submitted for approval to the Executive Committee of the National Economic Council (ECNEC).

Tax-worries whack stocks

2009-06-02T23:53:00.001-07:00

Volumes thin to 2-week low
KARACHI: Share prices continued to slide on second day of the week pushing the benchmark index lower by more than 1 per cent on Tuesday with volumes reduced to near two-week low, mainly due to what dealers said were pre-budget tax worries and the absence of leverage product. The benchmark KSE 100-Index fell by 85 points or 1.18 per cent to close at 7,125 points.
"Absence of ready board leverage the only reason for the ongoing price erosion/inflation, further delay in accepting the fact will continue to harm the local bourses," said Hasnain Asghar Ali, Head of Sales Aziz Fidahusein & Co.
Hasnain added that despite confirmation by FBR and finance authorities that no new taxes will be imposed on the share business in the upcoming budget, positive developments on Swat operation, expectations of early & successful completion of the operation, a comprehensive plan outlined by the PM to increase textile exports increased expectations of likely incentive to the textile manufacturers in the upcoming budget, rallying oil prices and participation by foreign players at the local bourses, the local equity market continued to give a deserted look, thus negating the views that the mentioned issues are the main reasons for lacklustre, and the local bourses continue to stay indifferent from the positive developments.
After a flat beginning, market showed some mix performance during the first hour of the session where at a moment it touched an intra-day high of 7,230 points (+ve 19 points), thereafter it finally went down into the bearish region mainly due to the selling pressure on fears of taxation on the capital market in the upcoming budget. Therefore the losses were multiplied and at about 1:48 pm it touched its lower level of the day of 7,087 points (-ve 123 points) however some support at lower levels allowed the index to close above 7,100 levels.
Foreigners too were on the selling side as according to the NCCPL figures, there was a net foreign selling of $2.1 million during the day.
KSE 30-Index dropped 104 points - 1.34 per cent to close at 7,671 points and KSE all-share index lost 59 points - 1.15 per cent to close at 5,110 points.
Volumes shrank further to 83 million shares - -down more than 29 million shares as compared with 113 million shares traded a day earlier. Out of total 308 active issues, 211 declined and 84 advanced while 13 issues remained unchanged.
Analysts said the market may show some range bound activities before the federal budget but they also add that news regarding taxation on the capital market would certainly have a negative impact on the market. They also urge for an early introduction of new leverage product in the market.

Stock brokers demand ‘leverage’ product

2009-06-02T00:27:00.001-07:00

KARACHI: In an informal meeting of members of the Karachi Stock Exchange on Monday afternoon, a strong 60 broker-member fraternity who participated out of the 200 members on roll, demanded a leverage product. ‘Leverage product’ in simple language would mean a product that could allow investors to purchase shares on borrowed money.

Sitting on the dais were half a dozen big brokers. The noisy proceedings started at the Trading hall but the venue was soon shifted to the KSE auditorium, away from the media glare.

A senior member present at the meeting said that the brokers stood united on the one basic point, that the market was in dire need of a leverage product—the void had been created following the scrapping of the ‘badla’ or CFS earlier in the year, without first replacing it with another acceptable-workable product.

‘Basically, the meeting deliberated on three points’, said a member present at the meeting. The first, of course, was the leverage product. It was resolved that a Committee of members be formed within 15 days to work with the trading affairs Committee of the KSE and discuss and deliberate on the leverage product; send the recommendations to the Consultative group formed by the SECP for onward submission to the Securities and Exchange Commission of Pakistan.

Interestingly, both groups of brokers known to be in favour of the earlier dumped ‘badla’ and against it, participated in the meeting. ‘While there was consensus on the need for a leverage product, there were heated arguments on its features and modalities’, said a meeting participant. Vocal members expressed diverse views on whether to adopt an ‘internationally accepted model’ or devise a home-grown product.

The worry over the absence of a leverage product dawned on the brokers, following the fall in daily trading volumes, which could scarcely climb up to 100 million shares, from 250 million shares earlier this year. ‘Declining volume means a hit on brokers’ commission’, said a floor trader, whose own income was also drying up with drop in business.

Next, the meeting considered establishing of an association of stock brokers. For that purpose, it was proposed that a Committee be formed (the same as would work on leverage) which should look into the legal aspects and conduct the work of registration and preparation of memorandum and articles of association.

The meeting was also said to have discussed less fiery issues of reaching out to the Government on confirming the status of tax on stocks in the upcoming June 13 federal budget, given the conflicting reports emanating from various sources.

FOREIGN INVESTORS: The foreign investors kept up the recent momentum of buying, with net purchase of shares at the KSE of the value of US$5 million on Monday. Overseas investors made portfolio buy of a huge $13.12 million and sold stocks worth $8.10 million. Analysts counted several reasons for the rejuvenation of foreign investors’ interest.

Attractive fundamentals of the Pakistani equities were believed to be on top.

Moreover, a fund manager said that with the rise in price of crude, foreigners were investing in good measure in the E&P stocks. He candidly pointed out that the foreign investors were not returning only to the KSE, but were entering most other markets in the region that offered good value for money.

Budget size expected to reach Rs2.9 trillion

2009-06-02T00:16:00.000-07:00

ISLAMABAD: The size of the budget for 2009-10 is likely to be increased by Rs210 billion to Rs2,900 billion.

Sources said here on Monday the increase was likely to ‘provide a slight cushion’ to the government to carry out development projects and offer relief to the poor.

A finance ministry team, headed by Finance Secretary Salman Siddique, briefed the National Assembly’s Standing Committee on Finance headed by Fouzia Wahab on salient features of the budget on Monday.

The delay in reimbursement of funds for the war on terror by the United States may increase the budget deficit.

The size of the Public Sector Development Programme (PSDP) this year is likely to be about Rs670 billion, allowing the government to launch new projects, particularly for poverty alleviation.

The sources said that the government was likely to announce a 20 per cent increase in salary and pension of government employees. Finance ministry officials are reported to have told the committee that Rs54 billion would be allocated for displaced people, Rs7 billion for Baitul Maal and Rs70 billion for the Benazir Income Support Programme, ‘targeting the poor of the poorest’. ‘The budget deficit is likely to increase from 4.3 per cent this year to 5 per cent next year,’ the secretary finance said while briefing parliamentarians on salient features of the next budget.

He said that the increase in deficit would result in an additional borrowing of Rs750 billion, increasing the debt liability of the government.

Analysts here said the increase in the budget deficit would erode gains achieved during the current fiscal year and take the economy back to the dismal days of the 90s.

A finance ministry official told Dawn that 40 per cent of the money pledged at the Tokyo donors’ conference would be used for financing the deficit.

However, a range of new tax measures have been proposed and several non-taxed sectors would be brought under tax net.

The government is planning to set a revenue target of Rs2.27 trillion against the current year’s Rs1.97 trillion. Tax revenues are projected at Rs1.71 trillion and non-tax revenue at Rs560 billion.

Share slide on tax fears

2009-06-01T23:12:00.000-07:00

Renewed worries clip 1pc off KSE; volumes less by 76mn shares.

KARACHI: Share prices at Karachi stock market slumped by nearly 1 per cent on Monday, as renewed fears over taxation issues clipped the gains made in earlier trade.
The benchmark KSE 100-Index dropped 66 points - 0.91 per cent to close at 7,210 points.
"Selling activity witnessed as uncertainty loomed over taxation on capital market and brokerage services," said Ahsan Mehanti, CEO Shehzad Chamdia Securities. He added that investors remained on sidelines as various rumors regarding imposition of GST on brokerage services, CVT raise on capital markets affected market sentiment negatively.
KSE 30-Index fell by 86 points, 1.1 per cent to close at 7,776 points and KSE all-share index lost 46 points, 0.89 per cent to close at 5,170 points.
Trading started marginally positive (16 points plus), following which it showed mild volatility giving number of visits to the both territories. 100-Index marked an intraday high of 7,326 points (+ve 50 points) in early trade, amid reports of select buying by foreign investors. However some pressure was witnessed around midday mainly due to pre-budget worries over taxation. The index finally close a just a bit higher from its day low of 7,195 points (-ve 81 points). Dealers say foreign investors availed this opportunity, as despite a negative closing, there was net buying of $5 million by the foreign investors during the day, as according to NCCPL data.
Volumes saw a significant decline, as nearly 113 million shares were traded during the day - down 76 million from a turnover of around 189 million shares on Friday.
Bears took a major lead over bulls as out of total 307 active issues, 205 declined and 90 advanced while 12 issues remained unchanged.

Stocks & Bonds-June 02, 2009

2009-06-01T23:09:00.000-07:00

KSE loses 66 points.

KARACHI (June 02, 2009): Karachi share market opened on a positive note and the benchmark KSE-100 index hit 7,326.85 points intra-day high level, up by 50.24 points on Monday. However, the upward trend could not continue due to investors' lack of confidence and the index dropped into the negative zone to reach 7,195.38 points intra-day low level, down by 81.23 points.

LSE index loses 15.28 points.

LAHORE (June 02, 2009): The Lahore stocks remained under the grip of depressed sentiments on Monday on account of rumours about the imposition of more taxes on stocks trading that also kept the investors away from the buying course resulting in low trading activity. The LSE-25 index lost 15.28 points and ended at 2145.32 against 2160.60 of the last Friday while transaction volume also restricted to 11.932 million shares as compared to previous volume of 16.872 million shares.

BRIndex30 drops 106.60 points.

KARACHI (June 02, 2009): On Monday, the BRIndex30 opened in the positive zone, at 6,821.09, but soon dropped into negative zone and, after fluctuating up and down for the first two hours, it went into negative zone and remained there for whole of the trading time, ultimately closing at 6,707.00 points with a net negative change of -106.60 points and percentage change of -1.56.

Protection of rights: association of KSE members formed.

KARACHI (June 02, 2009): The Association of Karachi Stock Exchange Members has been formed in a special meeting of KSE members to protect members' rights. An extraordinary meeting of KSE members was held here on Monday in which they also formed a five-member committee to pursue for the launching of alternative leverage product after CFS Mk-II, which has been discontinued from April 8, 2009.

'SECP taking lenient view of defaults not covered under CRS'.

ISLAMABAD (June 02, 2009): The Companies Regularisation Scheme (CRS) of the Securities and Exchange Commission of Pakistan (SECP) is not applicable to companies which have filed their overdue returns before May 15, 2009, the scheme's launch effective date. The amnesty scheme has been launched for a period of 45 days starting from May 15, 2009 up to June 30, 2009.

BULLS RULE KSE - Weekly Report

2009-05-31T21:07:00.000-07:00

Volumes improved as 756 million shares exchanged hands in the overall market during the week
KARACHI: Karachi stock market went through a bullish week as its main index ended near 2 per cent up mainly on decline in PIB yields, SC decision on Sharif brothers and rising international oil prices however deteriorating law and order situation remained a concern for the market participants.
The benchmark KSE 100-Index rose by 130 points or 1.82 per cent to end at a level of 7,276 points.
"Buying activity witnessed as PIB yields fall by 61 basis points in 10 years, tenor indicating falling interest rate trend. Bullish activity remained in oil sector as international oil prices cross 63 USD" said Ahsan Mehanti, CEO Shehzad Chamdia Securities.
Ahsan added that expectations of record PSDP allocation of over Rs 600 billion in Federal Budget 2009-10 invited investment in cement sector.
Sharif brothers eligibility for elections, gains in international equity markets & rise in oil prices played a catalyst role for positive activity in the market.
Moreover, investors remained positive on oil marketing companies due to limited fall of local petroleum prices. Gas line deals with Iran taken positive for gas marketing companies.
Week started with a minor gain of 27 points on Monday as investors took position at attractive levels but the participation of investors was limited due to strike call in the city, index moved in a limited range where at a moment during intra-day trading it touched its lowest level of the week of 7,125 points. Mixed activities stayed during the next two days also, where index closed 3 and 12 points up respectively on Tuesday and Wednesday.
On Tuesday there was uncertainty on the Supreme Court's decision regarding Sharif brother's eligibility but on the next day market saw some positive activities during intra-day trading on SC decision but market witnessed pressure due to Lahore incident.
Decline in PIB yields played a catalyst role for the bullish activity in the market on Thursday where the index gained 99 points, hopes of early end of the military action was also a factor for the bullish move.
Market continued to show positive activities on Friday where during intra-day trading it touched its highest level of the week of 7,368 points but as it was the last trading day of the week investors preferred to book profits at higher levels and market ended with a minor loss of 11 points below 7,300 levels.
Despite some positive activities in the market, there was net selling by the foreign investors as according to the figures released by NCCPL there was net foreign selling of around $4.15 million during the week.
Volumes too were improved as 756 million shares exchanged hands in the overall market during the week which is 177 million shares more as compared to a turnover of 579 million shares a week earlier.
Out of total 383 active issues, 215 ended positive and 145 negative while 23 issues remained unchanged.

Business Updates

2009-05-31T20:50:00.000-07:00

KSE directed to establish unified trading platform.

ISLAMABAD (June 01, 2009): The Competition Commission of Pakistan (CCP) has directed Karachi Stock Exchange (KSE) to establish a Singular Unified Trading Platform for the central execution of the trading orders of all the stock exchanges within six months period.

Big investment potential in banking sector: Governor SBP

Governor of State Bank of Pakistan (SBP), Syed Salim Raza, has said that Pakistan’s banking system has great potential for further investment. He was speaking at a ceremony held here for the launching of Silkbank Limited, formerly Saudi Pak Commercial Bank Limited, says a SBP statement. Raza said the performance of country’s financial sector, which is largely dominated by banks, has been outstanding throughout the current economic situation. He stated that the banking sector has over the years nurtured itself in a way that it is able to withstand some of the shocks it has faced in the last 18 months or so. “The banking system is on strong footing and has long term potential, a feature which has served to attract a substantial amount of Foreign Direct Investment (FDI) in the sector, with established global financial institutions now active participants in the domestic financial sector,” the Governor SBP said.

Small investors should stick to mutual funds: NIT

This was stated by the National Investment Trust chairman, Tariq Iqbal Khan, while briefing reporters on the capital market and the role of mutual funds in its development.

He said that the fundamentals of economy had improved, but the capital market was overly-depressed due to political and law and order situation.

He pointed out that mutual funds and bonds market were more favoured instruments of investment in developed economies.

For example, he said, against bank deposits of $66.9 billion in Pakistan, the net assets managed by mutual funds were equivalent to $2.75 billion, which was only 4.4 per cent of the bank deposits.

India had bank deposits of $751.8 billion and the net assets under the management of mutual funds were to the tune of $77.5 billion or 10.3 per cent of the bank deposits.

The US had bank deposits of $7363.7 billion while net assets managed by the mutual funds were $9248.9 per cent or equivalent to 125.6 per cent of its bank deposits.

He said out of 107 mutual funds operating in Pakistan 86 were open-end mutual funds and 21 were closed-end mutual funds. Seven pension funds were among the open-end mutual funds.

Currently, he said, the capital market of Pakistan had capitalisation of $25.7 billion against $602.4 billion in India and $13,886 billion in the US. Net assets of mutual funds in Pakistan’s capital market were to the tune of $2.75 billion equivalent to 10.7 per cent of the market capitalisation, he added.

Against this, the net asset value of Indian capital market was $77.5 billion equivalent to $12.9 billion of the market capitalisation.

The net assets of the US capital market were $9248.9 billion which was 66.6 per cent of market capitalisation.

