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News AlertDaily Updates

Friday, December 07, 2012

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2 Pak Law Publication : Office # 05, Ground Floor, Arshad Mansion, Near Chowk A.G Office,

Nabha Road Lahore.Ph. 042-37350473 Cell # 0300-8848226 [email protected]

News Contents

Taxation: Pakistan ................................................................................................................................4

Reducing age limits of imported vehicles: decision to cost Rs 17 billion to FBR, PAC told ....................4

Clarification.............................................................................................................................................5

Depleted vehicles may be disposed of through scrapping .....................................................................5

November 2011-November 2012 comparison: huge difference in revenue growth noted ..................6

DG I&I IR detects gross misdeclaration: over 100 chipboard makers involved in ST evasion................7

Information relating to ADRC: FBR refuses to entertain application of tax consultant .........................8

Excise and Taxation Department: irregularities in realisation of Rs 220 million tax unearthed ............9

Business & Economy...........................................................................................................................11

Dr Qadir Baloch appreciates govt's steps for promotion of agricultural sector...................................11

Alternative resources utilization to overcome energy crises: Dr Kamal Qazi.......................................11

Industries & Sectors ...........................................................................................................................13

Shipping activity at Port Qasim.............................................................................................................13

HESCO disconnects power supply to over 100 government offices and schools.................................13

Textile industry seeks reduction in interest rate ..................................................................................14

LCCI trade delegation leaving for India today.......................................................................................15

Fuel and Energy: Pakistan .................................................................................................................16

Talks on ''unmanaged'' energy issues today: US side to be led by Pascual, Olson...............................16

Power import plan deferred .................................................................................................................17

Audit of CNG stations'' accounts: Ogra asked to cancel licences of violators ......................................18

OGDCL discovers gas in Khairpur ..........................................................................................................19

Public service vehicles: additional CNG cylinders being disconnected.................................................19

Gas supply to CNG filling stations in Lahore resumed..........................................................................20

Fuel and Energy: World......................................................................................................................21

Oil prices fall..........................................................................................................................................21

Iraq offers olive branch to Turkey.........................................................................................................22

Banking & Finance .............................................................................................................................23

Refinance schemes valid till Dec 31, 2013: SBP....................................................................................23

SBP Deputy Governor at MF Forum: MFBs urged to emphasize on savings mobilization, cost

reduction...............................................................................................................................................23

Markets ................................................................................................................................................26

Innovative policies to be introduced in agri sector ..............................................................................26

ISE-10 index witness bullish trend ........................................................................................................26

BR Research: All .................................................................................................................................27

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Pakistan: No brownie points for effort in CPI 2012 ..............................................................................27

Gold seesawing at the tip of the fiscal cliff ...........................................................................................28

Saudi America not happening...............................................................................................................29

Brief Recordings..................................................................................................................................31

'Small & medium firms to drive business going forward,' Chief Executive, ZRG International ............31

Miscellaneous News ............................................................................................................................33

LNG supply: Pakistan, India in deadlock over transport fee.................................................................33

Korea commits $78 million for Malakand tunnel .................................................................................34

Microfinance providers: International fund offers Rs632 million to banks..........................................35

Farmers’ lobbies ask for subsidy, duty on Indian agri-imports.............................................................37

Textile sector rejects increase in gas prices..........................................................................................39

Market watch: Bourse surges to fresh record high despite volatility...................................................40

Real estate woes: No shelter from rising property prices in Peshawar................................................41

Brazil offers insights into poverty reduction programmes...................................................................42

Citigroup to scale back Pakistani operations ........................................................................................44

SBP extends validity of refinance schemes...........................................................................................44

OPEN MARKET FOREX RATES................................................................................................................46

INTER BANK RATES................................................................................................................................47

Bullion Rates (Gold Prices) in Pakistan Rupee (PKR).............................................................................48

Gold Rates & Silver Rate from major cities of Pakistan ........................................................................49

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Taxation: Pakistan

Reducing age limits of imported vehicles:decision to cost Rs 17 billion to FBR, PACtoldDecember 07, 2012

WASIM IQBAL

The Federal Board of Revenue (FBR) will face Rs 17 billion revenue shortfall due to thegovernment decision to reduce the age limit of imported vehicles from 5 to 3 years. The FBRofficials revealed this during the National Assembly''s Public Accounts Committee''s (PAC)meeting on Thursday which was chaired by Nadeem Afzal Gondal.

The PAC has taken notice of the reduction in age limit of the imported vehicles from 5-yearto 3-year and sought details in five days. Member of the Committee, Saeed Zafar, alleged thatthe sub-committee''s decision to fix the age limit was not taken seriously by concernedministries. The sub-committee had recommended the age limit at 5-year. Chairman PACdirected the ministry to fix the responsibility in this respect.

The officials of FBR informed the committee that the matter had also been under discussionin the National Assembly''s Standing Committee on Finance and Revenue. They further saidthat the Ministry of Industry had sent summary directly to Federal Cabinet for approval andFBR was not taken on board. They also informed the committee that the local automanufacturers did not honour their commitment of 100 percent indigenization.

The committee suggested that a joint session of PAC and NA Committee on Finance andRevenue might be convened to resolve the age limit of imported vehicles. The committeesought revenue record of 30 years regarding imposition of 5 percent duty on the import ofvehicles and 10 percent on import of machinery.

The officials of FBR further said the board had made recovery of Rs 140 billion last month.The committee also took notice of stay of unauthorised persons in guest houses of FBR indifferent parts of the country. Chairman PAC also challenged the content of the recentlylaunched report of Transparency International Pakistan which ranked Pakistan 33rd incorruption index and asked them to come in the PAC for debate on this.

Reviewing the audit reports of Ministry of Tourism Development for years 2004-5, thecommittee directed to recover the amount from those officers who borrowed from thegovernment. The CNIC of defaulters must be blocked. The committee was informed that Rs20 .3 million were borrowed but not returned. The committee showed serious concerns overdelay in calling the meeting of board of governors of the ministry. In his ruling ChairmanPAC directed the secretariat to write letter to federal minister for tourism to immediately callthe meeting so that pending matters could be resolved.

The auditor general of Pakistan informed the committee that IPC made payment of Rs 2.4million to Auto Trading Centre against the purchase of five vehicles but no vehicle has been

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delivered so far. The committee was informed that the matter was taken to court of law whichdirected to deduct the amount form the bank accounts of the company. Only Rs 50,000 wasrecovered from the accounts.

The committee directed to find out the property of the owner of the company and confiscate itwith the assistance of Revenue Department. Responsibility must be fixed on those who didnot take any guarantee from them at the time of agreement. The PAC also directed to recoverRs 8,60,000 (Travelling expenses) from former Federal Minister for Health Naseer Khan whoused government vehicles for three years which was unauthorised.

Copyright Business Recorder, 2012

ClarificationDecember 07, 2012

It is hereby clarified that the data published in a news item of a newspaper (not BusinessRecorder) on 5th December, 2012 associated with the Finance Minister Dr Abdul HafeezShaikh in fact pertains to another taxpayer having the same name bearing NTN No 0752459-5 and belonging to District Sukkur. He has no relevance with the data disclosed in the IncomeTax Return and Personal Expense Form of the Finance Minister.


Depleted vehicles may be disposed ofthrough scrappingDecember 07, 2012

The Federal Board of Revenue is likely to allow Collectors of Customs to dispose of depletedvehicles through scrapping and sell the scrap through open auction. Sources told BusinessRecorder here on Thursday that FBR has received requests from certain Model CustomsCollectorates for disposal of tampered confiscated vehicles through scraping and auction.

In this regard, the FBR has decided to obtain viewpoint of the Collectors of Customs to checkwhether such procedure of scrapping of tampered vehicles has been followed in the past.Taking into account the past practice, the FBR will take final decision to auction all suchscrap of tempered vehicles after scrapping.

Under customs rules and regulations, the tampered smuggled vehicles cannot be auctioned.The motor registration authorities (MRA) are part of the provincial excise and taxationdepartments. The MRA have refused to register the tampered vehicles. Thus, such vehiclescannot be publicly auctioned for the last 5-6 years. As the same cannot be auctioned, nopublic revenue could be recovered from seizure of such vehicles. Such vehicles have onlybeen allowed to federal and provincial government departments for official use under aspecial procedure. Another option is to dispose off depleted vehicles through scrapping andlater auction of scrap.


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November 2011-November 2012comparison: huge difference in revenuegrowth notedDecember 07, 2012

Growth in revenue collection was over 25 percent in November 2011 as compared to growthof over 4 percent in November 2012, reflecting a huge difference in revenue growth duringperiod under review. Sources told Business Recorder here on Thursday that Federal Board ofRevenue (FBR) has provisionally collected Rs 140 billion during November 2012 against Rs134 billion in the corresponding period of last fiscal year.

The difference of Rs 6 billion reflected growth of over 4 percent in November 2012 whencompared with November 2011. When the revenue collection was Rs 134 billion inNovember 2011, the FBR has witnessed a growth of more than 25 percent. The FBR isrequired to have minimum growth of 25 percent during 2012-13 as compared to nominalgrowth of over 4 percent in November 2012.

The FBR has maintained growth of 24-30 percent during July-November 2011-12. Duringfirst quarter of 2011-12, the FBR has witnessed a growth of 31 percent. Therefore, theaverage growth comes around 25 percent during July-November 2011-12. On the other hand,the FBR has provisionally collected Rs 688 billion during July-November 2012-2013 againstRs 646 billion in same period of 2011-12. The growth in revenue is around 6 percent duringJuly-November 2012-13 as compared to the corresponding period of 2011-12. In 2011-2012,the collection in July stood at Rs 112 billion; August Rs 122 billion; September Rs 150billion; October Rs 128 billion and revenue collection in November was Rs 134 billion. Thegrowth pattern in July-November 2011-12 reflected that the FBR has maintained averagegrowth of 25 percent in all five months of 2011-12.

The FBR has collected Rs 112 billion in first month of 2011-12 against Rs 77 billion in 2010-2011, reflecting a growth of 45.5 percent. In August 2011-12, the FBR has collected Rs 122billion against Rs 100 billion in August 2010-11, showing a growth of 22 percent. The Boardhas collected Rs 150 billion in September 2011-12 as compared to Rs 116 billion in 2010-11,reflecting a growth of 29 percent.

During first quarter of 2011-12 the FBR has witnessed a growth of 31 percent as compared tosame period of 2010-11. The FBR has collected Rs 128 billion in October 2011-12 ascompared to Rs 103 billion in October 2010-11, reflecting a growth of 24 percent. The FBRhas collected Rs 134 billion in November 2011-12 against Rs 103 billion in same period of2010-11, showing a growth of 30 percent.

According to the sources, revenue collection would cross Rs 145 billion on compilation offinal figures. In the next few days, the revenue reporting from far flung areas andreconciliation of data would result in further improvement in revenue collection. The FBRwill generate Rs 4-5 billion in coming days and revenue collection for November 2012 wouldstand at Rs 145 billion to Rs 146 billion.

Latest data revealed that the FBR has collected Rs 549 billion during July-October 2012-

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2013 against Rs 613 billion target for the period under review. During first quarter 2012-13,the FBR has collected Rs 409 billion against the target of Rs 437 billion during this period.


DG I&I IR detects gross misdeclaration:over 100 chipboard makers involved in STevasionDecember 07, 2012

SOHAIL SARFRAZ

Over 100 manufacturers of chipboard/particle board and MDF boards have been allegedlyinvolved in evasion of sales tax to the tune of billions by concealing actualproduction/quantities. It is learnt here on Thursday that Khawaja Tanveer Ahmed DirectorGeneral Intelligence and Investigation Inland Revenue Federal Board of Revenue (FBR) hasdetected the case of gross misdeclaration of sales and sales tax evasion by chip boardmanufacturers.

