Pages: 7 profit.com.pk Wednesday, 28 December, 2011

The Chinese juggernaut Page 3A year of gloom foragriculture sector Page 7

Addressing the gasdilemma Page 2

ISLAMABADAMER SIAL

eStImAtInG that consumerswere burdened with anenormous cost of rs20billion for new natural gas

supply schemes, ministry of petroleumhas moved a summary forconsideration of economicCoordination Committee (eCC)requesting either restoring the oldcriteria or providing soft loans at fiveper cent markup to utility companiesfor new projects.Petroleum minister Dr Asim Hussainconfirmed that two summaries havebeen forwarded to eCC for changingprice criteria for new gas supplyschemes and for changing pricestructure for LPG Air mix to meet uprising demand of LPG in the country.According to details, ministrydecided to seek amendment in theexisting gas supply price criteria,

which was notified in 2008 to bringthe two state owned gas utilitycompanies out of financial burden toundertake new projects. SSGC andSnGPL are eligible for a return onassets of 17 and 17.5 per centrespectively as determined by oil andGas regulatory Authority (oGrA).new criteria enhanced the consumercost by 2.7 times, while change inassuming consumer base from 30 percent to 60 per cent increased the costcriteria by 5.4 times. the criteria wasrevised by enhancing the perconsumer cost from rs20,000 tors54000 for 13.5 km pipeline radiusfrom gas fields in Punjab and Sindh,rs40,000 to rs108,000 for 27 kmradius in Khyber Pukhtoonkhwa andrs100,000 to rs270,000 for 67.5 kmradius in Balochistan.the decision cased an impact ofrs34.3 billion on SnGPL and rs7.5billion on SSGC. Share of SnGPLunder the old criteria would have been

rs6.6 billion and SSGC rs1.3 billion.this would have saved the consumersof financial burden of rs17.5 billion incase of SnGPL and rs2.8 billion incase of SSGC. this caused an increaseof 28 per cent in gas prices which wasborne by the consumers.Increase in cost required gas utilitycompanies to borrow funds tocontinue financing the ongoing capitalexpenditure, as oGrA determinedoperating cost did not include financialcharges incurred on interests of 16 percent. Due to which utilities had noincentive to launch new projects.Currently SnGPL is working on 2900new development schemes worthrs33 billion, which are 46 per centcomplete while SSGC is working on944 schemes worth rs7.8 billionwhich are 76 per cent complete. newschemes will cause an additionalburden of 694 mmcfd on SnGPLsystem and 15 mmcfd on SSGCsystem. SnGPL would provide gas to

1.7 million new consumers and SSGCto 65,280 new consumers. LPG Air mix: In a separate summary,Petroleum ministry has soughtinclusion of cost of LPG air mix in theuniform cost of gas formuladetermined by oGrA in the weightedaverage cost of gas (WACoG). Atpresent the guidelines are applicablefor stand alone distribution projectsfor the supply of LPG Air mix, LnGand CnG. Currently SSGC is supplyLPG Air mix to Gwadar and noshki inBalochistan and Kot Ghulammohammad in Sindh.Gas utility companies want to extendsupply to new areas which was onlypossible if oGrA includes cost ofLPG air mix in WACoG, which theministry estimates to cost rs308.95per mmBtU. However, the guidelinesdo not allow feasibility for newprojects without the specificdirections of the president, primeminister, cabinet or eCC.

LAHORENauman Tasleem

WItH the given resources,PePCo has performedvery well in the year 2011and we will make utmost

efforts to provide uninterruptedelectricity supplies to the country in2012, said Pakistan electric PowerCompany (PePCo) managing Directorrasool Khan mahsud in an interviewwith Profit. rasool Khan mahsud tookcharge of PePCo on october 1st, 2010and since then made utmost efforts forreducing load shedding but he saidoutages could not be controlled unlesssupplies of oil and gas are increased ordependency on both products reduced.He said oil and gas is the lifeline forpower plants but its unavailabilityremained major problem for thecompany during 2011 and because of the

absence of these products; the menace ofload shedding haunted the country. “ourenergy mix comprises of 30-35 (5,500-6,000 megawatts) per cent from hydelgeneration and 65 per cent (12,000-12,500mW) from thermal plants, whichruns on gas and oil therefore availabilityof gas and oil, is vital for power sector,”he said adding often generation ofelectricity declines sharply due to lessavailability of gas and oil. “our gas fieldsremained under problem due tosabotage activities by the terrorists and itresults in reduction in gas supplies topower plants and consequently, theelectricity production suffered badly,”PePCo mD said adding if there issmooth supplies then load sheddingcould end. He said company madeexcellent efforts after october 2011power crisis and there has been no loadshedding since then. He said if paymentsare made in time to the independent

power plants (IPPs) then there could besignificant reduction in outages. “Wefaced problems in october2011 due to oilpayments to theIPPs and sincepayments aremade in time,there is no loadshedding. Itreflects our roundthe clock efforts andcommitment,”he

added. to a question of increase inelectricity prices, rasool Khan mahsudsaid oil prices in international market areincreasing and in the past it touched the$147 per barrel but then musharraf-ledgovernment did not allow to increase theelectricity tariffs due to public fear andduring that time the circular debt ofPePCo piled up and now the currentgovernment is facing this problem.“WAPDA former chairman tariqHameed asked Pervez musharraf forincreasing electricity prices to save the

power sector from the heavy debts butthe latter denied it and now we

are facing huge increase inelectricity prices,” he saidadding in the year 2011PePCo successfully managedto control the circular debt.He said Karachi electric

Supply Company (KeSC)is not generating power

as per requirement of Karachi andcontinuously getting huge amount ofelectricity from PePCo and at the sametime KeSC is not paying outstandingrs45 billon to PePCo. “We have anagreement of providing 650 megawattsto KeSC but for the last three months weare giving more than 850mW to KeSCand it caused further pressure on oursystem,” he added. to a question ofunscheduled load shedding, PePCo mDsaid it is carried out to save the systemand if it is not done then the wholedistribution system could collapse. Hesaid forced load shedding is the betterway to save the system. rasool Khanmahsud emphasised on exploringalternative resources for producingpower. He said government is makinggreat efforts for enhancing powerproduction and also planned to installcoal projects so that dependency on oiland gas could be reduced.

petroleumministry seeksrevision inprice criteria

govt directs DIsCOs to shortlistCEO candidates

ISLAMABADAMER SIAL

Government has issued strictinstructions to the board ofdirectors of power distribution

companies (DISCos) to finalise names ofcandidates for appointing chief executiveofficers of these companies beforeDecember 31. An official source saiddirections were issued by ministry of waterand power after it was noted that boardshad failed to perform their task for the lastthree months. Federal cabinet had directedDISCo boards in early october to finalisenames of candidates. Government hadinitially planned to appoint new Ceos byoctober end to expedite restructuring ofmanagement of DISCos. the source saidonly four DISCos, including LeSCo,FeSCo, GePCo and QeSCo havesubmitted their panel of names to theCabinet Committee on restructuring(CCor) while response from IeSCo,mePCo, PeSCo, HeSCo and SePCo wasstill being awaited. they were remindedthat they have to finalise names before theyear end so that the process for appointingnew Ceos could be completed. Incumbentmanagement of DISCos was opposingappointment of new Ceos. the boards toohave some concerns on the advertisedcriteria for selecting new Ceos.Government allowed mePCo to includeother candidates for interviews, eventhough the final selection would be madeby the prime minister. the source said thatthere were concerns in official circles on theperformance of the boards as manydirectors have non professionalbackgrounds. After short listing candidates,CCor would be submitting the final panelconsisting three candidates to the primeminister for approval. Boards have sentpanels having five to seven names ofcandidates. the appointment of new Ceoswill start the second phase of power sectorreforms which will end with the making ofDISCos feasible for privatisation. thesource said the establishment of a powerwing in moWP having professionals toeffectively address power sector issues wasalso facing hurdles, as the establishmentdivision had not responded to the provisionof one joint secretary, two deputysecretaries and four section officers for thelast four months. Government has alreadytransferred all financial and administrativefunctions of PePCo to the nationaltransmission and Dispatch Company(ntDC) till full functioning of CPPA.

2011 Review: PEPCO did well with given resources

gas supply

PDF Profit_Layout 1 12/27/2011 11:40 PM Page 1

debate

Wednesday, 28 December, 2011

02

ALI RIzvI

GIven the excessive gas short-fall in the present wintersthat has pushed the authori-ties to make some drastic de-

cisions including gas curtailment to theCnG sector, certain industries and gasload shedding to domestic consumers,we met mr Arif Hameed, managing Di-rector SnGPL to get his take on the ex-acerbating scenario that is multiplyingthe woes of not only the domestic con-sumers but also of the industrial sector.the problems are indeed troubling andthere seems to be no easy way out of thequagmire, so we discussed with mr Arif,the priorities of SnGPL, the problemsbeing faced and the possible solutions toa worsening situation.

a DEplEtINg REsOuRCE“Gas in Pakistan is a rapidly depleting re-source. the effective utilisation of thenatural resource remains to be a priorityfor us and the government. Unfortunatelyover the past few decades authoritieshave failed to realise where their priori-ties lie. Pakistan is the largest consumerof CnG in the transport sector worldwide,followed by Iran. this obviously poses aserious dilemma for the effective alloca-tion of gas to different sectors of the econ-omy,” mr Arif explained.

What stands out according to statis-tics is that 61 per cent of all vehicles inPakistan run on CnG, whereas only12.64 per cent of all vehicles in Iran runon the same fuel. Such a discrepancyhighlights the enormity of the problemat hand. While talking to mr Arif re-garding the priorities of gas distribu-tion, he said, “our first priority lies withthe domestic consumer, followed by in-dustrial consumers and finally the com-mercial sector.”

