Friday, 22 June, 2012

Page 2

Euro slips, dollarrises in Asian trade

KARACHI

STAFF REPORT

THE former president of Federa-tion of Pakistan Chamber ofCommerce and Industry(FPCCI) Chaudhry Saeed

Thursday said there was a pressing needfor the diversification of the existing man-ufacturing sector and of agriculture prod-ucts in Azad Kashmir, which he believedwould boost the ailing economy. Saeed alsostressed upon the need for supporting thelong-neglected tourism sector in the valley.The former head stated this during a visitto Karachi Press Club.

While talking to journalists, he saidthat most of the manufacturing units inAzad Kashmir had almost shut down be-cause of a higher cost of doing businessowing in large part to expensive electricityand multiple taxes. The worst hit, in hisopinion, were the textile, ghee producingand other such manufacturing units.

Saeed further iterated that tax authori-ties needed to review the current taxationframework with regards to businesses inKashmir to forestall the closure of indus-tries. The move, he hoped, would help createan investment-friendly environment inAzad Kashmir. Reiterating his demand forrationalisation of the taxation system, Saeedsaid that the per capita income was still highin Kashmir as there had been no tax evasionby the businessmen. He pointed out thatpower tariffs for Kashmir were also higherby nearly to Rs 8 per unit, which also neededa revisit and should be receded. He saidKashmir's agriculture sector had the poten-tial to produce the world's class tea, only ifthe government were to embark upon an in-vestment-friendly policy to attract foreigninvestors for farming. He said Kashmircould also grow international standard flow-

ers but lamented that Pakistan did not havea significant share in the global trade of hor-ticulture products, particularly flowers – avalue that currently stands at $ 1.5 billion.

Saeed was concerned that Kashmir re-ceived Rs 9 billion during last year underthe federal divisible pool against its dueshare of two percent. He said Rs 30 bil-lion, as per mutual accord, should begiven to Kashmir. He said the Kashmir'scontribution in the country's dollar re-serves stood at $ 2.6 billion of the total $13 billion through worker remittances. Inreply to a journalist’s question he assertedthat Kashmir could not attract foreigntourists to the beautiful valley because ofthe government’s policy which disallowsthe international visitors. However, localtourists should be encouraged to visit

Kashmir which would help boost economyof the people. He cited the Indian examplewhere around million of local Indian tourthe occupied Kashmir every year, whichallow the domestic businesses to grow. Hepointed out that after the 9/11 incident,the tourists of Arab World thronged to fareastern countries despite the fact thatPakistan had greater tourism facilities andspots to enthrall the global visitors butfailed to attract any of them.

About the Halal Food global trade, hesaid Pakistan again does not place itsproducts on the global market while Thai-land had a greater share with improvedexpertise to export products to the inter-national consumers. The former FPCCIPresident who is also the Finance Secre-tary of Pakistan Muslim League (Nawaz)

said his party has already set an economicplan on how to augment the nationaleconomy and enhance the productivity, ifthey come to power. He said the PML-Ngovernment will go for diversification oftextile, rice, leather, agriculture productsand other key existing manufacturing sec-tors to increase the national productspresent on the global market and earnhuge foreign exchange.

He said his party government will en-sure the provision of a better business en-vironment for local and internationalinvestors to set up their units and busi-nesses through incentives. Among othersPresident KPC Tahir Hassan Khan andTreasurer Muhammad Rizwan Bhatti werepresent on the occasion. Seed also inviteda delegation of KPC to visit Azad Kashmir.

KARACHI

STAFF REPORT

The State Bank of Pakistan (SBP) hasallowed microfinance providers (MFPs)to mobilise funding from non-banksources and the capital market underthe Microfinance Credit Guarantee Fa-cility (MCGF). Accordingly, revisedguidelines on MCGF Thursday wereused to all the banks, Development Fi-nance Institutions (DFIs) and the Mi-crofinance Banks (MFBs).