Khawaja Tanveer has submitted viable suggestions to the FBR for increasing revenuecollection from chipboard/particle board manufacturers and improving documentation withinentire supply chain of the industry. According to the investigation conducted by DirectorGeneral I&I IR, in Pakistan approximately there are over 100 manufacturing units ofchipboard/particle board and MDF board scattered all across the country. Out of these 100manufacturing units; 35 to 44 units are registered with All Pakistan Particle BoardManufacturers Association.

The manufacturers of chip board/particle board sell their product in local market tounregistered wholesalers and retailers at a very low value to avoid sales tax. Themanufacturers apart from understating price also understate the production quantities in theofficial records. They are availing benefit of full input tax credit on consumption utilities likeelectricity, gas and other industrial inputs but are not declaring the actualproduction/quantities in their monthly returns. The average wholesale and retail prices ofchipboard/particle board during last three years have been worked out in detail. For example,FBR has collected Rs 54 million and Rs 78 million as sales tax during 2007-2008 and 2008-2009 respectively as compared to estimated sales tax of Rs 2.3 billion and Rs 2.7 billionduring the period under review.

It is evident from tax calculation done by the directorate that billions of rupees are beingevaded by the chip board/particle board, manufacturers only in the sales tax head. Thispractice is also promoting the non-documentation of the sector as it has become a practice inthe market that goods are bought and sold without sales tax invoices.

The said figures are self explanatory as there is huge gap of actual tax collected vis-à-visestimated, Khawaja Tanveer said. Director General I&I IR suggested that the FBR can collectsubstantial revenue by taking new tax measures. Firstly, input sales tax adjustment of utilities(electricity/gas) for the manufacturing of board should be restricted to the extent of theiractual declared production. This shall compel manufacturers to declare their correct

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production and its subsequent supplies.

Secondly, incorporate necessary amendment in SR0863 (1)/2008 so that manufacturers ofparticle board/chipboard, MDF board submit their monthly production data withFBR/concerned Regional Tax Office/Large Taxpayer Unit (LTU). Thirdly, to overcome lowprice, FBR may fix sales tax price for the producers of particle board and MDF board undersection 46 of the Sales Tax Act, 1990. Fourthly, under section 40B, RTOs/LTUs may bedirected to post Officer of Sales Tax to the premises of chipboard/Particle board, MDF boardmanufactures to monitor production, sale of taxable goods and the stock position.


Information relating to ADRC: FBR refusesto entertain application of tax consultantDecember 07, 2012

The Federal Board of Revenue has refused to entertain an application of a tax consultant,submitted for provision of 'orders' passed by FBR on the recommendations of AlternativeDispute Resolution Committees (ADRCs) under Freedom of Information Ordinance, 2002.

Sources told Business Recorder here on Thursday that the FBR has termed it as a verysensitive issue and started consultation with its legal advisors for not providing copies of theADRC orders to the applicant. On refusal, the applicant has filed a complaint with theFederal tax Ombudsman (FTO) Office. The FBR has repeatedly sought time for submissionof comments as the issue is of a very sensitive nature and consultations with legal advisorsare in process.

There is a controversy between citizens and FBR on the issue of providing informationrelating to the ADRC in light of Freedom of Information Ordinance, 2002. The FBR isreluctant to provide the information to the citizens by refusing them merely on lame excusesof privileged or personal information.

In this regard, a Lahore-based tax lawyer Waheed Shahzad Butt of Tax Resolution ServicesCompany has written a letter to the Chairman FBR, requesting him to provide certain data inlight of section 12 of the Freedom of Information Ordinance, 2002 read with Rule 4 ofFreedom of Information Rules, 2004.

Tax lawyer has requested the FBR to provide recommendation issued by Alternative DisputeResolution Committees and orders of the FBR under section 134A of the Income TaxOrdinance, 2001; u/s 47A of the Sales Tax Act, 1990, especially orders passed by Chairmanon recommendations issued by ADRC. In response to application under section 12 of theFreedom of Information Ordinance, 2002 instead of providing the requisite information underthe law, it was declined to provide it under section 8(g) of the Freedom of InformationOrdinance, 2002.

The FBR has taken the plea that the documents/ details/ information/orders relating torecommendations by the ADRC and subsequent orders passed by FBR u/s 134-A of theIncome Tax Ordinance, 2001 and Section 47A of the Sales Tax Act, 1990 for the period July,2010 to June, 2012 is record relating to the personal privacy of taxpayers. As per section 8 (g)

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of the Freedom of Information Ordinance, 2002 record relating to the personal privacy of anyindividual, falls out of the purview of Section 7 of Freedom of Information Ordinance, 2002.Thus, the request for providing certified copies of documents/details/ information/ordersrelating to recommendations by the ADRC and subsequent orders passed by FBR u/s 134A ofthe Income Tax Ordinance, 2001 and Section 47A of the Sales Tax Act, 1990, cannot beacceded to, FBR added.

It is further elaborated by the tax expert that nothing in this section prevents the FBR fromgiving information that has been requisitioned under Freedom of Information Ordinance,2002 as neither any statement, return/accounts or documents of "Personal Privacy oftaxpayer" have been requisitioned nor records of any assessment proceedings have beenasked for. The information, which has been requisitioned, is by no means confidentialinformation and does not come in the ambit of section 8(g) Freedom of InformationOrdinance, 2002. The stance of FBR is in contradiction with the Constitution of Pakistan.The fundamental right granted by the Constitution could not be altered or abridged by a lawenacted by the Parliament. Principle of law is that the Fundamental right under Article 19A ofthe Constitution was grant of the Constitution, and, therefore could not be altered or abridgedby a law enacted by the Parliament. Fundamental rights granted by the Constitution could notbe altered or abridged by a law enacted by the Parliament, Waheed added.

Meanwhile, Waheed further said that a complaint has been filed before the Federal TaxOmbudsman (FTO) Dr Muhammad Shoaib Suddle under section 19 of the Freedom ofInformation Ordinance, 2002 (FIO) against the FBR refusal to provide required information.Section 19(2) of FIO categorically provides powers to the FTO to investigate and decide thecomplaints and it shall be treated as final verdict. The law provides authoritative powers tothe FTO to issue Order of binding nature under section 19(2) of FIO.

Experts said that Freedom of Information Ordinance enables citizens to ask for informationas their right, just as every citizen has the right to freedom of speech and expression. TheFreedom of Information ensures transparency and to make the Government more accountableand ensure that the citizens have access to public records. It also enable the citizens todemand their rights, establish good governance through the enforcement of the rule of law,eliminate corruption and make the Government more effective in delivering social andeconomic public services, which require constant monitoring and attention.


Excise and Taxation Department:irregularities in realisation of Rs 220million tax unearthedDecember 07, 2012

YASIR BABBAR

Widespread irregularities in realisation of over Rs 220 million by the Excise and Taxationdepartment, have been unearthed by the Audit officials, Business Recorder has learnt.According to "audit report on the accounts of revenue receipts government of Sindh for audityear 2011-12", under Section (3) of Motor Vehicle Taxation Act, 1958, Motor Vehicle Tax is

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payable by owners of vehicles on annual/quarterly basis.

Failure to pay the tax within prescribed period with penalty under Section (9) of the Act, theunpaid amount of tax along with penalty is recoverable as arrears of Land Revenue. But,Excise and Taxation Officers (ETOs) did not recover the motor vehicle tax amounting to Rs63.202 million from various districts.

The report further stated that according to the provision of law contained in section 117 and118 of Sindh Local Government Ordinance 2001, "each taluka and town shall be rating areawithin the meaning of Section 3(2) Sindh Urban Immovable Property Tax Act & the Rules,1958, where it is stated that all the tax shall be charged, levied and collected at 20 percent ofthe amount of value of lands and buildings".

The Excise and Taxation Officers/Deputy District Officer Karachi in violation of the aboveprovision of law, did not realise the property tax current and arrears of Rs 46.112 millionfrom National Stadium Karachi during 2010-11. The para No: 3.4. "Non-realisation ofinfrastructure Cess - Rs 31.089 million" mentioned that according to Section-9 of SindhFinance Act, 1994 as amended by Sindh Finance Act, 1996 and Sindh Finance (secondamendment) Ordinance, 2001, "Infrastructure cess is levied and collected at 0.80 percentC&F value of a consignment on the movement of goods entering the province from outsidethe country through air or sea in cash."

The various ETOs did not recover the Infrastructure Cess amounting Rs 31.089 million inviolation of law during 2010-11. According to para "Non-realisation of property tax Rs23.738 million" Sindh Local Government Ordinance 2001, "each taluka and town shall berating area within the meaning of Section 3(2) Sindh Urban Immovable Property Tax tCt &the Rules. 1 958, where it is stated that all tax shall be charged, levied and collected at 20percent of the amount of value of lands and buildings".

Eighteen Excise and Taxation Officers / Deputy District Officers in violation of the aboveprovision of law, did not realise the property tax amounting to Rs 23.738 million during2009-10 & 2010-11. Similarly, there are many other paras including non-realisation ofrevenue on import of Gold - Rs 18.202 million, non-realisation of Professional Tax Rs 11.207million, non-realisation of Hotel tax Rs 3.994 million, non-realisation of Cotton Fee Rs 0.122million, non-realisation of license fee from motor vehicle dealers Rs 0.093 million, loss togovernment revenue Rs 19.087 million, estimated Loss of Government Revenue Rs 4million, late deposit of revenue into government account Rs 232.497 million. The audit reportfurther mentioned that all said matters had been pointed out to the authorities during August,November and December 2011. But no reply was received from the department tillfinalisation of the report.


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Business & Economy

Dr Qadir Baloch appreciates govt's stepsfor promotion of agricultural sectorThursday, 06 December 2012 13:06

Posted by Parvez Jabri

ISLAMABAD: Former Wheat Commissioner Dr Qadir Bakhsh Baloch appreciatedgovernment steps of enhancing support price of wheat and steps for promotion of agriculturalsector.

Talking to Radio Pakistan, he said that the government provided incentives to the farmers asit increased wheat price to 1200 per 40 kg.

He added that Pakistan became self sufficient especially in wheat because Pakistan produced36 million ton grain.

He said that government incentives improved the agricultural sector a lot in the country.

He also hailed Prime Minister Raja Pervez Ashraf's speech at Zarai Taraqiati Bank Limited.

Copyright APP (Associated Press of Pakistan), 2012

Alternative resources utilization toovercome energy crises: Dr Kamal QaziThursday, 06 December 2012 12:54


ISLAMABAD: Vice Chairman Karachi Chamber of Commerce & Industries, Dr QaziAhmad Kamal said on Thursday that the government has adopted alternative resourcesutilization to overcome energy crises in the country.

Talking in a programme of PTV, he said that coal is the most common source of energy allover the world and fortunately Pakistan is blessed with coal as compared to other developingand neighbouring countries.

"We have to make short and long term policies for energy conservation".

He said efforts are being made to increase production of energy from different resources likethermal, gas and coal.

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He hoped that the capacity from thermal resources would be enhanced to 2600 (MW)megawatt in the coming years.

He quoted Minister for Water and Power Ch Ahmad Mukhtar as saying that "The govt istaking steps to generate energy from coal and for this, all available resources in the countrywill be utilized", he said.

He said that there is a plan to transfer the energy dependency from furnace to coal which is acheap source of energy.

He said that the govt is focusing on coal and LNG products to overcome energy shortage.

He hoped there would be great improvement in the energy management sector in future.