He dispelled the general perception that some institutions, including the NIT, intervened in the in the falling capital market on the instructions of the government to give it a boost. He said the institutions act independently and take investment or selling decisions in the larger interest of investors.

He said this was the reason that the NIT had constantly been outperforming average growth at the Karachi Stock Market.

He said in depressed times the NIT losses were always lower than the general decline in the capital market.

He said institutions did intervene in the capital market to stabilise it in the larger interest of investors.

He said almost all mutual funds operating in Pakistan were being run by highly qualified professionals.

He said that the NIT had about 38 per cent share of the total open-end funds of Pakistan and 80 per cent of the open-end equity funds. The trust, he said, had investment in around 450, out of total 651 companies listed on KSE.

Value of NIT’s fund invested in the market at current price levels was around Rs72 billion. He said that the NIT was the single largest institutional investor in the KSE. Presently, he said that the NIT had over 55,000 unit holders, who collectively hold 1.9 billion NIT units.

Only the cash-rich may play stocks!

The total number of investor account in the Central Depository Company (CDC) currently stands at 0.05 million while those in the sub-accounts aggregate 0.25 million. In a population of 170 million, it would be one in a thousand that dabble in stocks. Fruitless to compare that with one in four persons that visit the Dalal Street in Mumbai or every second American who invests his money and future in stocks.

Markets all through the world were in melting pot in the year 2008, but there are indications of recovery. The KSE, which plunged by a historic 60 per cent during the year, the 100-share index tumbling from 15,760 to 4,800, pushed hundreds of middle class households to the brink of poverty. The injured were spared the agony of waiting for Probe reports as most people agreed that the greatest sufferers were those who bought stocks on borrowed money.

That brought on to surface the simmering revolt against the ‘badla,’ named as CFS and further glamourised into CFS Mk-II by the previous SECP chairman. Haji Ghani Haji Usman, who was one of the two major brokers who spearheaded the successful movement by more than 100 brokers to the end to ‘badla’ is aghast at the regulators’ dilly dallying on replacing the outgoing leverage product with another one with better features.

He says that a consultative committee was set up to review and release a new derivative product in the market, but after four meetings and a passage of two weeks, the public is at a loss to know, how far the progress has been made.

‘The Securities and Exchange Commission of Pakistan must ask the committee to come up with the alternative leverage product within 10 days,’ he says.

The consultative committee of 10 members has received much flak for what most believe to be its slow progress. But Aftab Diwan, who heads the committee, says that its consultations with the SECP on a new leverage product was only a part of the job. ‘The consultative group has been assigned the task of looking at all aspects of the capital market, including risk management and to discuss them with the SECP,’ says Mr Diwan. ‘Discovering a new leverage product is primarily the job of the stock exchanges,’ he says in defence.

SECP chairman Salman A Shaikh could not be reached, but spokesman for the apex regulator shifted the responsibility on the committee.

‘We are waiting for recommendations of the committee,’ said Imran Ghaznavi and added that the SECP would look into the features of the new product when one is placed on the table.

No one at the stock exchange, among the committee members or at the SECP would commit on a firm date for the launch of a new product.

Mr Diwan explained that all stakeholders were being consulted, including the Mutual Fund Association of Pakistan; the Association of Insurance Companies; Modarabas; financial institutions and the bourses. He said that reaching consensus would obviously take a little while.

The market pundits call the matter of new leverage product a ‘grey area.’ There was, however, a general agreement on finding a derivative product that stands up to ‘International best practices.’ But why was a quick introduction of the new leverage product of such paramount importance?

A small investor who had lost all of cash, house and a shop in the stock debacle of 2008, expressed his grievance.

‘During the bloodbath, CFS or ‘badla’ was believed to have caused the greatest amount of hurt,’ he said. That leverage product was scrapped, but small investors who would still like to trade with the hope of recovering of some of their losses, had been deprived of a new derivative product.

‘From the depth of 4,800, the KSE-100 index has clawed up 15 per cent or by around 2,400 points,’ he says. But because of the absence of leverage, only the deep pocket investors, who can take delivery on cash, are able to reap the riches. There is lot of heart burning among leverage players, who stand aside, cast out as the ugly ducklings. But some believe that as volume of trade keeps evaporating to 100 million shares a day from an average of 250 million in the first quarter of last year, the impact might be more widely felt.

Some prophets of doom even suggest cornering of scrips by ‘broker cartels,’ followed by lower locks and the fall of the market into another crisis.

Top Business News

2009-05-28T20:23:00.000-07:00

SAEP demands salary raise before June 30th.

President Society of Aircraft Engineers Pakistan (SAEP), Shoukat Jamshed, in a letter to MD PIA has demanded that Executive Committee of the SAEP has decided that prior to the settlement of the working agreement, the core issue of salary ratio between pilots and engineers i.e. 100:55 between average salary of a pilot and average salary of an air craft engineer may be settled down before June 1, 2009 and the remaining parts of the agreement be finalised before June 30, 2009.
As per letter, their demands for salary and better working conditions were long lasting but management was paying no heed towards the issue.
The letter further speaks that minutes-1 of the meeting held on 4th of July, 2008 vide Minutes-I refer HO: HRA & C/102/P&P, in which promise was made to carry out a quality study of the regional airlines regarding the salary ratio of pilots to aircraft engineers and the same was to be completed within 60 days. So far no further progress has been made on this issue. Management in the past also agreed and promised to settle down the issue before March 2008, vide Minutes-I refer HO-HR & A / 111 / HRM, Dated 23 Nov, 2007 and Admin Order No. 15/2007 dated 19th Dec 2007. Moreover, similar understandings were made vide MoUs signed between SAEP and the then management. First MoU was signed between SAEP and management on 24th May 1989; second on 17th October 1996; third on 30th Nov, 2000 and fourth Admin Order No. 05/2001. Referring to Admin Order No. 05/2001, adhoc ratio payment to serving aircraft engineers towards partial maintenance of ratio of 100:55 between the emoluments of pilots and aircraft engineers was made as an acceptance for the subsistence of this ratio. Furthermore, due to the increase in guaranteed flying hours payment (from 50 to 70) of pilots, heavy rise in salary will further widen the gap between existing salary ratio causing momentous strife among the SAEP members.

IMF projects GDP at 3.5pc, single digit inflation in '10.

The International Monetary Fund (IMF) Thursday projected Pakistan’s Gross Domestic Product (GDP) growth at 3.5 percent in financial year 2009-10, saying that the inflation would come down to single digit.
The IMF report on “Regional Economic Outlook: Middle East and Central Asia,” released on Thursday, said that the inflation would come down to 11.9 percent during 2008-09 and further slide to single digit at 7.5 percent in Fiscal year 2009-2010.
The report projected GDP growth at 2.5 percent during 2008-09 which was about 6 percent in 2007-08.
Speaking at the launching ceremony of the report here, IMF Resident Representative Pakistan, Middle East and Central Asia Department, Paul Rose observed that the budget deficit during 2009-10 would remain 4.6 percent.
He said that Pakistan’s Large Scale Manufacturing sector had to face shortfall in exports due to decreasing demand owing to global recession.
He was of the view that if the global recession continues Pakistan economy would be exposed to some risks including further decline in exports and private capital flows and decline in workers’ remittances.
He said that consolidating macroeconomic stability and ensuring protection of vulnerable groups should be policy priorities of the government adding that it needs to take care of the deprived sections of the society.
He said that the vulnerable groups could be protected through strengthening the social safety net by improved targeting of the poor under the Benazir Income Support Programme.
He maintained that the unemployment rate is likely to increase in Pakistan, as the direct investment in the country and foreign remittances have gone down.
He said that the third installment of IMF loan will be issued to Pakistan in July this year.
Briefing about the world economic outlook, he said that financial markets would remain highly stressed where as the world economy will contract in 2009 by around 1.25 percent before recovering gradually in 2010.
He said that emerging economies face dramatic drops in capital inflows, demand for their exports and commodity prices adding that a third wave of the global financial crisis is hitting the world’s poorest and most vulnerable countries.
The IMF representative said that turning around global growth depends critically on concerted policy actions to stabilize financial conditions, as well sustained strong policy support to bolster demand.

APFMA cuts flour price by Rs10 per 20-kg .

ISLAMABAD: The All Pakistan Flour Mills Association (APFMA) has decided to reduce the prices of 20-kg flour bag up to Rs10 to provide flour at affordable prices.

Chairman APFMA Asim Raza said here on Thursday that the prices of flour were different region-wise because of the transportation cost of wheat.

He said that the ex-mill rate for Rawalpindi and Islamabad had been fixed at Rs510 instead Rs520 per 20-kg bag for a period of one month.

The decision in this effect was taken after observing slight decrease in the wheat prices in open market during current month as the price of wheat was reduced by about Rs30-35 per 40 kg, he said.

The millers were buying wheat from the open market at the rate of Rs960-970 per 40kg, which was now available at Rs925-930 per 40kg, the chairman said.

TCP to import sugar, urea to stabilise prices.

KARACHI: The Trading Corporation of Pakistan (TCP) has finalised arrangements to import fertiliser and sugar to meet the expected shortfall of both the commodities during coming months.

It has already issued tenders for import of 100,000 tons sugar and 260,000 tons fertiliser and both the commodities are expected to arrive in second half of next month.

This was stated by Saeed Ahmad Khan, chairman TCP while talking to Dawn in his office on Thursday.

He said that TCP was ready to eliminate shortage of fertiliser for kharif crops as well sugar by importing that much quantity of both the commodities, which could help stabilise prices by increasing their availability in the local market.

The TCP chief said that 260,000 tons urea will start arriving from third week of June because there is a gap of 800,000 tons with production at 4.8 million tons and requirement at 5.6 million tons.

Every year there is fertiliser shortage and the government has to import to stabilise prices so that growers do not suffer, he said. Actually speculators and hoarders take advantage of demand and supply gap to make quick money but in the process country’s major crops suffer adversely due to such tactics.

Consequently, Mr Khan said that the kharif crops of rice, cotton and sugarcane would not face urea shortage as the government was fully alive of the situation and will not allow hoarders and profiteers to surge fertiliser prices to their advantage.

This season the TCP was asked by the government to procure 0.5 million cotton bales but the corporation after procuring 192,698 bales has to stop because cotton prices in the domestic market stabilised.

Responding to a question, he said the TCP procured cotton at an average price of Rs3,202 per maund and presently price in the open market has gone beyond Rs3,600.

The imported 0.1 million tons of sugar is expected to reach Karachi by end- June and hopefully it will help to stabilise prices, which are expected to rise owing to lower production of sugar during the coming season.

According to estimates the TCP chairman said the present stocks of sugar with TCP and sugar mills were at around 2.2 million tons, including 25,000 tons of TCP’s earlier stocks. These stocks would be sufficient for up to November or the start of next crushing season.

Undoubtedly, Mr Khan said the TCP is paying higher price for 0.1 million tons as the world sugar prices have gone up to $474-$494 in May against $451 per ton quoted in February this year.

This would mean that the landed cost to TCP on new imports would come to around Rs50 per kg and the government will sell it at a subsidised rate of Rs38 per kg.

However, he said there was a rare possibility that the corporation would suffer losses on sugar imports because it would be making profits on earlier stocks (imports) when prices in the world market were lower by around $40 per ton and would cost the TCP at Rs20 per kg in local market.

He said that the TCP tendering was transparent as it adheres to PEPRA rules, which under clause 40 do not allow negotiations and the lowest has to be awarded if all tender conditions are met.

Our Staff Reporter adds from Lahore: The problem of issuance of letters of credit (LCs) for the import of urea was resolved on Thursday after the Trading Corporation of Pakistan convinced the banks to provide guarantees for 255,000 tons import.

According to Shahid Hussain Raja, additional secretary (fertiliser) of ministry of food and agriculture, the liquidity crunch mainly caused by wheat procurement had hit the banks and imports alike. The government agencies, especially the Punjab Food Department launched a huge procurement drive, which emptied coffers of most of the banks.

But the TCP convinced the banks on the basis of its improved financial health having received money from provinces against imported wheat supply, he said.

Business & Economy

2009-05-28T20:18:00.000-07:00

Global crisis poses risk to Pakistan''s economy: Fund.

ISLAMABAD (May 29, 2009): The global financial crisis and recession pose risk to Pakistan''s economy with it growth, exports, remittances and capital inflow could decline further in the next fiscal year, according to the International Monetary Fund "Regional Economic Outlook: Middle East and Central Asia," released here on Thursday.

Tunisian envoy calls for stronger trade ties.

KAACHI (May 29, 2009): Ambassador of Tunisia, Mourad Bourehla has said that Tunisia is interested to further reinforce its bilateral trade and encourage establishment of industrial units through joint ventures with Pakistan. Speaking at a meeting of Karachi Chamber of Commerce and Industry (KCCI), he said that Tunisia is a part of the most advanced Free Trade Agreement (FTA) with European Union (EU) and a pivot part in others FTA with Arab, and Sub-Saharan countries.

'Businessmen can strengthen trade ties with Indonesia'.

ISLAMABAD (May 29, 2009): Business community has a big role to strengthen the economic and trade ties between Pakistan and Indonesia and to help the two countries in economic stability, said Ishak Latu Consina, Ambassador of Indonesia to Pakistan here on Thursday.

Pak-EU summit: market access, trade facilitation on top of agenda.

FAISALABAD (May 29, 2009): Market access and trade facilitation to Pakistani exports in European markets would be on top of agenda in the first ever Pak-EU Summit to be held in Brussels on June 17, 2009. Counsellor Economic Affairs Embassy of Germany, Dr Gregor Schotten disclosed this while addressing the members of Pakistan Textile Exporters Association (PTEA) here on Thursday.

Businessmen apprise Qaim of SITE problems.

KARACHI (May 29, 2009): Syed Qaim Ali Shah, Chief Minister of Sindh was appraised about the problems being faced by industries in SITE industrial estate, the biggest shareholder in the GDP and revenue contribution by a delegation of SITE Association of Industry (SAI) here on Tuesday.

Traders' leader to observe hunger strike till death.

ISLAMABAD (May 29, 2009): A traders' leader Jahangir Akhtar on Thursday said he would observe hunger strike till death in front of ministries of commerce and industry if his demands were not met. Akhtar, who has started hunger strike till death at Abpara Market against unnecessary delay in approval of Chamber of Small Traders and Cottage Industry, said there is no question of backtracking from a just stance.

Vast scope to export food products to Libya.

ISLAMABAD (May 29, 2009): Pakistan has vast scope to enhance export of food products to Libya which imports about 75 percent food products to fulfil its domestic requirements. This was stated by Ambassador of Pakistan in Libya, Jamil Ahmed Khan while giving a presentation to the business community at the Islamabad Chamber of Commerce and Industry.

Steps being taken for promotion of women entrepreneurship.

SIALKOT (May 29, 2009): Chairperson Departmental Committee on Women Entrepreneurs of Sialkot Chamber of Commerce and Industry (SCCI), Shabnam Asif has said that all necessary steps are being taken for the development of women entrepreneurship and to address their problems.

Zardari orders return of illegally occupied land to Sindh government.

KARACHI (May 29, 2009): Finally, President Asif Ali Zardari has issued instructions to the land owning departments of the federal government to transfer land occupied by katchi abadis to Sindh government for regularisation.

Zardari forms committee to curb land grabbing in Sindh.

KARACHI (May 29, 2009): A high-level meeting with President Asif Ali Zardari in the chair, decided on Thursday to form a provincial-level committee to curb land grabbing in Sindh.

Stocks & Bonds

2009-05-28T19:49:00.000-07:00

Healthy gains on KSE.