The revised guidelines on MCGFstressed upon the MFBs and MFIs toexplore other local currency fundingopportunities such as raising capital byissuance of redeemable capital fromthe capital market, thereby increasingfunding availability and diversificationof sources. The SBP has been encour-aging the viable microfinanceproviders, both the MFBs and Microfi-nance Institutions (MFIs) to mobiliselocal currency funding from banks andDFIs for lending to microfinance bor-rowers to enhance microfinance out-

reach. However, it has been observedthat funding requirements of MFBsand MFIs have been partially met bythe banks and DFIs. The revised guide-lines have been issued with a view tofurther easing the funding constraintsof the microfinance sector.

The central bank has advised allbanks, DFIs and MFPs to finalise theirfunding deals under the MCGF andsubmit their cases to SBP BankingServices Corporation (SBP BSC) for is-suance of guarantee as per procedureenvisaged in the revised guidelines onMCGF. It may be recalled that the Mi-crofinance Credit Guarantee Facility isa credit enhancement facility to attractlong-term and market-based financefor microfinance institutions. MCGFwas launched by the State Bank in De-cember 2008, with £10 million fund-ing support from the UK Departmentfor International Development (DFID)under the £50 million Financial Inclu-sion Programme (FIP) which is beingmanaged by SBP.

The facility offers 25% first loss or

40% partial guarantee (pari passu)coverage to the banks. The facility isfocused on market development andhas significantly helped in reducingthe risk-perception of banks towardsthe microfinance sector, thus intro-ducing poor borrowers to mainstreamfinancial institutions.

The facility has successfully over-come some funding constraints of themicrofinance providers as 15 guaran-tees have so far been issued, mobilis-ing private capital of over Rs.4 billionfrom commercial banks for onwardlending to around 200,000 new poorand low-income borrowers. As suchthe facility is now well positioned tomobilise non-bank financing fromcapital market and further diversify-ing sources of financing for microborrowers.

The revised guidelines on MCGFhave been issued by SBP throughAC&MFD’s Circular No 3 dated; 21stJune, 2012. This supersedes all ear-lier instructions issued in this regard,the circular added.

WB dives intoour reservoirsg Wapda chairman says

that World Bank inabsolutely ecstaticwith the prospect ofproviding funds for the4320MW Dasu project.This was followed by aclaim that globalfinancial institutionsare in fact queuing upto fund Wapdaprojects. Err… okay sirif you say so…

LAHORE

AGENCIES

Following the signing of an agreement withthe Government of Pakistan for providing$840 million for 1410 MW-Tarbela 4th Ex-tension Project, the World Bank has alsoagreed to provide financial assistance forthe 4320 MW-Dasu Hydropower Project. Ithas also been agreed that the project will beconstructed in phases after the 4500 MW-Diamer Basha Dam Project is initiated andfinancial plan has been finalised. This wasstated by the Pakistan Water and Power De-velopment Authority (WAPDA) ChairmanShakil Durrani while presiding over a meet-ing here at WAPDA House to discuss the re-port submitted by the International Panel ofExperts. WAPDA Member (Water), Secre-tary WAPDA and General Managers con-cerned attended the meeting. Addressingthe meeting, the chairman said that the In-ternational Financial Institutions were tak-ing keen interest in providing funds forWAPDA projects due to excellent EconomicInternal Rate of Returns (EIRR) of theseschemes. Dasu Hydropower Project is apart of least-cost energy generation plan,being executed by WAPDA to harness in-digenous hydropower resource of the coun-try with a view to improve the ratio of hydelelectricity in the national grid. The project isproposed to be constructed on the RiverIndus, seven kilometer upstream of Dasuvillage and 74 kilometers downstream ofDiamer-Basha Dam Project. Site of the proj-ect is situated at Karakoram Highway,about 350 kilometers away from Islamabad.

