Dr Asim Digs out A BeAuty

tuesday, 28 August, 2012

ISLAMABAD

APP

THE government on Mondayannounced the PetroleumExploration and ProductionPolicy 2012, which inthe Petroleum Advi-

sor’s words, would help achievemaximum self-sufficiency inenergy and promote explo-ration and production activ-ities by providingcompetitive incentives tothe investors.

Advisor to the PrimeMinister on Petroleum andNatural Resources Dr AsimHussain announced the

second petroleum policy of the currentgovernment – the first one was formu-lated in 2009.

Addressing newsmen, Dr Asim Hus-sain said the new policy was essential,

keeping in view the internationally in-creased oil prices as the compar-

atively lower prices inPakistan were hindering

investment in the coun-try.

Under the new pol-icy, the government hasset Well Head Gas Price

in Zone-III at $6 perMMBtu, $6.3 in Zone-IIand $6.6 in Zone-I, headded.

He said the Zone-Icomprised west Balochis-

tan, Pashin, and Potowarbasins, Zone-II consisted of

Kirthar, east Balochistan,Punjab Platform and

Suleman basinswhile theLower Indus

Basin fell in Zone-III. Moreover, the Advisor said the new

Petroleum Policy provided a comprehen-sive pricing mechanism for Zone O thathad been set at $7 per MMBtu for Shal-low, $8 for Deep and $9 for Ultradeep ex-ploration.

He said the policy maintained a systembased upon two different types of agree-ments to obtain E&P rights in Pakistan -Petroleum Concession Agreement for on-shore operations and Production SharingAgreement for offshore operations.

As per policy, the initial term of pro-duction and exploration lease will be upto 25 years in offshore area with one pos-sible renewal of up to five years, he added.

Dr Asim said that the new policywould also address the issues raisedafter the 18th Amendment that had in-creased the provinces share in naturalresources. Ninety percent of the gas pro-duce would be purchased by the govern-ment while rest 10pc would go to anythird party.

He said under this policy, the role ofDirectorate General of Petroleum Con-cessions would be reorganized that woulddecide the maters of grants, regulationsand petroleum concessions, besides tak-ing up the issue pertaining to inter-provincial importance and overseedevelopment plans and work progress ofE&P companies.

Moreover, the directorate will alsoaddress operational issues faced by thecompany in various concessions and as-sist for development and propose meas-ures to facilitate companies, he added.

The Advisor was optimistic about thedirect foreign investment in Pakistanconsequent to the new Petroleum Policyand mentioned to the interests shown bya Qatar-based firm and others.

He said that the government was or-ganizing road shows to attract investors inPakistan for TAPI project for what the com-panies of Singapore, New York, Londonand Bangladesh have expressed interest.

He said the Petroleum Policy 2012ensured spending of 10 percent of royaltyfor welfare of local community, addingthat the government was expected to in-crease the number of gas fields to 500 tohelp improve gas supply to domestic aswell as industrial sectors.

According to the policy, $30,000should be spent per year during the ex-ploration stage and up to $700,000 dur-ing commercial production phase andthat the social welfare projects must be

agreed with local community.He reiterated the government’s policy

to tighten the CNG usage. He said thatburning gas is the worst use of the naturalresources and exemplified the gas pro-ducing countries like Qatar where thereis no concept of piped gas.

The Advisor said that the governmentwas also in negotiation with India thathad recently allowed the import of200MMCF LNG through Lahore border.

He said that the steps being taken bythe government would make the countrycapable of exporting gas. He said that thesituation in the upcoming winter wouldbe better; however he did not rule out gasload-shedding.

Petroleum policy

2012 is here!Petroleum Policy announced to wooinvestment through incentives

Higher defaults on public sector credits hike baddebts of banks beyond Rs 625 billion

KARACHI

ISMAIL DILAWAR

The rate of defaults on the bank loans inthe financially-troubled country hasswelled beyond six percent of the banks’net credits, shows the official data.