KARACHI (May 29, 2009): Fresh buying mainly in cement, banking, fertiliser and power sector stocks supported the KSE-100 index to close with healthy gains of 99.29 points at 7,288.13 points level on Thursday. The market opened on a positive note and the index breached the 7,300 psychological level to hit 7,302.93 points intra-day high level. Trading activities also improved as the volumes at ready counter increased to 154.782 million shares as compared to 141.252 million shares traded a day earlier.

LSE index gains 26.95 points.

LAHORE (May 29, 2009): Equities extended gains across the board on the Lahore Stock Exchange (LSE) on Thursday on account of fresh entries made by the private and public sector institutions that also pushed the trading volume considerably up. The LSE-28 index further increased by 26.95 points to close at 2177.86 against 2150.91 of Wednesday while transaction volume slide up by 2.907 million shares to 16.489 million shares as compared to day earlier volume of 13.581 million shares.

ISE equities improve.

ISLAMABAD (May 29, 2009): Equities showed healthy signs at Islamabad Stock Exchange (ISE) where bulls dominated the proceedings under the lead of hot favourite amid increase in the index. ISE Ten Index showed an improvement of 38.19 points, as the Index moved from 1,694.11 to 1,732.30 points. The volume of trade amounted to 1,259,078 shares as compared to previous turnover of 989,245 shares.

BRIndex30 soars 84.39 points.

KARACHI (May 29, 2009): On Thursday, BRIndex30 opened in the positive zone at 6,822.58 and remained there for whole of the trading time. It closed at 6,867.53 with a net positive change of 84.39 points and percentage change of 1.24. It experienced intra-day high of 6,880.42 and intra-day low of 6,822.58.

KSE launches investor facilitation service.

KARACHI (May 29, 2009): Karachi Stock Exchange (KSE) has officially launched mKATS, in collaboration with VectraCom (Pvt) Limited on Thursday. The mKATS is an investor facilitation service provided on any hand held mobile set (all mobile operators), by dialling KSE(573) short code or sending an SMS, to receive live KSE Index position, information about any scrip, traded volume etc. The information is sent directly from KSE.

Rental income: SECP proposes rationalisation of taxation.

ISLAMABAD (May 29, 2009): Securities and Exchange Commission of Pakistan (SECP) has proposed rationalisation of taxation on rental income in the upcoming budget (2009-2010) to apply uniform tax rate on income from property. Sources told Business Recorder on Thursday that the SECP has proposed amendment in the Income Tax Ordinance 2001 to rationalise tax rate on rental income.

Stocks & Bonds

2009-05-24T20:09:00.000-07:00

Investors adopt cautious approach on KSE

KARACHI (May 25, 2009): The investors at Karachi stock market adopted cautious approach during the week ended on May 23, 2009 due to news regarding possible imposition of additional taxes at the share business in the next budget and the prevailing law and order situation in the northern parts of the country.

LSE index registers marginal gains

LAHORE (May 25, 2009): Mixed sentiment persisted on Lahore Stock Exchange during the week ended on May 23, 2009 and the equities registered marginal gains amid range-bound activity due to investors' cautious behaviour who were reluctant to take long positions and indulged in intra-day trading. The LSE-25 index recorded insignificant gain of 6.51 points and finished at 2125.76 against 2119.25 of previous week.

Alico AIG Life American Life Insurance Company (Pakistan) Limited

ISLAMABAD (May 25, 2009): Alico AIG Life has issued Weekly Unit Prices.

HBFCL capital structure

KARACHI (May 25, 2009): House Building Finance Corporation Limited (HBFCL) is incorporated under the Companies Ordinance -1984, with an authorised capital of Rs 6 billion divided into 600 million ordinary shares of Rs 10 each. The paid-up capital is Rs 3.001 billion divided into 300.1 million ordinary shares of Rs 10 each.

21.9 percent decline in CFS investment

KARACHI (May 25, 2009): The investment under CFS at the Karachi share market declined by 21.9 percent to Rs 167 million. The CFS rates depicted a divergent trend, increasing by 10pps, to reach 50 percent, though lack of depth did not allow deriving a meaningful conclusion from this increase, analysts said.

Revised Rates of Debt Securities

KARACHI (May 24, 2009): The following were the revised rates of debt securities on Saturday (May 23, 2009).

KSE index surges 176.42 points

KARACHI (May 23, 2009): The clarification by the Advisor to Prime Minister on Finance, denying imposition of additional taxes on share business, invited healthy buying on Friday said and the KSE-100 index surged by 176.42 points to close at 7,146.24 points level.

Bullish sentiments dominate on LSE

LAHORE (May 23, 2009): Bullish sentiments dominated on the Lahore Stock Exchange (LSE) on Friday and the equities registered gains across the board amid increased trading turnover following fresh buying on account of some encouraging news on the economic front.

Stocks & Bonds

2009-05-20T00:07:00.000-07:00

Another dull day on KSE

KARACHI (May 20, 2009): The benchmark KSE-100 index lost 105.00 points to close at 7,067.85 points level with thin volume due to investors' concerns over the continuous outflow by foreign investors and absence of leverage products, analysts said. The market opened on a positive note and the index hit 7,208.98 points intra-day high level.

33.12 points decline in LSE index

LAHORE (May 20, 2009): Equities registered losses across the board on Lahore Stock Exchange on Tuesday amid reduced trading turnover on account of negative news regarding GDP growth. The LSE-25 index declined 33.12 points from 2119.15 of Monday to 2086.03, while transaction volume reduced to 9.086 million shares as compared to Monday's 13.276 million shares.

Losers outnumber gainers at ISE

ISLAMABAD (May 20, 2009): Losers outnumber gainers at Islamabad Stock Exchange (ISE) where major players and small investors adopted cautious approach to avoid heavy losses amid increase in index. ISE Ten Index showed a decrease of 26.43 points, as the Index moved from 1,637.25 to 1,610.82 points.

BRIndex30 down 137.53 points

KARACHI (May 20, 2009): On Tuesday, the BRIndex30 opened in the positive zone, at 6,834.94, but closed at 6,661.23 with a net negative change of -137.53 points and percentage change of -2.02. It experienced intra-day high of 6,844.22 and low of 6,659.32. The volume amounted to 57,776,000 shares, which was 76.96 percent of the total market and 90.98 percent of KSE-100 index.

Shares buy-back schedule

KARACHI (May 20, 2009): Shares buy-back schedule of listed companies on Tuesday (May 19, 2009).

Placing price 'floor': CCP hearing in KSE, LSE appeals shortly

ISLAMABAD (May 20, 2009): The Competition Commission of Pakistan (CCP) will soon hold another hearing on the appeal of KSE against its order over placing/fixing "price floor" on the securities traded on the stock exchange. Sources said that the CCP had raised a number of questions during the first hearing on Monday, and the KSE asked for time to submit response to the queries raised by the Appellate Bench, comprising CCP Chairman Khalid A Mirza and Ms Rahat Konain.

Revised Rates of Debt Securities

KARACHI (May 20, 2009): The following were the revised rates of debt securities on Tuesday (May 19, 2009).

Odd Lot Market Rates

KARACHI (May 20, 2009): Odd Lot Market Rates on Tuesday (May 19, 2009).

Mutual Funds Association of Pakistan

KARACHI (May 20, 2009): Mutual Funds Association has issued open-end funds daily prices for Tuesday (19 May 2009)

BRIndex30 and BR Sectoral Indices

KARACHI (May 20, 2009): BRIndex30 and BR Sectoral Indices on Tuesday (May 19, 2009).

ADB Okays $5.3bn for development projects

2009-05-20T00:05:00.000-07:00

KARACHI: The Asian Development Bank (ADB) has approved $5.3 billion for 60 on-going development projects for Pakistan as of July 2008, which included a financing of $2.166 billion for energy projects.

This was stated by the country director ADB Rune Stroem while speaking at the 5th POGEE conference at the Karachi Expo Centre here on Tuesday.

He said that the ADB provided $1.8 billion in 2007, $1.2 billion in 2008 and $1.5 billion for 2009 to Pakistan. It stands as the largest development partner of this country. He said that these projects were in key infrastructure sectors, including energy, transportation, water resources and reforms.

Rune said that ADB was also the largest development partner in energy sector and across the power supply chain.

The ongoing loans included $510 million for renewable energy, $800 million for power transmission, and $810 million for power distribution enhancement, he added.

Similarly, ADB will provide $350 million for sustainable energy efficiency, $800 million for power transmission enhancement and $500 million for energy infrastructure under its future loan programme.

Rune pointed out that the ongoing technical assistance programme included gas sector restructuring, establishment of a central power purchase agency, renewable energy policy formulation and capacity building, power distribution enhancement and energy efficiency.

He said that ADB had recently concluded technical assistance programme for the development of Thar coal fields and provision of technical support to the office of energy adviser to the prime minister.

Illegal flow of remittances continuing, says Tarin

2009-05-20T00:04:00.000-07:00

ISLAMABAD: Pakistan’s federal budget for 2009-10 will be presented in the first half of June, the country’s economic manager said, although he has not been able to decide on a final date.

Advisor to the prime minister on Finance Shaukat Tarin has said here on Tuesday that the federal budget for 2009-10 will be presented either on June 6 or June 13.

‘Preparations for the budget have almost been completed but the final budget announcement date would be decided soon,’ he said talking to media at the launch of World Bank’s report on ‘Bringing finance to Pakistan’s poor’

The federal budget 2009-10 would be the first budget for Mr Tarin in capacity as the finance manager of the country.

Shaukat Tarin said that illegal channels still contribute to the major inflow of remittances into the country.

He acknowledged that the contents of the WB report that informal supply occurs through the organized hundi / hawala sector and through committees, shopkeepers, moneylenders and transfers through friends and family.

The WB report has called for easier access to finance for poor in Pakistan and added that un-official estimates of remittances to Pakistan are around $16 billion.

Mr Tarin said that though the remittances play a valuable role in supporting the economy by providing foreign exchange and improving financial strength to the individuals.

Responding to the WB report Mr Tarin said that the government has set the target to increase the outreach of the microfinance services to three million borrowers by 2010.

The report said that 14 per cent of Pakistanis were using a financial product or service of a formal financial institution including savings, credit, insurance, payments and remittance services.

While, it said that 40 per cent of adults in the country have no access to formal or informal financial systems, but the report said that if the informal financial access is taken into account around 50.5 per cent of Pakistanis have access to finance.

Shaukat Tarin said that there are 40 Microfinance providers which include seven Microfinance Bank with an overall operating base of 1,550 branches and services centers to serve a clientele of approximately two million.

‘The potential cliental base of microfinance sector is estimated to be around 25-30 million borrowers of whom a significant portion still remains unserved by both regulated and un-regulated sector,’ he added.

The advisor to the PM said that there are potentials for other products such as insurance, payments savings that could be launched through postal services network and mobile phones.

He said that increasing access to finance for the small and medium enterprises (SMEs) could also be facilitated by attracting institutional investors with a track record in SME lending and assisting other banks to go down market.

The Country Director for the World Bank in Pakistan, Yusupha Crookes presented the address of the welcome and highlight the main features of the report ‘Bringing Finance to Pakistan’s Poor.’

The report said that Pakistan microfinance market has much potential for a rapid outreach expansion and faces considerable unsatisfied demand, especially for saving products.

Tatiana Nenova, Senior Economists WB and lead author of the report, said that if appropriately supported, SMEs have the potential to be the growth engine of economy due to their ability to create jobs, foster entrepreneurship and to provide depth to the industrial base.

The SMEs sector get a small share of credit despite having a greater role to play in the economic development.

‘SME lending accounts to only 16 per cent of the total lending volumes.’ Ms Nenova said adding that an aggressive promotion of an enabling environment leading to higher financing for the SME sector was needed to reverse this trend.

The World Bank Country Director Yusupha B Crookes was of the view that despite significant banking sector reforms and efforts to expand financial market coverage over the past few years, outreach has lagged behind the country’s growth and development needs.

He said that this report demonstrates that there is an enormous growth potential for financial services in Pakistan, especially in the rural areas.

According to the report Policy efforts to increase access to finance in Pakistan have taken time to bear fruits, but now access is indeed expanding quickly in certain financial sectors especially the microfinance remittances, but at a very low base.

The WB report also speaks about the rapid growth of Islamic banking in the country but said that it lacked liquidity management instruments.

April trade deficit shrinks

2009-05-18T20:59:00.000-07:00

ISLAMABAD: The country’s trade deficit narrowed to $1.43 billion in April, compared with $2.30 billion in April last year, Federal Bureau of Statistic said on Tuesday.

Exports stood at $1.36 billion in April this year, as against $1.79 billion in the same period last year. Imports were worth $2.79 billion compared with $4.09 billion last year.

The deficit in the first 10 months of the 2008/09 fiscal year to April, narrowed to $14.16 billion compared with $16.83 billion in the corresponding period last year, the data showed.

The change is put down to weaker fuel prices, and a lower demand for imports following the global recession.

Current account deficit shrinks in July-April

2009-05-18T20:57:00.000-07:00

KARACHI: Pakistan’s current account deficit narrowed to $8.547 billion during the 10 months to April compared with $11.173 billion in the same period a year earlier, the State Bank of Pakistan said on Monday.

Analysts said the main reason for the narrowing in the shortfall was lower global commodity prices.

For the month of April, the current account recorded a deficit of $457 million compared with a revised deficit of $243 million in March.

‘The reason for a higher deficit in April as compared to March is due to slowdown in current transfers and also because of monthly fluctuations in imports,’ said Asif Qureshi, head of research at Invisor Securities Ltd.

Pakistan’s trade deficit narrowed to $1.43 billion in April, compared with $2.30 billion in April last year, data showed last week.

Pakistan entered an emergency International Monetary Fund programme for a 23-month emergency loan of $7.6 billion in November to avert a balance of payment crisis.

Pak-Iran gas pact next month

2009-05-18T20:55:00.001-07:00

KARACHI (APP) - Advisor to Prime Minister on Petroleum Dr Asim Hussain has said that Pakistan and Iran will sign the agreement for the supply of gas under Iran-Pakistan Gas Pipeline by the end of this month or next month.
He was speaking at the inauguration of 7th Pakistan Oil, Gas and Energy Exhibition (POGEE) and conference, 5th Fire & Security Pakistan exhibition at Karachi Expo Centre Monday.
He said that Iran has nearly built the site for the supply of gas to at Pak-Iran border. Currently we are working on the details of the project. For example, in which country we will go for the arbitration in case of dispute, he added. Dr Asim said that the efforts to get natural gas under Turkmenistan-Afghanistan-Pakistan gas pipeline were also in progress. At the same time, the government was exploring possibilities for utilizing Thar coal reserves for gasification and power generation, he opined.
Responding to the demand from speakers at the exhibition about the power shortage, he said that government was exploring every possible way to raise power generation.
However, he urged the masses to remain patient because it will take some time to enhance power generation in the country. The gap between the demand and supply of power will be overcome in next two to three years, he noted.