In response to how certain coun-tries across the globe have adoptedCnG since it is an environment friendlyfuel, he agreed with the impression andsaid that the benefits of CnG consump-tion for transportation cannot be ruledout. However he pointed out that one ofthe reasons for encouraging the use ofCnG in the transport sector was to cur-tail on oil imports that burdened theforeign exchange reserves and the cur-rent account.

IMplEMENtatION Of pOlICIEs“the situation could have been handledbetter if the policies that were formu-lated had been implemented. It wasagreed that CnG stations would begiven licenses for operation if they werespaced out between five kilometersfrom each other, however the policy wasnever adhered to, resulting in a satura-

tion of such outlets. the result was thatnearly everyone wanted a CnG station,”he said. While shedding light on theshortage of gas in the country, mr ArifHameed said, “In the last one year,there has been 90mmcf increase in de-mand of gas. We need to understand,that Pakistan is not purely an agrarianeconomy. the lifeline of the countrycontinue to be the industries as well,and as a result of an increase in demandof gas; the curtailments to the industry,have also adversely affected it. ourfocus remains, to find a solution thatbenefits all the stakeholders.”

SnGPL is catering to more than 4.1million consumers with one of thelargest distribution and transmissionnetwork connecting areas from northand Central Pakistan through an exten-sive network that runs the length ofPunjab, Khyber Pakhtukhwa and AzadKashmir. According to the companywebsite, SnGPL has 3,929,842 con-sumers in Commercial, Domestic, Gen-eral Industry, Fertiliser, and Power andCement Sectors.

supply CONstRaINts“on our part we are faced with severesupply constraints. there has been ex-pansion without keeping in mind consid-eration of supply inadequacies. Further

inefficiency of appliances is leading towastage of an important resource. Previ-ously the SnGPL used to authorize prod-ucts with an official seal of SnGPL on allgas products, however the policy is nolonger in effect. therefore, keeping acheck on all the substandard equipmentthat wastes gas has become a hard task,”Arif Hameed explained. As far as infra-structural problems are concerned, theSnGPL mD pointed out that thepipelines in many cities are decades oldtherefore there are leakages. the cost ofreplacement of this infrastructure isgreat not only in terms of the intangibles,he said, like inconvenience caused to themasses but also in terms of uprootingmajor roads of cities which is used by alarge number of vehicles for daily com-mutation. He said that they use laserradars to pinpoint leakages deep withinthe ground and based on the informationtry to address the problem as efficientlyas possible. moreover with an amount ofrs720m 1300 CnG stations have beeninstalled with state of the art systems toensure that gas theft is minimised.

While explaining the possible solu-tions for addressing the gas quagmire,the mD said that the shortfall could beoffset through a plethora of alterna-tives. these include the use of Liquefiednatural Gas, around 400mcbf can beextracted indigenously to cover theshortfall while 500mcbf will be made

available once the Iran Pakistan gasProject is operational. For LnG 3 termi-nals have been made where two localfirms and one foreign firm have beengiven licenses. It is pertinent to men-tion that the turkish firm that got thelicense for the project demanded thegovernment to purchase gas if they failto sell it to local consumers. mr ArifHameed, while speaking about thesame issue said that the turkish firmhas failed to pick up consumers and itis not under the domain of SnGPL to doso on the turkish firms behalf.

aDDREssINg CONCERNsto a question regarding the supply ofgas to the industrial sector for 9 monthsof the year SnGPL mD, Arif Hameedsaid that those fertiliser companies thatwere contracted before 1984 have a 12month supply agreement while thosecontracted after 1984 have a 9 monthcontract. Similarly, those CnG stationsthat were contracted before march2008 have a 12 month supply contractwhile those contracted after march2008 have a 9 month supply contract.

Briefing us about the gas load man-agement plan, which was discussed inthe economic Coordination Committeemr Arif Hameed clarified that the do-main of SnGPL is to formulate guide-

lines whereas the final decision is takenby the eCC and the Cabinet. While talk-ing about the scenario where the IPproject does not materialize, mr ArifHameed said that in that case, we willhave to rely more on LnG and LPG. Heexplained that the prices of both thefuels have risen because countries likeJapan and India have signed long termcontracts to cater to their energy needs.

When asked about the coal gasifica-tion project mr Arif Hameed said that itis a very good project one that promisesto address the energy needs of the coun-try, however the costs of the project arevery high. He explained that earlier,SnGPL was quite interested in the proj-ect however it is now a provincial proj-ect therefore it does not fall under thedomain of the company.

pROfIlE mr Arif Hameed joined SnGPL in 1978.He was a mechanical engineer initially inthe distribution department and workedhis way up the ladder as Gm sales. Hesaid he has worked in almost every de-partment of the company from purchaseto legal administration. ‘my bond withthe company is one that cannot be ex-plained in mere words. I feel genuinelydisturbed that this company has had toface a plethora of problems that have ad-versely affected the functioning. In mywork here as the managing Director Ihave made all possible efforts to improveupon the discipline in the company.”

Given the problematic gas situationin the country, with the ordinary con-sumer having to face the brunt of gasloadshedding, CnG curtailment and theindustry struggling, we felt that theSnGPL needs to be taken to task howeverafter talking to mr Arif Hameed, we wereforced to revisit our pessimism. mr ArifHameed was very straightforward and ac-knowledged the grievances we had how-ever, he said under his leadership SnGPLhas made all possible efforts to improveefficiency of the company. What needs tobe understood is that the company ismerely responsible for transmission anddistribution while the other decisions fallunder the domain of the respective min-istry and the cabinet. the company has tofollow directives issued from the relevantgovernment departments.

He also acknowledged the presenceof political pressure something hetermed as being part of the packagehowever he said that he believed in pro-moting the culture of merit and not suc-cumbing to any pressure from anysources. He praised Dr Asim Hussainfor his accommodating approach andprofessional attitude that is beneficialin supporting independent decisionmaking and promoting merit.

Comments and queries:ali.rizvi7957@gmail.com

Addressing the gas dilemma

NOuRIEL ROuBINI

tHe outlook for the global econ-omy in 2012 is clear, but it isn’tpretty: recession in europe, ane-mic growth at best in the United

States, and a sharp slowdown in China andin most emerging-market economies.Asian economies are exposed to China.Latin America is exposed to lower com-modity prices (as both China and the ad-vanced economies slow). Central andeastern europe are exposed to the euro-zone. And turmoil in the middle east iscausing serious economic risks – boththere and elsewhere – as geopolitical riskremains high and thus high oil prices willconstrain global growth.

At this point, a eurozone recession is cer-tain. While its depth and length cannot bepredicted, a continued credit crunch, sover-

eign-debt problems, lack of competitiveness,and fiscal austerity imply a serious downturn.

the US – growing at a snail’s pacesince 2010 – faces considerable downsiderisks from the eurozone crisis. It must alsocontend with significant fiscal drag, ongo-ing deleveraging in the household sector(amid weak job creation, stagnant in-comes, and persistent downward pressureon real estate and financial wealth), risinginequality, and political gridlock.

elsewhere among the major advancedeconomies, the United Kingdom is doubledipping, as front-loaded fiscal consolida-tion and eurozone exposure underminegrowth. In Japan, the post-earthquake re-covery will fizzle out as weak governmentsfail to implement structural reforms.

meanwhile, flaws in China’s growthmodel are becoming obvious. Falling prop-erty prices are starting a chain reaction that

will have a negative effect on developers, in-vestment, and government revenue. theconstruction boom is starting to stall, just asnet exports have become a drag on growth,owing to weakening US and especially euro-zone demand. Having sought to cool theproperty market by reining in runawayprices, Chinese leaders will be hard put torestart growth. they are not alone. on thepolicy side, the US, europe, and Japan, too,have been postponing the serious economic,fiscal, and financial reforms that are neededto restore sustainable and balanced growth.

Private- and public-sector deleveragingin the advanced economies has barely begun,with balance sheets of households, banksand financial institutions, and local and cen-tral governments still strained. only thehigh-grade corporate sector has improved.rising inequality – owing partly to job-slash-ing corporate restructuring – is reducing ag-

gregate demand further, because house-holds, poorer individuals, and labor-incomeearners have a higher marginal propensity tospend than corporations, richer households,and capital-income earners. Finally, policy-makers are running out of options. Currencydevaluation is a zero-sum game, because notall countries can depreciate and improve netexports at the same time. monetary policywill be eased as inflation becomes a non-issue in advanced economies (and a lesserissue in emerging markets). But monetarypolicy is increasingly ineffective in advancedeconomies, where the problems stem frominsolvency – and thus creditworthiness –rather than liquidity.

meanwhile, fiscal policy is constrainedby the rise of deficits and debts, bond vigi-lantes, and new fiscal rules in europe. Back-stopping and bailing out financialinstitutions is politically unpopular, whilenear-insolvent governments don’t have themoney to do so. And, politically, the promiseof the G-20 has given way to the reality ofthe G-0: weak governments find it increas-

ingly difficult to implement internationalpolicy coordination, as the worldviews,goals, and interests of advanced economiesand emerging markets come into conflict. Asa result, dealing with stock imbalances – thelarge debts of households, financial institu-tions, and governments – by papering oversolvency problems with financing and liq-uidity may eventually give way to painfuland possibly disorderly restructurings. Like-wise, addressing weak competitiveness andcurrent-account imbalances requires cur-rency adjustments that may eventually leadsome members to exit the eurozone.

restoring robust growth is difficultenough without the ever-present specter ofdeleveraging and a severe shortage of pol-icy ammunition. But that is the challengethat a fragile and unbalanced global econ-omy faces in 2012. to paraphrase BetteDavis in All About eve, “Fasten your seat-belts, it’s going to be a bumpy year!”