Shares struggle,commodities downas Fed disappoints

SINGAPORE

AGENCIES

Asian stocks outside Japan slipped andcommodities fell broadly on Thursday afterthe Federal Reserve ramped up monetarystimulus by expanding "Operation Twist"but disappointed some investors who hadbeen hoping for more aggressive measures.The U.S. central bank, as expected, ex-tended its programme of selling short-termsecurities and buying longer-dated ones, amove aimed at driving down borrowingcosts, but did not signal a third round ofquantitative easing. MSCI's broadestindex of Asia Pacific shares outside Japanfell 0.8 percent, Brent crude oil slid to an18-month low and the Australian dollar,sensitive to commodities demand, also lostground. Sentiment was not improved byclosely watched data from China, whereHSBC's flash purchasing managers indexshowed the factory sector contracted for aneighth straight month in June, with exportorders and prices at their weakest sinceearly 2009. Japan's Nikkei share averagebucked the trend, rising 1 percent after theFed's decision to restrict itself to extendingOperation Twist to the end of the yearweakened the yen against the dollar, whichshould help Japanese exporters.

Oil hits 18-month lownear $90 on weakdata, high supply

NEW YORK

AGENCIES

A technical breakdown in crude futuresprices on both sides of the Atlanticspurred further selling, with no bottomyet in sight, analysts said. Brent hasfallen almost $38 a barrel since hitting$128.40 in early March, as increasedproduction from Saudi Arabia has led toa rise in stockpiles. In London, Brent fu-tures for August delivery were down$1.92 at $90.77 a barrel by 11:45 a.m.EDT. They slipped earlier to $90.30, thelowest level since December 2010.U.S. August crude was down $1.70 at$79.75 a barrel, after hitting an eight-month low of $79.25."Supply is outstripping demand andwhatever other data you see out therewon't change that," said DominickChrichella, senior partner at the EnergyManagement Institute in New York."People who are long on oil are just bit-ing the bullet and heading home."China's factory sector shrank for aneighth straight month in June as exportorder sentiment hit its weakest sinceearly 2009, according to a survey indi-cating the country's economic troughmay extend well into the third quarter.U.S. jobs data added to the gloom withnews that the number of Americans fil-ing new unemployment claims changedlittle last week.

Ailing economy needsa trip to Kashmirg Ex-FPCCI chief wants diversification of manufacturing, agri products in Azad Kashmir, which should ensurethat our economy sky rockets to new heights – granted, of course, that we sort out the taxation conundrum

SBP gives microfinancesector the lollipopg With the nourishment and sustenance of the microfinance sector becominga veritable concern, the SBP has sprung into action, allowing the sectorfunding from non-bank sources and capital courtesy MCGF. One would betempted to say SBP saves the day, but wouldn’t that be too cheesy?

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SC OPENED THIS HONEY JAR!

2Friday, 22 June, 2012

Next wave of Ultrabook devices,

laptops and all-in-one PCs

ISLAMABAD: The next wave of ultra sleek Ultra-book™ systems, inspired by Intel is now available.Powered by 3rd generation Intel® Core™ processors,made with the world’s most advanced 22nm 3-D tri-gate transistors, these new Ultrabook devices are re-sponsive and more secure to better protect personalinformation. The new chips also offer increased mediaand graphics performance, long battery life and morechoice in stylish designs. This wave of Ultrabook de-vices brings Intel Corporation one step closer to deliv-ering on the industry wide, multi-year endeavor todeliver a no-compromise, must-have computing ex-perience. The innovation will continue in the comingyears as Intel and the industry aim to raise the bar forpersonal computing experiences, evolving to morenatural and intuitive interactions. “Similar to the in-troduction of Intel® Centrino® nearly a decade ago,this is a time of revolutionary change in personal com-puting,” said Naveed Siraj, Country Manager, IntelPakistan. “We’ve forecasted over five times more Ul-trabooks to be introduced in the next 12 months ascompared with the previous. This also includes newbusiness, touch, and convertible designs. At the sametime, we’ve continuously improved on security and re-sponsiveness. With these new 3rd generation IntelCore-based Ultrabook devices, mobile computing aswe know it today will suddenly seem old fashioned.”