Zero duty on maize, vaccines to help reduce poultry prices

2009-05-18T20:54:00.001-07:00

ISLAMABAD (APP) - The federal government has allowed import of maize for utilization poultry feed and vaccines at zero duty aimed at reducing input costs in poultry production which will help in decreasing poultry prices in the country.
According to sources of the ministry of livestock, in order to reduce input costs in poultry production, poultry vaccines, feed items and other inputs used in poultry feed has been zero rated.
Responding to a question about steps taken by the government to reduce poultry prices in the country, the sources said that Sales Tax exemption had been granted for un-cooked poultry meat to encourage establishment of value chain industry.
In order to facilitate establishment of value chain industry, government has allowed import of poultry meat processing machinery/equipment, poultry equipment’s (Incubators, Brooders, Evaporation Cooling Pads, Cooling system, grain storage for poultry), at zero per cent custom duty.
This will increase the shelf life of poultry meat, limiting middle man exploitation of farmers and consumers and assist in stabilizing the chicken prices to some extent.
For providing protection to domestic poultry industry, 25 per cent custom duty has been imposed on import of poultry meat and their products.
In order to deal with bird flu, an umbrella project titled “National Programme for Control and Prevention of Avian Influenza” amounting to Rs.1180.148 million is already under implementation in the country.
Regarding steps to compensate poultry farmers, the sources said that to restore confidence of poultry farmer an amount of Rs.
324 million had been allocated under the project for compensation to farmers whose birds were culled on account of bird flu. Under this project, an amount of Rs. 20.5 million has been disbursed to affected farmers during 2007-08.
These measures would help to increase the poultry production and price stabilization in the country, the sources hoped.
When asked to comment on the hike of poultry prices, he said that the increase in per capita income and increased of urban population is a main cause of demand of chicken which ultimately led to increased price of poultry meat. Moreover, comparatively less prices of live chicken than mutton prompted more consumers preference and demand, the sources added.
The increased input costs like feed (Contribute 65-70 per cent in total cost of poultry production), led to an overall increase in cost of production of chicken attributing to increased prices.

Inflation surges by 1.41 per cent

2009-05-12T02:08:00.000-07:00

ISLAMABAD: Latest figures show the Consumer Price Index (CPI) rose by 1.41 per cent during April 2009 over the month of March.

CPI inflation during the first 10 months of the current financial year increased by 22.35 per cent over the corresponding period of the last financial year.

According to Federal Bureau of Statistics, prices of non-perishable items surged by 16.22 per cent and perishable items by 22.71 per cent in April 2009 over April 2008.

Ten-month average Wholesale Price Index inflation stood at 21.44 per cent between July 2008 to April 09.

Last year during the same period, WPI stood at 13.7 per cent. Increase in WPI-based inflation indicates a further increase in retail prices of essential commodities.

CPI covers retail prices of 374 items in 35 major cities and reflects roughly the changes in the cost of living in urban areas.

In April 2009, fuel and lighting charges went up by 26.68 per cent, education 23.04 per cent, house rent 18.86 per cent, cleaning laundry and personnel appearances 16.03 per cent, recreation and entertainment 13.86 per cent, medical cover 13.36 per cent, household furniture and equipment 12.63 per cent, apparel textile and footwear 12.34 per cent and transport and communications charges increased by 8.65 per cent as compared to the same month of 2008.

A high inflationary trend in food has been noticed since the start of the last fiscal year (July 2007).

Food inflation stood at 8.47 per cent. In August, it was 8.62 per cent, September 12.97 per cent, October 14.67 per cent, November 12.47 per cent, December 12.21 per cent, January, 2008 18.25 per cent, February 16.05 per cent, March 20.61 per cent, April 25.5 per cent, May 28.48 per cent, June 32.05 per cent, July 33.81 per cent, August 34.09, September 29.91, October 31.67 per cent, November 30.44 per cent, December 27.92 per cent; January 2009 21.61 per cent, February 22.90 per cent, March 19.73 per cent and during April it stood at 17.04 per cent.

The Wholesale Price Index (WPI) stood at 8.30 per cent during the month under review as compared to 23.50 per cent in corresponding month of the last fiscal year.

In the basket of WPI, raw material prices went up by 18.44 per cent, food 17.18 per cent and manufactures by 5.15 per cent while fuel, lighting and lubricants expenses were down by 4.70 per cent in April over the corresponding month of the last fiscal year.

In raw material, wholesale cotton price went up by 7.34 per cent and cotton seed 3.23 per cent. Furnace oil prices were up by 14.70, cotton yarn 4.05 per cent, other electrical goods 3.35 per cent and blended yarn by 1.75 per cent over March 2009.

Wholesale prices of tomato went up by 56 per cent, vegetables 14.47 per cent, potato 9.54 per cent, gur 8.89 per cent, wheat flour 7.31per cent and fresh fruits by 7.10 per cent over March 2009.

IMF relaxes Pakistan’s budget deficit target

2009-05-12T01:58:00.000-07:00

WASHINGTON: The International Monetary Fund announced on Monday a preliminary agreement to raise the budget deficit target Pakistan must meet to take advantage of international aid.

Following a meeting with Pakistani authorities in Dubai over the past week to discuss the IMF’s $7.6 billion standby agreement with the country, the IMF agreed to raise the deficit target for fiscal year 2009-2010 to 4.6 per cent of gross domestic product from 3.4 per cent.

‘The slowing economy, additional donor support and the need to protect priority expenditures call for a relaxation of the fiscal deficit target for 2009/10,’ the IMF said in a statement issued in Washington after its mission returned from the region.

Shaukat Tarin, the prime minister’s financial adviser, held two rounds of meetings with IMF and World Bank officials over the past two weeks.

President Asif Ali Zardari too met senior IMF and World Bank officials in Washington last week, discussing various measures to help stabilise economy.

President Zardari and his Afghan counterpart Hamid Karzai also held a joint meeting with the World Bank president and agreed to expedite efforts to promote electricity trade between South and Central Asian regions.

On Monday, the IMF noted that Pakistan remained on track to fulfil conditions under the IMF-sponsored programme.

‘While the external current account deficit has started to narrow and inflation has declined, the drop in the demand for exports and uncertainty regarding the prospects for workers’ remittances pose risks to the external outlook,’ it said, noting that the international assistance would enable the country to pursue counter-cyclical policies.

‘The authorities and the IMF team agreed the Tokyo package should be regarded as a bridge towards the stronger medium-term revenue effort,’ the fund said.

‘In this regard, it is crucial to reinforce efforts to increase the tax revenue-to-GDP ratio through tax policy and administration reforms.’

The IMF plans to complete discussions on the second review of Pakistan’s programme over the next few weeks.

Karachi bourse lags behind regional markets

2009-05-08T03:37:00.001-07:00

KARACHI: The Pakistan stock market underperformed against the regional markets in about 40 days since the end of March. The index also lagged far behind both the MSCI Emerging Market as well as MSCI World Index that gained 25 per cent and 16.5 per cent during the second quarter of 2009, so far.

The KSE-100 index rose by just about 5 per cent, which was at the lower end of nine competitive regional markets. Indonesia took the lead with 38.8 per cent gain since March 31 and a cumulative growth of 43.8 per cent for the year to date.

‘The KSE has been bleeding due to battle in the North of the country, as well as law and order situation in some other cities’, says a stock broker.

On the other hand, the gains achieved by the MSCI emerging market and MSCI World Indices were attributed by Farhan Mahmood at JS Global to ‘easing concern of global recessionary woes, improved liquidity conditions and reduced risk-aversion of investors’.

In the first quarter of the year, the KSE had beat the best of the regional markets and its cumulative growth at 20.6 per cent was only slightly down the Mumbai index rise by 21.5 per cent.

China was another country that has not done well in 2Q so far with only 9.4 per cent rise, though its aggregate gains in 2009 at 42.5 per cent, was a close second to Indonesia’s cumulative growth of 43.8 per cent including the highest gain of 38.8 per cent in 2Q.

Other markets which fared well during the period included: Taiwan up 28.6pc, India 26.1pc, Korea 24.5pc, Thailand 23.1pc, Malaysia 21.2pc and Philippines rising by 12.5pc.

Traders and brokers at the KSE hoped that healthy corporate earnings announced by most companies in the last reporting season and stable macroeconomic environment in the country could still put the KSE back on the rails.

The question mark was not then on the fundamentals for many stocks at the KSE still offered dividend yields of over 13 per cent, but on the administration’s ability to quickly restore the law and order situation to a semblance of normalcy.

Frontier Index

Investors are watching out with interest the results of the MSCI Inc, Semi-Annual Index Review, scheduled for May 13. MSCI Inc, the internationally acclaimed index provider, headquartered in New York, calculates over 120,000 indices across 70 countries daily.

As the Pakistani stock index was displaced from the ‘Emerging market’ and shifted to ‘the Frontier market’, the results announced by MSCI would be closely watched by the local and foreign investors. Sajid Bhanji, senior analyst and investment manager at Arif Habib Limited, said that the significance of it all lies in the fact that following the Pakistani Index induction into the Frontier market, it would be for the first time that its weightage would be disclosed by MSCI.

In addition, the results would also reveal the Pakistani companies that have been selected to be a part of the Pakistani index in the Frontier market. ‘Those companies can benefit as they will appear on the radar screen of foreign investors who track the MSCI indices’, says Sajid.

Stagnant deposit growth threatens banks

2009-05-08T03:36:00.000-07:00

KARACHI: The banking sector in Pakistan which has, so far, escaped liquidity crisis is facing stagnant deposit growth for the last two months, signifying the potential risk behind the scene.

What happened to the global banking system during last one year was almost irrelevant to banking industry in Pakistan as no bank failed.

However, latest State Bank reports about the deposit and credit growth were worrisome for the banking sector and economy.

According to State Bank’s latest report, for the last couple of months deposit growth of the scheduled banks remained stagnant. In fact, the deposit growth has been falling since the beginning of the new banking year.

The State Bank reported that the total deposits of banks were Rs3,874 billion in March 2009 which remained unchanged in April. The deposits fell from Rs3,897 billion in February.

The most significant part was that about 90 per cent deposits have been kept for less than one year despite several incentives being provided to banks by the State Bank.

Banking experts said the stagnant deposit growth with poor credit growth for private sector, reflected the depressing situation for banking in the country.

The first quarterly report of the banking sector showed that banks’ profits fell 24 per cent. Non-performing loans (NPLs) of the banks crossed over Rs100 billion setting a new record.

The tumbling economic growth added more troubles to banking industry as failure of business and companies are adding to the mounting NPLs.

Reports suggest that the government plans to help the sinking companies with the help of Securities and Exchange Commission of Pakistan. However, no official announcement has been made.

Banking experts said it was the shadow of economic slump in the country which engulfed the banking system.

The IMF predicted on Wednesday that the Asian countries would face longer recessionary periods than developed economies which is alarming for countries, like Pakistan.

The reasons cited for stagnant deposit growth are high inflation and poor returns to depositors which encourages potential depositors to spend money instead of allowing it to devalue by putting into banks.

Banks are generally offering in the range of 10-16 per cent for longer term deposits but it was still negative return in the presence of over 19 per cent main inflation.

It was also noted that for the last six months banks were not marketing their products aggressively while new banking products were rare during this period.

An analyst said banks were not advertising their products through media or have minimised their advertising campaigns in the wake of declining profits.

Islamic banking gains ground in Pakistan

2009-05-08T03:33:00.000-07:00

LAHORE: Islamic banking is fast gaining ground in Pakistan because it is risk free as compared to conventional modes of banking.

This was stated by chief executive officer AlBaraka Islamic Bank Mohamed Isa Al Mutaweh while talking to Lahore Chamber of Commerce and Industry president Mian Muzaffar Ali here on Thursday.

He said that Islamic financing products such as Murabaha, Ijara, Musharaka and Islamic Export Refinance were catering to a diverse cross-section of the economy, including the corporate, SMEs and consumer sectors.

Speaking on the occasion the LCCI president said that more than two hundred and fifty Islamic financial institutions were operating worldwide from China to US. Western banks through their Islamic units in UK Germany, Switzerland, and Luxembourg were also practicing Islamic banking.

He said that Islamic finance was practiced mostly in the Muslim world throughout the middle ages facilitating trade and business activities. In Spain and Baltic States, Islamic merchants became indispensable middlemen for trading activities. Many concepts, techniques and instruments of Islamic finance were later adopted by European financers and businessmen.

He said that the Islamic financial system employed the concept of participation in the enterprise, utilising the funds at risk on a profit-and-loss-sharing basis.

Exports can be increased with better policies

2009-05-07T01:11:00.000-07:00

LAHORE: Trade Development Authority of Pakistan (TDAP) Chief Executive Syed Mohibullah Shah has said Pakistan can enhance its exports by upgrading its export potential of products where it has competitive advantage and increasing market share in traditional as well as non-traditional markets.

At a workshop on ‘Global economy: meeting challenges by Pakistan’ organised for the Lahore Economic Journalists Association at the TDAP office here on Wednesday, Shah said Pakistan lagged behind because it had not worked in synergy with the forces of industrial revolution.

Billions of dollars coming to the country after 9/11 were squandered on unnecessary imports creating trade deficit instead of developing capacity for increasing exports.

Up to $8 billion had been spent on the import of cellular phones despite the fact that a cellular phone manufacturing factory could be established at a cost of $250 million here in Pakistan. The country had more than 100 million cell phones at present, he said.

He said historically over the last five decades, specifically in 1949-2000, Pakistan’s exports had grown by an average 10.4 per annum whereas imports had grown by an average 9.7 per cent. He said that fundamental reforms were needed to liberate the entrepreneurship from the colonial medieval structures. Pakistan could increase its agricultural production from its available land and water four times by adopting better management and production techniques. A stone being sold for $100 could fetch $10,000 if it was marketed after proper cutting and polishing, he said.

Telecom sector attracts huge foreign investments

2009-05-07T01:10:00.000-07:00

KARACHI: The telecommunications sector attracted an investment of about $9 billion in the last three years.

This was stated by the Pakistan Telecommunication Authority chairman Dr Mohammad Yaseen while speaking at the inaugural session of 4th connect conference 2009 at Karachi Expo Centre here on Wednesday.

Long distance and international operators have made huge investment in optical fiber, system up-gradation and installation of other communications equipment, he said.

He said that the companies, like Multi-net, Wateen and Link Direct, have installed almost 15,000 km long optical fiber between Karachi and Peshawar.

If the optical fiber of PTCL is included, the total length of optical fiber will reach 30,000 to 40,000 kms, he noted.

Talking about measures to check quality of service, Dr Yaseen pointed out that the PTA has installed state-of-the-art equipment for this purpose.

‘We are carrying out a survey to assess the quality of Internet service providers on a daily basis, and on the basis of our findings, we are suggesting them about corrective measures,’ he said.

Dr Yaseen pointed out that billions of rupees have been collected by USF Company for laying network lines by the operators.

Under the agreement, all telecom operators are required to deposit 1 to 1.5 per cent of their revenue minus expenses with USF Company.

This company provides a subsidy from this amount to telecom service operators for laying a broad band network to unconnected areas in the country, he added.

So far, two districts, including Faisalabad, have been provided broad band facility while Multan would also be connected soon, he said. The PTA chairman said that the number of mobile phone subscribers has increased from five million in 2004 to 91 million in 2009 and fixed line users have grown from 3.7 million in 2004 to 4.5 million in 2009.

Speedy completion of privatisation deals ordered

2009-05-07T01:08:00.000-07:00

ISLAMABAD: The Privatisation Commission Board on Wednesday directed speedy disinvestment of 23 public sector entities through the Public-Private Partnership (PPP) mode.

The board meeting, with Privatisation Minister Syed Naveed Qamar in the chair, also reviewed the implementation status and progress of the ongoing transactions.

The board was informed that preliminary process for a number of transactions would be finalised in few months. About the privatisation of the SME Bank it was decided to hold a meeting of the financial adviser and the privatisation committee of the bank to reassess the transaction structure.