A version of this article was firstpublished in Project Syndicate

profits ali Rizvi interviews MD sNgpl arif Hameed to discuss the gas dilemma, and the possible solutions to addressing the shortfall

Fragile and Unbalanced in 2012

PDF Profit_Layout 1 12/27/2011 11:40 PM Page 2

WHen Giuseppe mazzini was at theforefront of the Italian political scenein the mid-nineteenth century, hewas vying to unite a previously dis-jointed Italy. once that was achieved

in 1871, mazzini reiterated that the unification of eu-rope was the continuation of the Italian unification.While the idea made sense even back then, europe wasmarred by a plethora of antagonistic forces sandwichedbetween the German and Italian Unifications and theculmination of World War II. that moment onwards

europe has collectivelyhankered after sustainableunity, to extinguish thedemons of their violentpast, but that hasn’t man-aged to materialise for amultitude of reasons. thequestion of european inte-gration has an uncannytendency of resulting in athrowback to the past. Andwith europe falling fromthe apogee of its heyday,

the continent has found it hard to deal with the chang-ing global picture.

Historically USA has provided europe with thesole model for a single market, but global economicconvulsions have meant there is an upsurge of Asiaand Latin America as well. experts opine that soon theeurozone GDP could lag behind China as far as pur-chasing power parity is concerned. And even morealarmingly there is a possibility that China, when cou-pled with India, could amount to nearly twice the sizeof the eurozone economy. the cumulative GDP of G-7 countries could diminish owing to the recent up-surge of nascent economic powerhouses. Hence, itgoes without saying that europe is far from being apart of any geopolitical status quo - if one exists – andit must collectively endeavour to overcome the politi-cal and economic differences within its ranks.

Considering the fact that any unification involvesthe collective good and the vested interests, clarity indifferentiating and apt prioritising is a prerequisite forprogressing together. David Cameron’s ‘holier than

thou’ standpoint at the recent eU summit was a perfectexample of what should not be happening, for the eu-rozone to climb the pecking order in the global matters.obviously, the foremost task of every individual mem-ber state is to ensure that its own unit attains as muchstability as possible. this can only be achieved via re-sponsible policy making on the part of individual gov-ernments, who should take measures that prove to befruitful for their own interests but that also, cater thegreater good of the entire zone. It is all good compellingindividual states to follow a rulebook, and for those whoprove to be incompetent conditional aid is another pop-ular choice; but every country should be given an op-portunity to cleanup its own mess.

now, for those countries who have generated somuch mess that they are forced to wash their dirty linenin public – or worse, who are dependent on others fora purge out- an authoritative, yet considerate approachon the part of the Who’s Who of the zone is required.the formulation of budgetary policies, of the countriesthat find themselves in a hole, is the most telling taskfor any authority, and therefore, it should be handledmeticulously. this would require a metamorphosis ofthought process at the european helm, and the powersthat be must embrace the redefinitions of sovereigntyand authority among other things. the interlinked webthat the eurozone has become connotes that sifting col-lective interests from individual standpoints would takean unprecedented level of mutual understanding, bar-ring which the european cauldron would continue tosimmer on endlessly.

Any planning for the future for the europeansshould encompass both the fiscal policies and compet-itive policies and the imposition of “second stage”. theexecutive duties should obviously continue as they existpresently, but another important factor worth consid-ering is the presence of a ministry representing the eu-rozone in international financial institutions. thecreation of a european finance ministry is proving to beinevitable; and if it isn’t formulated in the days to come,it would have to be formed for better supervision of thefinancial sector eventually. For example, G-20 mem-bers envisage europe as a whole rather than focusingon its member states individually; and hence collectiverepresentation would prove to be unavoidable one day.

Any student of european history is well aware ofthe historical problems that the continent has had toface. And now with the continent at the crossroads ofepoch-making developments a collective effort, that su-persedes historical animosities and egoistic approaches,is required for the zone to penetrate into the upper ech-elons of the global geopolitical structure.

The writer is Texas A&M Universitygraduate who is currently employed with

Telenor in the Products - Commercial Division.He can be reached at syed.jan@gmail.com

SrI Lanka expo 2011 comes at anopportune time for Pakistan,when donors and friends alike areraising disturbing questions re-garding resource mobilisation.

Unfortunately, Islamabad seems to have re-alised ambitious budget targets are going tobe embarrassing misses, and is weighing dif-ferent options of communicating the failurein a way that does not erode too much dig-nity ahead of elections.

So instead of the promised PSe privati-sation drive we’ve had an ideological shift.the people’s party suddenly finds reason torevisit its original left-leaning ethos, that re-structuring should suffice in place of sellingstate assets altogether. Few expected ejectionof political appointees so close to the electionin the first place. And while PSes continue todrain rs400 billion annually, official fiscalspace is expected to remain tight since therehas been no visible effort to reorient the ex-port basket. there will be little to be ex-

tracted from the otherwise disturbing col-lapse of the rupee. And little needs to be saidregarding FBr reforms. It seems we willhave to rely on foreign aid that much longer,since the government is already exhaustinglocal borrowing opportunities to fund itsnon-development budget.

therefore initiatives like the Sri Lankaexpo 2011 need to be taken seriously. toprovide much needed fiscal elbow room, thegovernment must go back to the basics oftrimming losses and expanding earning.While improving trade, its best to build o andfine tune existing arrangements, beforeleveraging the improved profile to ventureinto uncharted capitals. So long as the gov-ernment is without the political will to takepainful but necessary steps like privatisationand FBr overhaul, it must at least build onexport revenue. that way, it will draw someadvantage yet from the rupee weakening en-vironment. So far, though, there has been lit-tle of note in the ongoing fiscal year.

Trade not aid

Europe needs acollective effort thatsupersedes historicalanimosities andegoistic approaches

The European dilemma

Syed Omer Jan

E D I T O R I A L

The Chinese juggernaut

CHInA has over the last severaldecades emerged as the worldssingle most dynamic economybut this progress has beenmore marked ever since it

began its transition to a more market basedeconomy. the question though is what in ef-fect drove them to make these changes. tech-nological advancement in economies beganfrom the industrial revolution that acceler-ated the pace of development mostly throughthe mechanization of work and processes,breakthroughs that were led by scientists and

engineers in their laboratories. the Chinese juggernaut picked up pace

after mao Zedong and other Chinese leader-ship began to reverse the backwardness ofthe region by adopting a policy which facili-tated the construction of advanced capitalintensive industries. Such a strategy eventu-ally enabled China to test the nuclear bombin 1960 and soon after launch satellites inspace in the 70’s. However the economy wasstill fairly poor and agrarian in nature, withlittle comparative advantage against othersuch capital intensive economies. the firmsrequired government protection and policiesof import substitution, subsidies and admin-istrative directives. While these policies werein some measure successful, they could notjump start economic growth with the per-formance being relatively poor.

What stood out when finally the transi-tion of the Chinese Goliath to a market basedeconomy started in 1979 was that the leader-ship under Deng Xiaoping did not resort to apolicy of privatisation or trade liberalisation.

Instead it continued to strengthen the domes-tic industry through government patronageand simultaneously allowed private enter-prises to invest in the labour intensive sectorsthat were comparatively repressed but con-sistent with Chinese comparative advantage.

Such an approach paid great dividends asit enabled the country to not only achieve sta-bility but also paved way for economicgrowth. What exactly are the dividends? Well,they have witnessed 9.9 per cent of averageannual GDP growth and 16.3 per cent of an-nual trade growth over the past 32 years –growth that holds lessons for other develop-ing nations. the result of integration into amore market based economy has been thatthe country is now the worlds largest exporterand second largest economy. A gargantuan600 million people were pulled out of povertyowing to such developments.

the moral of the story is that progress andeconomic growth are not lofty ideals but quiteachievable if a dedicated team of policy makersand visionaries are bent upon producing re-

sults. the global eco-nomic recession has hitthe developed world hard,however it has simultane-ously presented theemerging economies withthe opportunity to tapinto the developed mar-kets, to fill in the voidsince these economies re-main relatively unaffected. It comes as no won-der that one third of the worlds savingsoriginate from Asia. therefore the way forwardis for Asian countries to invest in infrastruc-ture, human resource and capital intensive in-dustry. more importantly after the Asianeconomies were shaken by the financial crisisback in the 2000’s they made a concerted ef-fort to move towards financial self reliance.the transition of Asian economies to self re-liance was in stark contrast to the massive debtcreation, unprecedented leverage and creditcreation frenzy of the developed economies.

What eventually ensued were large im-

balances that shook theeconomic landscapeacross the globe. In thewake of such imbalancesthe strength of the Asianeconomies have increas-ingly been highlightedand they can continue ontheir path towards dy-namic growth. While

some may be quick to argue that the perform-ance of a country of over 1 billion people can-not be replicated however, what policymakers need to understand is that all devel-oping countries can enjoy similar successes tosustain economic growth and reduce povertyexponentially by merely exploiting the bene-fits of their backwardness, exporting technol-ogy from the developed world and upgradingindustries. the recession for Asia is an oppor-tunity to bottom fish yet again.

The writer is a professionalbanker and financial commentator

Basit Rizvi

For comments, queries and contributions, write to:

Email: profit@pakistantoday.com.pk ph: 042-36298305-10 fax: 042-36298302 website: www.pakistantoday.com.pk

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We d n e s d a y, 2 8 D e c e m b e r, 2 0 1 1

Can the Chinesemodel of success bereplicated by otherdeveloping nationsacross the globe?

