Maturities offorward importcover and L/C mustcoincide: SBP

KARACHI: The central bank Tuesday

clarified to the authorized dealers that

in all cases the maturity of the forward

contract against import should

coincide with the maturity of the

underlying Letter of Credit (L/C).

Referring to F.E. Circular No. 06, which

was issued on December 21, 2011, the

State Bank of Pakistan said in case of

issuance of an L/C, which requires

payment to be made after a given

number of days of shipment and the

shipment date has been determined

on or before the L/C expiry date, the

forward contract can be rolled over on

forward maturity date to coincide with

L/C payment date. This, it said, was

subject to the condition that the roll

over is not for less than one month.

The central bank said in case the

shipment period was not determined

on the L/C expiry date, forward cover

cannot be rolled over and has to be

closed out at the prevailing exchange

rate on the L/C expiry date. “Where

L/C payment is due before L/C

expiry/forward maturity, forward

contract would have to be taken up on

the date when the payment is due for

delivery to the customer,” it said in a

circular issued Tuesday. Even, the

regulator said, in cases where partial

shipments were allowed, the forward

contract against import should

coincide with the maturity of the

underlying letter of credit. In case of

partial payment prior to the L/C expiry

date, the forward contract can be

taken up to the extent of the partial

payment. In case of partial payments

after the L/C expiry date please refer

to our clarification at S. No.1 above, it

said. STAFF REPORT

01

KARACHI

STAFF REPORT

THOUGH the country’s frag-ile economy is hit hard by afresh spate of protest demon-strations in almost all majorcities, economic observers

expect that the booming stocks market maypeak to an all time high of 19,500 points inthe months ahead.

“The equity market continues its risingtrend with another milestone is comingclose as Pakistan market is about to touch

18,000 mark,” said the analysts at ToplineResearch in a report issued Tuesday.

On Oct 9 last year, they recalled,when the benchmark Index was at

15,688 points, they in a report oncountry’s poli-

tics had

targeted the Index to reach the 18,000 markin the run up to elections by May 2013.“The index has now reached close to18,000 mark but two months ahead of whatwe thought,” they said.

Many investors, the analysts said, werenow curious to know the future directionof market beyond 18,000 mark in light ofworsening security conditions and upcom-ing transfer of power at the domestic polit-ical scene. “We maintain our Index targetof 19,500 points without re-rating as men-tioned in our note titled ‘Pakistan Invest-ment Strategy 2013’ issued on Dec 12,2012,” they added.

The target, they said, was based on15% discount to last 10 year average PE of8.2x as this discount made sense consider-ing economic slowdown, security con-cerns, circular debt and external accountvulnerabilities.

About the impact of ensuing polit-ical developments on the stocks mar-ket of the electioneering country, themarket observers said: “In case thetransfer of power, that is selectionof caretaker PM is through con-sensus and there is no uncer-tainty, we expect the market tocontinue to perform well,otherwise some correctionexpected”.

About the fate of rupee,

the analysts said, last week the central bankhad to take some strict measures to controlthe falling rupee. However, the fact of thematter was that there were hardly any dol-lar inflows that could stop the decliningforeign exchange reserves.

The country’s dollar reserves, in otherwords the SBP’s reserves, had fallen to 50-month low of $8.5 billion causing the dol-lar to appreciate by 8 percent in last oneyear and 0.4 percent in last one monthagainst the local currency.

“We believe if deal with IMF or anyarrangement of decent inflow is not done,the local currency can fall another 5 per-cent by June 2013,” he warned adding thatan abrupt depreciation of local currencywas negative for equities.

On foreign inflows, they said in linewith trend seen in other markets, the for-eigners had bought shares worth $ 117 mil-lion and sold $ 89 million at the Karachibourse in six weeks of 2013 so far resultingin net buying of $ 28 million. This love foremerging and frontier markets along withpre-election buying by foreigners would beimportant determinant of market directionin coming few months.

“In case the elections are held on timeas per the constitution and there is nomajor disruption towards the political tran-sition, then the foreign flows would remaindecent,” said the analysts.

BUSINESS

BWednesday, 20 February, 2013

Poland could provide assistance to Pakistan in power

generation through coal of which the country has very

huge reserves. – Polish envoy Dr Andrzej Ananicz

If a deal with IMF or anyarrangement of decentinflow is not arranged,the local currency canfall another fivepercent by June

Stock market all set to hit19,500 points despite odds

KARACHI

STAFF REPORT

The 9th International Safe and Secure Pakistan Exhibition-2013 is set to bring major investment opportunities forlocal and foreign exhibitors and manufacturers, said Man-aging Director Pegasus Consultancy, Aamer Khanzada.

Khanzada, organizer of the event, said the megaevent was being organized first time in Islamabad’s Pak-China Convention Centre from February 26-28.

Safe Secure Pakistan is the international tradefair, which is a platform through which safety and se-curity equipment and training industry’s stakeholderscommence B2B interaction and exchange valuablebusiness prospects.

After the 8 years success of the international SafeSecure Exhibition, 2013 event will bring in big oppor-tunities of investment for local and international ex-

hibitors, brand owners and manufacturers.National Disaster Management Authority, Capital

Development Authority, Fire Protection Association ofPakistan, Emergency Rescue Services 1122, RawalpindiChamber of Commerce and Industry and IslamabadChamber of Commerce and Industry are supporting theSafe Secure Pakistan 2013 Exhibition.