The meeting was informed that the SME Bank disinvestment had been delayed due to various factors including objections from the officers association over the offers made in Voluntary Separations Scheme (VSS) before the sale of the bank.

The meeting was informed that the Terms of Reference (ToR) for the appointment of financial adviser for Pakistan Post privatisation had been finalised. The PC plans to expand the services of the post offices in remote areas as a small bank providing financial services to the villagers.

The board also decided to initiate the process for the appointment of new financial adviser for Jamshoro Power Company Limited for which the PC had already received seven expressions of interest (EoIs).

The government has amended its privatisation policy to take on board the workers of state-owned entities for their empowerment by giving them shares in their respective units when the units are privatised.

However an official of the Privatisation Commission said the meeting was informed that the government was not satisfied with the pace of privatisation, which is almost stagnant or moving very slowly.

The PC Board however observed that the deteriorating law and order situation had slowed down the privatisation process during the last one and half years.

Secretary Privatisation Ahmed Jawad, PC Board members and senior officials and consultants also attended the meeting.

Business

2009-05-07T01:06:00.000-07:00

KARACHI: Benchmark 6-month Treasury bills rates were increased on Wednesday despite one per cent cut in the policy discount rate recently allowing the interest rate to remain high.

The 6-month cut-off yield rose by 20 basis points to 13.18 per cent supporting the rising trend of Karachi Inter-Bank Offered Rate (Kibor).

The higher interest rate is in inconformity with the International Monetary Fund (IMF) programme as the donor agency has advised Pakistan to keep the interest rate high unless the inflation falls to a single digit. The main inflation (Consumer Price Index - CPI) is still over 19 per cent despite hopes of improvement being expressed by the government as well as the State Bank.

The Kibor, which is a barometer of interest rate, was at 13.26 per cent for 6 months on April 21 before the last Treasury bills auction. The Kibor kept on increasing as it reached 13.35 per cent on Wednesday.

The State Bank has been under immense pressure from the business and industrial sectors to reduce the policy interest rate as their cost of doing business went much higher than the regional countries.

The State Bank at the time of Monetary Policy announcement in the middle of last month reduced the policy rate by one per cent, which was treated as token reduction by the market.

Most of the market players saw no hope of improvement with the token reduction in policy interest rate, which proved correct as reflected from the poor credit growth for the private sector. It fell to just 13 per cent of what it was during the first ten months of the current fiscal year.

The State Bank picked up Rs71.772 billion and out of this the central bank picked up Rs64.266 billion for 12 months at the rate of 13.29 per cent, slightly increased by 2 basis points.

The SBP raised Rs4.981 billon for 6-month and Rs2.524 billion for three months.
Experts said the SBP was making efforts to keep the interest rate as high as required by the IMF.

Last month, the governor State Bank said the inflation would come down to a single-digit by next fiscal year. The next fiscal year will begin two months from now while the prevailing inflation rate is above 19 per cent.

‘The higher interest rate has impacted negatively on the economy as the performance of both the trade and industry could touch the lowest in the first decade of this new century,’ said a senior banker.

He said the banking industry was itself feeling the negative impact of higher interest rate despite the fact their net interest income has increased.

However, the high interest rate resulted in the collapse of series of businesses that mounted the non-performance loans (NPLs) setting new record during the current fiscal year.

‘The poor credit growth to the private sector is the outcome of higher interest rate that has threatened the overall economic growth despite strong agriculture growth during the current fiscal year,’ said the banker.

Banks and DFIs allowed to invest in commercial papers

2009-05-06T00:40:00.000-07:00

KARACHI: Banks and Development Financial Institutions (DFIs) have been allowed to invest in commercial papers to help the corporate sector to get short-term financing to overcome the liquidity problem.

In order to develop and broaden the money market and also to provide an additional financial instrument to investors, it is considered desirable to allow highly rated companies to diversify their sources of short-term financing by issue of commercial paper (CP) as an instrument of redeemable capital.

The State Bank on Saturday issued a circular introducing amendment in the Guidelines of Commercial Papers.

‘The banks and DFIs may make investment in Commercial Paper (CP) as per policy approved by their board of directors and keeping in view the bank’s and DFI’s equity,’ said the SBP circular.

Earlier, banks and DFIs interested in investing in CP were required to obtain one time prior approval from SBP for commencing or undertaking such activity.

According to the guidelines the equity of a company issuing a commercial paper should not be less than Rs100 million.

The State Bank also wants to ensure that the issuer company has obtained the credit rating from a rating agency. The minimum credit rating of the issuer should be ‘A-’ (medium to long-term) and ‘A2’ (short-term).

The SBP said at the time of issue of commercial paper, the company will ensure that the rating is current and not more than two months old.

‘The bank or DFI would ensure that the risks associated with investment in CPs are in line with their risk taking capacity and appropriate measures have been taken to mitigate these risks,’ said the circular.

The commercial paper will be issued for maturities between 30 days and one year from the date of subscription. The minimum size of the issue of a commercial paper will not be less than Rs10 million.

Banking analysts said the free involvement of banks and DFIs for investing in the commercial papers would also help banks as they are facing falling credit growth.

Banks have been investing heavily in the Treasury bills since the beginning of the fiscal year that sharply hurt their lending trend resulting into sharp fall in credit growth.

Along with the Treasury bills, the government was the real borrower from the banks as it recenly borrowed to retire the circular debt of the oil companies. The government borrowed Rs80 billion through Term Finance Certificates to retire the circular debt.

However, the borrowing by the corporate sector has alarminlgy fallen during the first nine months of the current fiscal as was obvious from the State Bank report that private sector credit growth fell by 48 per cent.

Banks’ profits fall by 24pc in first quarter

2009-05-06T00:38:00.000-07:00

KARACHI: Impact of global financial meltdown finally impacted the local banking industry, which witnessed a sharp 24 per cent decline in profits during the first quarter, Jan-March, 2009.

Pakistani banks have been showing resilience since the collapse of banking system largely in the developed economies and the impact was almost negligible.

However, the new banking year came under the garb of global economic recession, which is a direct outcome of the financial meltdown that ruined giant banks in United States and Europe.

‘During the first quarter of 2009, profits-after-tax of all banks stood at Rs16.1 billion as against Rs21.1 billion during the same period last year,’ said Kamran Rahmani, the banking analyst at First Capital Equities.

The banks’ trouble began with the slowdown of the economy, which severely slashed the credit growth for private sector. The liquidity flow for trade and industry has dried up and remained just 14 per cent during the last nine months compared to same period of last year.

On the other side, banks’ non-performing loans (NPLs) rose to record high level that has eaten up the profitability of the banking industry.

Banks have earned reasonably good net interest income due to high lending rates, an outcome of tight monetary policy and higher policy discount rate.

‘Notable rise in provisions against NPLs along with the impairment charges on equity portfolio were the prime reasons behind a double-digits decline in the underlying profits,’ said Rahmani.

The non-performing loans of banks and Development Financial Institutions (DFIs) set a new record of over Rs100 billion in just one year reflecting the gravity of the risks involved with financial system of the country.

The NPLs of all banks and DFIs reached Rs325.3 billion at the end of December 2008, which was Rs100.7 billion higher than NPLs at the same time last year.

The commercial banks were the real sufferers as they added Rs100.8 billion to their total NPLs.

Analysts said the NPLs were rising mainly because of deterioration in the economic system and the banks would be one of the biggest victims of the economic slowdown.

It is believed that the country would see just about 2 per cent economic growth during the current fiscal, which is much lower than the last year’s 5.8 per cent growth.

The rising NPLs and slowdown of economy forced small and medium-size banks to get a large shelter either by merger or by selling the entire entity.

Rahmani said the net interest income of the banks witnessed an increase of 24 per cent in first three month of the new calendar year compared to the same period of last year. However, the industry failed to retain the profitability because of massive NPLs and provisioning.

Few analysts were of the view that the inflows of loans from IMF, World Bank and monetary support of the United States would help to improve the economic growth and that would ultimately save many sectors from default and NPLs might drop in future.

Banking spread rises to 7.66 per cent

2009-05-06T00:37:00.000-07:00

KARACHI: Banking spread continues to increase for the month of March mainly at the cost of depositors as the deposit rates were reduced by the banks.

Banking spread for March rose to 7.66 per cent, which was 57 basis points higher than the corresponding period of last year.

‘The average spread for the first three months of 2009 stood at 7.69 per cent, representing an increase of 62 basis points over the same period of last year,’ said Mohammad Imran, head of research at First Capital Equity.

Higher banking spread has been under serious criticism but the banks have continued with their strategy for higher profiteering at the cost of depositors who are already troubled by high inflation.

Bankers said one of the main reasons for the higher banking spread was the high inflation that made their earning devalued.

Analysts said the lending rates dropped by 20 basis points while the deposit rates dropped by 24 points in March.

It looks that the situation for depositors would not be changed and the rates might not be up for any significant decline in the banking spread.

The first quarterly report of the banks’ performance showed that the industry was gradually heading towards troubled waters and their earnings have started falling sharply. This dismal picture of the industry does not give any hope of relief to the depositors already under crunching impact of very high inflation rate of over 19 per cent.

Pakistan’s economy still not out of the woods

2009-05-06T00:04:00.000-07:00

ISLAMABAD: Pakistan is geared up to keep trade deficit to 4.3 per cent of GDP and current account deficit within the range of 5.9 per cent, but it will continue to be threatened by the dangers of ‘domestic socio political upheavals’, intensity in the war-on-terror and global recession.

The Ministry of Finance on Monday released a report titled ‘Review of the Economic Situation (July-March 2008-09)’, which notes that after endorsement of the $7.6 billion economic stabilisation programme by the International Monitory Fund (IMF), the economy got confidence back.

Signs of improvement in economic variables such as inflation stabilisation, foreign exchange reserves build-up, import compression, and net zero government borrowings from the State Bank of Pakistan (SBP) by end of April is evident, the report says.

However, global financial crisis and extremely vulnerable security environment at home have added risks to the economy.

The trade data for February and March this year hints at imminent risks to the external sector. The report says external sector data for the last quarter (April-June) will be a real reflection of the impact of global financial crisis on the economy. The economic growth target at around 2.5-3 per cent is still gettable in the given circumstances.

The massive negative growth in the large-scale manufacturing (LSM) for January and February this year may not likely to persists in the remaining four months of the current fiscal year, but still LSM growth will remain hostage to acute energy shortages and demand shrinkage in the export based industries.

AGRICULTURE: Agriculture has been facing acute irrigation water shortages and the water-intensive kharif crops sugarcane and maize fell short of the target and depicted negative growth of 18.5 and 7.5 per cent, respectively.

However, cotton and rice have registered positive growth of 7.3 and 13.5 per cent, respectively. The combined weight of sugarcane and maize in overall agriculture is 6.2 per cent while that of cotton and rice is 13 per cent.

The report says that Rabi season started with estimated water shortages of 31.6 per cent, however, widespread rainfall between December and February had positive impact on the outlook for the Rabi crop.

Wheat with its 12.7 per cent weight in overall agriculture is estimated to post 7.8 per cent growth over the last year.

Disbursement of credit to agriculture sector by commercial and specialised banks has increased by Rs13.3 billion by 9.6 per cent year-on-year to Rs151.9 billion during the period under review from Rs138.6 billion in the corresponding period of last year.
The crop sector is projected to surpass the growth target. The livestock sector is buoyant because of enormous price incentive in the sector.

All livestock products witnessed increase in prices and thus the target of 3.2 per cent will be achieved. The demand for livestock products is growing at phenomenal pace. The agriculture sector is likely to achieve its growth target of 3.3 per cent.

SERVICES: The services sector exhibited resilience to fluctuations in the economic activities. The foreign direct investment (FDI) inflows in the telecommunications, financial businesses and personal services have reached a level of saturation in the first nine months.

PRICES: Food inflation is estimated at 28 per cent during July-March as against 13.8 per cent in the comparable period of last year. Although food inflation has eased during the course of the current fiscal year, the report says ‘it remains painfully high and remained a major cause of concern’.

‘This can be attributed to the stubbornness in prices of some key commodities such as edible oil, pulses, rice, milk, sugar, poultry, meat, wheat, wheat flour, and fresh vegetables,’ the report observes.

On the other hand, non-food inflation stood at 19.2 per cent, against 6.3 per cent in the corresponding period of last year. Non-food inflation has remained persistently around 18-20 per cent throughout this year as the transport group, fuel and lighting group and house rent index have remained high.

ASSETS: Net domestic assets (NDA) have increased by Rs307 billion as compared to increase of Rs627.5billion in last year. However, it is showing an increase of 7.6 per cent in stock during this period, whereas, last year the growth in stock was 20.4 per cent in the comparable period.

Net foreign assets (NFA) have recorded a contraction of Rs263.9 billion against the contraction of Rs356.4 billion in the comparable of last year.

Government borrowing for budgetary support has recorded an increase of Rs240.5 billion as compared to Rs336.0 billion in the comparable period of the last year. The government has over performed against freezing the net borrowing from SBP at Rs257 billion in 2008-09 and the SBP financing has shown a net increase of Rs103.3 billion and financing from scheduled banks witnessed a net increase of Rs137.2 billion during July 1, 2008-April 18, 2009.

DEBT: External Debt and Liabilities (EDL) stood at $49.7 billion or 30.7 per cent of projected GDP for this fiscal year. This is higher than end-June 2008 stock of $46.3 billion or 27.6 percent of GDP.

The EDL grew both in absolute and relative terms during July-December period but witnessed some correction in the third quarter. Almost all categories of EDL barring Paris Club, Eurobond and military, have witnessed increase.

Labour court issues arrest warrants for businessmen

2009-05-06T00:03:00.000-07:00

KARACHI: The Sindh Labour Court has served warrants of arrest on leading business leaders and industrialists of the city on a complaint lodged by Inspector of Factories, West division, Labour Department.

The warrants sent jitters across the business community, which felt that some conspiracy was being hatched against the present government striving hard for improving business climate for attracting local and foreign investment.

The notices issued by Sindh Labour Court-III directed some industrialists to appear in person and others were issued warrants of arrest. But the most untoward part of the episode is that the area police had been directed to search the accused industrialists and present them before the court.

According to reports some of the industrialists have gone underground fearing arrest and others are seeking legal advice from their solicitors so that bail before arrest could be arranged.

M A Jabbar, chairman Site Association of Industry, told Dawn that a court bailiff along with police from Site police station on Tuesday came to his office searching for some industrialists to serve warrants of arrest and other notices.

Jabbar said to his utter dismay the police and the bailiff of the court asked him to help them in finding out the industrialists against whom the court notices are issued because he is the head of their representative body.

On reading the court notices he came to know that two notices were issued in the name of Shabir Ahmed and another in the name of Asif Shaikhani. But the worst part of it that the warrant of arrest has been served under U/S 7(2) of SO 198. The section related to penalty of Rs100 and does not involve chasing industrialists on the charges.

In another case, he said an industrial unit at Site was served with recovery notices by Labour Levies department under section 202 of the Land Revenue Act. For this the department hired private ‘muscle’ to raid the company and make recovery of payments under coercive and extortionist method from the management of the unit.

The Site chief along with other business leaders representing different industrial estates and trade bodies were unanimous in their demand for immediate suspension of the Inspector of Factories, who has shown the brute authority for no reason and rhyme.

Business leaders were of the unanimous view that the Labour Department was discouraging industrial investment in the province in general and Karachi in particular. These leaders include president FPCCI Sultan Chawla, president Karachi Chamber Anjum Nisar, Korangi Association of Trade and Industry chairman Mian Zahid Hussain, Capt Moiz Khan, founder chairman of North Karachi Association of Trade and Industry and Younus Khimisani, chairman NKATI.