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Industries & Sectors

Shipping activity at Port QasimThursday, 06 December 2012 15:13


KARACHI: Shipping activity remained active at the Port during last 24 hours where threeships carrying containers steel coil and iron ore plates were allotted berth at QasimInternational containers terminal and multi purpose terminal during last 24 hours,

Meanwhile two more ships scheduled to load/offload containers and edible oil also arrived atouter anchorage of Port Qasim during last 24 hours.

Berth occupancy was 55% at the Port on Thursday where total number of six ships namelyCGM Bellinl, Sai Eyemity, Arietis, Vina Line Sky, Beauty Full Rena and Ghem Road Vegaare currently occupying berths to load/offload containers, wheat, furnace oil, steel coil, ironore plates and edible oil respectively during last 24 hours.

A cargo volume of 54376 tonnes comprising 46477 tonnes imports and 7899 tonnes exportsinclusive of containerized cargo carried in 841 containers (Boxes) were handle at the Portduring last 24 hours.


HESCO disconnects power supply to over100 government offices and schoolsThursday, 06 December 2012 12:27


SHAHDADPUR: Hyderabad Electric Supply Company HESCO has disconnected powersupply to over one hundred government offices and schools of Shahdadpur subdivision torecover electricity arrears amounting Rs.185 million.

The electric supply was disconnected during an overnight operation, SDO Haji Bin Yameentold.

Dozens of schools, a library of Taluka Municipal Administration, sewerage disposal plant,tube-wells of irrigation department, offices of public health department, revenue department,health and other departments are among those who were targeted in first phase of operation.

The irrigation department that runs tube-wells (58 connections), owes Rs.80 million, publichealth department owes Rs.80 million (4 connections), health department owes Rs.5.5 million

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(10 connections), revenue department owes Rs.3 million (4 connections), educationdepartment owes Rs.15 million (40 connections) and Taluka Municipal Administration owesRs.5 million to HESCO.

Meanwhile, a spokesman of Public Health Department, Sanghar division refuted HESCOclaim of Rs.80 million arrears saying the public health office Shahdadpur is closed since lasteight years while all the schemes of water supply and drainage were handed over to TalukaMunicipal Administration.

The citizens of Shahdadpur were also surprised on HESCO move as according to them thewater supply scheme is inoperative since last 18 years.

Copyright PPI (Pakistan Press International), 2012

Textile industry seeks reduction in interestrateThursday, 06 December 2012 12:14

Posted by Imaduddin

HAMID WALEEED

LAHORE: Textile industry demanded reduction in interest rate by 250 bps to 7.5 percent inthe monetary policy, likely to be announced shortly, as growth of Large Scale Manufacturing(LSM) sector is stalemate due to short of investment.

They said the industry off-take has reduced by Rs.100 billion since September 2010 toSeptember 2012 that has arrested growth in the Non-Performing Loans (NPLs) of theindustry.

However, they added, it has a dire impact on the investment front, as all investment planshave been withheld by the investors due to high interest rate, which has yet to witness theregime of single digit to compete with regional competitors.

It may be noted that the State Bank of Pakistan has already reduced interest rate by 400bpsduring last two years that has played vital role in stopping nosedive decline in industrialgrowth. However, still the industry is badly looking for substantial reduction in interest rate,in line with the regional competitors, to make new investments and avail the upcoming tradeopportunities from the EU, including recently trade concession on 75 items and upcomingGSP Plus.

Meanwhile, inflation has also come down to 6.5 percent that has asserted the industryviewpoint agitating the point that the country is facing cost-push factor and not a demand-pull.

The textile industry is the worst hit of the high interest rate, losing strength fast amidstunprecedented energy shortage, both electricity and gas. A good number of textile mills have

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closed down operations from November 2007 when energy shortage hit the country. Many ofthe mills are still unable to meet financial obligations due to shift losses with rise in energyshortage. However, the government as well as the SBP responded poorly to the emergencylike situation.

The role of Gohar Ejaz, Group Leader APTMA, cannot be ignored in this regard. Hecontested industry case by tooth and nail and convinced the government functionaries tobring 180 degree shift in its approach towards monetary policy. Today, the government hasreduced interest rate from 14 percent to 10 percent and much credit goes to unstinting effortsof Gohar Ejaz.

But the industry is apprehending losing more against India if the government failed torespond industry call for reduction in interest rate by another 250bps to enable the industry ininvesting more to create jobs and earn foreign exchange for the country. It becomes furtherimportant in a situation when Indian textile industry has planned to create 20 million jobs by2015, added the industry sources.

LCCI trade delegation leaving for IndiatodayThursday, 06 December 2012 11:19

Posted by Imaduddin

RECORDER REPORT

LAHORE: A 200-member trade delegation, led by the LCCI vice-president Mian AbuzarShad, is leaving on 4-day visit to India on Thursday (today) to participate in PunjabInternational Trade Expo (PITEX-2012) being held in Amritsar.

On December 6, the delegation will attend a business dinner in Amritsar being hosted by theChief Minister of Indian Punjab Parkash Singh Badal. On December 7, the delegation willparticipate in the inaugural ceremony of PITEX 2012 Exhibition and visit the stalls.

The delegation will have high-profile business-to-business meetings with their Indiancounterparts besides discussing with them various aspects Pak-India trade. The LCCIExecutive Committee members included in the delegation: Mudassar Masood Chaudhry,Mian Zahid Jawaid Ahmad, Sheikh Muhammad Tariq, Chaudhry Iftikhar Bashir, SyedMahmood Ghaznavi and Nabila Intisar, former Senior Vice Presidents Engr. Sohail Lashari,Yaqoob Tahir Izhar and former Vice President Saeeda Nazar.

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Fuel and Energy: Pakistan

Talks on ''unmanaged'' energy issues today:US side to be led by Pascual, OlsonDecember 07, 2012

MUSHTAQ GHUMMAN

Washington and Islamabad are holding detailed parleys on the energy sector''s ''unmanagedissues'' under the auspices of Pakistan-US Working Group on Friday (today). The Pakistaniside will be represented by Minister for Water and Power Ahmad Mukhtar, Prime Minister''sAdviser on Petroleum and Natural Resources Dr Asim Hussain and Deputy Chairman of thePlanning Commission Dr Nadeemul Haq.

The US side would be headed by Special Envoy for International Energy Ambassador CarlosPascual and US Ambassador to Pakistan Richard Olson. The meeting will review theprogress on import of Liquefied Natural Gas (LNG) and TAPI gas pipeline project. TheMinistry of Water and Power and the Ministry of Petroleum have invited GEI and Engro, butignored Pakistan GasPort Limited (PGP), one of the three companies given a licence by Ografor LNG import.

PGP had signed a term sheet with the US State Department''s Overseas Private InvestmentCorporation (OPIC) in October 2011 for financing the LNG project. The Group will discussall energy related issues in three sessions, to be attended by the energy experts of bothcountries.

Discussions in the first session will be as follows: (i) supply and demand shortages (currentsituation and projections); (ii) energy sector reforms, progress and challenges (GoP update);(iii) dispatch management and generation efficiency (GoP); (iv) regulatory environment andneeded improvements (NEPRA and tariffs, DISCO''s governance, GoP, USAID), tariffstructure and regulators (GoP), dispute resolution (GoP);(v) financial environment andcommercial viability( eg circular debt, subsidies), investment climate, Diamer Basha USG)and project financing (Asian Development Bank).

The country''s private sector will also give views on power sector issues. The second sessionwill be dedicated to discussions on the fuel sector which includes an update on current supplydemand situation (GoP), fuel mix distribution; investment climate, TAPI; regulatory andpolicy framework (2012-Petroleum Exploration and Production Policy; Shale and Tight GasPolicies). The Group will consider contract assistance and US engagement and assistance ininvestment in LNG in Pakistan.

Discussion in the third session will be for hydropower projects, reforms and challenges andDiamer-Bhasha dam, especially the US and IFI engagement. Other participants of meetingwill be Secretary for Water and Power Nargis Sethi, Secretary for Petroleum and NaturalResources Dr Waqar Masood Khan, Secretary, Economic Affairs Division Javed Iqbal,Special Secretary for Water and Power Himayatullah Khan, Director General, EconomicReform Unit Dr Khaqan Najeeb Hassan, Additional Secretary, Water and Power ArshadMirza, Muhammad Ali Shahzada, Joint Secretary (Admn & Water); M Zargham Eshaq Khan,

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Joint Secretary (Power Resources); Pervaiz Ahmed Junejo, Joint Secretary (DevelopmentProjects); Dr Zafar Nasrullah Khan, Joint Secretary (Entities & DISCOs); Musaddiq AhmadKhan, Joint Secretary (Power Transmission); Member (Water), WAPDA; Syed RaghibAbbas Shah, Chairman Water & Power Development Authority; Shakeel Durrani, Advisor onDiamer Basha; Sohail Khan, DG (Americas), M/o Foreign Affairs; .Husham Ahmed, AD(USA), M/o Foreign Affairs.

Mohsin Khalid, Chairman BoD, IESCO; Sarim Sheikh, CEO, GE Pakistan and arepresentative of private sector would also attend the meetings. Masood Siddiqui, ManagingDirector, Oil & Gas Development Company (OGDCL); Peter Seitinger, General Manager,OMV; Erno Liptak, Managing Director, MOL; Ahmet Caliksan/ Farrakh Qayyum, GEH;Sheikh Imran ul Haque/ Muhammad Ali Uddin, ENGRO; Omar Sheikh, Managing Director,Shell.

Ambassador Carlos Pascual, Special Envoy for International Energy Affairs, US StateDepartment; Ambassador Richard Olson, US Ambassador to Pakistan Richard Albright, Co-ordinator for Economic and Development Assistance, US Embassy Islamabad; Robert Ewing,Counsellor for Economic Affairs, US Embassy Ibd; Jonathan M. Conly, Mission Director,USAID Mission Pakistan; Paul Hueper, Director of Energy Programs, Energy Bureau, USState Dept; Denise Marsh, Director, Office of the Middle East and Asia, Energy Bureau, USState Department; Ms Denise Marsh, Director Office of the Middle East and Asia, EnergyBureau, US State Department; Ms Lauren Culver, Special Assistant, Energy Bureau, USState Department; Ms Erin Krasik, Director, Office of Pakistan Affairs, US Agency forInternational Development (USAID); Jeremy Chen, Pakistan Desk Officer, US StateDepartment; Ms Melissa Knight, Director, Office of Energy, USAID Mission Pakistan;Vinay Chawla, Deputy Co-ordinator for Economic and Development Assistance, USEmbassy Islamabad; Saeed Anwar, Program Management Specialist, USAID MissionPakistan; Jaffer Askari, Economic Specialist US Embassy Islamabad; Matt Bonaiuto,Economic Officer, US Embassy Islamabad; James Fluker, Commercial Attache, US Dept. ofCommerce, US Embassy Islamabad; Ms Maegon Barlow, Energy Attache, US Dept. ofEnergy, US Embassy.


Power import plan deferredDecember 07, 2012

ZAHEER ABBASI

A plan to import 1,000 megawatts of electricity from Iran has now been deferred because offunding problems, an official of the National Transmission and Dispatch Company told theSenate''s Sub-Committee on Finance on Thursday. Briefing the Senate body, NTDC''s ChiefEngineer Masoodul Hassan informed the Senate Sub-Committee on Finance that hugefunding was required for laying transmission lines for importing electricity from Iran, whichcould not be arranged and the project had been relegated to backburner.

He said it was Pakistan''s responsibility to lay the transmission line. Masood stated that aMemorandum of Understanding (MoU) for the project had been signed in June this yearduring the visit of the NTDC managing director visit to Iran, but further progress on theproject could not be made. In reply to a question of a committee member, he said that an

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MoU and not an agreement had been signed for the import of electricity.

