01

BUSINESS

BSaturday, 13 April, 2013

KARACHI

sTaFF rePOrT

AS expected, the centralbank on Friday kept thediscount rate intact at9.5 percent for the nexttwo months.

The decision was taken by the CentralBoard of Directors of the State Bank ofPakistan (SBP) at a meeting held under thechairmanship of Governor Yaseen Anwar atthe SBP Head Office.

Low financial inflows and high debtpayments that currently are driving the dol-lar-hungry country’s balance of paymentsposition forced the central bank to maintainthe status quo.

While the external current accountdeficit is expected to widen further in theremaining months of FY13, the net capitaland financial inflows are not likely to in-crease considerably. In addition, the SBPhas to retire another $838 million of IMFloans during the remaining period of FY13after making payments of $2.2 billion dur-ing the first three quarters of the current fis-cal year. Due to these developments, thepressure on foreign exchange reserves islikely to remain in the coming months.

It was also observed by the Board thatcontrary to expectations, the year-on-yearinflation has come down by 1.5 percentagepoints; from 8.1 percent inJanuary 2013 to 6.6 percentin March 2013 posing diver-gent policy choices for theSBP. While the balance ofpayments position calls forcaution, the declining trend ininflation indicates a possibleresumption of ease in the pol-icy rate.

In the monetary policystatement of February 2013,the SBP highlighted two mainchallenges for monetary pol-icy: to manage the balance ofpayment position and to con-tain the possible increase in inflation.

Since then, SBP’s foreign exchange re-serves have declined by another $2 billion;from 8.7 billion at end-January 2013 to$6.7 billion as of 5th April 2013, mainlydue to debt payments. Contrary to expecta-tions, however, year-on-year inflation hascome down by 1.5 percentage points; from8.1 percent in January 2013 to 6.6 percentin March 2013. These developments posedivergent policy choices for the SBP. Whilethe former calls for caution, the latter indi-

cates a possible resumption of ease in thepolicy rate.

The balance of payments position con-

tinues to bedriven by lowfinancial in-flows and highdebt payments.A cumulativenet capital andfinancial inflowof $34 millionduring July–February, FY13 is insufficient to financethe external current account deficit of $700

million for the same period. While the ex-ternal current account deficit is expected towiden further in the remaining months ofFY13, the net capital and financial inflowsare not likely to increase considerably.

It is important to emphasize that it isnot the size of the external current accountdeficit, which is projected to be small andmanageable, but the lack of adequate finan-cial inflows that is exerting pressure on thebalance of payments.

In addition, the SBP has to retire an-other $838 million of IMF loans during theremaining period of FY13 after making

paymentsof $2.2 bil-lion duringthe firstthree quar-ters of thecurrent fis-cal year.Thus, thepressure onforeign ex-change re-serves islikely toremain in

the coming months. So far the SBP hasplayed an active role in managing the con-

ditions, but only a consistent increase inforeign exchange can ensure sustainablestability in the market.

The role of interest rate is also impor-tant in this context as it determines the re-turn on rupee denominated assets relativeto foreign currency assets. The idea is todiscourage speculative demand for dollarsby keeping rupee denominated assets suf-ficiently lucrative.

Real returns on rupee denominated as-sets have marginally increased due to a sub-stantial decline in inflation. Moreover, ledby a depreciation of 5.2 percent in theNominal Effective Exchange Rate (NEER),the Real Effective Exchange Rate (REER)has also depreciated by 4.2 percent duringJuly – February, FY13. This bodes well forthe competitiveness of the external tradesector. However, real cost of borrowing hasincreased, which may be undesirable in thewake of declining private investment andlow growth in the economy.

Despite continued energy shortages andsubstantial fiscal borrowings from thebanking system, credit extended to privatebusinesses has shown some nascent recov-ery. During July – February, FY13, loans toprivate businesses have increased byRs173.3 billion as opposed to Rs56.8 bil-lion during the same period of last year.

SBP keePS Policy rate iNtactat 9.5% for two MoNthS

LOW FINANCIAL INFLOWS ANDHIGH DEBT PAYMENTS THATCURRENTLY ARE DRIVING THEDOLLAR-HUNGRY COUNTRY’SBALANCE OF PAYMENTSPOSITION FORCED THECENTRAL BANK TO MAINTAINTHE STATUS QUO.

NEWS DESK

The Federal Investigation Agency (FIA)has launched an investigation into thecountry’s biggest foreign currency ex-change scandal which reportedly causedhuge losses to the national kitty, accordingto media reports.