Textile exports decline by 7.58 per cent

2009-05-05T23:35:00.000-07:00

ISLAMABAD: Textile exports during the first nine months of the current financial year witnessed negative growth of 7.58 per cent as compared to the corresponding period of the last year.

Textile exports during July-March (2008-09) were recorded at $7.193 billion as compared to the exports of $7.783 during July-March (2007-08), according to Federal Bureau of Statistics.

Export of cotton yearn declined by 15.52 per cent, cotton carded or combed by 5.62 per cent, yarn other than cotton yarn by 53.30 per cent while the export of knitwear declined by 4.80 per cent.

Similarly, export of bed-wear witnessed a negative growth of 11.68 per cent, tents, canvas and tarpaulin 19.29 per cent, readymade garments 13.10 per cent, art, silk and synthetic textile 32.50 per cent, made up articles (excluding towels and bed-wear) 2.69 per cent while the exports of other textile materials witnessed a negative growth of 16.37 per cent.

Only three textile items showed positive growth. Export of raw cotton during the period under review witnessed an increase of 73.57 per cent as compared to the same period of last financial year.

Similarly, export of towels increased by seven per cent while export of cotton cloth witnessed positive growth of 3.53 per cent.

The economic observers believe that the textile sector was passing through a difficult phase due to energy shortage in the country, resulting in less production and exports.

Meanwhile, the government is all set to launch textile policy next month and is considering curative measures on the recommendations of stakeholders to address the problems and issues faced by the textile industry.

‘The textile policy is in final stages and would be announced in June,’ advisor to textile ministry, Dr Mirza Ikhtiar Baig told APP.

The ministry has consulted all textile sector associations and the chambers of commerce and industry and taken them board before finalising the textile policy, he said, adding that the policy was nearing completion.

Ikhtiar Baig said that the ministry has received recommendations for zero rating on import of textile machinery, zero rating exports, tariff reduction, incessant energy supply to textile units.

Issues related to market access and quality products with timely delivery and single digit mark up and special power tariff for the textile industry have also been recommended.

It has been suggested that textile policy might include the issue like duty free market access to European Union and US as Pakistan is the largest importer of US long staple cotton to the tune of $400 million to $500 million every year.

Cement companies’ profit jumps 833 per cent

2009-05-05T23:30:00.000-07:00

KARACHI: The cement companies saw a big leap forward as their earnings jumped by 833 per cent to Rs4.7 billion for the nine months to end-March 2009, from Rs395 million in the similar three-quarters of the previous year.

Atif Zafar, who tracks the cement sector for JS Global, wrote in his report on Monday that the growth in profitability represented an extension of the companies’ earnings in the first half of the year. The analysis included 18 out of 21 listed companies, which representing 94 per cent of the sector market capitalisation.

Analysts commented that the improvement was on the back of higher retention prices and higher rupee-based export sales, being a benefit of rupee depreciation.

Net retention prices rose by 64 per cent to Rs230 per bag (partly down for effective ‘price arrangement’ between manufacturers) and better export based revenue, owing to the rupee depreciation (21 per cent year-on-year). All that resulted in net sales growth of 74 per cent.

Gross profits depicted 287 per cent rise with gross margins increasing by 1,491bps to 27 per cent, compared to 9MFY08 gross profit margins of 12 per cent. However, 96 per cent increase in financial charges due higher average 6-month KIBOR (434bps) during the period took some gloss off the bottom-line as net margins recorded an increase of just 317bps to 4 per cent.

Overall sales despatches for 9MFY09 managed to trudge ahead by 0.6 per cent to 24.718 million tons, from 24.570 million tons in the same time last year. Local sales were down by 15 per cent to 15.789 million tons, from 18.624 million tons, but exports witnessed a commanding growth of 50 per cent to 8,949 million tons, from 5.947 million tons.

Meanwhile, analysts say that the tug of war between the cement producers and builders has intensified. The decrease of Rs40 per bag by the largest producer of cement 15 days back and a quick return to what manufacturers believe was the ‘fair price’, remains shrouded in mystery.

Builders have alleged ‘cartelisation pressure’ that pushed the company to backtrack on its lower sales prices per bag. The company denies that it was coerced to re-adjust price to the higher level by other producers, stating that it had reverted to the old price as the objective of making an inroad into the local market was achieved.

Business & Economy

2009-05-05T21:28:00.000-07:00

'Efforts underway to attract foreign investment'

ISLAMABAD (May 06, 2009): Federal Minister for States and Frontier Region (Safron) Najmuddin Khan has said that present government is trying to bring more foreign investment in the country and planning to offer legislative cover to protect investor. While talking to the Deputy High Commissioner of South Africa Qasim Pir in his office here on Tuesday, the minister said that government is committed to enhancing co-operation and harmony between local and foreign investors.

Sindh chief minister discusses guidelines for 2009-10 budget

KARACHI (May 06, 2009): The budget position of the current financial year was reviewed at a meeting held under the Chairmanship of Sindh Chief Minister Syed Qaim Ali Shah at Chief Minister House. The meeting discussed in detail the policy guidelines for development planning for fiscal year 2009-10.

Sindh budget 2009-10 to be presented on time

KARACHI (May 06, 2009): Despite all inconvenience being faced in making the fiscal budget for 2009-10, the Sindh government is optimistic to present the next financial plan on time, Business Recorder learnt here on Tuesday. According to the well-informed sources in the Planning and Development Department (PDD) that almost 80 percent of budget proposals, submitted by the provincial departments, have been compiled.

New trade policy will bear no fruit: Piaf

LAHORE (May 06, 2009): Pakistan Industrial and Traders Association Front (Piaf) while terming the government's decision to announce new trade policy for three year, said that the government would not be able to achieve the desired targets from the new policy till the impediments in doing business are removed.

Pakistani traders urge Obama to announce market access

LAHORE (May 06, 2009): Private sector traders here urged US President Barack Hussein Obama on Tuesday to announce direct market access to Pak products on zero-rated duty, while meeting with President Asif Ali Zardari to help stabilise Pakistan's bleak economy as the country has suffered a colossal loss of $68 billion since turmoil in Afghanistan and war against terror.

Hina reviews economic, trade ties with Germany

ISLAMABAD (May 06, 2009): Minister of State for Finance, Revenue, Economic Affairs and Statistics, Hina Rabbani Khar on Tuesday had an in depth exchange of views with Karin Kortman, Parliamentary State Secretary, Federal Ministry for Economic Co-operation and Development, Germany and other members of her delegation attending the ADB meeting.

Babar Awan helps develop his native town

ISLAMABAD (May 06, 2009): Federal Minister for Parliamentary Affairs, Dr Babar Awan has said that multi sectoral development projects have been approved for his native town Hothla, Tehsil Kahota. He said this while chairing a meeting to review the pace of development projects, at the residence of former Vice Chairman, District Council Rawalpindi, Raja Mazhar on Monday.

Ill-planned Sindh uplift schemes: millions of rupees allocations likely to lapse

KARACHI (May 06, 2009): Millions of rupees, which were earmarked by Sindh government for various ill-planned development schemes during the outgoing fiscal year 2008-09, are likely to be lapsed. According to sources the provincial government had allocated at least Rs 1995 million for the improvement of different sectors in budget 2008-09, but due to inefficiency of the concerned authorities in different departments the budgeted amount was still lying unused.

LCCI becomes first chamber to have full banking facility

LAHORE (May 06, 2009): Lahore Chamber of Commerce and Industry (LCCI) on Tuesday became the first chamber in the country to have a full-fledged banking facility for its members within the chamber's premises. Now all the membership-related transactions would be carried out through the banking channel against the previous practice through which the LCCI Membership Department was responsible for maintaining cash and data of enrolled members.

Traders' delegation meets KCCI president

KARACHI (May 06, 2009): A delegation of Fruit and Vegetable Joint Action Committee headed by the Vice Chairman, All Pakistan Fruit and Vegetable Exporters, Importers and Merchants Association, Abdul Khaliq Yousuf called on the President KCCI, Anjum Nisar. The delegation discussed various problems faced by the traders of new sabzi mandi with particular reference to the Charter of Demands put by the Joint Action Committee before the higher authorities of the Government of Sindh

NWFP government orders to reopen mines in Sherwan area

ABBOTTABAD (May 06, 2009): NWFP Government has ordered to reopen the mines of soft soap in Sherwan area of district Abbottabad besides establishing one hospital at Pind Kargu Khan and executing one big water supply scheme costing Rs 6 million.

Nine percent decline in cement exports in one month

ISLAMABAD (May 06, 2009): Pakistan's cement industry, which pocketed windfall profits in previous years, is claiming that its exports declined by 9 percent in April as compared to March 2009. The All Pakistan Cement Manufacturers Association (APCMA) is already in hot pursuit of fiscal incentives in the 2009-10 federal budget with the argument that it would collapse if the government did not extend a rescue package to it.

833 percent growth in cement sector July-March profits

KARACHI (May 06, 2009): The cumulative profit of listed cement sector companies increased to Rs 3.7 billion in the nine months of FY09 depicting a massive growth of 833 percent over the corresponding period in FY08 of Rs 395 million.

Shipping Intelligence

KARACHI (May 06, 2009): Karachi Shipping Intelligence report incorporating changes till 7 am on Tuesday (May 05, 2009).

Etihad to unveil new first class at ATM

KARACHI (May 06, 2009): Etihad Airways, the national airline of the United Arab Emirates, will unveil for the first time its new first class at this year's Arabian Travel Market (ATM), which takes place between Tuesday and Friday at the Dubai International Convention and Exhibition Center, says a press release.

Professionals forecast slow recovery for world economy: survey

KARACHI (May 06, 2009): Finance professionals are forecasting a slow recovery for the world economy, according to new research published on Tuesday by the Association of Certified Chartered Accountants (Acca) in its first Global Economic Conditions survey. The survey of 805 Acca members from 80 countries world-wide warns of a slow and credit-constrained recovery, which might threaten some of the world's leading economies with stagnation.

FDI declines by eight percent

ISLAMABAD (May 05, 2009): Foreign Direct Investment (FDI) has declined by eight per cent during the first eight months of current fiscal to $3.0421 billion against $3.306 billion in the same period of last year, according to Ministry of Finance's "Review of Economic Situation"

NWFP abolishes provincial economic commission

PESHAWAR(May 06, 2009): The government of NWFP on Tuesday abolished the Provincial Economic Commission (PEC) saying it has failed to achieve the purpose of its establishment. The decision was taken at a meeting presided over by NWFP Minister for Finance Mohammad Hamayun K

MCCI for long term financing

MULTAN (May 06, 2009): The Multan Chamber of Commerce and Industry (MCCI) has urged the government to issue directives to banks asking them to extend long-term loans to the business community, enabling them to establish labour intensive new industries for creating job and accelerating economic activities in the country. The President, MCCI, Anis Ahmed Sheikh expressed these views on Monday.

KCCI demands survey certificates for five years

KARACHI (May 06, 2009): Karachi Chamber of Commerce and Industry (KCCI) has suggested that survey certificates should be issued for five years.

Company News

2009-05-04T22:49:00.000-07:00

Power: Kot Addu Power Company Limited - Analysis of Financial Statements Financial Year 2002 - 1st H 2009

OVERVIEW (May 05, 2009): Kot Addu Power Company Limited (Kapco) was incorporated on April 25, 1996 as a public limited company. It is listed on all the three stock exchanges of the country. The principal activities of the company are to own, operate and maintain a multi-fuel fired power station having fifteen generating units with a nameplate capacity of 1,600 MW in Kot Addu, District Muzaffargarh, Punjab.

Entity, TFCs ratings of PMCL maintained

KARACHI (May 05, 2009): The Pakistan Credit Rating Agency (Pacra) has maintained the long-term and short-term entity ratings of Pakistan Mobile Communications Limited (PMCL) at 'AA-' (Double A minus) and 'A1' (A One), respectively. The ratings of the secured TFCs of 3,261 million rupees and 6,000 million rupees have been maintained at "AA-" (Double A minus).

Meezan Bank post-tax profit increases to Rs 283 million in first quarter

KARACHI (May 05, 2009): Meezan Bank has posted 13 percent growth in its post-tax profit for the first quarter ended March 31, 2009. According to a press release issued here on Monday, the post-tax profit increased to Rs 283 million in this period as compared to Rs 251 million in the corresponding period of last year.

Tobacco: PAKISTAN TOBACCO COMPANY - Analysis of Financial Statement Financial Year 2003 - Financial Year 2008

OVERVIEW (May 04, 2009): Pakistan Tobacco Company Limited (PTC) is part of British American Tobacco - the world's most international tobacco group - with brands sold in 180 markets around the world. The company produces high quality tobacco products to meet the diverse preferences of millions of consumers, and it works in all areas of the business - from seed to smoke.

Industry: NAKSHBANDI INDUSTRIES - Analysis of Financial Statements Financial Year 2003-H1'09

OVERVIEW (May 02, 2009): Nakshbandi Industries was incorporated in Pakistan as a public limited company. Its shares are quoted on KSE. The company is principally engaged in production and export of towels. The towel division is one of the country's most technically advanced set up.

PTCL earns Rs 1, 909.018 million net profit

KARACHI (May 01, 2009): Pakistan Telecommunication Company Limited has earned Rs 1,909.018 million as profit after tax in the quarter ended March 31, 2009 as compared to Rs 2,977.335 million earned in the corresponding period in 2008. The board of directors of the company in its meeting held on Thursday declared that the company's earning per share stood at Re. 0.37 in this period against Re. 0.58 in the same period last year.

Hubco profit increases

KARACHI (May 01, 2009): The profit of Hub Power Company Limited (Hubco) has increased to Rs 1,274.018 million in the quarter ended March 31, 2009 as compared to Rs 651.721 million earned in the corresponding period in 2008. The board of directors of the company in its meeting held in London on April 29, 2009 declared that the company's earning per share has increased to Rs 1.10 in the period under review against Re 0.56 in the same period a year back.

Bank Alfalah earns Rs 448.403 million profit after tax

KARACHI (May 01, 2009): The Bank Alfalah Limited has earned Rs 448.403 million as profit after tax in the quarter ended March 31, 2009 as compared to Rs 997.718 million earned in the corresponding period in 2008. The bank's earning per share stood at Re 0.56 in this period against Rs 1.25 in the same period last year.

Cement Company: DG KHAN CEMENT COMPANY LIMITED - Analysis of Financial Statements - FY Year 2002-1QFY 2009

OVERVIEW (April 30, 2009): DG Khan Cement Company Limited (DGKC) is producer and seller of ordinary portland and sulphate-resistant cement. The company is a unit of Nishat group, which is a leading and diversified business group with a strong presence in three most important sectors of Pakistan: textiles, cement and financial services.

Cement: PIONEER CEMENT LIMITED - Analysis of Financial Statements Financial Year 2004 - H 2001 Financial Year 2009

OVERVIEW (April 29, 2009): Pioneer Cement Limited (PIOC) project started in November 1994 when its first unit commenced production. The second unit was commissioned in January 2006. PIOC is a medium sized company in the cement sector which began its operations with an installed capacity of 2000 tons per day of clinker.

Money & Banking

2009-05-04T22:45:00.000-07:00

THE RUPEE: dollar slides

KARACHI (May 05, 2009): Upward trend was seen on the interbank market on Monday as the rupee gained eight paisa against dollar for buying at 80.50 and rose by six paisa for selling at 80.54 due to easy supply of the US currency, experts said. In the meantime it seems that in case dollar demand goes up, the rupee may face erosion in its value, they said.