About the Dadu-Khuzdar transmission line, he said that the project was funded by the JapanInternational Co-operation Agency (Jica) and work had been delayed because of the Iraniancompany''s inability to supply the material following sanctions on Iranian banks. Now, hesaid on the proposal of Jica, the NTDC was going to open Letters of Credit (LCs) and wouldpay directly to contractors. He said that the project is scheduled to be completed by June nextyear if all obstacles were removed at the earliest.

To another query, he explained that all findings for transmission lines and a grid station forDadu-Khuzdar was being provided by the Jica, which wanted speedy resolution of paymentissues for quick completion of the project. He said that resolution of the power shortageproblem in Quetta might take some time. Masood also briefed the committee about theprogress on a 100MW electricity project for Gwadar and expressed the hope that it wouldmaterialise soon. He said that a 51-million-euro fund and a contractor for the project had beenarranged and appeared optimistic about early completion of the project.


Audit of CNG stations'' accounts: Ograasked to cancel licences of violatorsDecember 07, 2012

KHUDAYAR MOHLA

The Supreme Court on Thursday directed Oil and Gas Regulatory Authority (Ogra) to cancellicences of all those owners of Compressed Natural Gas (CNG) stations who have refused toget their accounts audited by December 17. A two-judge bench comprising Justices JawwadS Khawaja and Khilji Arif Hussain resumed the hearing of the CNG case.

At the outset of proceedings, Malik Shakeelur Rehman, the counsel for Federal Board ofRevenue (FBR), submitted a report in pursuance of the court orders, arguing that CNG stationowners had paid Rs 4,091.9 million in tax in the last three years. The report stated that Rs1,008.9 million income tax was paid in 2009, Rs 1,427.4 million in 2010 and Rs 1,655.6million in 2011.

Salman Akram Raja, the counsel for Ogra, informed the bench that the Federal Cabinet hadyet to approve new CNG pricing formula proposed by Ogra. CNG Association ChairmanGhayyas Paracha alleged that Ogra was trying to pitch the association against the public andmaintained that CNG stations purchased CNG from the government at a rate which washigher than offered to other sectors. He contended that CNG station owners were facingmassive losses due to a massive cut in CNG prices.

Ogra had earlier withdrawn a memorandum of understanding (MoU) between CNG and thegovernment and cut prices of CNG per kg by Rs 31. CNG owners went on strike in protestand urged the court to direct Ogra to revisit the pricing formula. The court declined sayingthat it was only concerned with the procedural illegality and would not determine the price asit was not court''s prerogative.

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Justice Khawaja remarked that the court was aware of the actual operating costs of CNGstation owners and observed that they had earned a profit of Rs 31 per kg for four years underthe rubric of operating costs. Justice Khawaja further observed that the court would onlyexamine the issue of transparency in procedure adopted for price fixation and added that Ograhad not undertaken due diligence in the matter of Tauqeer Sadiq''s appointment case. Thehearing was adjourned till December 17.


OGDCL discovers gas in KhairpurDecember 07, 2012

Oil and Gas Development Company Limited (OGDCL) has discovered 20 Million Cubic Feetper Day (mmcfd) gas from Suleman-I exploratory well located in District Khairpur, Sindh.According to OGDCL spokesman, the company is also operating in Khewari Block JointVenture and having working interest of 95 percent and Government Holding Pvt Limited (5percent).

The structure of the Suleman-I was delineated drilled down to the depth of 4,575 meter. Thisis the second discovery of hydrocarbons in the current financial year. Earlier, OGDCL hadmade discovery of hydrocarbons at Nashpha in District Kohat of Khyber- Pakhtunkhawa(KP) in September 2012. During the on-going financial year the OGDCL has planned to drill37 wells in the country.

Exploration activity in Pakistan remained slow in recent years due to low prices offered bythe government and the impact of circular debt in the oil and gas sector. The country has gasreserves of 23 tcf/day. Pakistan''s current domestic gas demand exceeds its productioncapacity of 4.2 bcf/day by 1.2-1.4 bcf/day, which increases to 2 bcf/day in winter. If adequategas is not discovered within 3-4 years, the shortfall is projected to increase to 2.5-3 bcf/day.


Public service vehicles: additional CNGcylinders being disconnectedDecember 07, 2012

ABDUL RASHEED AZAD

Oil and Gas Regulatory Authority (Ogra) in collaboration with provincial governmentsstarted disconnecting additional CNG cylinders in Public Service Vehicles (PSVs). Theauthority has allowed only two CNG cylinders in Light Transport Vehicles (LTV) and amaximum of four cylinders in Heavy Transport Vehicles (HTV), while only one CNGcylinder be fitted in private vehicles.

According to Ogra sources, the Authority has taken this step after a number of fatal incidentsin CNG fitted vehicles which claimed lives of dozens of people. The regulatory authority isgoing to strictly implement safety of CNG cylinders/kits in collaboration with provincial

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governments, the source said.

Criteria for vehicular monitoring and recommendations regarding placement of CNGcylinders in public service and private vehicles have been prepared by HDIP and is beingimplemented by Ogra and provincial transport departments. The move is backed by AllPakistan CNG Association (APCNGA) as well as by the transport unions. APCNGA had alsoproposed that Radio-Frequency Identification (RFID) chips should be installed at CNGstations for monitoring faulty cylinders and kits. Meanwhile, the Ministry of Petroleum hasprepared a summary for stopping supply to the CNG sector for two months in winter as wellas providing CNG only to vehicles up to 1000 CC.

According to the sources in the Petroleum Ministry, the summary would be sent to theEconomic Co-ordination Committee (ECC) next week. The summary recommends notallowing vehicles of over 1000cc to get CNG. However, PSV should be allowed to get theCNG, the sources said. It is also proposed to pass on the authority of installation of CNGfilling stations to the provinces. Sources said that the suggestions are meant to ensure non-stop supply of gas to residential consumers in winter season and to help avert the CNG crisisin future.


Gas supply to CNG filling stations inLahore resumedDecember 07, 2012

The compressed natural gas (CNG) supply to the filling stations resumed in Lahore onThursday after a three-day weekly closure but many stations remained shut due to strike,while few stations were opened which complained about the low gas pressure.

In Lahore, long queues of vehicles were witnessed early morning at the stations that wereselling gas but most of the stations remained closed due to the CNG association's strike.

Commuters were facing severe difficulties as most of them had been waiting in the queuessince midnight to get CNG and blamed the CNG association for this misery. The CNGassociation is on strike due to differences with Oil and Gas Regulatory Authority (Ogra) overthe pricing formula and that is why most of the stations are not selling CNG.

Chairman All Pakistan CNG Association Punjab Captain Shuja Anwar (Retd) while talkingto Business Recorder said that association has not given call of any strike adding that itdepends upon the CNG station owners that if they think that it is viable for them to sell gason current price. It is pertinent to mention here that in an attempt to put pressure on thegovernment to increase the per kilo price of the compressed natural gas (CNG), most of theCNG stations remained closed in Lahore for the past whole week.


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Fuel and Energy: World

Oil prices fallDecember 07, 2012

Oil prices fell on Thursday as the downside risk to the euro zone economic outlookreinforced worries about demand for petroleum, while uncertainty about budget negotiationsin the United States continued to stoke investor caution. The European Central Bank leftinterest rates unchanged at a record low 0.75 percent on Thursday and ECB President MarioDraghi raised the prospect of more weakness in the region.

"The Governing Council continues to see downside risk to the economic outlook for the euroarea," Draghi told a news conference after an ECB policy meeting. The dollar indexstrengthened and the euro fell versus the dollar and the yen on the lowered growth forecastfor 2013. A stronger US currency usually puts pressure on dollar-denominated commoditieslike oil.

Brent January crude fell $1.76 to $107.05 a barrel by 11:33 am EST (1633 GMT), havingslumped as low as $106.80. US January crude was down $1.80 at $86.08 a barrel, havingfallen as low as $85.77 during the session. Prices for both crude contracts were on pace topost weekly losses of more than 3 percent.

"Downward movement has been pretty consistent this morning, and additional volume fromthe opening of the New York open outcry session I'm sure accelerated it, and the ECBkeeping rates steady helped as well," said Michael Fitzpatrick, editor-in-chief at industrynewsletter EnergyOverview in New York. US RBOB gasoline and heating oil also fell onThursday, under pressure again after the Energy Information Administration's weeklyinventory report on Wednesday showed sharp increases in fuel stockpiles.

The EIA data helped push gasoline futures down nearly 2 percent on Wednesday. Whilebudget negotiations continue in Washington, looming mandated US tax increases andspending cuts, the so-called "fiscal cliff," remain a threat to slow the world's largest economyand dent demand in the world's top oil consumer.

The number of Americans filing new claims for unemployment benefits fell for a thirdstraight week, a report showed on Thursday, dropping back to their pre-Hurricane Sandyrange. Initial claims for state unemployment benefits dropped 25,000 to a seasonally adjusted370,000. Thursday's jobless claims data followed private payrolls processor ADP's report onWednesday showing private-sector employers added 118,000 jobs in November, fewer thanexpected.

Those employment gauges arrived ahead of the closely watched US November non-farmpayrolls report due on Friday. Non-farm payrolls are expected to have increased by only93,000 last month, with storm disruptions and fears of fiscal cliff-induced austerity hobblingcompany hiring.

Wednesday's EIA report, while showing crude stocks fell, revealed big builds in refined oilproducts, with gasoline stocks registering the biggest increase since 2001, up 7.86 millionbarrels. US stocks of distillates - including diesel fuel and heating oil - also rose. US

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inventory levels will be a factor considered by Opec oil ministers at the group's meeting nextweek to consider market share and production policy.

"The question is, will Opec actually cut production which they should and need to do in thefirst half of 2013," said Bjarne Schieldrop, chief commodity analyst at SEB. "People are alsothinking more about softer seasonal demand in the first half of the year." Oil's price slide maybe limited by Egypt's struggle over its future.

Israel's plans to build more settlements in the West Bank prompted the European Union tosummon Israel's envoy on Wednesday and helped reinforce fears about the potential for theregion's conflicts to disrupt oil supply. Syria's civil war and the dispute between Iran andIsrael and the West over Tehran's nuclear program remain factors adding to oil's geopoliticalrisk premium.

Copyright Reuters, 2012

Iraq offers olive branch to TurkeyDecember 07, 2012

Iraq's Prime Minister Nuri al-Maliki said he wanted to improve strained ties withneighbouring Turkey, but warned Ankara in a newspaper interview not to interferre in Iraq'sinternal affairs In the latest sign of worsening relations between Iraq and Turkey, the centralgovernment in Baghdad on Tuesday denied permission to land for a plane carrying Turkey'senergy minister to an energy conference in Iraqi Kurdistan.

Baghdad has been angered by Ankara's moves to forge closer ties with northern Iraq'sKurdistan Regional Government, which is in a dispute with the federal government over oiland land rights. Turkey and Iraq have also accused each other of inciting sectarian tensionsand have summoned each others' ambassadors in tit-for-tat manoeuvres. "Despite all theproblems, we want good dialogue with Turkey. I am extending an olive branch from here,"Maliki told Turkey's Hurriyet newspaper in Baghdad.

"Security, oil, trade, culture. We are ready and want to work with you in every field. But donot interfere in Iraq's politics and domestic affairs," he said. A major source of tensionbetween Baghdad and Ankara is the presence in Turkey of fugitive Iraqi Vice President Tareqal-Hashemi, who has been sentenced to death in Baghdad on charges of running deathsquads. Maliki said he also sent a message of brotherhood to Turkish Prime Minister TayyipErdogan, who has said Ankara would not hand Hashemi over and that there was no truth inthe accusations against him.