According to central bank figures,during last quarter of FY12, April-June, the Non-Performing Loans(NPLs) of the banks and developmentfinance institutions (DFIs) swelled toRs 653 billion compared to Rs 625.44billion of the preceding quarter, Janu-ary-MarchFY12.

Percentage-wise, the rate of de-faults on bank loans amounts to 6.15percent which the bankers deem ashigher that they opine warrants moreprovisioning by the lenders, viz thebanks and DFIs. The bankers proposethat the banks’ NPLs to their net loansshould remain well below five percent.

This surge in the bad debts of thebanks and DFIs is masterly driven byborrowers’ defaults on the public sec-tor loans. “This figure has been prima-rily inflated by substantial increase of15 percent under the NPLs head of thepublic sector banks,” viewedInvestCap analystMazhar A. Sabir.

According toState Bank,during the pe-riod under re-view the publicsector bankssaw their baddebts inflating to an alarming 12.78percent or Rs 196.399 billion from Rs171.422 billion or 10.47 percent in lastquarter. This marked a quarter-on-quarter (QoQ) increase of Rs 24.977billion or 14.5 percent in the bank’sNPLs.

Given the experts warning to thebanks against not to have the rate ofNPLs above 5 percent, this upsurge to

a double-digit, 12.78 percent, in cred-itors’ defaults on the public sectorloans stand more worrisome.

On the other hand, the privatelocal banks kept their bad debts sub-dued by what the analysts said “com-mendable recoveries” during thereview period. The NPLs of the localprivate banks slid to Rs 395 billionfrom Rs 398 billion of the previousquarter. While that of the foreignbanks, specialized banks and DFIsrose, respectively, to Rs 7.88 billionfrom Rs 7.76 billion, Rs 35.78 billionfrom Rs 31.81 billion and Rs 18.20 bil-lion from Rs 16.68 billion.

“Despite contributing as much as61 percent to the total industry NPLs,the private banks’ NPLs growth waslargely flat while the foreign banks’NPLs recorded a meager 1.5 percentgrowth,” observed Mazhar.

On the recovery side, overall thebanks performed well except the DFIswhich could manage to recover Rs 332million compared to last quarter’s Rs372 million. Of the total Rs 20.664 bil-

lion recov-ered cash,

t h epub-

lic sector banks made Rs 3.254 billion,local private banks Rs 13.747 billion,foreign banks Rs 155 million and spe-cialized banks Rs 3.177 billion againsttheir previous quarter’s recoveriesamounting, respectively, to Rs 2.099billion, Rs 10.222 billion, Rs 83 mil-lion and Rs 1.542 billion.

The analysts termed the cash re-coveries by the lenders as laudablewhich they said restricted the cumula-tive growth in the commercial banks’bad debts to 3.8 percent or Rs 599 bil-lion during the said quarter.

“Improved cash recoveries in NPLscan be attributed to relatively bettersurveillance by the banks,” saidMazhar adding the recent 150 basispoint rate-cut by the central bank mayaugur well for the banks’ cash recover-ies. “Borrowers are foreseen toreschedule their debts at lower rates,”the analyst said. Mazhar said the infec-tion ratio of all banks had remainedvirtually stagnant at 17.4 percent dur-ing the month of June due to flat trendwitnessed in the advances head. More-over, the analyst said, continued diversionof the banking sector deposits towards in-vestments amid high credit risks due toabove mentioned factors are expected tokeep the banking sector infection ratio in

the double digits.