Per details, FIA is looking into allegeddubious deals between Western Union(WU), ZARCO Exchange Company Pri-vate Limited (ZECPL) and the State Bankof Pakistan (SBP) on account of misappro-priation in remittances, it was reported.

A case has been registered at FIA Cor-porate Crime Circle Lahore, while non-

bailable arrest warrants were issued forSBP Export Policy Department (EPD) Sen-ior Joint Director Najamul Saqib.

The agency has also summoned EPDSenior Executive Director Asad Qureshi,EPD Director Muhammad Mansoor Ali,EPD Additional Director Moinuddin, WUCountry Manager Abdul Hameed Fareed,former country head Sobia Rehman andSenior Vice President Middle East andAfrica Jean Claude Farah. Evidenceemerged regarding payment of school feesof Saqib’s son from the account of ZECPLon instructions of Mubashir Hayat Mirza,former chief executive officer of ZARCO.Under the law, Saqib and the other men-

tioned officials of the EPD are required torestrict ZECPL from illegal transfers offoreign exchange outside the country.

Per SBP rules, a foreign exchangecompany can transfer only 20% outside thecountry against the foreign remittances re-ceived in the country. The investigation re-vealed that ZECPL transferred 35% foreignexchange currency in collusion with offi-cials of WU and SBP.

Investigations suggest that this in-creased transfer resulted in a surge in thevalue of the dollar against the rupee, caus-ing heavy losses to the exchequer.

FIA’s investigations also reveal thatWU did not pay any amount in taxes de-

spite earning an approximate profit of Rs1.5 billion per year. The question of tax of-ficials’ involvement in the large-scale eva-sion is also being scrutinised by the FIA’sinvestigation team.

FIA officials involved in investigationssaid if the accused are arrested and requi-site records are provided to the agency, itwould help put a stop to illegal transfer offoreign exchange abroad in future.

However, the task had been made dif-ficult for FIA as EPD officials reportedlyrefused to provide the required records,while the Finance Ministry and the SBPhave also barred WU representatives frombecoming party to the investigation.

FIA is looking into alleged

dubious deals between Western

Union (WU), ZARCO Exchange

Company Private Limited

(ZECPL) and the State Bank of

Pakistan (SBP) on account of

misappropriation in remittances

Mansha considering buying Neelum-Jhelumhydel project

NEWS DESK

Leading Pakistani industrialist and entre-preneur Mian Muhammad Mansha said heis considering buying the Neelum-JhelumProject which is estimated to produceelectricity that would cost 14.5 cents perunit, according to media reports on Friday.Speaking at a workshop on the upcomingpolls organised by Media Advocacy Cen-tre (MAC) the other day, Mansha said hewas approached by the government to in-vest in the said project after funds pro-vided by the Asian Development Bankfell short of the required capital. He saidhe had declined the offer because he didnot consider investing in governmentprojects a wise idea. However, when hewas offered the option of buying thewhole project, he said he would considerit and will initiate a serious discussion onthe deal within a couple of months.Terming power shortage the biggest issuefacing Pakistan, he said the countryneeded to work its way out of it as soon aspossible using all means available such asalternate fuels for thermal energy, wind,solar and run-of-the-river hydel projectsinstead of going for construction of mas-sive dams. Talking about the state of af-fairs in Pakistan and the direction inwhich he believed they were moving, hesaid social protection provided by the freemedia and the independent judiciarycaused a paradigm shift in Pakistan for thebetter which needed continuity.

Pakistan Petroleum buys MND Group assets

PRAGUE: Czech integrated energy playerMND Group has sold its upstream assets inPakistan and Yemen to Pakistan Petroleum.The Prague-based energy company, which isowned by the KKCG investment group, putthe assets in the shop window this time lastyear. As part of the deal, Pakistan Petroleumis picking up a stake in OMV’s Sawan gasfield, where output runs to about 200 millioncubic feet per day of gas. The Karachi-basedexplorer is also gaining a boosted share in itsown Barkhan gas block as well as stakes inMari Gas Company’s Harnai and Ziaratblocks. In Yemen, MND E&P held a stake inTotal’s Block 3 also part of the sale. Thevalue of the deal was not disclosed, butMND Group said that Pakistan Petroleumhad been the highest bidder. The Czech com-pany added that both sides were “confidentthat the consideration paid fairly reflected thehigh value of the producing assets as well asthe superior prospectiveness of the explo-ration licences”. The deal is being made as acorporate sale of London-registered MNDExploration & Production, which PakistanPetroleum has renamed PPL E&P Europe.Although it has sold off the E&P arm, theCzech company is not exiting upstream ac-tivities. MND Group oil and gas directorMiroslav Jestrabik said that the explorerplanned to “use the substantial funds fromthe transaction” to help raise financing for itsprojects in central and eastern Europe. Thecompany holds exploration and productionassets in the Czech Republic, including shaleacreage, as well as stakes in Georgian blocksand business in drilling and field services,terminals, gas storage and gas trading. InP