Copyright Reuters, 2012

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Banking & Finance

Refinance schemes valid till Dec 31, 2013:SBPThursday, 06 December 2012 12:21

Posted by Imaduddin

RECORDER REPORT

KARACHI: The State Bank of Pakistan (SBP) has extended the expiry date of the RefinanceFacility for Modernization of Small & Medium Enterprises (SMEs), Refinance Scheme forRevitalization of SMEs in Khyber Pakhtunkhawa (KP), Gilgit-Baltistan (GB) and theFederally Administered Tribal Area (Fata), Financing Facility for Storage of AgriculturalProduce (FFSAP), and Agri.

Loans Refinancing & Guarantee Scheme for War Affected Areas of KP and Fata by oneyear. These facilities/schemes will now remain valid up to December 31, 2013.

Refinance limits already sanctioned in favour of selected banks/Development FinancialInstitutions (DFIs) under the abovementioned schemes/facilities will also continue to beavailable up to the expiry date of December 31, 2013, the State Bank announced in a series ofcirculars issued on Wednesday.

Banks/DFIs can also apply for enhancement of limits after utilisation of their existing limits.Further, other interested banks/Development Finance Institutions, may also apply toIH&SME Finance Department of SBP for sanctioning of fresh limits under thesefacilities/schemes, the circulars added.

SBP Deputy Governor at MF Forum: MFBsurged to emphasize on savings mobilization,cost reductionThursday, 06 December 2012 12:20

Posted by Imaduddin

RECORDER REPORT

KARACHI: The Deputy Governor, State Bank of Pakistan (SBP), Kazi Abdul Muktadir onWednesday urged Micro Finance Banks (MFBs) to emphasize on savings mobilization andcost reduction by developing new strategies & infrastructure such as branchless banking.

Inaugurating the 6th Pakistan Microfinance Country Forum, Kazi said that despite severalsuccesses in microfinance and branchless banking, financial exclusion is still very high as

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currently, microcredit is reaching only 2.3 million borrowers which are less than 10 percentof a target market, estimated to be around 30 million.

“I would like to assure that the regulatory environment and market interventions wouldcontinue to support all these developments,” SBP Deputy Governor added.

He said the Microfinance Credit Guarantee Facility (MCGF), a 10 million British poundguarantee facility, has so far mobilized commercial funding of Rs6.325 billion to fourmicrofinance providers for onward lending to around 200,000 new micro borrowers. “Goingforward, the facility will aim to raise commercial debt from non-bank sources, diversifyingsources of commercial capital for microfinance providers,” Kazi added.

In addition, International Strengthening Fund (ISF) has so far approved Rs 632 million for13 microfinance providers including top and middle-tier Micro Finance Banks (MFBs) andMicro Finance Institutions (MFIs).

He said under the ISF arrangements (a UK grant of 10 million British pounds facility), ISFhas supported 20 projects for investments in key areas such as human resources (HR),information technology (IT), product development, risk management systems, business plansand branchless banking development. “The Pakistan Microfinance Network (PMN) was alsoprovided funding support under ISF to conduct research and develop the industry’sinfrastructure such as the testing of microfinance Credit Information Bureau (CIB) in Lahoreand its expansion to the national level,” he added.

He said the Financial Innovation Challenge Fund (FICF), which is also a 10 million Britishpound facility, will provide new ways of meeting the larger demand for financial services. Hesaid the first round of the Fund which was held to promote the “Government to Persons(G2P) Payments” has now been successfully completed by deciding to award Rs505 millionto six projects being undertaken by the applicant institutions. “The 2nd FICF Round would beheld on rural financial services including agricultural finance and broad based financialservices projects using telecommunication infrastructure to promote micro payments forpeople who are not part of financial services,” he added.

The SBP Deputy Governor observed that it is encouraging that the investors’ enthusiasm inmicrofinance has been on the rise especially in the last couple of years, and one of the majordrivers for investors is the opportunity to enter the branchless banking space.

Abdul Muktadir said that now four branchless banking providers are operating with fullrange of services. He said that the brick and mortar retail network of the entire financialindustry stands at around 11,000 outlets after 65 years whereas within a short span of two anda half years’ branchless banking retail agents’ network has grown beyond 30,000 agents.With almost 1.8 million mobile banking accounts branchless banking customers conductedmore than 28.4 million transactions worth Rs115.3 billion during the quarter ending June2012, he said, adding that the average size of transaction is Rs 4,065 which shows that thetechnology is helping ‘financial access’ of the unbanked.

The SBP Deputy Governor said the mobile phone banking has emerged as the new marketniche for both banks and mobile network operators and added that the existing growing agentnetwork will rapidly expand to reach all rural and remote geographic locations across thecountry.

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He said the State Bank envisions branchless banking as a great opportunity for safe, fasterand efficient provision of financial services to the un-served segments of the society. AbdulMuktadir, however, observed that despite the early successes in microfinance and branchlessbanking, the fact remains that financial exclusion is still very high. Currently, microcredit isreaching only 2.3 million borrowers which is less than 10% of a target market that isestimated to be around 30 million, he added.

He noted that this high level of financial exclusion offers enormous opportunities to themicrofinance operators in the country to benefit from a favourable market environment, andgrow fast while becoming an important participant within the overall financial sector thatwould serve the millions of underserved and unbanked people.

Meanwhile, talking to newsmen on the sideline of the conference, he said that energy crisis,poor law and order and unemployment are key hurdles in the growth of the economy. He saidPakistan’s economy has a lot of opportunities to grow well; however there is need to removethese hurdles. In reply to a question regarding new IMF programme, he said the governmentwill decided that the country needs another IMF programme or not.

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Markets

Innovative policies to be introduced in agrisectorFriday, 07 December 2012 04:05

Posted by Abdul Ahad

LAHORE: The Pakistan Agri Forum expressed its apprehension that this year set target ofwheat, rice and cotton production will not be achieved by the Punjab government.

In a press release issued on Thursday, Agri Fourm chairman Muhammad Ibrahim Mughalsaid during the last four years, the Punjab government could not achieve target of wheat,cotton and rice.

He said according to the government statistics wheat target for the last four year was 70.68million tonnes while 70.30 million tonnes of wheat was produced due to which the provincehad to face a financial loss of Rs 75 billion.

He said it was the need of the hour to introduce the best and innovative policies foragriculture sector to counter challenges facing farmers.


ISE-10 index witness bullish trendThursday, 06 December 2012 20:02

Posted by Shoaib-ur-Rehman Siddiqui

ISLAMABAD: The Islamabad Stock Exchange witnessed a bullish trend on Thursday as theISE-10 index was up by 6.26 points to close at 3238.98.

A total of 182,100 shares were traded, which were up by 105,000 shares as compared toprevious day's trading of 77,100 shares.

Out of 161 companies, share prices of 118 companies recorded increase and those of 43registered decrease. No company remained stable.

The share price of Unilever Pakistan increased by Rs. 149.89, while that of Murree Brewerydecreased by Rs. 9.96.

P.T.C.L, Byco Petroleum and Silk Bank remained the top trading companies with 50,500,32,000 and 30,000 shares respectively.Copyright APP (Associated Press of Pakistan), 2012

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BR Research: All

Pakistan: No brownie points for effort inCPI 2012December 07, 2012

BR RESEARCH

Transparency Interna-tional, the leading international watchdog fighting corruptionworldwide, has released its 18th annual Corruption Perceptions Index for 2012, rankingPakistan on the 139th position amongst 176 countries.

The CPI, which is a combination of surveys and assessments of corruption collected throughvarious reputed independent institutions, scores these 176 countries and territories from zeropercent -highly corrupt- to 100 percent -very clean- based on perceived levels of public sectorcorruption.

This year, the report reveals that nearly two-thirds of the 176 countries ranked in the 2012index score below 50, showing a driving need for governments to ensure greater transparencywithin public institutes and increasing accountability of those that have power.

What remains the core issue however, is recognising the fact that the fight against corruptionis not just a cause to ensure the legal protections for civil societies against the abuse that theymay receive at the hand of those in power, it is in all effect, a fight against human sufferingcaused by an act that transcends simple violation of power.

Linked inextricably with the exploitation and injustice, corruption is central to the fight forhuman rights, as it is the vulnerable and marginalized within a society who often suffers theharshest consequences of corruption.

"In dealings with police, judges, hospitals, schools and other basic public services, poorcitizens tend to suffer more violations than the rich and see a larger share of their resourceseaten away", points out a report prepared by ICHRP report prepared in conjunction withTransparency International.

For Pakistan -whose score has worsened down the scale by nine points- the CPI 2012 reportthus hits home the inescapable conclusion that combating corruption needs to become one ofthis nations biggest priorities.

Having become permanently weaved within the fabric of our national ethos; corruption issomething no citizen of this country is immune to. From the telephone line man and the gasmeter reader up to the government officials within the highest echelons of power, in Pakistan,seemingly everything and everyone can be bought if one has enough money.

Translating into human suffering, extortion and corruption is in fact the biggest reason.Pakistan remains one of the worst countries in the world in terms of justice, accountabilityand freedom provided to the masses.

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A recent World Justice Project report, which finds Pakistan as the seventh most corruptnation and one of the weakest and most ineffective accountability system in the world, notesthat the billions of rupees of taxpayers money spent on developing anti-corruptionapparatuses have been spent largely in vain.

The 241-page report notes that "Pakistan shows weaknesses in most dimensions whencompared to its regional and income-group peers. Low levels of government accountabilityare compounded by the prevalence of corruption, a weak justice system and a poor securitysituation, particularly related to terrorism and crime."

India -one of the most notorious nations in the world when it came to matters related tocorruption-meanwhile has cleaned up its act this year. Ranking on the 94th position among176 countries on CPI 2012, Indias score is 36 on a scale from zero to hundred.

However, Transparency International -which has updated the methodology for the CPI 2012-notes that the levels of corruption still seem insurmountably high in many nations ravaged byabuse of power, bribery and under the table deals.

Moreover, the report notes that many of the countries where citizens had challenged theirleaders to stop corruption during the course of the last 12 months have actually seen theirpositions in the index worsen.

"After a year of focus on corruption, we expect governments to take a tougher stance againstthe abuse of power. The Corruption Perceptions Index 2012 results demonstrate that societiescontinue to pay the high cost of corruption," said Huguette Labelle, the Chair ofTransparency International in a press release accompanying the release of the report.

=================================

Rank Country/Territory Score*

=================================139 Pakistan 2794 India 36144

Bangladesh 2679 Srilanka 40118 Egypt 32160 Libya 21144

Syria 26

=================================

Gold seesawing at the tip of the fiscal cliffDecember 07, 2012

BR RESEARCH

Its been called the icking time bomb by many, but for gold investors, the fiscal cliff is also alandmine of anticipation.

Analysts are debating over whether the precious metal will tip towards the bearish end or thebullish end if the US goes over the fiscal cliff.

Those in the bull camp argue that the safe haven appeal of gold will become the keymotivator if the US goes over the fiscal cliff, making investors revert to the precious metal to

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hedge their risk.

What is believed to drive this bullish sentiment is the fact that if the country dives over thefiscal cliff, a lot of uncertainty in markets will ensue. And uncertainty appears to be a closefriend of gold.

At the same time, because the US is largely believed to plunge into a recession if thespending cuts and tax increases come into effect, the greenback will also likely lose somestrength. And what does that mean? That golds luster will increase more in comparison.

At the other end, those in the bear camp believe that if no resolution about the fiscal cliff isreached and the economy rolls over it, the consequent recessionary impact will take a toll onall markets, and gold will also go down with other assets.

"As a rule of thumb, you would likely see everybody from financial institutions to real moneymanagers probably take larger cash positions than otherwise. That implies selling assets, andgold would certainly behave like a risk asset then," Bart Melek, head of commodity strategyfor TD Securities - a Toronto-based Capital Markets firm, was quoted by the Forbesmagazine last week.