RAK Free Trade Zone visits Pakistan

LAHORE: Following the success of the Karachiroad show, Ras Al Khaimah Free Trade Zone (RAKFTZ) is all set to conduct a road show in Lahore from26 to 27 June. RAK FTZ is currently visiting Pakistanwith an agenda to attract Pakistani businessmen toRas Al Khaimah. Pakistan is the third biggest marketfor RAK FTZ, and the free zone is looking to improveand succeed even more by demonstrating completededication to the region. To achieve this, RAK FTZ isconducting a series of road shows and seminars inPakistan. Judging by the success of the first show inKarachi, the organisation is expecting its secondshow in Lahore to be even more successful. The pur-pose of these road shows is to showcase RAK FTZ asthe ‘home of Pakistani businesses in the Middle East’,where one can invest and benefit from its variousbusiness set-up packages that offer residence visa, el-igibility for a bank account in the UAE, 100% busi-ness ownership, and 100% tax-free income, as wellas a business climate that provides security, stabilityand abundant room for growth and success. Com-menting on RAK FTZ’s activities in Pakistan, RAKFTZ Marketing Representative Omar Ul Haq stated,“RAK FTZ has planned a series of activities in Pak-istan, and RAK FTZ is certainly worth a closer lookfor a majority of start-ups and existing Pakistanibusinesses. Pakistan already holds a considerablepercentage of the market in Ras Al Khaimah as wellas the UAE, and the positive response that we re-

ceived during our road show in Karachi has furtherconvinced us that Pakistani businesses are eager tojoin us at RAK FTZ. Through these road shows andseminars, we hope to establish a strong business re-lationship with Pakistani entrepreneurs and compa-nies, and we aim to continue such activities tomaintain our contact with the Pakistani market.”

Iqra University 2nd BOG held

PESHAWAR: Second meeting of the Board of Gov-ernors of Iqra National University held at the BoardRoom of the University on June 21, 2012. The Chan-cellor Mr. Obaid Ur Rehman chaired the meeting. Themeeting was widely attended by the eminent scholarsand academicians from different fields of Specializa-tions. The BoG reviewed Curriculum, Academic Poli-cies, Human Resource Policies thoroughly and showntheir satisfaction with the quality standards set by theUniversity. The Vice Chancellor presented AnnualReport giving achievements and accomplishments ofthe University during 2011-12 that was highly appre-ciated by the participants. The Chancellor Mr. Obaid

Ur Rehman, Vice Chancellor Prof. Dr. Syed AtherAbbas Zaidi, Registrar Ms. ShaistaShafiq, Controllerof Examination Mr. Malik Taimur Ali, Treasurer Mr.Zafar Mohsin organized the meeting.

MUZAFFARABAD: Former Prime Minister of PakistanMian Muhammad Nawaz Sharif was warmly received byMr. Aamir Kazi, General Manager Pearl ContinentalHotel Muzaffarabad.

ISLAMABAD: ICI Pakistan Chief Executive Waqar Malikreceives ACCA WWF 2011 ‘Best Sustainability Report’award from Dr. Ishrat Hussain.