ISLAMABAD

aPP

The Islamabad High Court (IHC) on Friday upheld the fed-eral government’s decision of sacking Utility Stores Cor-poration Managing Director Maj Gen (r) Farooq.

The court also ordered the Ministry of Industries sec-retary to assign a senior officer to look after the affairs ofthe Corporation until a new MD was appointed.

A single-member bench of IHC comprising JusticeShaukat Aziz Siddiqui resumed hearing of a plea filed byGeneral (r) Farooq against his termination.

During the hearing, Farooq’s lawyer Akram Shaikh saidthat his client’s contract was terminated without any priorintimation. To this, Justice Siddiqui asked Shaikh whetherhis client was appointed through competitive process.Shaikh responded that according to the notification of the

Establishment Division, there was no requirement of com-petitive procedure to hire retired judges, civil servants andarmy officers on any post. The judge observed that thereshould be no special treatment for retired judges, civil ser-vants and army officers and all appointments should bemade on merit by adopting competitive procedure.

Representing the federation, Deputy Attorney GeneralTariq Mahmood Jahangiri said that neither the advertise-ment for the post of MD Utility Store was given nor ruleswere followed in the appointment. He argued that theSupreme Court had also given a decision in the Hajj Cor-ruption case that after retirement, no officer should be ap-pointed on contract in any organisation. After hearing thearguments, the court vacated the stay order in favour ofFarooq and ordered the Industries secretary to appoint anew MD within a month through competitive procedure.

IHC upholds govt’s decisionof sacking Utility Stores MD

Yaseen anwar

There should be no special treatmentfor retired judges, civil servants andarmy officers and all appointments

should be made on merit by adopting competitive procedure.

SHAUKAT AZIZ SIDDIQUIJustice

FIA TO PROBE CURRENCY SCANDAL

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BUSINESSSaturday, 13 April, 2013