Bad by default

Businessmen upbeat ISLAMABAD

APP

The business communities has welcomed the Petroleum Policy 2012 saying it willcreate positive aspects for overall economy of the country. Talking to APP, abusinessman Zaheer Ahmed said that under the new policy, the governmentwould increase the availability of gas by exploring new gas fields across thecountry. There are abundant reserves of gas and oil available in Sindh,Balochistan and other part of the country and these all would be explored to endthe existing energy crisis in the country, he said. Moreover, the better gas priceand decrease in levy would attract foreign investment to materialize the target ofmaximum exploration, he said. Quoting Dr. Asim Hussain, Advisor to PrimeMinister on Ministry of Petroluem and National Resources (MPNR), he said thatthe loadshedding would be ended by the coming winter which would be positivefor the economic activities in the country. Appreciating the new petroleum policy,another businessman Shahid Ali said that the fertilizer sector would be the mostbeneficiary because the gas supply would be provided uninterruptedly. In thepolicy, the role of Economic Coordination Committee (ECC) was eliminatedbetween exploration company and fertilizer sector which is positive for the sector,he added. The revision of well-head price would be benefit for the oil sectorespecially exploration companies in the country. He said that the Petroleum Policy2012 would resolve the energy crisis in the country.

ISLAMABAD

APP

Following are the prominent features of thePetroleum Exploration and Production Policy 2012announced by Advisor to Prime Minister onPetroleum and Natural Resources Dr Asim Hussain;

8 Well Head Gas Price for Zone-III is $6 perMMBtu, $6.3 for Zone-II and $6.6 forZone-I $7 per MMBTU for Zone OffshoreShallow, $8 for Offshore Deep and $9 forOffshore Ultra Deep

8 Petroleum Concessions Directorate to bere-organized

8 Royalty worth 12.5pc of petroleum value tobe payable

8 E&P companies in Pakistan to operateexploration blocks at 100pc ownership

8 Lease term to be for 25 years with onepossible five-year renewal

8 No royalty for first 48 months aftercommercial production

8 Incentives in duties/taxes and fees to beprovided

8 Bonanza of $1 per MMBTU for first threediscoveries in offshore area

8 Govt to purchase 90pc gas, 10pc to go tothird party

8 Separate Cell to be set up to meetdeadlines $25,000 to be spent on socialwelfare projects in onshore zones duringexploration, $50,000 during developmentand production $50,000 per year to bespent in offshore zones during explorationand $250,000 in development andproduction

8 Exploration license period reduced from 9to 7 years to accelerate exploration

8 Windfall Levy reduced from 50% to 40%.8 Base Price of crude oil and condensate for

Windfall8 Levy increased from $30/barrel to $

40/barrel8 Windfall Levy to be equally shared

between federal and provincialgovernments

8 Gas pricing Ceiling of $ 100/barrelreplaced with $ 110/barrel

8 SSGCL and SNGPL to be responsible forlaying of pipelines against tariff ontransportation of gas as approved by OGRA

Highlights ofPetroleum Policy 2012 PTCL ‘VideoCon’

service extendedcountrywide

ISLAMABAD

PRESS RELEASE

Pakistan Telecommunication CompanyLimited (PTCL) announced theavailability of its “VideoCon” servicesnationwide. Beneficial for both corporateand residential customers, ‘PTCLVideoCon’ is the country’s first and onlyvideo phone service which allows real-time video conversations with friends,family or business associates.Businesses are always looking for ways ofsaving money and increasing productivitywhere “PTCL VideoCon” through its longdistance face to face high quality videoconference facility, will be the ultimatesolution to their needs.

Let the blamegame begin…

KARACHI

StAFF REPORt

The Pakistan Steel Mills (PSM) Fridaysaid portraying the PSM as a non payerof the Karachi Water and SewerageBoard’s (KWSB) bills is a baseless andunjustified fact. A PSM spokesman saiddespite facing financial problems thePSM was regularly paying a handsomeamount to the KWSB on monthly basison account of utility bills. He disclosedthat on the orders of Sindh High Courtthe KWSB was itself a defaulter of Rs 350million of Pakistan Steel. The PSMspokesman said on account of monthlybills (June and July2012) PSM hadalready submitted Rs 20 million in Juneand Rs 30 million in July to the KWSB.“After the deduction of net amounts ofbills and dues KWSB will be still thedefaulter of about Rs 150 million,” hesaid. He said PSM was a responsiblenational entity which always tried tokeep the mutual understanding and goodrelationship with other dealingorganizations.