However, those in the bull camp outnumber those in the bear camp. Further, EuroInvestor, aninternet media company, providing investment information claims that investors have uppedtheir purchase of gold coins due to the uncertainty about the fiscal cliff.

Thats understandable given the anticipation about the outcome of deals on the fiscal cliff.Whats more important is how this ticking time bomb will be resolved. If no deals reached andthe economy goes over the cliff, gold followers should likely brace for a bull run thanks tothe ensuing uncertainty. But if a reasonable deal is reached, gold prices may be broughtdown.

Saudi America not happening...December 07, 2012

BR RESEARCH

Saudi America, the latest buzzword has found ample space in media for its share to a sectoralready under limelight. Chanting the wildly optimistic renaissance in the world energy map,the US aficionados forget about the thorns that snag the rosy picture.

The recent global forecast by International Energy Agency, IEA stated that by around 2020,US will become the worlds largest oil producer overtaking the Kingdom, and will become anet oil exporter by 2030s. But things are wooly and not that simple.

Some straightening of the aggressive assumptions makes more sense. For one, the unknownabout the shale reserves in the US is a mystery in itself.

The industry might just be too optimistic about the shale reservoirs that are the main sourceof forecasted production; conventional oil production is actually projected to fall andstabalise around 4-5mboe/d in US. Similarly the natural gas production from conventionalsources is set to remain stunted around 4mboe/d.

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Also, global oil prices can play their treacherous game, and a continued fall can turn shale oilproduction sour. Already, the break even for the oil companies producing from shale basins ismuch higher than the conventional production.

Its not wise to keep OPEC out of the loop. With the top position and power of OPEC over theoil market threatened, it is too dicey to assume that the cartel will sit silently. In an attempt toretain its power, the group can pump more oil using its spare capacity to bring down oilprices and throw US shale oil production in shambles.

A little bit of math also raises concerns over the pompous claims. Production during 2012 sofor from conventional US reserves stands around 6mboe/d, while the tight oil production isaround 1mboe/d, which is forecasted to grow by 2.2mboe/d till 2020s.

With current conventional production set to stabalise at the existing levels as per theprojections, US production during mid 2020s will be around 8.2mboe/d, whereas IEAassumes that Saudi Arabias production will be roughly around their current averageproduction of 9-10mboe/d.

The trick lies here: According to the Paris-based organisation, US will be producing around11mboe/d which not only includes the oil but also other liquids and the refinery outputs.

Even if the official reasoning behind the figures comes clean, one thing is for sure: theincidence of rise in US oil is puffed up more than its magnitude and duration that requireequal attention. In the long term, Saudi Arabia will rise again - back to being the leader - saysno one else but IEA.

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Brief Recordings

'Small & medium firms to drive businessgoing forward,' Chief Executive, ZRGInternationalDecember 07, 2012

RECORDER REPORT

Ayub Butt is a graduate from Central State University, Oklahoma - USA. He has spent aconsiderable amount of his professional career in the Silicon Valley, California, USA and hasworked at Stanford University, Hitachi America, and VLSI Corporation. He has been leadingZRG International since 1994.

Since its inception about 18 years ago, ZRG International has focused mainly on providingsoftware solutions to big firms. The Information Technology solutions provider specialises inproviding systems for customer services functions. The Company's Chief Executive AyubButt told BR Research in a recent interview, that a large chunk of the firm's revenues hashistorically been generated from the banking and financial sector.

"It is not that we are solely focused on providing solutions for this sector," he clarified,adding that the skew towards banks is a result of consistent investments by the banks inupgrading and improving their customer services functions. Butt explained that his companyhas so far successfully completed projects for all five telecommunications services providersas well as major national companies including Pakistan State Oil, EFU Life Insurance andTCS Courier Services, in addition to 16 of the banks operating in the country.

"The other sectors have just not kept pace, when it comes to investing in their customerservices functions and overall use of information technology to improve efficiencies acrosscore and support business functions," he contended. However, the rapid growth witnessed bythe banks and telcos in the early 2000s is also a memory of the past now. "Business activityover the past four years has been relatively slow everywhere, but more so in Pakistan," saidthe CEO. "Besides, the banks are not growing at a commensurate pace, as far as branchlessbanking and consumer banking are concerned. On the other hand, the telcos are also unlikelyto bloom the way they did a few years back because cellphone subscriptions appear to havelevelled off now and only marginal increases are expected in their client base from here onout".

But ZRG International is not throwing in the towel. Instead the Company has redirected itsfocus to diversify into other sectors and geographical regions. In the past, over 90 percent ofthe firm's revenues were generated from domestic revenue streams. Of this, about three-fourth of all business activity was generated from the banking sector. But all that is nowchanging, and fast.

"The future growth drivers of Pakistan's economy will be small and medium enterprises.Those progressive firms that are into consumer businesses will be our key focus area withinthe country going forward," contended Ayub Butt. The shift will not require any major

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shuffling within the Company, as Butt explained, "we already have the relevant softwaresolutions needed by small and medium-sized companies; and with a little bit of trimming andcustomisation we can meet their needs". This translates into quick delivery times for SMEswhile also ensuring that the overall cost of implementation is low enough for smallerbusinesses to afford.

Diversification lies within the natural growth trajectory of ZRG International, according to itschief executive; "we have made a good name for ourselves by completing numerous projectswith many of the most renowned and largest companies within the Country. The brand equitywe have nurtured over 18 years has made us a prominent name within the B2B realm, andsmaller companies now aspire to implement the same sophisticated and latest systems asindustry stalwarts. So we do not want to leave that market segment open for others".

Besides tapping small and medium-sized businesses in Pakistan, the Company is alsoincreasing its regional presence. "In the early day of our business, we had experimented withthe idea of hiring marketing firms in other regions like Africa and the Middle East, but wesoon realised that was not the way to go," he said. The chief executive explained that theCompany is engaged in a specialised IT business which mandates direct contact withprospective clients to better understand their particular requirements and also to be able toexplain to them, the product offerings available with ZRG International.

However, the Company has formed partnerships with a network of dealers that help facilitateimplementation of projects in other countries. "Within Pakistan, we use our internal resourcesfor all business activities," said Ayub Butt.

About 60 employees comprise the workforce at ZRG International, majority of whom are ITprofessionals. But the Company was not always this well-manned. Ayub Butt recalled "whenwe started back in 1994, we were just three people, but the business we received in our earlydays from ANZ Grindlays Bank and other corporate clients allowed us to expand over time."

Growth in the firm's human resources has been deliberately slow. "Many of the local IT firmshave very high employee turnover because they bring on people when they have projects towork on, but then they fire the extra help once the pile of work is cut down," he contendedadding that, "we have always been conservative in our approach because we prefer to take ononly those people who can add value to the enterprise and whom we can inculcate long-termrelations with."

Butt attributed the early success that the Company has enjoyed to a core team of dedicatedprofessionals. "Business volumes are not as high as they were at the peak of the banking andtelecom sectors' booms but all we need are a couple of big projects to grow beyond previouslevels," he said. "The main target is to continue to innovate and bring those solutions tomarket that are on the cutting edge of information technology to ensure that companies herecan avail cost-effective and efficient software solutions. We keep our eyes on the prize,which simply put is total customer satisfaction," he summed up.


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Miscellaneous News

LNG supply: Pakistan, India in deadlockover transport feeBy Zafar Bhutta

Published: December 5, 2012

India will lay a 60km pipeline from Bhatinda to Wagah border while Pakistan will constructits part of the pipeline stretching over 30 km to inject gas into the system of SNGPL.PHOTO: FILE

ISLAMABAD:

Pakistan and India have reached a deadlock in their talks over supply of liquefiednatural gas as Delhi has sought transport charges of $4.5 per million British thermalunits (mmbtu) for the supply of gas through a pipeline, officials say.

Representatives of the two countries are now expected to meet on December 11-12 in NewDelhi to try and make some headway in the LNG project.

During talks held in Islamabad in October this year, the Indian team proposed a price of $21per mmbtu for LNG supply including all charges, but Pakistan did not accept it. The pricewas higher than the $18 quoted by Qatar and much higher than the $11 proposed by Dutchfirm 4Gas in January 2011 under the Mashal LNG project.

India has offered Pakistan export of 200 million cubic feet per day (mmcfd) of LNG for fiveyears by laying a pipeline from Bhatinda to the Wagah border.

“The transport fee of $4.5 per mmbtu is even higher than the cost of gas being produced byexploration companies in Pakistan,” an official pointed out.

According to sources, during October talks, India offered two options for LNG supply. First,it asked Pakistan to pay $21 per mmbtu including the price and transport and re-gasificationcharges. Second, Pakistan should itself import LNG and pay re-gasification charges at theterminal and fee for the transport of gas through the pipeline.

“Now, Indian and Pakistani teams will try to remove their differences over the pricing issue,”a source said.

According to discussions between the two sides, India will lay a 60km pipeline fromBhatinda to Wagah border while Pakistan will construct its part of the pipeline stretchingover 30 km to inject gas into the system of Sui Northern Gas Pipelines Limited (SNGPL).

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A senior government official told The Express Tribune that initially Pakistan would import200 mmcfd and later it could ask for more over the long run.

“For the time being, LNG import from India is the most viable option as there will be nocapital cost involved and supply can start within months of a deal,” an official of the Ministryof Petroleum and Natural Resources said.

However, he said, if the government decided to import LNG through Karachi, the cost of justlaying a pipeline from Karachi to Lahore will be $1.4 billion.

In Asia-Pacific countries including Pakistan, India and Japan, the price of LNG rangesbetween $16 and $17 per mmbtu, in the European market the price is between $9 and $9.5and in the United States the price at Henry Hub stands sharply lower at $2.75 per unit due todiscovery of large shale gas reserves.

“We should keep in mind that the US will become an exporter of LNG in 2016-17, therefore,we should not get locked in a long-term deal (with India),” an energy expert suggested.

He said India was importing LNG from Qatar at a lower price, but this agreement was goingto expire. “India inked the LNG import deal with Qatar in 2004, but Pakistan tried and failedto book supplies from Qatar in 1991,” he said.

Published in The Express Tribune, December 6th, 2012.

Korea commits $78 million for MalakandtunnelBy APP


President asks the business community to boost the trade volume from existing $1.5 billion to$2 billion in the next three years.

SEOUL: Pakistan and South Korea on Wednesday inked two agreements that will pavethe way for the construction of Malakand tunnel and development of water resourcesincluding building of dams.

First agreement on the Malakand tunnel construction project was signed during a meetingbetween President Asif Ali Zardari and Export Import Bank of Korea Chairman Kim Yong-Hwan here. Under the agreement, the Korean government will provide $78 million for theproject through the Economic Development Cooperation Fund.

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The Malakand tunnel will not only provide a short route to the people of Dir, Malakand, Swatand adjacent localities, but will also provide easy access to markets of central Asian states.

The project, spread over 9.7 km, also includes approach roads on both sides of the tunnel andthree bridges. Korean consultants, in collaboration with the National Highway Authority,which is also the executing agency, have completed initial feasibility study of the tunnel.

Speaking during the meeting, President Zardari said Pakistan and Korea should explore thetrue potential of trade and investment and take bilateral trade to new heights. He asked thebusiness community to boost the trade volume from existing $1.5 billion to $2 billion in thenext three years.

He said major Korean companies were doing business in Pakistan and had invested in keyprojects including chemical plants, energy, infrastructure and port facilities. He asked thecompanies to cash in on numerous opportunities and incentives for investment as Pakistanhad opened all sectors of the economy.