Revised Rates of Debt Securities

KARACHI (May 05, 2009): The following were the revised rates of debt securities on Monday (May 04, 2009).

Odd Lot Market Rates

KARACHI (May 05, 2009): Odd Lot Market Rates on Monday (May 04, 2009).

EFU Aitemad Growth Fund Rates

KARACHI (May 05, 2009): EFU Aitemad Growth Fund Rates on Monday (May 04, 2009).

EFU Capital Growth Fund Rates

KARACHI (May 05, 2009): EFU Capital Growth Fund Rates on Monday (May 04, 2009).

EFU Pension Growth Fund Rates

KARACHI (May 05, 2009): EFU Pension Growth Fund Rates on Monday (May 04, 2009).

EFU Managed Growth Fund Rates

KARACHI (May 05, 2009): EFU Managed Growth Fund Rates on Monday (May 04, 2009).

NJLI MEESEQ Fund Rates

KARACHI (May 05, 2009): NJLI Meeseq Fund Rates on Monday (May 04, 2009).

THE RUPEE: dollar slides

NJLI Sarmaya Growth Fund Rates

KARACHI (May 05, 2009): New Jubilee Life Insurance Sarmaya Growth Fund Rates on Monday (May 04, 2009).

NJLI Managed Growth Fund Rates

KARACHI (May 05, 2009): New Jubilee Life Insurance Managed Growth Fund Rates on Monday (May 04, 2009).

Business & Economy

2009-05-04T22:41:00.000-07:00

FDI declines by eight percent

ISLAMABAD (May 05, 2009): Foreign Direct Investment (FDI) has declined by eight per cent during the first eight months of current fiscal to $3.0421 billion against $3.306 billion in the same period of last year, according to Ministry of Finance's "Review of Economic Situation".

US senators present Pakistan aid bill

KARACHI (May 05, 2009): The Kerry-Lugar bill, a legislation which would triple non-military aid to Pakistan for the next one decade, was presented in the US Senate on Monday, Aaj TV reported. The bill has been jointly tabled by Senator John Kerry, who head the power Foreign Relations Committee of the US Senate, and Senator Lugar.

Shahbaz calls for healthy and sustainable economic growth

LAHORE (May 05, 2009): 'We must make Pakistan's economic growth competitive, equitable and sustainable,' Punjab Chief Minister, Mian Shahbaz Sharif said. He was speaking at the second meeting of the National Policy Platform for Competitiveness and Economic Growth (NPPCEG) on Monday with its Chairman, Shahid Javed Burki in the chair.

Strategy evolved to enhance export volume: TDAP

SIALKOT (May 05, 2009): Chief Executive Trade Development Authority of Pakistan (TDAP) Syed Mohib Ullah Shah said that a new export strategy has been chalked out for enhancing export volume. The TDAP has focused on exploring Asian and other neighbouring markets, which had not been paid proper heed in the past, he said.

Too many projects, too little funding: mismatch delays completion of uplift schemes

LAHORE (May 05, 2009): A mismatch between planned project funding, the budgetary allocations and the actual release of funds are one of the factors, contributing to delays in projects completion. The development experts believe that the planning, programming, budgeting and managing processes of the government are flawed.

ICCI and Enterprises World sign agreement

ISLAMABAD (May 05, 2009): Islamabad Chamber of Commerce and Industry (ICCI) and Enterprises World have signed an agreement enabling the members to acquire the skill and opportunities to obtain industry competencies, receive adequate recognition, maximise their opportunities in the international market for the benefit of the country.

Proposals for 2009-2010 budget submitted: SCCI

KARACHI (May 05, 2009): The following are Sukkur Chamber of Commerce & Industry's proposals/suggestions for 2009-2010 budget:

Shafi Villas project: KBCA issues legal notice

KARACHI (May 05, 2009): The Karachi Building Control Authority (KBCA) has described the ongoing advertisement and sale of one unit bungalows in the private public sale project "Shafi Villas" on Plot No ST 10-13, Sector 7-8, KDA Scheme-42, Surjani Town as illegal.

Shipping Intelligence

KARACHI (May 05, 2009): Karachi Shipping Intelligence report incorporating changes till 7 am on Monday (May 04, 2009).

Activity at Karachi and Qasim ports

KARACHI (May 05, 2009): The Karachi Port handled 250,757 tonnes of cargo including 171,335 tonnes of import and 79,422 tonnes of export, 3,747 loaded and empty containers (TEUs) during last 24 hours ending at 0700 hours on Monday.

Stocks & Bonds

2009-05-04T22:35:00.000-07:00

KSE index down 139.85 points

KARACHI (May 05, 2009): The Karachi share market on Monday opened on a positive note and KSE-100 index hit 7,310.07 points intra-day high but the momentum could not continue due to investors' concerns over the law and order situation, as a result of which the index closed at 7,062.25 points with a loss of 139.85 points.

LSE index down 41.15 points

LAHORE (May 05, 2009): Equities remained under the grip of bearish sentiments on the Lahore Stock Exchange on Monday, mainly on account of deteriorating situation in the NWFA areas while because of lacking any positive news on the economic front also kept the buyers at distance.

ISE index falls 38.61 points

ISLAMABAD (May 05, 2009): Equities showed negative signs under the lead of hot favourite at the Islamabad Stock Exchange (ISE) where bears remained in the front seat under the lead of hot favourite amid decrease in index. ISE Ten Index showed a decrease of 38.61 points, as the ISE Ten Index moved from 1,646.92 to 1,608.31 points. The overall turnover stood at 1,579,600 shares as compared to previous turnover of 2,039,459 shares.

Mutual Funds Association of Pakistan

KARACHI (May 05, 2009): Mutual Funds Association has issued open-end funds daily prices for Monday (04 May 2009)

World’s biggest bond investors are sticking with Pakistan

2009-05-03T21:43:00.000-07:00

Bloomberg reports that most of the major inventors in Pakistani bonds are holding and not selling the bonds. This is a sign of confidence in the country. So contrary to the blasphemy of Hillary Clinton, and the claptrap emanating from the 5th column of the Pakistani media.

April 23 (Bloomberg) — Some of the world’s biggest bond investors are sticking with Pakistan even as the government struggles to combat al-Qaeda and Taliban militants along the border with Afghanistan.

ING Groep NV, Erste Sparinvest KAG and HSBC Holdings Plc, which oversee more than $800 billion in assets, are maintaining holdings of Pakistan’s dollar bonds as almost $13 billion in assistance from the International Monetary Fund and aid pledges help the country stave off default. The nation’s bonds have returned 35 percent this year, the best performance in Asia among dollar debt indexes compiled by London-based HSBC.

“Broadly, we believe that it definitely doesn’t look as bleak for Pakistan,” said Joel Kim, who helps oversee $433 billion globally as head of Asian debt at ING Investment Management in Hong Kong. “They’ve passed the worst point. The IMF money has helped stabilize things.”

A $7.6 billion bailout from the Washington-based lender in November stabilized Pakistan’s currency after it plunged 22 percent last year and boosted foreign-exchange reserves to $7.8 billion on April 4 from $3.5 billion in October, according to data compiled by the central bank. The South Asian nation won promises this month for $5.3 billion in aid from more than 20 countries to help shore up its economy and combat al-Qaeda and Taliban militants.

Cost of Terrorism

Terrorism has cost Pakistan $35 billion in economic losses and damage to infrastructure, according to a statement given to reporters by President Asif Ali Zardari’s aide on April 17. More than 3,500 terrorist incidents have occurred since 2007, killing an average of 84 people per month this year, the aide said.

“The financial package for Pakistan in November should help the country muddle through, but the political risk in the country remains extremely high,” said Peter Marber, the New York-based head of emerging-market debt and currencies at HSBC Global Asset Management, which oversees $370 billion in funds worldwide. “We have maintained a market weighting. We have no plans to increase exposure.”

U.S. Secretary of State Hillary Clinton said yesterday that Pakistan’s government is “abdicating” to the Taliban and other extremists. The U.S. is developing performance measures for Pakistan that will be linked to American aid, Clinton told the House Foreign Affairs Committee.

Pakistan’s 6.875 percent dollar bond maturing in June 2017 yielded 18.62 percent yesterday, versus a record high of 26.30 percent on Nov. 3, 2008, according to data compiled by Bloomberg. The price has climbed to 52 cents on the dollar, from as low as 35 cents last year.

Political Concerns

Standard & Poor’s, which rates Pakistan’s foreign-currency debt CCC+ or seven levels below investment grade, said international investors will stay away because political concerns distract policy makers from fixing the government’s budget and current account deficits.

The IMF forecasts the economy will expand 2.5 percent in the 12 months ending June 30, the slowest pace in eight years, after growing at an average annual pace of 6.8 percent since 2002. Foreign investment fell to $5.19 billion in the year ending June 30, 2008, from a record $8.43 billion a year earlier, government data show.

The government aims to collect 1.25 trillion rupees ($15.5 billion) in taxes in the fiscal year, from 1.04 trillion rupees a year ago, to narrow the budget deficit to 4.3 percent of gross domestic product. Central bank Governor Salim Raza said Jan. 31 that meeting the tax collection target may be a challenge as economic growth slows.

“The fiscal and external positions have continued to deteriorate,” said Agost Benard, S&P’s Singapore-based associate director.

Investors Return

Pakistani business officials say the perception of political risk is overstated and international investors are starting to return.

“There is now very early signs of portfolio investment starting to come back,” Asad Umar, the president of Karachi- based Engro Chemical Pakistan Ltd., said in an interview yesterday in New York. “Pakistan is going to come out of it earlier than the rest of the globe.”

The Karachi stock index is up 27 percent this year, compared with a 12 percent gain in MSCI’s emerging-market stock index. The rupee, which declined 22 percent against the dollar last year, the second-worst performer in Asia, fell 1.8 percent this year.

“International portfolio investment has been returning,” U.S. Ambassador to Pakistan Anne Patterson said in an interview on Bloomberg TV yesterday. “The stock market is beginning to recover.”

Bond Risk

The extra yield investors demand to own Pakistan bonds has tumbled 7.35 percentage points to 14.87 percentage points after reaching a seven-year high on Dec. 19, according to JPMorgan Chase & Co. Still, the country’s bond risk remains high. Five- year credit default swaps based on Pakistan’s bonds show investors need to pay $2.2 million annually to protect $10 million of Pakistan’s debt for five years, the third-highest in the world, according to CMA Datavision.

“We’re’ still holding the dollar bonds,” said Anton Hauser, a fund manager who oversees the equivalent of $1.1 billion in emerging-market debt at Vienna-based Erste Sparinvest, including Pakistani bonds due in 2017. “We’re neutral on Pakistan. We expect that they will muddle through and they will not default on their bonds.”

Stocks & Bonds

2009-05-03T21:25:00.000-07:00

KSE index loses 418.77 points

KARACHI (May 04, 2009): The KSE-100 index declined by 418.77 points, or 5.5 percent, during the week ended on May 2, 2009, closing at 7,202.10 points level from previous weeks 7,620.87 points due to the incidents of violence in Karachi, which forced the investors to offload their holdings on available margins.

LSE activity hurt by Karachi violence

LAHORE (May 04, 2009): The general law and order situation in the country due to fresh wave of violence in Karachi, and Army operation against militants in Lower Dir, Buner and other parts of NWFP hurt the sentiment on Lahore Stock Exchange during the week ended on May 2, 2009 and LSE-25 index went down by 126.27 points, or 5.69 percent, to close at 2091.01 points on Thursday against 2217.28 points of previous week.

Offshore investors withdraw another $12.216 million from equity market

KARACHI (May 03, 2009): The outflow of foreign portfolio investment continued as the offshore investors withdrew another $12.216 million from the country's equity market during April 2009. According to the National Clearing Company of Pakistan Limited (NCCPL) data.

EFU funds rates

KARACHI (May 03, 2009): EFU Life Assurance Ltd announced that the Offer and Bid prices for the following funds effective from Monday May 04, 2009.

Disturbances affect KSEKARACHI (May 01, 2009):

The benchmark KSE-100 index lost 69.20 points to close at 7,202.10 points level amidst thin volumes on Thursday due to investors' concerns over the deteriorating law and order situation. The market started on a negative note and the index hit 7,118.95 points intra-day low level, down by 152.34 point

Stocks & Bonds

2009-04-29T20:18:00.002-07:00

Bearish trend on KSE.

KARACHI (April 30, 2009): Karachi share market witnessed bearish trend due to investors concerns over the prevailing law and order situation in the northern parts of the country and the benchmark KSE-100 index declined by 158.78 points to close at 7,271.30 points level on Wednesday. The market opened on a positive note and the index hit 7,549.36 points intra-day high level, up by 119.28 points.

Panic selling seen on LSE.

LAHORE (April 30, 2009): Depressed sentiment continued at Lahore Stock Exchange on Wednesday and equities registered losses amid panic selling on account of ongoing operation against Taliban in some districts of NWFP. The LSE-25 index slipped by 50.02 points to 2101.48 against 2151.50 of Tuesday. Transaction volume squeezed to 18.762 million shares as compared to 22.481 million shares.

ISE index loses 27.87 points.

ISLAMABAD (April 30, 2009): Equities failed to show plus signs at Islamabad Stock Exchange (ISE) on Wednesday where fresh bearish assault moved the entire ready board in downward direction amid decrease in index. ISE-10 Index was down by 27.87 points from 1,674.79 to 1,646.92 points. Turnover amounted to 1,891,835 shares as compared to previous volume of 2,343,850 shares.

BRIndex30 sheds 166.35 points.

KARACHI (April 30, 2009): On Wednesday, the BRIndex30 opened at 7,007.23 with an upward gap of 41.17 points, and closed at 6,799.71 points, with a net negative change of 166.35 points and percentage change of 2.39. It experienced intra-day high of 7,127.25 and low of 6,779.82 points. The volume amounted to 146,530,400 shares, which was 80.58 percent of the total market and 96.10 percent of KSE-100 index.
Shares buy-back schedule
KARACHI (April 30, 2009): Shares buy-back schedule of listed companies on Wednesday (April 29, 2009).

IGI Investment Bank listed on ISE.

KARACHI (April 30, 2009): IGI Investment Bank, part of the IGI Financial Services, after meeting all the necessary financial and regulatory requirements, is now effectively listed on the Islamabad Stock Exchange (ISE).

Statutory returns: non filers to face legal action: SECP.

ISLAMABAD (April 30, 2009): The Securities and Exchange Commission of Pakistan (SECP) has decided to take legal action against directors and chief executives of approximately 23,850 companies, who failed to file statutory returns under the Companies Ordinance, 1984.

Revised Rates of Debt Securities.

KARACHI (April 30, 2009): The following were the revised rates of debt securities on Wednesday (April 29, 2009).

Odd Lot Market Rates.

KARACHI (April 30, 2009): Odd Lot Market Rates on Wednesday (April 29, 2009).
Mutual Funds Association of Pakistan
KARACHI (April 30, 2009): Mutual Funds Association has issued open-end funds daily prices for Tuesday (29 April 2009)

Trademark protection: Smeda publications to help SMEs improve export performance

2009-04-29T20:18:00.001-07:00

LAHORE (April 30, 2009): The Small and Medium Enterprises Development Authority (Smeda) has launched two new business development publications for the benefit of small and medium entrepreneurs (SMEs) to enable them to avail of the opportunity. Smeda Chief Executive Officer (CEO) Shahid Rashid highlighted the major features of the publications in a briefing held here on Wednesday.