02

Tuesday, 28 August, 2012

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERUniLever PakXD 8485.00 8850.00 8840.00 8850.00 365.00 640Bata (Pak) Limited 870.53 914.05 914.05 914.05 43.52 450Nestle Pakistan Ltd. 4050.00 4070.00 4000.00 4070.00 20.00 320Exide (PAK) XD 254.54 267.26 258.00 267.26 12.72 18,100Sanofi-Aventis Pak 220.50 230.00 221.00 230.00 9.50 400

Major LosersColgate Palmolive 1475.00 1450.00 1405.00 1423.33 -51.67 250Indus Dyeing 431.50 410.00 409.93 410.00 -21.50 300Philip Morris Pak. 145.43 149.99 138.50 140.11 -5.32 37,600Noon Pakistan 62.80 59.67 59.67 59.67 -3.13 500IGI Insurance Ltd 67.50 64.51 64.51 64.51 -2.99 500

Volume Leaders

P.T.C.L.A 15.29 16.29 15.96 16.29 1.00 33,484,000Lafarge Pakistan 5.70 6.00 5.69 5.96 0.26 20,302,000Fauji Cement 6.80 7.10 6.73 7.06 0.26 17,821,500D.G.K.Cement 49.73 52.21 49.55 51.96 2.23 17,441,000WorldCall Telecom 2.58 3.16 2.60 3.05 0.47 15,200,500

Interbank RatesUS Dollar 94.8174UK Pound 149.8494Japanese Yen 1.2048Euro 118.7208

Dollar EastBUY SELL

US Dollar 94.15 94.95Euro 117.10 118.63Great Britain Pound 147.84 149.73Japanese Yen 1.1853 1.2003Canadian Dollar 94.26 95.97Hong Kong Dollar 11.96 12.17UAE Dirham 25.53 25.83Saudi Riyal 24.97 25.28Australian Dollar 96.73 99.42

Business

KARACHI/LAHORE/ISLAMABAD

StAFF REPORt/ AGENCIES

THE bulls stamped their authorityat the Karachi stock market on thefirst working day of the week withbenchmark, KSE 100-share indexgaining a mammoth132.48 points.

The day saw the index closing up at 15, 171.66points against 15, 039.38 points of Friday.

Stocks closed bullish with higher tradesafter Supreme Court granted Prime Ministertill Sept 18 to resolve the NRO implementationissue. Investor interest witnessed in stocksacross the board as global stocks and com-modities surge on stimulus hopes. This wasstated by Ahsan Mehanti, Director at ArifHabib Investments Limited.

On Monday, the trading volumes at theready-counter were recorded lower at 269.258million shares against315.106 million shares ofthe previous day. Thetrading value in-creased to Rs 5.930trillion comparedto Rs 5.000 tril-lion of the previ-ous session. Theintraday high and low, re-spectively, stood at 15, 185.01and 15, 039.18 points.

He added that thestrong valuations andthe Sindh High Courtdecision on restrainon Gas Infrastructure

Development Cess above Rs13 for industriesplayed the catalyst’s role in bullish sentimentsin the earning announcement session at KSE.

The free-float KSE-30 index adds 137.14points to close at 12, 997.19 points against theprevious 12, 860.05 points.

The KMI 30-share was up by 334.42 pointsto close at 26, 792.53 points from its openingat 26, 458.11 points. The KSE all-share indexclosed with a gain of 98.33 points to 10, 695.32points as against 10, 596.99 points.

Pakistan Telecom (P.T.C.L.A) was volumeleader of the day with 33.484 million shares, fol-lowed by Lafarge Pakistan, Fauji Cement, D.G.KCement, WorldCall Telecom and Telecard Lim-ited with a turnover of Rs 20.302 million, Rs17.821 million, Rs 17.441 million, Rs 15.200 mil-lion and Rs 14.408 million shares respectively.

The UniLever Pakistan and Bata PakistanLimited, up Rs365.00 and Rs43.52, led highestprice gainers while,

Colgate Palmoliveand Indus Dyeing,down Rs 51.67 and Rs21.50 respectively, led

the losers.STAMPEDE IN LA-

HORE: Lahore Stock Ex-change on Mondaywitnessed bullish trendby gaining 33.23 pointsas the LSE-25 Indexopened with 3,949.56

and closed at3,982.79 points.