LAHORE: Tunisian Ambassador Mourad

Bourehla gives a certificate to Honourary Consul

General Farooq Hameed at Avari. sTaFF PHOTO

KARACHI: The Honorary Consul General of

Romania Tariq Saud hosted a reception in

honour of the Romanian Ambassador Emilian

Ion at a local hotel. Picture shows Acting

Sindh Governor Nisar Ahmed Khuro, Fahad

Saud, the host and the chief guest. Pr

leadership and Neuroscience led Social cognition Breakthroughs unveiled at kSBl

KARACHI: Dr Milan Pagon

-Professor of Management

at Zayed University, UAE,

shattered common

misconceptions about

human psyche at a

Leadership seminar

organized by Karachi

School for Business Leadership-KSBL. The seminar

was attended by students from varsities across

Karachi, heads of corporate entities including

Gillette Pakistan, ICI Pakistan, HUBCO, etc,

entrepreneurs from various industries and Syed

Shabbar Zaidi, Minister of Finance, Govt. of Sindh -

who shared his views about the importance of

higher education as well as leadership for national

progress and praised the role being played by

KSBL. Professor Pagon highlighted the impact of

neuroscience on better leadership practices to

enhance individual productivity and harness the

languishing manpower in Pakistan to create

economic and social prosperity. Dr Pagon said that

having a healthy balance of emotions and logic in

decision-making is vital along with stating that

human beings were using their entire brain

according to latest research- a refutation of the

widely believed theory of just 10 percent of the

human brain being utilized. He said that consistent

positive feedback and initiating behavior changes

by introducing positive practices instead of trying to

delete negative ones were pivotal tactics to make

an organization and nations successful. Pr

MotoGPtM engines get fired-up to the newtissot chronographs

KARACHI: The time has come for another exciting

season of fast-paced and breath-taking

performances. This is not only true for the MotoGP

races but also for their dedicated watches. At the

start of the season, Tissot, the Official Timekeeper

of MotoGP, launches the MotoGP 2013 watch

Collection, which will keep everyone right on track

for all the races this season. This year’s Official

MotoGPTM Collection comprises of two Tissot T-

Race MotoGP Limited Edition 2013 watches; one is

a mechanical piece limited to 3333 pieces, while

the other is powered by a quartz movement,

produced in a series of 8,888 pieces. These

watches illustrate both the qualities of the bikes

themselves as well as those of the riders. They

have the dynamic look and robust aspect of the

bikes with details reflecting some of their features,

from the counters all the way to its carbon

composition. Pr

Samsung introduces the GalaXy Mega

LAHORE: Samsung Electronics

Co., Ltd, a global leader in digital

media and digital convergence

technologies, today announced

the Samsung GALAXY Mega, a

device that combines the

portability and convenience of a

smartphone with the power,

multitasking capabilities and

extensive viewing experience of

a tablet. The newest addition to

the GALAXY family balances an

optimal viewing experience on a 6.3-inch HD

screen, yet is ultra-thin and portable enough to put

into a pocket or hold in one hand. The GALAXY

Mega offers a mix of popular smartphone and tablet

features such as an effortless user experience, a

split screen, multitasking between video and other

apps and more. “We are aware of a great potential

in the bigger screen for extensive viewing

multimedia, web browsing, and more,” said JK Shin,

CEO and Head of IT & Mobile Business, Samsung

Electronics. Pr

NBP’s cSr servicesappreciatedKARACHI: The community and social services of

National Bank of Pakistan has been appreciated

by the Inter-Services Public Relation (ISPR).

During the closing ceremony of the skiing event,

the ISPR not only acknowledged the principal role

of NBP in the event but also awarded a shield

that was received by Syed Ibne Hassan,

Divisional Head-Corporate Communication

Division of the bank. Under the banner of

“Heliski”, it was the first event of this project

organised by ISPR. In this way, the organiser

brought the first ever Heliski adventure to the

amazing mountains of Pakistan and promoted the

soft image of the country. In this exploration

event, eight specialist international Heli-skiers

participated. The NBP was the major sponsor of

this event. Pr

every second counts as Murray wins Miami MastersKARACHI: Rado sends congratulations to our

global brand ambassador, Andy Murray, on

winning the Miami Masters. In extremely hot

and humid conditions, Andy showed his

resolve, strength and determination to win a

memorable match. The win gained crucial tour

points for Andy, and helped to secure his status

as 2 the ATP world rankings. This was Andy’s

ninth Masters title and adds to his impressive

tally of 26 career titles. Commenting on Andy’s

latest victory, Rado CEO Matthias Breschan

said: “We are delighted for Andy that he has

won another career title and returned to 2 in

the ATP world rankings. Andy continues to build

on the great success he had in 2012 and

everyone at Rado is proud to share this journey

with him.” Pr

CORPORATE CORNER

02

B

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERunilever Food XD 5000.00 5175.00 4901.00 5175.00 175.00 160Bata (Pak) XD 1773.00 1840.00 1808.00 1840.00 67.00 800Wyeth Pak Ltd XD 1194.58 1254.30 1180.00 1249.53 54.95 7,600sanofi-Aventis sPOt 435.48 457.23 457.23 457.23 21.75 100clariant PaK. XD 251.86 264.45 250.00 264.45 12.59 37,800

Major Loserscolgate Palmolive 1999.00 1950.00 1950.00 1950.00 -49.00 50Philip Morris Pak. 341.45 349.00 324.38 324.38 -17.07 11,800sunrays textile 198.00 189.00 188.20 188.20 -9.80 1,000Premium tex. 145.00 145.90 137.75 137.75 -7.25 2,500Pak Oilfields 482.07 482.65 472.10 475.16 -6.91 197,300

Volume Leaders

tRG Pakistan Ltd. 7.33 8.33 7.40 8.31 0.98 35,501,500Pak elektron Ltd. 12.04 13.04 11.25 13.04 1.00 14,217,500Jah.sidd. co.XD 12.43 13.28 12.34 12.84 0.41 13,738,000Bankislami Pakistan 6.30 7.15 6.15 6.94 0.64 9,699,500P.i.A.c.(A) 6.45 6.93 6.30 6.48 0.03 8,429,500

Interbank RatesusD PKR 98.2497GBP PKR 150.8625JPY PKR 0.9905euRO PKR 128.1963

ForexBUY SELL

us Dollar 98.95 99.20 euro 127.95 128.28 Great Britain Pound 149.88 150.24 Japanese Yen 0.9822 0.9914 canadian Dollar 95.79 97.39 Hong Kong Dollar 12.43 12.65 uAe Dirham 26.63 26.85 saudi Riyal 26.13 26.35

ISLAMABAD

aPP

CARETAKER PrimeMinister Mir HazarKhan Khoso on Fri-day constituted athree-member com-

mittee for preparing concrete andpractical recommendations to over-come the financial woes of the Pak-istan Steel Mills (PSM).