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVER

UniLever Pak 7300.00 7400.00 7200.01 7367.43 67.43 90Siemens Pakistan 688.06 722.45 699.00 718.69 30.63 5,607Nestle Pakistan Ltd. 4079.57 4100.00 4070.00 4085.41 5.84 13Ismail Industr 95.07 98.99 91.01 98.99 3.92 4,109Mari Gas ComSPOT 94.65 99.00 93.25 98.14 3.49 670,982

Major Losers

Unilever Food 2772.50 2772.50 2634.00 2714.00 -58.50 59Mithchells Fruit 285.79 281.00 271.51 271.64 -14.15 1,554Indus Motor Com 262.68 274.50 249.55 249.56 -13.12 81,155Philip Morris Pak. 181.61 190.00 172.53 172.79 -8.82 6,525Linde Pakistan Ltd 118.97 115.06 115.00 115.04 -3.93 1,000

Volume Leaders

P.T.C.L.A 14.68 14.60 13.90 14.00 -0.68 5,142,862Hub Power Com 41.80 42.00 41.60 41.93 0.13 3,995,756D.G.K.Cement 40.03 40.15 38.53 39.08 -0.95 3,621,558Jah.Sidd. Co. 13.32 13.49 13.01 13.12 -0.20 3,035,373Nishat Chun Power 15.18 15.25 15.03 15.05 -0.13 3,016,290

Interbank RatesUS Dollar 94.3071UK Pound 148.1942Japanese Yen 1.1808Euro 119.5343

Dollar EastBUY SELL

US Dollar 95.10 95.80Euro 118.74 119.72Great Britain Pound 147.57 148.75Japanese Yen 1.1752 1.1845Canadian Dollar 91.83 93.08Hong Kong Dollar 12.10 12.24UAE Dirham 25.80 25.98Saudi Riyal 25.29 25.44Australian Dollar 94.84 97.06

CORPORATE CORNER

Business

KARACHI

STAFF REPORT

KARACHI Stock Exchange (KSE)benchmark 100-share index onThursday fell by 0.49 percent asthe stocks closed bearish amid po-

litical concerns. Investors remained cautiousahead of the nomination of the new PM, deal-ers said. The benchmark KSE 100-shareIndex declined by 66.58 points, or 0.49 per-cent, to 13,600.60 points. The index movedboth sides of the fence by 159.86 points, mak-ing an intra-day high of 13,697.08 points anda low of 13,537.22 points.

“Uncertain global stocks and commoditieson concerns for global economic slowdown,limited foreign interest affected the senti-ments,” said Ahsan Mehanti, Director at ArifHabib Investments Limited. The KSE 30-shareindex dropped 88.92 points, or 0.75 percent, to

11,746.51 points. Stocks that played a majorrole in driving the benchmark index down wereHub Power Company, DG Khan Cement, LuckyCement, Nishat Chun Power, Engro Corpora-tion, Pakistan Telecommunication CompanyLimited (PTCL), Fauji Fertilizer Company,Quice Food SPOT, Jahangir Siddiqui Companyand Adamjee Insurance. Mehanti observedthat power shortfall for industrial units and gasshutdown for fertiliser plants played the cata-lyst’s role in bearish activity at KSE.

A total of 157 companies’ stocks closedunder selling pressure out of total 346 compa-nies’ active on the board. However, stocks of 93companies managed to close in the positive di-rection while 96 companies’ stocks closed un-changed. Moreover, about half a dozen stocksclosed with over four percent decline in theirshare prices in the session. These includedUniLever Food, Mithchells Fruit and IndusMotors. Turnover improved by three percent

to 57.159 million shares from 47.417 millionshares traded in the previous session. Turnoverin futures market surged to 5.674 millionshares from 4.973 million shares traded a dayearlier. Market capitalisation declined by Rs18billion to Rs3.470 trillion.

Pakistan Telecommunication CompanyLimited (PTCL) was the turnover leader with5.142 million shares and it closed at Rs14.00.It was followed by Hub Power Company withturnover 3.995 million shares and it closed atRs 41.93. DG Khan Cement with turnover3.621 million shares and it closed at Rs39.0.Jahangir Siddiqui Company was on the fourthposition with 3.035 million shares turnoverand it closed at Rs13.12.