The market’s overall situation, however, didnot correspond to an upward trend as it re-mained at 6.564 million shares to close againstprevious turnover of 7.853 million shares, show-ing a downward slide of 1.289 million shares.While, out of the total 91 active scrips, 46 movedup, 34 remained equal and 11 shed values.PARADE IN THE CAPITAL: IslamabadStock Exchange (ISE-10) on Monday witnessedbullish trend as the index was up by 30.24 pointsto close 3075.38 as compared to the previousday’s trading. Talking to APP, stock analystJeewan said that the fertilizer and oil sector ledthe bullish rally in the local stock market due tothe announcement of Petroleum Policy 2012.

The elimination of role of Economic Coor-dination Committee (ECC) between explo-ration companies and fertilizer companies is apositive sign for the fertilizer sector, he said.

Moreover, the better gas price and reduc-tion in the levy will attract the foreign invest-ment to explore the maximum gas and oil fieldsacross the country, he added.

It will ensure ending the existing energycrisis by improving overall economy activitiesin the country which is positive for the capitalmarket, he added.

20h Palmolive Sindh women’sswimming championshipKARACHI: The 20th Palmolive Sindh Women’s SwimmingChampionship came to a close today at the KarachiGymkhana. This competition was organized by KarachiWomen’s Swimming Association (KWSA) & sponsored byColgate-Palmolive (Pak) Ltd. PRESS RELEASE

NIB Bank’s half-yearly results signal a turnaroundISLAMABAD: Revenue crosses Rs. 2 billion with a signifi-cant reduction in loss. The highlights of achievements in-clude total revenue increased by 43% to Rs. 2.4 billion, netinterest income increased by 51%, non-interest income in-creased by 34%, administrative expenses increased only by9%, pre-tax loss of only Rs. 154 million (down from Rs.3.7billion a year ago). PRESS RELEASE

Ufone and Plan Int’l Pakistan join handsto conduct Pre Floods awareness driveISLAMABAD: In wake of the possible floods Ufone de-cided to come up with an early flood warning service whichis a part of a comprehensive flood awareness campaignthat was launched in collaboration with Plan InternationalPakistan. PRESS RELEASE

CORPORATE CORNERSTPF 2012-2015 to be announcednext month

ISLAMABAD

APP

The government is all set to announce thenew three-year Strategic Trade PolicyFramework (STPF 2012-2015) during firstweek of September, with special focus onexport development initiatives, launchingof Export Import Bank (EXIM Bank) andmeasures to cope with new tradechallenges. “The Policy has been devisedkeeping in view the financial restraints ofthe government to make it applicable andimplement able,” a top official told APPbefore presenting the policy to the PrimeMinister, who is likely to attend briefingon Tuesday. The three -year trade policy2009-12 is coming to an end and newStrategic STPF (2012-2015) has beenformulated in consultation withstakeholders in order to propel Pakistan’sexports making it competitive andfacilitating the exporters for the benefit ofthe country”, the senior official remarked.The official maintained that the tradepolicy 2009-12 could not be properlyimplemented due to paucity of funds. Theofficial said that the Textile Ministry haddemanded the government funds ofRs.188 billion for the implementation ofthe trade policy (2009-12) for five years,but the ministry of provided just Rs.23billion for three years.

FAP, Sindh govt ink$100m pact forgrain storage

KARACHI

StAFF REPORt

The country’s first dedicated bulk cargoterminal Fauji Akbar Portia MartineTerminals (FAP) would develop a strategicstorage facility in this port city at a cost of $100 million. To this effect, a Memorandumof Understanding (MoU) was inked Mondaybetween the FAP and the Sindh governmenthere at the office of Sindh Board ofInvestment (SBI). The agreement wassinged by Chief Executive Officer of FAPAhmed K. Rana and Secretary Food AftabAhmed Memon. Present among others wereprovincial Finance Minister Murad Ali Shah,SBI Chairman Zubair Motiwala, SecretaryFinance Naveed Kamran Baloch, FaujiFoundation Lt M.D.. Gen (R) Mustafa Khanand FAP Ghouse Vice Chairman Akbar.