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MaHEEN syEDSub-Editor

Benefits of MFN status

this is with regards to the feature, ‘mFn, apromising dream’, published yesterday.the title itself is a misnomer today, keepingin mind the fact that once, back in 1996,India had also blessed Pakistan with asimilar title and since then, it has remaineda subject of immense debate. there are anumber of trade experts and economiststhat have spoken in favour of the grant ofmFn status to India; negating the notionsthat domestic industry would suffer onseveral grounds as a result. As a generalrule, the clauses laid down in the agreementclearly promote non-discrimination amongboth the countries and aim to uphold thetrue spirit of free trade. therefore, mFnstatus to India would bring greaterbenefits to Pakistan.

FAROOq AHMEDWAH CANTT

The omen factor

this is with regards to the article, ‘Zongand manchester Unite(d)’ publishedyesterday. one has to agree that Zong’ssales are going to skyrocket after thecollaboration with manchester United. Ihave many friends who are die-hardUnited supporters, and they want tocollect every single thing that isassociated with their club. But yes theomen factor pointed out in the article isalso very interesting, because Zong’sdeal has come at a time whenmanchester United has been strugglingon the pitch. there has been recentimprovement though, and whether theystruggle or not, the annoyingbandwagon of United fans does not looklike halting any times soon.

TALAL DARLAHORE

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04news

wincom CEO, Mr Zahoor Motiwala

System and processes are in place andreinventing the complete system will becounter production for the GDP of thecountry, at least in the short term

Index ends flat on investor pessimismKARACHI

STAFF REPORT

KSe 100 index closed flattishat 11,311 levels after the fi-nance minister rejected the

idea of withdrawing Capital Gainstax (CGt) or bringing it under thePresumptive tax regime (Ptr).volumes once again painted a verygrim picture with 20 million shareschanging hands. Furthermore, a re-port citing American officials assaying that US-Pakistan relation-ship is in troubled waters dentedthe already beleaguered sentiment.

FFC closed in the ‘green’ up 0.7per cent after FFC and FFBL in-creased the price of urea by

rs.100/bag to rs.1580/bagtoday, but declining urea and DAPoff take numbers in novemberweighed in on fertilizer advance asFFBL dipped 0.94 per cent andenGro closed down 0.33 per cent.

Almost all major oil and Bankingstocks witnessed dismal volumesand remained out of favor with in-vestors. Investors seem to be on along vacation as volume shrank tomerely 19.58m shares with the indexremaining almost at the same level.In the light of fragile economic con-ditions investors remained at bay.‘We believe today’s speech by mr.Zardari will set the tone for the restof the current regime’s tenure,’ saidBilal Asif at HmFS. Among the top

ten stocks only four stocks crossedover the million share trading mark.the volume attrition continues tothreaten the viability of stock pun-ters and brokers. We firmly believethe stock market has incorporatedthe futuristic risk, hence the in-vestors’ sentiment seems fairly jus-tified, he added. As soon as theconcerns related to economic con-cerns are addressed, the benchmarkperformance may improve accord-ingly. the valuations at local bench-

mark are fairly attractive, but macroeconomic menace has taken the in-vestors away.

the KSe 100 index closed at11311.38 levels after gaining 1.03points. the KSe 30 index closed at10275.60 levels with the loss of16.98 points, while All Share indexgained 0.43 points to close at7826.66 levels. total 86 scrips ad-vanced 104 declined and 110 re-main unchanged out of total 300scrips traded.

sECp approves reportingof trades in unlisted tfCsISLAMABAD: Securities and exchange Commission ofPakistan (SeCP) has approved the amendments forregulations of national Clearing Company of PakistanLimited (nCCPL); providing for electronic reporting oftrades executed in unlisted term Finance Certificates(tFCs) on tuesday. SeCP has taken the decision as partof the commission’s efforts to promote the debt capitalmarket in Pakistan. nCCPL reporting platform will beoperational from next month and all financialinstitutions, mutual funds, brokers and other corporatebodies will be able to report their trades through thisfunctionality. Unlisted tFCs represent a major portion ofthe corporate debt market in the country. Hence, thedevelopment of a centralised platform, providing accessto real-time trading information in these securities wasvital. this will not only provide market participants withtransparent and accurate trading information, but willalso assist in the price discovery process. the tradesreported through this platform will also be disseminatedto the stock exchanges and displayed on their websites,to provide the debt market participants with a holisticview of the local corporate debt market and its tradingactivities. efforts are also underway for introducingclearing and settlement of these unlisted tFCs throughnCCPL which will facilitate investors in settling theirtransactions and provide the debt market segment withnecessary infrastructural support. SeCP has advisednCCPL to disseminate the concept paper on the abovereporting platform to all of its clearing members andconduct training sessions and workshops to createawareness among market participants. Going forward, inorder to ensure completeness of trading data beingreported, amendments will also be made to theregulations of the Central Depositary Company whereby,movements of tFCs in CDC on account of tradingactivity will only be allowed if these trades are reportedthrough nCCPL platform. STAFF REPORT

prolonged load sheddingperturbs sialkot chamber SIALKOT: Addressing an important meeting of all themain trade bodies of Sialkot held at SCCI, PresidentSialkot Chamber of Commerce and Industry (SCCI)naeem Anwar Qureshi strongly condemnedreintroduction of prolonged load shedding. He saidunscheduled load shedding for extended hours is notmerely disturbing the routine of the people but is alsoadversely affecting production of the industry. Herevealed that exporters are unable to honour theircommitments despite the fact that they are under anobligation to deliver consignments to their foreignbuyers as per agreed terms. on this occasion, JavaidGhuman (Superintending engineer) Gepco Sialkot toldthe meeting that that the load shedding was due to non-payment of fuel charges to IPPs. He, however, assuredthe Sialkot business community that the situation willimprove in a day or two due to payment of fuel chargesto IPPs, which will bring additional 3500 megawattelectricity to the national Grid. ARIF MEHMOOd SHEIKH

plan chalked out forhill torrent managementLAHORE: Punjab Irrigation Secretary, Irfan elahi hassaid a comprehensive plan has been chalked out to savethe far-flung areas of DG Khan and rajanpur from thehavoc of hill torrents. He said in this regard, work hasbeen started on the project and rs5,398 million havebeen allocated for hill torrents’ management. Irfanelahi further added that the project costing rs1,605million, has been approved for Kohra, Dahwa andSanghar. Similarly, rs717 million has been approvedfor Kohra and rs3076 million has already beenallocated for the management of hill torrents inSorilund, Chahar, vidore and mithawan in Dera GhaziKhan. ‘After the completion of these projects,thousands acres of barren land can be cultivated withthe water of hill torrents which would be a goodaddition in agriculture products,’ he added. STAFF REPORT

aBC and OCCI seekmeasures to counter piracy ISLAMABAD: American Business Council (ABC) andoverseas Chamber of Commerce and Industry (oCCI)have sought steps from government to counter piracyand counterfeiting of registered brands. A delegation ofABC and oCCI met with the chairman of IntellectualProperty organization Pakistan (IPo-Pakistan) HameedUllah Jan Afridi and discussed issues of piracy andcounterfeiting of registered international brands in thecountry. STAFF REPORT

Mafia controls FPCCIallege Balochistan chambers

KARACHIGHULAM ABBAS

tHe hot seat of presidentFederation of PakistanChambers of Commerceand Industry (FPCCI)may become a source of

serious rift in the business commu-nity of the country since all chambersof commerce and industry ofBalochistan have stood against one ofthe contestants, allegedly nominatedby a strong group of FPCCI.

All five chambers of commerceregistered in Balochistan have termedone of the three contestants, vying forthe slot of president of FPCCI in theforthcoming annual elections, as anominee of mafia which controls thewhole body. Addressing a joint pressconference at Karachi Press Club ontuesday, the representatives of Las-bela Chamber of Commerce and In-dustry, Gawadar Chamber of

Commerce and Industry, makranChamber of Commerce and Industryand Chaman Chamber of Commerceand Industry alleged that a mafia ledby tariq Sayeed, a renowned business-man, has nominated Haji Fazal KadirKhan Sherani as a contestant of thepresidential seat from Balochistan.

As Sherani is not a representativeof any chamber of what is touted as adeprived province, his candidature forthe hot seat was a conspiracy againstnot only the business community ofthe province but also whole country.

It is worth mentioning, as per rulesof FPCCI the presidential slot was to befilled on rotation bases as it was theturn of Balochistan this year. threecandidates had so far filed their nomi-nation papers for the election whichwas scheduled to be held on thursdaybetween 9am and 5pm at the FPCCIhead office. A tough fight was expectedbetween three candidates namelyKadir Khan Sherani, maqsood Ismail

and mir Haji Lashkari raisani.“We have the chance to have the

presidential seat of FPCCI after 12years but the strong mafia in thebody is trying to elect its blue-eyedone, a nominee of none of theBalochistan’s registered chambers,”meer naveed from Gwadar Cham-ber of Commerce and Industry said.“We the real representative of alltrade bodies of the province havethe right to decide who will be thenominee for PFCCI presidentialslot”, he said adding that but the in-terest group in the body was notready to give the right to the alreadydeprived province.

He alleged that Sherani was con-testing the presidential slot as a mem-ber of All-Pakistan ContractorsAssociation (APCA), an unregisteredassociation in Balochistan. the associ-ation was registered in Lahore makinghim disqualified for the slot whichshould be filled from Balochistan.

Daroo Khan from Chaman Cham-ber of Commerce and Industry said,interestingly, Sherani, despite being amember of Quetta Chamber of Com-merce, was not nominated or selectedby the chamber for the presidentialelection. Showing a letter of Securityand exchange Commission of Pakistan(SeCP), company registration officeQuetta, he said the association ofSherani was not registered in SeCP.