IDA to provide $250 million for poverty alleviation project

2009-04-29T20:16:00.000-07:00

FAISALABAD (April 30, 2009): International Development Agency (IDA) will provide $250 million for 'Third Pakistan Poverty Alleviation Fund Project' to empower the targeted rural poor people that would help them achieve respectable livelihoods.

Rs 300 million provided for 202 uplift schemes in Dera Ghazi Khan

2009-04-29T20:15:00.002-07:00

MULTAN (April 30, 2009): Punjab government has provided funds of Rs 300 million for 202 development schemes of 33 electoral areas of provincial assembly in Dera Ghazi Khan division, said Commissioner Dera Ghazi Khan Hassan Iqbal while presiding over a high level meeting in Muzaffargarh on Wednesday.

Dearth of civil engineers hampering infrastructure development

2009-04-29T20:15:00.001-07:00

LAHORE (April 30, 2009): The dearth of civil engineers in Pakistan is hampering planning and delivery of infrastructure projects in the country and experts express fear that the phenomenon may continue over the next few years.

CCP to charge Rs 0.1 million for advice on mergers

2009-04-29T20:14:00.002-07:00

ISLAMABAD (April 30, 2009): The 'Acquisitions & Mergers Facilitation Office' (AMFO) of the Competition Commission of Pakistan (CCP) will charge a huge fee, of Rs 100,000 per case, for providing advisory facilitation service to companies.

Promotion of exports: ministry selects 10 officers for appointment abroad

2009-04-29T20:14:00.001-07:00

ISLAMABAD (April 30, 2009): Commerce Ministry has selected ten officers of District Management Group(DMG), Commerce and Trade (C&T) and one ex-cadre (Economist) to be appointed abroad to promote Pakistani exports, out of which more than half are, allegedly, 'Parchi Holders' of influential politicians.

Land for Gwadar airport: Balochistan government held responsible for raise in price

2009-04-29T20:12:00.000-07:00

ISLAMABAD (April 30, 2009): The Ministry of Defence has held the Balochistan government responsible for 122 percent increase in the price of the land for New Gwadar International Airport (NGIA). The provincial government has also been accused of not only ignoring the directives of the Deputy Chairman Planning Commission, but also changing the basic data of calculating the average price of land.

Volume squeezes to 181m shares as KSE sheds 239 points

2009-04-23T20:33:00.000-07:00

KARACHI - Nervousness among the investors over certain political and economic issues once again pushed the local bourse towards red-zone as KSE-100-index lost another 239 points on Thursday.Dusty opening kept the prospective buyers on the back foot, despite foreign inflows reported for Wednesday, the local participants stayed cautious and the equities continued to lose value.Corporate participants did come in for accumulation, however, knowing the factual situation that low turnover mainly due to absence of leverage product in ready board may lead to further price erosion, liquidity was withheld for bottom fishing (bottom yet to be identified).The KSE-100 Index closed at 7,335.72 points, confirming a loss of 238.45 points after touching day’s high level of 7,630.66 points and low level of 7,314.59 points on Thursday. Trading activity at the KSE was disturbing as the market volume squeezed to 181.167 million shares on Thursday as compared to 226.886m shares of last session.“The bearish blast turned out to be damaging for the investors as stock prices slide down in fast and furious manner. Despite quarterly results announced today were largely impressive, especially OGDC, FFC and MCB along with greater payouts. But the height of bearish tide washed away the stocks with better results”, stated Shahid Ali, CEO HMFS adding, FFC was the only stock left aside in the green zone. Over the last three days, the benchmark index remained under selling pressure as market lost 585 points and moved towards 7,000 points benchmark. Total trading value of the market remained 9.280b rupees as compared to last session’s 10.587b rupees.

Out of 352 active stocks at the KSE, only 60 companies managed to gain value, 282 declined while the worth of the shares of only 10 symbols remained unchanged. Market Capitalization decreased to Rs2.193 trillion on Thursday, showing loss of nearly Rs71b from last session’s Rs2.264 trillion.Fauji Fertilizer was witnessed as the volume leader of the day with the trading of 13.452m shares on Thursday. Other prominent shares at the KSE include Lucky Cement 12.960m shares, OGDC 12.198m shares, NIB Bank 11.185m shares, DGKC 8.344m shares, Bank Al-Falah 7.036m shares, Jahangir Siddiqui 6.997m shares, NBP 5.859m shares, Pak Oilfields 5.708m shares, United Bank 4.927m shares, Pak Petroleum 4.614m shares namely.Top gainers at the Karachi stock market include Service Industries and it gained Rs7.66/share, closing at Rs160.89, Exide Pakistan added Rs6/share and closed at Rs136 with the trading of only 200 shares, Shahtaj Sugar gained Rs3.44/share and its value was improved to Rs75.20, IGI Insurance added Rs2.83/share and closed at Rs101.83, Pakistan Tobacco added Rs2.29/share and closed at Rs74.29, Zulfeqar Industries closed at Rs76.25, gaining Rs2.11/share, Fauji Fertilizer gained Rs1.50/share and closed at Rs99.91.On the other hand, Wyeth Pakistan lost Rs54.25/share and closed at Rs1325.75 with the trading of only 60 shares on Thursday, Unilever Pakistan lost Rs31.99/share and its value was decreased to Rs1948.01, Attock Petroleum also lost Rs12.97/share and closed at Rs291.45, Shell Pakistan lost Rs11.82/share, closing at Rs228.21, PSO Pakistan closed at Rs200.40, losing Rs10.54/share, Siemens Pakistan lost Rs10/share and closed at Rs750, MCB Bank lost Rs9.32/share and closed at Rs177.27.Growing concerns regarding certain political issues and anticipation of a sour budget have together allowed nervousness to resurface. Low turnover at peak is certainly pushing the levels at the lower side.

Pakistani businessmen have 'successful' talks in New York

2009-04-23T20:30:00.000-07:00

NEW YORK - A delegation of Pakistani businessmen and entrepreneurs, jointly sponsored by the governments of Pakistan and the United States, flew to Washington Thursday after a "successful visit" to New york where its members met their American counterparts and news media representatives."We had a very good visit here and achieved a lot," Saleem Mandviwala, Minister of State and Chairman of the Board of Investments who is leading the delegation, told a press conference.In Washington, the delegation is expected to meet US commerce secretary Gary Locke and other administration officials, besides businessmen and investors.US Ambassador to Pakistan Anne Patterson, who accompanied the delegation, said that she felt that Pakistani entrepreneurs had made a "great impact" on American investors during their presentations about the vast opportunities in Pakistan, despite security challenges in the country.Mandiwala acknowledged that there were security challenges, but Pakistan provided very easy terms to foreign investors. There were vast investment opportunities in the pakistan, a country of 16 million people with a big market.The basic purpose of the delegation, the minister said, was to bring home to their American counterparts that the situation in Pakistan was not as serious as projected in the media. "We apprised them of the correct sitaution," he said.Other delegation members pointed out that despite the security situation, none of the multinationals and other foreign-owened enterprises have abandoned their businesses.Asked to specify the successes of the delegation, Mandviwala referred to an announcement earlier this week that Oaklahoma-based businesses have been awarded nearly $100 million in contracts for the engineering, procurement and construction of two power plants in Pakistan. The two natural gas-fired power plants will produce a combined 160 megawatts of electrical power.Mandviwala said that more delegation would come from Pakistan to follow up on the results achieved by them.

SBP releases annual report 2007-08: working capital, trade loans show increase while bank advances to equity market depict decline

2009-04-23T20:29:00.000-07:00

KARACHI (December 07, 2008): Review of the Economy: Both working capital and trade loans showed an increase while fixed investment loans and bank advances to the equity market demonstrated a decline in the last financial year, says the State Bank of Pakistan in its annual appraisal of the economy in financial year 2007-08. The document was issued Saturday, after a delay of five months.

Recent trends in key macroeconomic variables quite encouraging

2009-04-23T20:28:00.002-07:00

ARTICLE (April 05, 2009): Recent trends in most macroeconomic variables suggest that the disciplined implementation of the macroeconomic stabilisation program is bearing fruit. With an improvement in fiscal discipline complementing the tightening of monetary policy, aggregate demand has seen a meaningful contraction.

Reasonable growth in agriculture sector hoped

2009-04-23T20:28:00.001-07:00

KARACHI (April 05, 2009): Agricultural sector growth will be reasonably good during FY09 due an anticipated record wheat harvest above target performance of minor crops and a reasonably good out turn by the livestock sub-sector. According to the SBP second quarterly report, despite the drag from 18.5 percent decline in sugarcane output during kharif FY09, agricultural sector expects a healthy growth due to the bumper wheat crop.

CPI inflation to remain above 20 percent

2009-04-23T20:27:00.002-07:00

KARACHI (April 05, 2009): The State Bank of Pakistan has predicted that headline CPI inflation would be above 20 percent in FY 2009. "Although headline CPI inflation showed some signs of respite after reaching its three decades high level of 25.3 percent in August 2008, it has remained on the higher side," said the SBP second quarterly report on economy.

Result of disciplined implementation: macroeconomic indicators start showing improvement

2009-04-23T20:27:00.001-07:00

KARACHI (April 05, 2009): Pakistan's macroeconomic indicators have started to show improvement due to disciplined implementation of the macroeconomic stabilisation program. However, the country will miss the chief economic targets like GDP, inflation, remittances, exports and large-scale manufacturing (LSM) in fiscal year 2008-09, according to the Second Quarterly Report of the State Bank of Pakistan on the State of Economy released on Saturday.

Defence spending, interest on debt absorb three-fourths of revenues

2009-04-23T20:24:00.000-07:00

KARACHI (April 05, 2009): Defence spending and interest costs on country's rising debt are absorbing three-fourth of the revenues, says the State Bank of Pakistan. The second quarterly report on the economy, issued by SBP, on Saturday also said that due to sharply constrained access to international capital markets as well as slower deposit growth in banks, the domestic interest rates will be more sensitive to government funding demands through the volume-based auctions of government paper.

Politics and industrial development in Pakistan discussed

2009-04-23T20:23:00.000-07:00

LAHORE (April 24, 2009): On the second day of the conference held here Thursday, session three focused on "Industrial development and competitiveness" of Pakistan economy. Dr Hamid chaired the session. The lead speaker for this session, Dr Adeel Malik discussed the political economy of industrial development in Pakistan from a long term perspective.

CDGK decides to turn KIA into model industrial zone

2009-04-23T20:22:00.002-07:00

KARACHI (April 24, 2009): The city government has decided to turn sector 27 of Korangi Industrial Area (KIA) as model sector industrial zone, this was stated by Town Nazim, Landhi, Asif Husnain in a meeting with Chairman and members of Korangi Association of Trade an d industry (KATI) on Thursday.

UNIDO accelerates CDM for energy efficiency in Pakistan

2009-04-23T20:22:00.001-07:00

KARACHI (April 24, 2009): United Nations Industrial Development Organisation (UNIDO) has accelerated its efforts towards implementation of its Clean Development Mechanism (CDM) programme leading to energy efficiency in the Pakistan. The CDM under article 12 of Kyoto Protocol is considered as an effective mechanism for industrial and economic development for the developing countries like Pakistan.

Only half of Rs 67 billion spent on uplift schemes: Qaim unfolds 53-page one-year performance book in Assembly

2009-04-23T20:21:00.003-07:00

KARACHI (April 24, 2009): Sindh government during the last one year has calculated its development portfolio in different sectors at Rs 67 billion, out of which the "very week institutions" of PPP-led provincial government spent 30 to 50 percent on ground.

Senate body urges members to take country out of economic crunch

2009-04-23T20:21:00.001-07:00

ISLAMAMABAD (April 24, 2009): The Senate Standing Committee on Finance on Thursday met and urged the elected representatives to not only reduce their expenditure but also make efforts to take the country out of the severe economic crunch. The Secretary Senate informed the meeting that the Secretariat made a substantial saving of Rs 10 crore last year and this year too a substantial amount of saving is expected.

IMF projects current account balance minus 5.9 percent of GDP

2009-04-23T20:20:00.001-07:00

ISLAMABAD (April 24, 2009): The International Monetary Fund (IMF) has projected Pakistan's current account balance for 2009 as minus 5.9 per cent of GDP in dollar terms. A recent report of IMF revealed that in 2009, the external debt refinancing needs of the country in 2009 as percentage of reserves would be around 28 per cent.

Repatriation of profit by foreign investors rapidly decreasing

2009-04-23T20:17:00.000-07:00

KARACHI (April 24, 2009): Repatriation of profit and dividend by foreign investors is rapidly decreasing as it has registered a decline of 4 percent during the first nine months of current fiscal year mainly due to the slackness in the economy.

BRIndex30 down 254.36 points

2009-04-23T20:16:00.000-07:00

KARACHI (April 24, 2009): On Thursday, BRIndex30 opened at 7,177.15. It closed at 7,002.64 with a net negative change of -254.36 points and percentage change of -3.51. It experienced intra-day high of 7,330.65 and intra-day low of 6,982.11. The volume amounted to 142,267,100, which was 78.53 percent of the total market and 93.32 percent of KSE-100 index.

ISE index shows decrease of 54.57 points

2009-04-23T20:14:00.000-07:00

ISLAMABAD (April 24, 2009): Equities failed to show recovery signs at the Islamabad Stock Exchange (ISE) where major players and short-term margin hunters offloaded their positions to avoid heavy loses amid decrease in index. ISE Ten Index showed a decrease of 54.57 points, as the ISE Ten Index moved from 1,679.15 to 1,624.58 points.

Bears remain in driving seat on LSE

2009-04-23T20:12:00.000-07:00

LAHORE (April 24, 2009): Bears remained in the driving seat at the Lahore Stock Exchange (LSE) where losers outclassed gainers with wide margin under the lead of favourite scrips amid descending transaction volume on Thursday. The LSE-25 index further declined to 2117.90 against 2204.52 of Wednesday, depicting a fall of 86.62 points.

Selling pressure on KSE intensifies

2009-04-23T20:08:00.000-07:00

KARACHI (April 24, 2009): Heavy selling pressure continued at Karachi share market due to below the expectations of corporate results and absence of leverage product and the benchmark KSE-100 index witnessed a further decline of another massive 238.45 points (3.15 percent) to close at 7,335.72 points level on Thursday.

Financing allowed for spinning sector machinery import

2009-04-22T04:41:00.001-07:00

KARACHI (April 22, 2009): The State Bank of Pakistan has allowed financing for plant, machinery & equipment under LTFF to be used by the export-oriented projects in sub-sectors/processes of spinning sector including doubling, twisting, combing, slubbing, lycra, and yarn dyeing.

Machinery import under LTFF: refinance of outstanding long-term loans allowed

2009-04-22T04:38:00.000-07:00

KARACHI (April 22, 2009): The State Bank of Pakistan has decided to allow a one-time opportunity for export-oriented industries to refinance their outstanding long-term loans availed from banks/DFIs for import/purchase of plant and machinery with loans under SBP's long term finance facility (LTFF) scheme to facilitate exporters.

Are they preparing to fight? 15,000 licences for fire arms issued

2009-04-21T20:31:00.000-07:00

KARACHI (April 22, 2009): Sindh home department has issued as many as 15,000 licences for fire arms to Pakistan People's Party loyalists from Sindh Home Minister's quota only, violating its own directives against issuance of licences for maintaining peace in the province.