OH IT’S A BULL BASH ALRIGHT!

SINGAPORE

AFP

Crude prices surged in Asia Monday as supplyof oil and gas from the Gulf of Mexico was cur-tailed after Tropical Storm Isaac forced the clo-sure of production facilities in the region,analysts said.

New York’s main contract, light sweet crudefor October delivery soared $1.35 to $97.50 a

barrel and Brent North Sea crude for delivery inOctober gained $1.40 to $114.99.

The shutdown and evacuation of personnelfrom production facilities in the Gulf due toTropical Storm Isaac was fuelling a crude rally,said Victor Shum, senior principal of Purvin andGertz energy consultants in Singapore.

“In the Gulf of Mexico there is this TropicalStorm Isaac that’s threatening the region andhas already caused some precautionary shutdown of the production facilities there,” he toldAFP. “And so the tropical storm in the Gulf ofMexico is the main factor supporting oil at thispoint,” Shum added. The Gulf of Mexico is thehub of US offshore energy production, account-ing for 23 percent of US crude oil output and 7.0percent of US natural gas production.

The Gulf coast’s facilities also have morethan 40 percent of total US petroleum refiningcapacity and 30 percent of natural gas process-ing plant capacity. BP said Sunday it was shut-ting down production at all of its oil and gasplatforms in the Gulf and evacuating all staffamid forecasts that Isaac was set to strengtheninto a category two hurricane.

PM gets latitude, bullsshow their attitude.KSE, LSE, ISE up 132,

33 and 30 pointsrespectively

HONG KONG

AFP

Asian markets were mixed Monday amid hopesof new easing measures by the United Statesand diplomatic manoeuvring on Greece, butSamsung shares plunged after a US court rulingin favour of rival Apple.

Tokyo climbed 0.34 percent, Sydney rose0.28 percent, Hong Kong was flat, while Shang-hai fell 0.99 percent.

Seoul was down 0.13 percent as shares ofSamsung fell sharply after a US court fined theSouth Korean technology giant $1.05 billion forinfringing on six of Apple’s technology patents.

Samsung has said it would contest the ver-dict that analysts say could have huge marketrepercussions, but the stock opened 6.8 percentlower and at one point fell by as much as 7.7 per-cent, its lowest intra day level in a month.

Markets were rife with speculation over pos-sible stimulus measures in the United Statesafter minutes released last week from the Fed-eral Reserve’s latest policy meeting showed UScentral bankers worried about slowing growth.

Investors are now looking ahead for furtherclues to Fed chairman Ben Bernanke’s speech atan annual economic policy symposium to be at-tended by central bankers and economists laterthis week.

“We have got through a quiet August,”Shane Oliver, head of investment strategy andchief economist at AMP Capital in Australia.

“And we are now coming up to a peak periodin terms of events where the market patience

might wear out if the policy action doesn’t comeout,” he told Dow Jones Newswires.

Europe was also in the spotlight after GreekPrime Minister Antonis Samaras met GermanChancellor Angela Merkel and French PresidentFrancois Hollande, with both leaders affirmingthey wanted Greece to remain in the eurozone.

But markets were braced for further toughnegotiations as Merkel said she was awaiting areport by global lenders reviewing the debt-bur-dened country’s performance on reform targetsbefore agreeing to revisit any terms.

Asian stocks mixed on stimulus

hopes, Samsung falls

The article titled, “Banking industry’s role inpreventing rupee capitulation”, published onMonday, 27-08-2012 was erroneously credited toKunwar Khuldune Shahid. The actual author of thearticle is Khalid Bin Shaheen. We regret the error.

CORRIGENDUM

oil soArsin Asia on Gulf of Mexico supply disruption