In reply to query, Jamal-uddin,member of FPCCI said business com-munity of Balochistan would approachprime minister, commerce ministerand other concerned authorities if themafia elected the bogus candidatefrom his province. He said all cham-bers of the province including Quettachamber have developed a consensuson a contestant. “We will go to court ifSherani was not deleted from the con-testant list”, he added. It is worthmentioning here that four vice presi-dents including engineer Daroo KhanAchakzai, Zubair Ali, mirza Abdulrehman and mohammad Iqbal fromchambers of commerce and industryseats have already been declaredelected unopposed.

LCCI fears massive lay-offsin wake of gas suspension

LAHORESTAFF REPORT

LAHore Chamber of Com-merce and Industry (LCCI)on tuesday feared massive

lay-offs in the industry in wake ofgas suspension and urged the gov-ernment to reverse the decisionwithout any further delay for thesake of economy.

In a strong statement issued,LCCI President Irfan QaiserSheikh, Senior vice PresidentKashif Younis meher and vicePresident Saeeda nazar said if reg-ular supply of gas to the industrywas not restored, thousands of in-dustrial workers, particularly thedaily wagers would face retrench-

ment. “If there is no gas and noelectricity, how can an industrialunit continue its operations?”

LCCI office-bearers urged thegovernment to save the industry inPunjab which is providing jobs toover 15 million people. “Govern-ment would have to reset its prior-ities regarding provision of gasotherwise situation would go outof hands.” they said the gas clo-sure decision is a calculated andwell thought-out conspiracyagainst the present regime andpeople sitting at the helm of affairsmust understand the importanceof industry. they emphasised onthe fact that it was the responsibil-ity of the government to ensurelevel playing field to entire indus-

try in Pakistan. Discriminationwith the industry in Punjab issheer injustice that calls for an in-tervention by prime minister ofPakistan. “the rise in number ofunemployed would definitely giveair to anti-government sentimentsand street crimes. It is not only theindustry that would be sufferingmassively, but the governmentwould also lose on many counts.”

Irfan Qaiser Sheikh urged thegovernment to immediatelyshelve the proposed, “IndustryClosure Plan” to avert industrialclosures and resultant massivelay offs. “How can the industryafford to pay the all-time highmark up when there in no gas forthe industry?”

psO in dire straits asreceivables increase

Staff reportKarachi

PAKIStAn’S biggestpetroleum handler,Pakistan State oil (PSo)

is on the verge of financialcollapse since its outstandingdues from various ‘energysector’ entities has reached tothe extent of rs180 billion(which is the highest in fouryears). It seems that no bailingout is forth coming fromministry of finance (moF).Actual cash flows of the entityhave gone negative due toincidence of more short termloans to keep daily operationsafloat. It is imperative that thecalculation of DCF value ofsuch an entity may be a futileexercise and thus tantamountto mislead investors.

g Interest group vies to deprive Balochistan of its rights in fpCCIg all chambers of Balochistan to go to court if a bogus nominee elected president

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news

CORPORATE CORNEROMD, CEO asiapacific visits pakistan

LAHORE: Steve Blakeman Chief executive ofomD for Asia Pacific, visited Pakistan last week fordiscussions with the Chairman of omD PakistanDara Bashir Khan and Ceo rizwan merchant tostrategise on the 2012 growth plans of omD inPakistan and in the region. omD Worldwide is oneof the largest and most innovative media buyingand planning specialists in the world and isrecognised for its global imprint, strategicintegration and creativity. PRESS RELEASE

united Bank limitedannounces Interim payout KARACHI: the Chief executive, under theauthority of the Board of Directors of UBL Fundmanagers Limited, announced an interim payout forthe period ended December 22, 2011 from UBLLiquidity Plus Fund (ULPF) and UBL GovernmentSecurities Fund (UGSF). the following interimpayouts have been announced: UBL Liquidity PlusFund (ULPF) rs2.71 per unit of par value of rs100.Unit holders holding 100 units as at December 22,2011 will get 2.7017 units on the ex-dividend price ofrs100.3057 per unit. Unit Holders who have optedfor cash payout will receive cash dividend, net ofapplicable taxes. ULPF is a money market fund thatoffers an ideal short-term avenue for placement ofcash. the Fund yielded a return of 11.35 per centp.a. since inception. A payout of rs3.27 per unit ofpar value of rs100 was announced for UBLGovernment Securities Fund (UGSF). Unit holdersholding 100 units as at December 22, 2011 will get

3.2617 units on the ex-dividend price of rs100.2536per unit. Unit Holders who have opted for cashpayout will receive cash dividend, net of applicabletaxes. PRESS RELEASE

Emirates bringsstar cricketers to Edhi village

KARACHI: emirates, one of the fastestgrowing international airlines, provided anunforgettable experience for orphans atKarachi’s edhi village Apna Ghar, when itbrought a number of star cricketers to thefacility to host a coaching clinic. the childrenwere thrilled as Yasir Hameed, ZulqarnainHaider, Shakil Ansar and Sajjad Hussain–players for Quaid-e-Azam trophy finalists Zaraitaraqiati Bank Ltd (ZtBL) – signed autographsand posed for pictures. the children also hadthe opportunity to ask the players – who haveall played at international level - about theirlives as professional cricketers. “Interactingwith these children and experiencing theirexcitement first hand is a gratifying feeling.Knowing that you may be able to make adifference to their lives is the reason I gotinvolved with the sport in the first place,” saidZtBL player Yasir Hameed. PRESS RELEASE

ptCl launches sMsCustomer Complaint service ISLAMABAD: Pakistan telecommunicationCompany Limited (PtCL) has launched a uniquecustomer complaint registration service via mobileSmS for its valued landline and broadband

customers. Customers can now register acomplaint in five easy steps: Step 1-type ‘CmP’;Step 2-type Area Code and Landline number; Step3- type Product Code (for Landline: ‘LL’; forBroadband: ‘BB’), Step 4-send to 05 1218 1218;and Step 5-complaint registration numberreceived, or simply type ‘HeLP’ and send to 051218 1218. PRESS RELEASE

Ds railways inspectslahore-sahiwal sectionLAHORE: Divisional Superintendent (DS)railways Javed Anwar Bubak, along with concerneddivisional officers visited Lahore-Sahiwal section.He met certain delegations at different stations andpromised to solve their genuine problems at theearliest. He suspended muhammad naeem SCA (P)at Lahore cantt station for not performing hisduties properly. He gave away rs200 cash prize tostation master Kana Kacha on his goodperformance. Furthermore at okara cantt stationhe ordered to clear the encroachments,immediately. PRESS RELEASE

pIa hold BoDs’ meeting

LAHORE: PIA’s 336th Board of Directors’meeting was held at Karachi. Presentation onFleet replacement Plan was made during themeeting according to which PIA fleet will begradually renewed and the airline will have atotal number of 67 aircrafts by 2020. Boardwill be briefed on marketing plan whichincluded the marketing performance anddifferent marketing strategies. Board reviewedHr and other matters of strategic interestsduring the meeting. the meeting was chairedby Ch Ahmed mukhtar, minister for defenceand chairman PIA. PRESS RELEASE

In order to achieve somethingyou want, you must have avision, a roadmap and abalance sheet of life

siemens pakistan CEO, sohail wajahat siddiqui

KARACHI: The Consul General of Srilanka Mr d WJinadasa, hosted a dinner at consulate premises.Picture shows the founder Chairman of Pak-Sri LankaBusiness forum, Mr Majyd Aziz, President Mr TarekKhan, Mr Abdul Rauf Tabani, Mr Farrukh Mazhar, andMr Iqbal Shaikhani, with the host. PRESS RELEASE

KARACHI: Mrs Sadia Rashid, President HamdardFoundation Pakistan, dr Syed Jaffer Ahmed, directorPakistan Study Center, University of Karachiaddressing the function of Hamdard NaunehalAssembly on the occasion of quaid-i-Azam 135thbirth anniversary at a local hotel. PRESS RELEASE

KARACHI: Chairman APCMA, Aizaz Manzoor Sheikh,presenting a cheque of Rs6.5 million to GovernorPunjab Sardar Latif Khosa, for flood affectees inSindh. PRESS RELEASE

KARACHIWAqAR HAMzA

A S the ‘Carriage of Goodsby Sea’ bill was approvedby the national Assem-bly’s standing committeeon ports and shipping last

month, this bill is all set to becomean act once it is introduced in the as-sembly. thus, traders and maritimeexperts demand that since the bill isin complete favour of shippingagents and freight forwarders and no

protection is given to trade, thereshould be a regulatory authority formaking sure that there will be nofraud in Bill of Lading and nochanges are made in the titles ofgoods by the shipping agents. theauthority should also monitor thefreight, they demanded.

‘Carriage of Goods by Sea’ wasdrafted in 2005 by the then directorgeneral ministry of ports and ship-ping captain Anwar Shah, and thatdraft was prepared with the consentof all stakeholders. But this revised

draft (that was made bill by thestanding committee) was much tem-pered and does not protect rights ofmany stakeholders. It is to be notedthat two documents ‘bill to enactCarriage of Goods by Sea Act, 2011’and ‘bill to enact Sea Carriage Ship-ping Documents Act, 2011’ were lastconsidered by the national Assem-bly standing committee on ports andshipping in the meeting held on 26thSeptember 2011, in which Pakistanapparel forum had proposed certainamendments to the bills. Standing

committee had decided that com-ments on the same may be obtainedfrom ministry of commerce, StateBank of Pakistan, and Federal Boardof revenue (FBr) for reconsidera-tion of the matter by the committee.

COMMITTEE’S STANCE

‘Carriage of Goods by Sea’ bill,2010 attempts to modernise the oldlaw, that is, the ‘Carriage of Goodsby Sea’ act, 1925 by incorporatingprovisions of the international con-vention relating to the bills of ladingsubject to necessary amendmentsand further provides for a list oflegal documents concerning the car-riage of goods by sea. While the SeaCarriage Shipping Documents Bill,2010 largely aims at recognising dif-ferent legal documents for purposesof carriage of goods by sea and de-termining their rights and obliga-tions, and stipulating evidentiarystatus of such documents. It is notclear why these matters could not becovered into one consolidated lawon carriage of goods by sea.