Later, the president met with Korea Water Resources Corporation CEO Kim Keun-Ho. Afterthe meeting, a memorandum of understanding was signed between the Korean company andWater and Power Development Authority (Wapda).

Under the MoU, both sides will work for sustainable development of the water and powersector and cooperate in flood control and building water resources including dams,hydropower plants and canals.

They will also exchange technical expertise, train engineers and technicians and conductstudies on operation and management of dams, hydropower plants, hydrology andsedimentation.


Microfinance providers: International fundoffers Rs632 million to banksBy Our Correspondent / Creative: Jamal Khurshid


Currently, microcredit is reaching only 2.3 million borrowers, which is less than 10% of atarget market that is estimated to be around 30 million. ILLUSTRATION: JAMALKHURSHID

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KARACHI:

The International Strengthening Fund (ISF) has so far approved Rs632 million for 13microfinance providers of Pakistan including top and middle tier microfinance banks(MFBs) and microfinance institutions (MFIs), said State Bank of Pakistan (SBP)Deputy Governor Kazi Abdul Muktadir.

Inaugurating the 6th Pakistan Microfinance Conference here on Wednesday, Muktadir saidunder the ISF arrangement – a UK grant of 10 million pounds – the fund has supported 20projects for investments in key areas such as human resources, information technology,product development, risk management systems, business plans and branchless bankingdevelopment.

The Pakistan Microfinance Network (PMN) was also provided funding support under the ISFto enable it to conduct research and develop the industry’s infrastructure such as the testing ofmicrofinance Credit Information Bureau (CIB) in Lahore and its expansion at the nationallevel, he said.

The deputy governor said the Financial Innovation Challenge Fund (FICF), a 10 millionBritish pound facility, would provide new ways of meeting larger demand for financialservices.

The first round of the fund, held to promote government-to-persons (G2P) payments, has nowbeen completed with the decision to award Rs505 million to six projects being undertaken byapplicant institutions.

The second FICF round will be held on rural financial services including agricultural financeand broad based financial services projects using telecommunication infrastructure topromote micro payments for people who are not part of financial services.

Muktadir said now four branchless banking service providers were operating with full rangeof services. The brick and mortar retail network of the entire financial industry stood ataround 11,000 outlets after 65 years whereas within a short span of two and a half years thenetwork of branchless banking retail agents had grown beyond 30,000, he said.

With almost 1.8 million mobile banking accounts, branchless banking customers conductedmore than 28.4 million transactions worth Rs115.3 billion during the quarter ended June2012, he said, adding the average size of transaction was Rs4,065, which showed that thetechnology was helping the ‘unbanked’ to have access to financial services.

The deputy governor pointed out that mobile phone banking had emerged as a new marketniche for both banks and mobile network operators and hoped the agent network wouldrapidly expand to reach all rural and remote locations across the country.

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He, however, was of the view that despite the early success of microfinance and branchlessbanking, the financial exclusion was still very high. Currently, microcredit is reaching only2.3 million borrowers, which is less than 10% of a target market that is estimated to bearound 30 million.

He noted that this high level of financial exclusion offered enormous opportunities to themicrofinance providers to benefit from a favourable market environment and grow fast.

Speaking on the occasion, Mohammad Ali Jinnah University President Dr Abdul Wahab saidthe Japanese model of assistance in which big industries assisted new small industries ininitial years had been successfully implemented in Sialkot’s sports industry, which shouldalso be emulated in other parts of Pakistan.

Comparing Grameen Microfinance model of Bangladesh with the Japanese model, Wahabsaid despite all the merits of Grameen Microfinance bank, the system could not stop growthof poverty in Bangladesh over the years.

However, the Japanese model, which Sialkot copied, proved very successful in which smallindustries received assistance from bigger industries that helped promote entrepreneurshipand employment.

Orangi Pilot Project Executive Director Anwar Rashid said there were thousands of villagesin rural Sindh and south Punjab where microfinance institutions had no presence at all.


Farmers’ lobbies ask for subsidy, duty onIndian agri-importsBy Our Correspondent


Pakistan’s trade imbalance in India’s favour increased from 80:20 to 85:15 over the last year.ILLUSTRATION: JAMAL KHURSHID.

LAHORE: Not pleased with trade liberalisation with India, farmers ask the governmentto provide them subsidy or impose a tax on agricultural imports from India to ensure alevel playing field.

Their demands include a Rs12,000 per acre subsidy to growers on various agricultural inputsor a Rs400 per 40 kilogramme regulatory import duty on highly subsidised Indian agricultureimports.

“We can produce abundant vegetables, fruits and other produces if prices of inputs includingfertiliser, diesel and electricity are brought at par with Indian levels,” said representatives offarmers on Wednesday while adopting a joint resolution at an event on ‘Farmer’s perspectiveon Pakistan India trade liberalisation’, held under the aegis of Agricultural JournalistsAssociation (AJA).


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The recent cotton export restrictions, cement import impediments and other tariff and non-tariff barriers by India protected its agriculture and industry. Pakistan’s trade imbalance inIndia’s favour increased from 80:20 to 85:15 over the last year.

During June 2011 to June 2012, Pakistan’s imports from India were valued at Rs134.7 billion(1.44% of total exports), whereas exports to India amounted to Rs30.3 billion (3.36% of totalimports), according to latest figures available on Pakistan Bureau of Statistics’ website.

Farmers were generally in favour of trade with India; however they were of the view thatdynamics of the farming sectors of both countries should be examined before fully openingtrade doors.

The joint resolution warned the government that agriculture was the livelihood of 65% of thePakistani population and imbalance in trade with India will mean suffering for country’seconomy and depriving people of their livelihood.

They asked authorities concerned to devise a separate trade policy for agriculture producesafter consulting with representatives of farmers’ organisation.

Speaking on the occasion, Dr Tariq Bucha, president of Farmers Associates Pakistan saidinterest of the agriculture and related sectors were not taken into consideration before takingtrade related decision. “Decisions are being taken in a hurry by the government, leaving manycritical questions unanswered as there is a visible negative impact on Pakistan’s agriculturesector if free trade initiative is completed.”

Ibrahim Mughal, another agriculturist, said Pakistani vegetable growers will have to payadditional Rs63 billion because of high input costs to compete with Indian vegetables.

India gives Rs1.1 billion as subsidy to its agriculture sector annually in addition to Rs0.367billion as food subsidy. Pakistan can only allocate subsidy to its sector by diverting fromother state-owned enterprises, projects and other sectors of the economy.

Abdul Basit, former chairman of the Poultry Association of Pakistan said, “We have alreadylost market of Afghanistan due to contrasting cost of production.”

Former food minister Hussain Jahania Gardezi said cotton production has stalled due tovarious factors including low quality seed, whereas India managed to double its production.“We cannot ignore interests of farmers while opening trade with India,” he observed.

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Basmati Growers Association President Hamid Malhi said farmers were not consulted beforeevolving the trade liberalisation policy with India.

The secretary of the Ministry of Commerce, he claimed, was recently caught off guard duringa presentation to the Standing Committee of the Senate on Foreign Affairs, and later at themeeting of the Public Accounts Committee, when asked to show any record of consultationwith farmers before entering into a dialogue on the issue with India.


Textile sector rejects increase in gas pricesBy Our Correspondent


Gas prices for the industrial sector in Bangladesh and Sri Lanka were lower than Pakistan.PHOTO: FILE

FAISALABAD: Textile exporters rejected the proposed raise in gas prices by thegovernment and termed it an unwise move, as it will further increase the cost ofbusiness, hamper production and affect exports.

Earlier, the Oil and Gas Regulatory Authority (Ogra), in a summary to the petroleumministry, recommended a hike in gas prices by 9.87% to Rs31.12 million British thermalunits (mmbtu) for Sui Northern Gas Pipelines and 6.14% to Rs28.28 per mmbtu for SuiSouthern Gas Company consumers. The notification, if approved by the government, will beimplemented from January 1, 2013.

Pakistan Textile Exporters Association (PTEA) said the decision will paralyse the industryalready facing the energy crisis and liquidity crunch, thus the government should cut taxesinstead of putting additional burden on the sector.

To keep the economic cycle well on track, the government will have to shelve the decision toincrease gas prices, it demanded. Many business units have moved out their operations toother countries and the decision will force more industrialists to do the same.

Gas prices for the industrial sector in Bangladesh and Sri Lanka were lower than Pakistan. InPakistan, gas prices were Rs235 per unit higher than Bangladesh and Rs165 per unit higherthan Sri Lanka.

PTEA Chairman Asghar Ali said gas supply to the industrial sector had been reduced by329% in the last four years. Explaining, he said that gas supply remained suspended for 41days in 2008-09, increasing to 175 days in 2011-12.

Quoting statistics, he said that product-wise details showed that knitwear exports went down7.11% in quantity terms in the July-October period of the present fiscal year, bed sheetfabrics export decreased 13.4% and made-up articles were down 1.04% against thecorresponding period of the previous fiscal year.


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PTEA called for withdrawal of increase in gas prices to strengthen the industry and tradeactivities.


Market watch: Bourse surges to freshrecord high despite volatilityBy Our Correspondent


Trade volumes rose to 234 million shares compared with Tuesday’s tally of 193 millionshares.

KARACHI: Volatility prevailed at the market today as investors took new positions instocks reflecting sector-specific news flows, but managed to close up record high forsecond straight session. Telecom sector was the talk of the day attracting sellingpressure due to withdrawal of the international clearing house (ICH) notification by thetelecom regulator, while lack of interest in the index-heavyweight oil and gas sectordented overall sentiments.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index climbed 0.15% or 25.55points to end at 16,675.70 point level.

“Stocks traded both columns managing to close green towards the end of the session,” saidHaris Batla, analyst at Elixir Securities. Telecom sector was the market mover whilesentiments were low as oils and cements traded red for most of the session on lack of interest,Batla added.

The Pakistan Telecommunication Authority (PTA) withdrew the imposition of ICH chargeson incoming calls from abroad. The proposed ICH gateway would have converged allinternational calls to a single technical gateway led by Pakistan TelecommunicationCompany (PTCL) against the current practice of being handled by 14 long distanceinternational operators. The news led PTCL to plunge and hit its lower lock of 5%.

On the contrary institutional activity kept banks upbeat as investors bet on payoutexpectations with calendar year coming to a close. Engro Foods was the highlight of the day,hitting the upper circuit, as funds flow for consumer plays following Unilever intention to de-list.

The market also found support from expectations that the State Bank of Pakistan will cut itsdiscount rate this week after government data showed inflation under control.

Trade volumes rose to 234 million shares compared with Tuesday’s tally of 193 millionshares.

Shares of 401 companies were traded on Wednesday. At the end of the day 164 stocks closedhigher, 193 declined while 44 remained unchanged. The value of shares traded during the daywas Rs5.61 billion.


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PTCL was the volume leader with 27.19 million shares shedding Rs0.90 to finish at Rs17.01.It was followed by Jahangir Siddiqui and Company with 23.92 million shares gaining Rs0.30to close at Rs18.77 and Lotte Pakistan with 16.66 million shares climbing Rs0.04 to close atRs7.23.

Foreign institutional investors were net sellers of Rs97.95 million, according to datamaintained by the National Clearing Company of Pakistan Limited.


Real estate woes: No shelter from risingproperty prices in PeshawarBy Hassan Ali / Creative: Faizan Dawood


Prices of luxury houses are largely unchanged, but rental rates have witnessed a sharpincrease of up to 40% since 2007. DESIGN: FAIZAN DAWOOD

PESHAWAR:

The rapid boom in real estate business in Peshawar from 2004 till 2006 has all butwinded down. And with the rapid influx of refugees from militant-hit Khyber Agencyand neighbouring Afghanistan, property prices have increased manifold.