UniLever Pakistan and Siemens Pakistan,up Rs 67.43 and Rs 30.63, led highest pricegainers while, UniLever Food and MithchellsFruit, down Rs 58.50and Rs 14.15 respec-tively, led the losers.

Bears queue up amidPM nomination rumoursg Bears, politically aware as always, really want to know who the next prime minister ofPakistan would be. KSE had to ‘bear’ the brunt resulting in a 67-point tumble

TOKYO

AGENCIES

The euro slipped in Asian trade Thursday onconcerns Spain's troubled banks may need abigger bailout, while the greenback had aslight boost after moves by the US FederalReserve to power the economy.

The euro dipped to $1.2664 and 100.83yen in Tokyo morning trade from $1.2702and 100.97 yen in New York late Wednes-day.

The dollar edged up to 79.60 yen against79.49 yen in US trading.

Markets are growing increasingly wor-

ried that an audit of Spanish lenders willshow a recent multi-billion dollar loan toshore up the nation's troubled banks maynot be enough, said a senior dealer at amajor Japanese bank.

"Our bank's internal research showsSpanish banks have a huge amount of badmortgage loans and real estate, so it's possi-ble that the audit will negatively surprise themarket," he told Dow Jones Newswires.

Earlier this month, Spain's eurozonepartners agreed to lend up to 100 billioneuros to save a bank sector laden with badloans extended during a real estate bubblethat imploded in 2008.

On Wednesday, the US central bank ex-tended a bond-swapping programme by sixmonths, aimed at pushing down longer-termborrowing costs and stimulating the world'sbiggest economy.

But the Fed provided no hint of furtherquantitative easing steps while saying itstood ready to do more to help the US eco-nomic recovery.

Any further upside for the dollar fromthe Fed's move was limited, the bank dealersaid.

Madrid is expected to transmit an offi-cial request for the bank aid.

LCCI informsgovt that they’rein low cottonLAHORE: The Lahore Chamber of Com-merce and Industry Thursday urged thegovernment to announce a special packagefor ailing cottage industry to offset the finan-cial losses it has suffered because of un-precedented and unscheduled power cutsand highest-ever electricity tariff. The LCCIActing President Kashif Younis Meher wastalking to a 25-member delegation of cottageindustry belonging to Daroghawala, BundRoad, Dawood Colony and Baghbanpra andheaded by Chairman All Pakistan CottageIndustry and Small Traders Ghulam SarwarMalik. Haji Sultan Mehmood, Haji BarkatMunir, Mohammad Umer and Mian Mo-hammad Nasrullah were prominent amongthe delegates. Kashif Younis Meher said thatthe package for Cottage Industry must in-clude one-slab low electricity tariff, powersupply for at least 8 to10 hours at a stretchand its employees limit should be raised to20 persons instead of existing five persons.The LCCI Acting President said that the highrates of electricity being charged from themand longer hours power cuts have totally de-stroyed the small businesses therefore thegovernment should come up with a packageof incentives in shape of cut in electricity tar-iff and power outages duration. PRESS RELEASE

Oil prices down inAsia as stockpiles rise

SINGAPORE

AGENCIES

Oil prices fell in Asian trade Thursday on rising UScrude stockpiles while traders were also disappointedby muted stimulus measures from the Federal Reserve,analysts said. New York's main contract, light sweetcrude for August delivery, shed $1.09 to $80.36 a barrelin the afternoon of its first trading day and Brent NorthSea crude for delivery in August retreated 47 cents to$92.22. "The lack of fresh Fed stimulus, the downgradeto the US outlook and an unexpected rise in US invento-ries took their toll on the price," IG Markets said in areport. The Fed on Wednesday announced that it wasextending a programme designed to push down interestrates on long-term bonds, encouraging investors tomove money into more neglected securities and lower-ing costs for borrowers. But traders had been hoping fora third round of asset purchases, or quantitative easing,to boost growth in the world's largest oil consumer.

Euro slips, dollarrises in Asian trade

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