COMMENTS OF MOC

Amendments proposed in theSea Carriage Shipping DocumentsBill, 2011 by the internationallyrecognised legal nomenclature is‘bill of lading’ and not the ‘carrierbill of lading’. Similarly, ‘Seawaybill’ and ‘delivery order’ are inter-nationally recognised documentsrelating to carriage of goods by sea.their definitions and related sub-sections cannot be changed ordeleted. moreover, ‘consignee’ isthe legal term and cannot be re-placed as proposed. Definitions areexactly the same as in British ‘Car-

riage of Goods by Sea’ act, 1992 andcannot be changed.

regarding Section 3 that dealswith shipping documents to whichthis act applies, as already explainedunder Section 2 that documentshave been listed in accordance withinternational shipping practice andBritish Carriage of Goods by Sea Act,1992. Carrier bill of lading is just onedocument in use, and internationalshipping cannot be restricted to useof only one document. In addition,Section 4 about rights under ship-ping documents clearly defines therights under various documentsand how these are transferred.this is in keeping with the Britishact, and the amendments pro-posed are not workable.

SBP’S RESPONSE

A summary for approval in prin-ciple for the Logistics ServiceProviders regulatory Authority Bill,2011 has already been submitted bythe ministry of Commerce to theCabinet. After vetting by law divisionand final approval of the cabinet, thebill will be submitted to the nationalAssembly for its consideration. mainconcern of the traders’ bodies hasbeen that freight forwarders issuinghouse bill of lading do not carry anyliability in case of loss or damage tocargo.

this ‘Logistics ServiceProviders regulatory Authority’bill, 2011 provides that all logisticservices providers take suitable lia-bility insurance cover of rs1 millionand those issuing their own trans-port document i.e house bill of lad-ing or house airway bill, etc ofrs10million, for loss or damage tothe cargo handled and transportedfor which they are liable as per

terms of their contract.It may be added that in case of

imports through freight forwarders,importers in Pakistan normally takedelivery of goods on the basis of for-warder’s house bill of lading withoutany mBL of shipping line but inorder to safeguard the interest of ex-porters in Pakistan, SBP has put inplace all possible measures to min-imise the allied risks.

Pakistan Apparel Forum’s pro-posals regarding amendment in var-ious section of proposed billspertains to shilling lines and freightforwarders which requires delibera-tions with shipping lines and freightforwarders in the light of interna-tional trade rules and practices. Wepropose that prior to finalising thecurrent bills ministry of ports andshipping may obtain the views andcomments of all stakeholders.

STAKEHOLDER CONCERNS

the forum desired someamendments in the bill and they in-clude: carrier bill of lading must beissued by carrier/master of vessel;‘consignee of the goods’ should bereplaced with ‘by the owner of thegoods’; ‘any seaway bill’ should bedeleted; the word ‘a seaway bill’must be replaced by ‘carrier bill oflading’; and after the word ‘con-tract’ in the Section 3 the words ‘asinstructed by the shipper (owner)’should be added.

Jawed Bilwani, Chairman PAF,further said that if this bill is allowedit will open doors of malpractices bythe freight forwarders in con-nivances with the shipping agents,therefore, it must be ensured that theinstructions of the actual shipper(owner of the goods) are shown in alldocuments in each of the shipment.

‘Carriage of goodsby sea’ bill approved

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top 5 perForMers sector wisesyMBOl OpEN HIgH lOw CuRRENt CHaNgE vOluME syMBOl OpEN HIgH lOw CuRRENt CHaNgE vOluME

Food ProducersAdam Sugar 17.90 18.90 18.40 18.90 1.00 10,491AL-Abbas Sugur 92.48 92.49 88.00 92.49 0.01 7AL-Noor Suger Mills 55.99 55.99 53.20 55.99 0.00 26Baba Farid 39.83 39.00 39.00 39.00 -0.83 2,000Bawany Sugar 11.00 11.80 11.00 11.00 0.00 10

Household GoodsAL-Abid Silk Mills 23.34 24.50 24.50 24.50 1.16 500Hala Enterprise 7.00 7.00 6.90 7.00 0.00 111Hussain Industries 3.00 3.00 3.00 3.00 0.00 100Pak Elektron Ltd. 3.55 3.65 3.40 3.59 0.04 38,312Tariq Glass Ind. 8.30 8.49 8.00 8.12 -0.18 4,396

Personal GoodsAmtex Limited 1.20 1.25 1.19 1.24 0.04 103,150Azam Textile 1.11 1.60 1.11 1.11 0.00 1Azgard Nine 3.21 3.26 3.08 3.11 -0.10 314,901Babri Cotton 8.41 8.50 8.41 8.41 0.00 1Bannu Woollen 14.85 14.37 14.26 14.26 -0.59 1,510

Future ContractsAHCL-DEC 27.00 26.92 26.05 26.73 -0.27 88,500AHCL-JAN 27.47 27.10 26.40 26.93 -0.54 94,000ANL-DEC 3.25 3.20 3.11 3.17 -0.08 1,500ATRL-DEC 109.50 109.25 108.30 108.91 -0.59 60,000ATRL-JAN 110.62 110.50 109.31 109.94 -0.68 61,000

Pharma and Bio TechAbbott Laboratories 99.95 100.00 99.50 100.00 0.05 1,361Ferozsons (Lab) Ltd. 75.44 78.00 75.44 75.44 0.00 1GlaxoSmithKline Pak. 66.08 67.00 66.00 66.68 0.60 1,508Highnoon (Lab) 30.23 30.23 29.25 30.23 0.00 20IBL HealthCare 13.76 14.00 13.70 14.00 0.24 5,275

Fixed Line TelecommunicationP.T.C.L.A 10.00 10.10 9.96 10.00 0.00 140,195Pak Datacom Ltd 34.50 34.50 34.00 34.50 0.00 101Telecard Limited 0.80 0.83 0.75 0.80 0.00 42,806Wateen Telecom Ltd 1.75 1.85 1.75 1.75 0.00 26,613WorldCall Telecom 0.85 0.89 0.83 0.84 -0.01 214,669

ElectricityGenertech 0.31 0.34 0.22 0.27 -0.04 30,012Hub Power Co. 34.17 34.33 34.06 34.11 -0.06 417,944Japan Power 0.64 0.68 0.61 0.63 -0.01 47,381K.E.S.C. 1.59 1.59 1.53 1.59 0.00 41,119Kohinoor Energy 15.51 15.51 14.62 15.51 0.00 100

BanksAllied Bank Ltd 56.41 56.50 54.99 55.34 -1.07 16,622Askari Bank 10.01 10.20 9.85 9.92 -0.09 80,549B.O.Punjab 4.86 4.96 4.83 4.93 0.07 331,096Bank Al-Falah 11.20 11.34 11.18 11.20 0.00 102,692Bank AL-Habib 28.10 28.20 27.80 27.88 -0.22 60,345

Non Life InsuranceAdamjee Ins 44.42 45.70 43.30 45.29 0.87 102,889Central Ins Co. 50.02 52.50 50.02 50.02 0.00 50EFU General Ins 36.21 36.05 36.00 36.00 -0.21 1,804Habib Insurance 9.85 10.29 9.85 9.85 0.00 100IGI Insurance Ltd. 43.38 43.50 42.74 43.46 0.08 2,200

Life InsuranceAmerican Life 14.50 14.50 13.50 14.50 0.00 2East West Life Assur 1.40 2.34 1.40 1.40 0.00 1EFU Life Assur 65.53 68.80 65.53 65.53 0.00 157

Financial ServicesAMZ Ventures A 0.35 0.35 0.30 0.34 -0.01 1,523Arif Habib Investmen 14.90 15.60 13.90 15.17 0.27 6,608Arif Habib Ltd. 13.67 13.60 13.28 13.59 -0.08 12,450Dawood Equities 0.65 0.70 0.70 0.70 0.05 500F. Nat.Equities 2.55 2.75 2.37 2.54 -0.01 4,006

Equity Investment Instruments1st.Fid.Leasing Mod 1.58 1.60 1.58 1.58 0.00 7,490AL-Noor Modar 4.50 4.30 4.10 4.30 -0.20 10,239B.F.Modaraba 4.25 4.00 4.00 4.00 -0.25 1,398B.R.R.Guardian 2.06 2.15 2.06 2.06 0.00 100Cres. Stand.Mod 0.49 0.50 0.42 0.50 0.01 4,815