Prices of residential property have witnessed an increase of up to Rs50,000 per marla (272square feet) while prices of commercial property have soared to Rs100,000, say real estateagents from the provincial capital.

The cost of one marla of commercial land in densely populated parts of the city varies fromRs0.8 million to Rs1.5 million, while residential property can cost up to Rs0.4 million toRs1.2 million, says Haji Ajmal Khan, a property dealer at Warsak Road.

People are hesitant to purchase property due to the high cost of land, but many people whohave escaped fighting in militant-hit regions of Khyber-Pakhtunkhwa and the tribal areas arerenting houses in the metropolitan.

Khan is optimistic that business will gain momentum again. He says the city’s increasingpopulation is attracting investors, adding that people earlier pulled back their investments dueto a near 400% hike in land prices from 2004 to 2006. This, he said, is when the real estatebubble burst.

In the last three months, price of land at the Overseas Pakistani Foundation (OPF) housingsociety in Doran Pur has gone up to Rs50,000 per marla, suggesting that people have startedinvesting in real estate again, says a property dealer at Ring Road, Muhammad Arif Safi.

Since the price of land in posh areas of the city are not within the reach of all, families whohave migrated from militancy-hit areas prefer to settle in the suburbs, where land prices varybetween the more affordable rates of Rs70,000 and Rs100,000 per marla.

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He says most of the property near areas outside Ring Road has been bought by people hailingfrom Khyber Agency who have established residential colonies.

Property is not the only expensive component of a house in Peshawar. People prefer to buyold houses due to the high cost of construction, says real estate investor Saleem Jan. He saysthe price of bricks has gone up from Rs3,000 per one thousand bricks in 2007 to Rs7,000 in2012.

“I constructed a double storey, six bedroom house over five marlas which cost me Rs1.5million in 2007. Constructing a similar house in 2012 has cost me Rs2.6 million.”

Prices of luxury houses are largely unchanged, but rental rates have witnessed a sharpincrease of up to 40% since 2007. A one kanal (approximately 500 square metres) house cannow fetch up to Rs40,000 to Rs50,000 a month, adds Jan.

A resident of Hayatabad, Adil Yousafzai says rental rates might come down once Afghanrefugees return to their homeland. “Rental rates of one-kanal houses decreased significantlyin 2002-2003, when a large number of immigrants who had rented houses in Peshawarreturned to Afghanistan.”

Permanent residents of the city often find it difficult to find an affordable house to rent inSethi Town, Hayatabad and Afghan Colony for the same reason.

“Afghan refugees are part of financially sound tribal families, and are willing to pay morerent than the permanent residents. This has jacked up prices considerably,” says Yousafzai,who is waiting for the day all refugees are repatriated back to their country.

The resentment is also apparent in a resident of Dinbhar Colony, who too blames “outsiders”for high rental rates. “Renting a six-bedroom house around the City area costs Rs20,000, butif the Afghan refugees are repatriated the same house will not cost more than Rs15,000.Renting out property has become a profitable business and many people have constructedmore than one house for the same purpose.”


Brazil offers insights into poverty reductionprogrammesBy Our Correspondent


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“The issue of poverty is a big challenge, and our experts’ visit to Pakistan has been successfulin sharing experiences in tackling poverty alleviation,” says Leoni.

ISLAMABAD: Brazil has succeeded in cutting back on poverty from 30% to 7% andhas offered to share its experiences with Pakistan.

While addressing a press conference along with Brazilian experts, Brazilian AmbassadorAlfredo Leoni said that the exchange of delegations will eventually lead not only to enhancedbilateral cooperation in food security, but other fields as well.

He said that Brazil has the world’s most advanced food security policy, due in large part to itssuccessful rural extension programmes, inter-institution coordination and mobilisation ofcivil society.

“The issue of poverty is a big challenge, and our experts’ visit to Pakistan has been successfulin sharing experiences in tackling poverty alleviation,” he said.

Pakistan Agriculture Research Council Chairman Iftikhar Ahmad said that food prices wereon an uptick globally, and Pakistan was facing problems in this regard as more and morepeople were being pushed under the poverty line.

“We do not want to increase production only, but also wish to tackle the food security crisis,”he said, referring to ‘zero-hunger’ programmes introduced in different countries. “We havediscussed experiences with Brazilian experts during the seminar to tackle poverty along thesemodels,” he said.

Cynthia Jones, deputy director of the World Food Program Center of Excellence in Brazil,said that Brazil had a legal framework and financing programmes for farmers. “We need toengage civil society to understand the problem of hunger and poverty,” she added.

Marcos Lopes, from General Coordination of International Actions to Combat Hunger, talkedabout the Brazilian government’s programme to counter hunger and poverty. “The Braziliangovernment has set a minimum price for producers to guarantee incomes,” he said; addingthat it also worked at creating more jobs for the poor.

He explained that people used to buy products from large companies, but the institutionalmechanism set up now allows consumers to buy from small farmers. “Now, our governmenthas different policies for different producers to guarantee their incomes,” he said. TheBrazilian government sometimes buys products through the National Company for FoodSupply for storage purposes, or to run social food assistance programmes.

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“As the next step, we have invited Pakistani officials to visit Brazil and study our model. Thetwo countries will soon sign a Memorandum of Understanding (MoU),”he added.


Citigroup to scale back PakistanioperationsBy AFP


Citi says it will “significantly” scale back operations in Pakistan, Turkey, Paraguay, Uruguayand Romania. PHOTO: AFP

WASHINGTON: Citigroup announced Wednesday that it would cut more than 11,000jobs and “significantly” scale back operations in several countries including Pakistan ina move boost efficiency.

“Due to this repositioning, Citi expects to record pre-tax charges of approximately $1 billionin the fourth quarter of 2012 and approximately $100 million of related charges in the firsthalf of 2013,” the company said.

Around 6,200 of the job losses will be in the consumer banking division as Citi pushes astrategy of focusing on the 150 cities around the world “that have the highest growthpotential in consumer banking.”

As a result, Citi said it will “significantly” scale back operations in Pakistan, Turkey,Paraguay, Uruguay and Romania.

Other markets affected by the cuts include the United States, Brazil, Hong Kong, SouthKorea, and Hungary.

“While we are committed to – and our strategy continues to leverage – our unparalleledglobal network and footprint, we have identified areas and products where our scale does notprovide for meaningful returns,” said Michael Corbat, the huge bank’s new chief executive.

“And we will further increase our operating efficiency by reducing excess capacity andexpenses, whether they center on technology, real estate or simplifying our operations.”

The actions came seven weeks after Corbat was named chief executive following the shocksacking of Vikram Pandit and Pandit’s top aide in an unexpected board move against them.


SBP extends validity of refinance schemesBy Our Correspondent

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Other interested banks and DFIs may also apply to the central bank for the sanction of freshlimits under the schemes and facilities.

KARACHI: The State Bank of Pakistan (SBP) has extended the expiry date of itsfinancing schemes by one year and now they will remain valid up to December nextyear.

The schemes include Refinance Facility for Modernisation of Small and Medium Enterprises,Refinance Scheme for Revitalisation of SMEs in Khyber-Pakhtunkhwa, Gilgit-Baltistan andFederally Administered Tribal Areas (Fata), Financing Facility for Storage of AgriculturalProduce and Agri Loan Refinancing and Guarantee Scheme for War-affected Areas of K-Pand Fata, said the SBP in a press release on Wednesday.

Refinance limits already sanctioned in favour of banks and development finance institutions(DFIs) under the above schemes and facilities would continue to be available up to the expirydate of December 31, 2013, it said. The SBP told banks and DFIs they could also apply forenhancement of limits after utilisation of their existing limits. Other interested banks andDFIs may also apply to the central bank for the sanction of fresh limits under the schemesand facilities.


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OPEN MARKET FOREX RATESUpdated at: 7/12/2012 6:08 AM (PST)

Currency Buying Selling

Australian Dollar 100.2 101.3

Bahrain Dinar 253 255

Canadian Dollar 96.5 97.5

China Yuan 13 13.5

Danish Krone 16.5 16.8

Euro 125.3 126.7

Hong Kong Dollar 11 11.5

Indian Rupee 1.7 1.8

Japanese Yen 1.168 1.25

Kuwaiti Dinar 339.1 340.6

Malaysian Ringgit 28 28.5

NewZealand $ 74.5 75.5

Norwegians Krone 16.5 17

Omani Riyal 249.1 250.9

Qatari Riyal 25.6 25.7

Saudi Riyal 25.65 25.85

Singapore Dollar 77.5 78.5

Swedish Korona 13.1 13.6

Swiss Franc 99 100

Thai Bhat 2.6 2.7

U.A.E Dirham 26.25 26.55

UK Pound Sterling 154.7 156

US Dollar 97.15 97.55

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INTER BANK RATESUpdated at: 7/12/2012 6:08 AM (PST)

CurrencyBank Buying

TT CleanBank Selling

TT & OD

Australian Dollar 100.78 100.99

Canadian Dollar 97.04 97.24

Danish Krone 16.85 16.89

Euro 125.71 125.97

Hong Kong Dollar 12.43 12.45

Japanese Yen 1.1669 1.1693

Saudi Riyal 25.68 25.73

Singapore Dollar 78.96 79.12

Swedish Korona 14.58 14.61

Swiss Franc 103.85 104.07

U.A.E Dirham 26.22 26.27

UK Pound Sterling 154.93 155.25

US Dollar 96.3 96.5

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Bullion Rates (Gold Prices) in PakistanRupee (PKR)As on Fri, Dec 07 2012, 03:45 GMT

Metal SymbolPKR

for 10 GmPKR

for 1 TolaPKR

for 1 Ounce

Gold 24K XAU 52,913 61,653 164,582

Palladium XPD 21,517 25,071 66,926

Platinum XPT 49,655 57,856 154,446

Silver XAG 1,028 1,198 3,197

Gold Rates in other Major Currencies

Currency Symbol 10 Gm 1 Tola1

Ounce

AustralianDollar

AUD 523 609 1,625

CanadianDollar

CAD 543 633 1,689

Euro EUR 422 492 1,313

JapaneseYen

JPY 45,175 52,636 140,511

U.A.EDirham

AED 2,012 2,344 6,257

UKPoundSterling

GBP 341 397 1,061

USDollar

USD 548 638 1,703

http://www.forex.pk/bullion-rates-gold-24k-xau-pkr.php

http://www.forex.pk/bullion-rates-palladium-xpd-pkr.php

http://www.forex.pk/bullion-rates-platinum-xpt-pkr.php

http://www.forex.pk/bullion-rates-silver-xag-pkr.php

http://www.forex.pk/bullion.php?base=AUD&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=CAD&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=EUR&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=JPY&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=AED&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=GBP&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=USD&curr=XAU&type=ounce

Email # 280



Gold Rates & Silver Rate from major citiesof Pakistan

A year by year reference of the daily Silver Price in Pakistan and history of Gold Rates inPakistan

20121206Dec 06, 2012

Following table shows gold rates per Tola in Pakistan in Pakistani Rupess (PKR) in 24 caratper 10 Grams, 22 carat per 10 grams and sliver rates per 10 grams in pakistan. Select datefrom january 2012 for Gold rates history in Pakistani cities

City 24k per 10 Grams 24 carat per Tola 22k Per 10 Grams Silver 10 Grams

Karachi Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Lahore Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Multan Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Faisalabad Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Rawalpindi Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Hyderabad Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Gujranwala Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Peshawar Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Quetta Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Islamabad Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Sargodha Rs. 53400 Rs. 62300 Rs. 48949 Rs. 985.71

Source: Karachi Saraf.

news 07 dec 2012 email # 280 07 dec... · 2012-12-11 · email # 280 4 pak law publication: office...

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