The committee consists of sec-retaries of ministries of finance andproduction, and chief executive of-ficer (CEO) of Pakistan Steel Mills.

The PM constituted the commit-tee while presiding over a meetingto review the overall performance ofPSM and the challenges it faces.

Briefing the PM,Ministry of ProductionSecretary Shahid UllahBaig said the basic causeof losses incurred byPSM was due to its in-ability to utilise its capac-ity and that it would

break even only if its pro-duction was 75% of thetotal capacity. He also in-formed the PM that fourbailout packages hadbeen given to PSM butthey could not help in

improving its performance becauseof piecemeal payments.HIGHWAYS AND MOTOR-

WAYS: Separately talking to FederalMinister for Communication, Portsand Shipping Asadullah Khan Man-dokhel, Prime Minister Khoso saidthat road network is crucial not onlyin connecting different parts of thecountry but also for sustained eco-nomic growth. Khoso urged the Min-istry of Communication to vigorouslypursue communication projects sothat economic activity can be accel-erated. He said that the Ministry ofCommunications should prioritisework for early completion of inter-provincial highways, adding that thequality of work must be maintainedat par with international standards.

PM forms committee forPSM financial bailout

HIGHWAYS,MOTORWAYS IS CRUCIAL FOR SUSTAINED ECONOMIC GROWTH.

ISLAMABAD

aPP

Mobile banking in Pakistan haswitnessed a reasonable growth asthe number of such accounts (M-Wallets) has reached 1.4 millionby 2012, showing an increase of156 % as compared to previousyears.

The current number of m-banking accounts is seven timeshigher than the numbers at theend of September 2010. Of thetotal 1.4 million m-banking ac-counts, 66 % are active ac-counts and the ratio of activeaccounts has increased from 54% as of end December 2011.

The Pakistan Telecommunica-tion Authority (PTA) in its re-port has revealed that thisincrease in the active accountsis mainly due to increase in thesmall transaction m-banking ac-counts by UBL Omni, facili-tated by regulatory flexibility inaccount opening by State Bankof Pakistan (SBP).

Keeping in view the cellu-lar mobile subscription of over120 million, the figure of 1.4million m-banking accounts isa very small number, and showsthe potential of m-banking inPakistan even if we were toreach 50 % of all cellular sub-scribers.

The report said Pakistan hastwo major players Telenor with‘Easypaisa’ launched in Octo-ber 2009 and United Bank Lim-ited (UBL) with ‘Omni’initiated in April 2010. Thesetwo major m-banking initiativeshave significant contribution inthe growth of mobile banking inthe country.

It said during last two years,there has been a massivegrowth in terms of basic indica-tors of m-banking indicators in-cluding m-banking agents,m-wallet accounts, number oftransactions undertaken per dayand the outreach to low-incomesubscribers.

Sc declares SecP chairman appointment invalidISLAMABAD: The Supreme Court ofPakistan (SC) on Friday declared the ap-pointment of Security and ExchangeCommission of Pakistan (SECP) chair-man illegal and invalid.A two-judge bench headed by JusticeJawwad S Khawaja issued the brief orderin the case. According to the judgment,the appointment of former chairmanSECP Muhammad Ali was illegal and,hence, invalid. The court maintained thatrules and regulations were not adhered toin the appointment of the SECP chairmanand clause 5 of SECP rules is in conflictwith the law and constitution. Moreover,the SECP chairman’s position was not ad-vertised, court ruled, ordering the federalgovernment to appoint a new SECP headsoon. sTaFF rePOrT

Mobile-banking with 1.4 million accounts shows remarkable surge

SBP caps forex exposure at rs 3.5 billionKARACHI: The central bank has decided to increase the maxi-mum cap on aggregate Foreign Exchange Exposure Limit(FEEL) of the authorized dealers to Rs 3.5 billion. The increasewould be effective from April 15, said the State Bank. Based onthe review of the annual audited accounts, the FEEL of each au-thorized dealer would be advised separately, the regulator said.All other instructions on the subject, however, shall remain un-changed, it said. sTaFF rePOrT

MIr Hazar KHOsO

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