MiscellaneousCentury Paper 13.00 13.15 13.00 13.02 0.02 2,500Security Paper 35.95 36.35 35.70 35.88 -0.07 11,000P.N.S.C. 13.02 13.00 13.00 13.00 -0.02 7,000Pak.Int.Con. SD 61.23 64.20 61.23 61.23 0.00 153TRG Pakistan Ltd. 1.18 1.16 1.13 1.15 -0.03 125,579Murree Brewery 64.18 65.00 64.00 64.08 -0.10 5,721Grays of Cambridge 23.75 23.90 23.75 23.75 0.00 10Shifa Int.Hospitals 28.58 28.69 28.58 28.58 0.00 73Media Times Ltd 9.41 10.41 10.00 10.41 1.00 3,556P.I.A.C.(A) 1.85 2.08 1.81 1.84 -0.01 44,931Pak Hotels 28.29 29.70 28.80 28.80 0.51 317Pak Services 138.65 140.00 138.65 138.65 0.00 7Sui North Gas 15.98 15.99 15.75 15.75 -0.23 31,074Sui South Gas 19.16 19.50 19.00 19.45 0.29 27,800American Life 14.75 14.00 14.00 14.00 -0.75 5,000EFU Life Assur 72.87 74.90 69.57 73.82 0.95 4,360AKD Capital Ltd. 25.01 25.01 24.00 25.01 0.00 250Pace (Pak) Ltd. 1.30 1.45 1.23 1.25 -0.05 219,577Netsol Technologies 9.02 9.08 8.91 8.96 -0.06 40,203Pak Telephone 2.18 3.05 2.18 2.18 0.00 2

syMBOl OpEN HIgH lOw CuRRENt CHaNgE vOluME

Oil and GasAttock Petroleum 420.02 420.50 416.00 419.75 -0.27 16,299Attock Refinery 109.17 109.55 108.00 108.56 -0.61 152,085Burshane LPG 22.52 22.80 22.52 22.52 0.00 101Byco Petroleum 6.72 6.78 6.65 6.75 0.03 60,252Mari Gas Co. 83.42 84.74 82.62 82.74 -0.68 4,422

ChemicalsAgritech Limited 15.55 16.50 16.40 16.44 0.89 1,800Agritech(PREF)(R) 1.01 0.85 0.40 0.64 -0.37 16,880Arif Habib Co SD 26.97 27.00 25.95 26.70 -0.27 1,559,547Clariant Pakistan 151.00 151.50 149.00 149.30 -1.70 1,265Dawood Hercules 37.70 39.58 38.00 39.58 1.88 411,564

Industrial metals and MiningCrescent Steel 18.50 18.75 18.15 18.74 0.24 10,566Dost Steels Ltd. 1.13 1.12 1.10 1.10 -0.03 8,000Huffaz Seamless Pipe 8.24 8.43 8.00 8.09 -0.15 4,334Int. Ind.Ltd. 32.91 34.55 31.70 34.46 1.55 173,937Inter.Steel Ltd. 10.49 10.50 10.03 10.47 -0.02 5,502

Construction and MaterialsAl-Abbas Cement 2.54 2.60 2.12 2.32 -0.22 820,325Attock Cement 50.99 51.00 50.99 50.99 0.00 26Cherat Cement 6.75 6.80 6.45 6.75 0.00 1,502D.G.K.Cement 18.82 18.95 18.70 18.83 0.01 419,090Dadabhoy Cement 1.41 1.59 1.41 1.41 0.00 1

General IndustrialsCherat Packaging 27.23 27.85 27.10 27.23 0.00 326ECOPACK Ltd 3.75 3.70 3.60 3.70 -0.05 7,012Ghani Glass Ltd 42.06 43.00 41.30 42.85 0.79 5,515MACPAC Films 6.99 6.99 6.90 6.99 0.00 47Packages Limited 79.81 81.00 80.00 80.74 0.93 2,100

Industrial EngineeringAdos Pakistan 5.28 5.80 4.70 5.31 0.03 3,131AL-Ghazi TractorsXD 176.55 184.75 176.00 180.75 4.20 707Bolan Casting 28.50 29.92 28.50 28.50 0.00 8,600K.S.B.Pumps 24.51 25.73 24.51 24.51 0.00 99Millat Tractors Ltd. 365.22 369.00 364.00 366.04 0.82 4,390

Automobile and PartsAtlas Battery Ltd. 162.00 165.00 163.45 164.45 2.45 1,460Atlas Honda Ltd. 125.98 125.98 125.00 125.98 0.00 5Bal.Wheels 23.70 24.88 23.70 23.70 0.00 300Dewan Motors 1.69 1.68 1.62 1.62 -0.07 27,809Exide (PAK) 159.60 161.30 159.60 159.60 0.00 1

BeveragesMurree Brewery Co. 110.49 111.43 109.00 111.18 0.69 1,170Shezan Int’l 150.02 150.00 145.05 145.58 -4.44 203

Mutual Funds

fund Offer Repurchase Nav

Alfalah GHP Cash Fund 501.2900 501.2900 501.2900 Askari Islamic Asset Allocation Fund 114.7196 111.8516 111.8516Askari Islamic Income Fund 103.6501 102.6136 102.6136 Askari Sovereign Cash Fund 100.6900 100.6900 100.6900 Atlas Income Fund 519.3500 514.2100 514.2100 Atlas Islamic Income Fund 519.0900 513.9500 513.9500Atlas Money Market Fund 516.9700 516.9700 516.9700 Atlas Stock Market Fund 453.1500 444.2600 444.2600 Crosby Dragon Fund 82.9800 81.3500 81.3500

fund Offer Repurchase Nav

HBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087

Markets

Wednesday, 28 December, 2011

06

top 10 sectors

24% 01%Construction & Materials

Chemicals General Industrials

07%Electricity

02%03%

Fixed Line Telecommunication

01%Equity Investment Instruments

Financial Services

09%Banks35%Oil & Gas10%Personal Goods08%

International Oil PriceWTICrude Oil

$100.01

BrentCrude Oil

$107.97

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 11311.38 +1.03 14,940,804 642,257,619 LSE-25 2822.88 -11.11 439,236 8,997,316ISE-10 2553.33 -12.6 11,600 118,920

Major Gainers

Company Open High Low Close Change TurnoverNestle PakistanXD 2969.91 3118.40 3099.00 3118.40 148.49 360UniLever Pak Ltd. 5502.82 5700.00 5555.00 5649.62 146.80 891Siemens Pak 932.53 979.15 945.00 979.15 46.62 620Unilever Pak Foods 1670.00 1712.00 1705.00 1708.18 38.18 57Wyeth Pak Limited 760.39 798.40 749.99 786.32 25.93 515

Major Losers

Rafhan Product 2540.00 2494.97 2450.00 2464.17 -75.83 22Tri-Pack Films 167.65 166.00 162.10 164.83 -2.82 2,710P.S.O. 232.01 231.80 229.10 230.19 -1.82 74,913Faisal Spinning 45.80 44.00 44.00 44.00 -1.80 500Clariant Pakistan 151.00 151.50 149.00 149.30 -1.70 1,265

Volume Leaders

Fatima Fert.Co. 23.12 23.20 22.82 22.96 -0.16 3,304,155Arif Habib Co SD 26.97 27.00 25.95 26.70 -0.27 1,559,547Pak Reinsurance 14.50 14.73 14.38 14.56 0.06 1,029,249Engro Foods Ltd. 23.00 23.00 22.80 23.00 0.00 1,005,190Jah.Sidd. Co. 4.12 4.17 4.03 4.07 -0.05 937,415

Bullion MarketPer Tola (PKR) Per 10 Gm (PKR) Per Ounce US$

Gold 24K 53,838.00 46,207.00 1,598.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 977.00 839.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 89.4102UK Pound 139.7929Japanese Yen 1.1460Euro 116.7787

Buy SellUS Dollar 89.50 90.50Euro 116.46 118.36Great Britain Pound 139.74 141.69Japanese Yen 1.1439 1.1561Canadian Dollar 87.30 89.77Hong Kong Dollar 11.39 11.65UAE Dirham 24.38 24.62Saudi Riyal 23.89 24.09Australian Dollar 90.40 93.20

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Wednesday,28 December,2011

news

07

Pro-business policies andsupportive taxation laws canwork wonders in increasingthe GDP growth of the country

gillette pakistan CEO, saad amanullah Khan

LAHOREIMRAN AdNAN

AGrICULtUrIStS and farmershave termed the year 2011 as‘black year’ for agriculture asimposition of General Sales tax

(GSt) on agriculture inputs/implementsand withdrawal of subsidies have multi-plied cost of farming in the country.Speaking to Profit, Pakistan AgriculturalScientists Association (PASA) PresidentJamshed Iqbal Cheema estimated that onthe one hand withdrawal of subsidies andlevy of GSt had increased the input costby over 35 per cent, while on the otherhand agriculture produce prices , exceptwheat, dropped by nearly 25 per cent thatcaused huge losses to farmers. the coun-try had witnessed negligible agricultureperformance in 2011 that had compro-mised its growth. the imposition of GSton fertilisers had shown 30 per cent de-cline in diammonium phosphate (DAP)usage, besides drop in urea and pesticidesusage, he maintained.

He further stated that loans to agricul-ture sector also witnessed a decliningtrend because both the provincial and fed-eral governments had already over bor-rowed from banking channels that lefthardly any amount for agriculture. Heurged the economic managers to allocatean amount equivalent to the share of agri-culture in GDP, which was 23 per cent.

Cheema said loaning had not onlyshrunk for farmers but also for those in-volved in the business of agricultural inputsand agricultural produce. He pointed outthat even the loan spread had beensqueezed for rice sheller, flour mills and

agriculture produce distributors (arhtis).He said decrease in loaning to agriculturesector badly hit the farmers, as marketforces had limited liquidity to buy agricul-ture produce. Citing an example, hepointed out that government had an-nounced rs1,050 as support rate for 40kilograms of wheat, but it could be ensuredonly when markets had sufficient fundsand competition, otherwise farmers couldnot benefit from the support price. PASApresident said absence of food processingindustries, storage and other value-addi-tion industries was another issue, whichcould not be tackled by any governmentdespite tall claims during the outgoingyear. “no new scheme or investment wasbrought in this sector which could not onlyovercome waste of perishable and non-per-ishable agricultural commodities but couldalso help both producer and consumer inshape of sustained prices,” he regretted.

Agri Forum Pakistan Chairmanmuhammad Ibrahim mughal also believedthat the year 2011 was the worst year foragriculture sector. He pointed out that thecountry had missed almost all major croptargets. Government had fixed cotton croptarget of 14.5 million bales, while it wasbeing expected that the country would missit by 1.8-2 million bales. Similarly, govern-ment fixed wheat sowing target of 22 mil-lion acre, whereas it would be missed byover 2.1 million acres due to high input costand shortage of much needed inputs, headded. He pointed out that huge increasein agriculture and food products importsfurther disturbed the trade balance, whichwas a matter of great concern for an agri-cultural economy. He underscored that itwas the worst year for formers as fertiliser

prices witnessed an unprecedented of overrs800 in 2011, mainly because of suspen-sion of natural gas supply to fertiliserplants. the country was already short ofurea fertiliser and absence of price controlfurther aggravated the situation by offer-ing an opportunity to profiteers andhoarders. Conservative estimates indi-cated that profiteers had fleeced somers10 billion from poor farmers by exploit-ing the situation, he maintained.

responding to a question, he said, inreal terms agriculture sector witnessedzero growth due to anti-agriculture poli-cies and did not see any positive change in2012 as neither policymakers had wish tobring change, nor they had vision. Pak-istan Basmati Growers Association Presi-dent Hamid malhi said that it was a hardyear for farmers. He also pointed out thatmassive increase in the cost of agricultureinputs compromised its growth. He indi-cated that it was not an agenda item forthe government in the whole policy mak-ing process. “It would not be wrong, if wesay that the government had ruined agri-culture sector in 2011,” he underscored.He said he did not expect any positivechange from the present regime, but hewas optimistic about the future of agricul-ture. the new government might bringsome silver lining for agriculture.

Almost all agriculture and farmersbodies had urged government to cutagriculture inputs cost, improve market-ing system and enhance loan spread be-sides investing in research to increaseper acre yield. these steps were essen-tial to overcome food shortage and avoidany threat to food security in the future,they concluded.

KARACHISTAFF REPORT

HIGHer Current Account(C/A) deficit and sub-stantial borrowing of thegovernment sector to fi-

nance the deficit has once againraised the demand for money. this isreflected from the secondary markett-bill yields which are currently at12.08 per cent, surpassing the Dr(Discount rate) of 12 per cent.

Last time market witnessedsuch a pattern was on november 6,2008, where t-bill yields surged to13.45 per cent compared to the pol-icy rate of 13.0 per cent. Followingthis, the SBP raised the Dr by200bps to 15 per cent on november12, 2008. So does this mean thatthe market is pricing in the Drhike? ‘our answer is no! However,the market is expecting a hugebailout from the Central Bank,’ saidmuzzammil Aslam and FurqanAyub at JS. So far, SBP has spon-sored money shortfall through con-sistent open market operation

Injections (current outstandingrs262 billion) which, analysts said,in our view, is not sustainable or aviable option, even in the short-term. We believe, it has to be re-placed with either SBP printingmoney or retirement of govern-ment’s huge debt balances to bank-ing companies, they added.M2 gROw MERELY AT 2.92pER CEnT fROM JuLY TODEC 9: Due to the surge in C/Adeficit, the money supply has wit-nessed a meager growth of 2.92 percent versus 6.18 per cent last year.net Foreign Asset (nFA) contractedby rs117 billion versus an expan-sion of rs72 billion during the sameperiod last year. However, the netDomestic Asset (nDA) has in-creased by rs318 billion versusrs285 billion last year. It is inter-esting to note that the governmentborrowing for budgetary supporthas actually increased by rs719 bil-lion versus rs371 billion last year.

the difference between nDAand budgetary borrowing stands ata net retirement of rs274 billion

by Public Sector enterprises(PSes). For this, government (inorder to ease off the burden on en-ergy companies), has convertedPSes debt into t-bills and PIBs,which has further deteriorated thebanking sector’s advance to de-posits and in turn strengthen in-vestments to deposits. this hasresulted in banking sector strayingaway from its original role of beingan intermediary and facilitator tothe private sector.T-BILL YIELD HIgHER THAnTHE DR: Analysts believe that themoney growth of 2.92 per cent isnot enough to offset the impact ofinflation (expected to be around 12per cent in FY12). In addition, gov-ernment’s persistent failure to mo-bilise resources has increased thedemand for money. Hence, t-billyield has officially surpassed theDr rate (first time since november2008). recall, SBP has aggressivelyeased its policy stance by 200 bpsto 12 per cent in FY12 so far. oneyear t-bill yields which were at13.68 per cent on January 1, 2011,

touched a year low of 11.76 percent on november 2, 2011. Sincethen the yields have bouncedback to 12.10 per cent as of yes-terday. A similar pattern hasbeen witnessed in PIBs as well.IS THE MARKET pRICIng In AnOTHER HIKE In THEDR? We believe the current situa-tion is quite different when com-pared to 2008, they said, addingthat today the country is engulfedwith fiscal crisis which is the out-come of lower savings and highergovernment expenditures. How-ever, in 2008 the crisis emanatedfrom balance of payment risk,which led to fast depletion of for-eign reserves and in turn hugenFA contraction. Furthermore,the government was aggressivelyprinting money to subsidise thehigher oil prices in 2008. there-fore, we believe the risk of fur-ther hike in Dr is not on thecards but if government fails toaddress its lower saving issuethen we are not far from a fur-ther hike in Dr, they added.

T-bill yield surpasses DR

ISLAMABADJALALUddIN RUMI

DeSPIte ongoing energy crisis,floods and war on terror, LargeScale manufacturing (LSm) sectorof the country continued its better

performance during the first four months ofcurrent fiscal year (July-october) with 2.07 percent growth over the same period last fiscal year2010-11. According to latest figures released byFederal Bureau of Statistics (FBS) on tuesday,Quantum Index number of LSm industriesstood at 104.16 points in first four months of fis-cal year 2011-12 as compared to 102.05 pointsof July-october period of the year 2010-11. Ac-cording to statistics, LSm recorded growth of4.68 per cent during the month of october overthe month of September, Quantum Indexnumber of LSm industries stood at 105.48points in october 2011 as compared to 100.76points of September 2011. trade analysts andeconomic experts believed that if the presenttrend continues in large scale manufacturing aswell as in agricultural sector, government couldachieve the revised economic growth target of3.6 per cent in current fiscal year.

Quantum Index numbers (QIn) of largescale manufacturing industries has been com-puted in the FBS on the basis of latest produc-tion data of 112 items received from various

sources i.e. oil Companies Advisory Commit-tee (oCAC), ministry of industries and pro-duction and provincial bureaus of statistics.oCAC supplied data of 11 items, ministry ofindustries and production supplied the dataof 36 items and provincial bureaus of statis-tics provided data for 65 items.

According to FBS figures, oCAC groupgrew by 0.41 per cent during first four monthsof the ongoing financial year; ministry of Indus-tries registered a growth of 0.50 per cent andprovincial BoS showed growth of 2.15 per centin July-october period. In oCAC, commoditiesshowed negative growth including jet fuel oil(5.56 per cent), diesel oil (38.98 per cent), lu-bricating oil (2.70 per cent), solvent naphtha(7.89 per cent), and LPG (12.98 per cent) duringfirst four months of current fiscal year 2011-2012 against same period last year. meanwhilein oCAC, the following products showed posi-tive growth rate including kerosene (35.20 percent), motor spirit, (11.32 per cent), high-speeddiesel (18.32 per cent), furnace oil, (1.08 percent), and jute-batching oil (1.12 per cent). min-istry of industry index registered a negativegrowth of 0.50 per cent comprising 35 main in-dustries in QIn of LSm. Industries showingpositive growth includes, sugar (1.52 per cent),cigarettes, (1.11 per cent), cotton yarn, (6.67 percent), cotton cloth, (2.21 per cent), Phos Fertilis-ers (4.53 per cent) and LCvs (17.97 per cent).

KARACHISTAFF REPORT

WItH the recent ban on import andinstallation of CnG kits by auto as-semblers, Pak Suzuki motor Com-

pany Limited (PSmCL), is bound to take a hitsince, majority of its sales are of CnG variantmodels. on the flip side though, CnG unavail-ability and recent proposals to bring CnGprices at 80 per cent parity with petrol (as op-posed to the current 55 per cent), along witha planned 25 per cent increase in CnG pricesearly next year, are poised to increase demandof smaller engine size vehicles (of whichPSmC is the market leader) and likely to (atleast partially) mitigate the impact of this ban.

the current Auto Industry Develop-ment Programme (AIDP) is also slated tobe revamped during 2012, which adds tothe uncertainties surrounding the sector.9MCY11 EARnIng REvIEw: PSmC’s bot-tom line grew by a whopping 73 per cent tors672mn, during 9mCY11 (9mCY10:

rs388mn), which translates to a 9mCY11 ePSof rs8.16 (9mCY10: rs4.71). net sales wit-nessed a YoY upsurge of 22 per cent tors38.5bn, during the period under review,mainly on account of 7.5 per cent YoY pricehikes and 17 per cent volume growth. A combi-nation of improved gross margin in 9mCY11(3.78 per cent versus 3.13 per cent in 9mCY10),higher operating efficiency, and a 5 per centjump in other income is to be attributed to theimprovement in the company’s bottom line.3QCY11: YELLOw CAB SCHEME: Witha QoQ PAt growth of a massive 109 per centto rs393mn (2QCY11: rs187mn), commence-ment of taxi deliveries during September 2012has indeed bode well for PSmCL, with its topline registering a 43 per cent QoQ increase tors15.3bn. the depreciating rupee and higherinput costs squeezed gross margin by 35bps to4.15 per cent, during the period under review.Bottom line also received support during thequarter in the form of a 16 per cent reductionin finance costs and lower effective tax rate (29per cent versus 42 per cent in 2QCY11).

large scale manufacturing upby 2.07pc during July-October

CNg kit ban aggravating suzuki sales

agRICultuRE sECtORa yEaR Of glOOM fOR

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