The event will showcase the display of latest tech-nology, innovations and advancements of internal secu-rity, firefighting, policing, emergency and rescue as wellas transport safety. Over 150 companies are participat-ing in safe secure Pakistan 2013, which will benefit thelocal and international markets.

Exhibitors from Pakistan, Austria, Canada, China,France, Germany, Indonesia, Japan, Netherlands, SouthAfrica, UAE, UK, USA, Turkey, Thailand, Hong Kong,Singapore, Switzerland and Italy will be displaying theirbrands at the Safe Secure International exhibition.

9th World Safety and SecurityExhibition from 26th

KARACHI

ISMAIL DILAWAR

If participation in the central bank’s open marketoperations, ranging from mop-up to injection activ-ities, is any criteria the regulator and the commer-cial banks seem to be playing cat and mouse overhuge profits the latter seem to have addicted tothrough investing billions in the risk-free govern-ment securities.

Tuesday saw the profit-conscious banks givinga cold shoulder to the State Bank of Pakistan’s(SBP) open market operation under which the reg-ulator wanted to mop up liquidity from the bank-ing system through selling out t-bill of three-daymaturity. The State Bank received zero bids fromthe banks.The lack of interest the banks showedTuesday is because of, what the banking analystssaid, their cautious attitude towards using theSBP’s interest rate corridor that is nowadays undera strong vigil of the regulator. “The SBP now notesthe banks which either place or borrow funds fromit,” Asfar Bin Shahid told Pakistan Today.

The economist said the SBP was now closelywatching the banks which were using its interestrate corridor more frequently. The regulator has re-

cently allowed the banks to place or withdraw theirsurplus liquidity in its interest rate corridor notmore than seven times in a fiscal quarter, inclusiveof both placements and withdrawals.

In its last monetary policy decision the centralbank capped its interest rate corridor at 7 percent in-creasing it from 6.5 percent. The bank also put a 9.5percent ceiling to the corridor. The measure, as abanker put it, is aimed at some tightening to reducethe widening monetary gaps. Another reason for thebanks’ lukewarm response to SBP’s auction on Tues-day the analysts said was the former’s desire for max-imum returns on the government papers that theinflation-conscious regulator has slashed significantlyin recent months through cutting the discount rate atleast by 2.5 percent to 9.5 percent from 12 percent.

Further, the analyst said, the profit-crazy banksdid not show interest in the mop-up auction because

it was conducted at the open market rates currentlyranging between 4 and 4.5 percent.

“Tomorrow (today) SBP would call bids for T-bills so the banks did not want to block their funds forthree days and lose out on bidding,” said AB Shahid.The State Bank, as per its quarterly auction calendar,would hold its 4th auction of this quarter Wednesday(today) to sell T-bills worth Rs 175 billion with ma-turity amount standing at Rs 141.313 billion.

A banker also seconded this view saying the bankswere desperately looking for windows where they couldpark their liquidity. On the other hand, the banker said,the central bank was going stricter in terms of returns onthe government securities. “The State Bank rejected thelast two bids for T-bills and PIBs owing to the above-than-normal rates (quoted by the banks),” said thebanker, requesting not to be named.According to thebanker, the state bank also seemed determined to reducethe volume of liquidity it has been pumping into thebanking system in recent months. “This would be adaunting task (for SBP) given the ever-widening (mon-etary) deficits and the resultant government’s reliance onbudgetary bank credits,” he added. The banker said thebanks’ participation in Wednesday’s auction would behuge as each of the big five banks have been quotingheavy maturities of more than Rs 50 billion.

SBP, banks playing cat and mouse overheavy-yielding government papers?

Dr Asim serves Rs 1b notice onGhiyas Paracha

ISLAMABAD: Adviser to the Prime Minister onPetroleum Dr Asim Hussain has served Ghiyas AbdullahParacha, Chairman Supreme Council APCNGA with alegal notice demanding Rs one billion as compensationfor his views appeared in press criticising policies andmassive corruption in the petroleum ministry. Legalnotice served under Section 8 of the DefamationOrdinance, 2002 issued by Mansoor Ahmed Khan andCo, Karachi says that Dr. Asim is a truthful and honestperson dedicated to providing services to the generalpublic, according to APCNGA press release.It adds thatcertain news published in various newspapers byParacha has demeaned his image and defamed his goodname. The adviser has demanded of Paracha to publishunqualified apology and pay Rs one billion as damagesfor defamation and compensation for causingembarrassment and loss of reputation. Reacting on thedevelopment, Ghiyas Abdullah Paracha said thatexposing corruption, criticising policies framed tobenefit few influential and resisting designs to ruin CNGsector having Rs 400 billion investments is not a crime.He said that he will continue to counterattack efforts topush millions in the unemployment to benefit few anddo his best safeguard rights of 3.7 million consumersof economical fuel. Paracha said that mailed noticesand threats cannot hide reality and will not force himto change his just stance. Policies orchestrated in thepetroleum ministry to reward nobility on the cost ofmasses have left country and 180 million people highlyinsecure which is intolerable, he added. The leader ofthe CNG sector said that silence over crimes againsthumanity is itself a crime and there must be institutionsand people who will never allow interests of themasses to be compromised. He said that not a singlemove of Dr. Asim has been endorsed by independentoil and gas experts, despite tall claims since years, hehas failed to complete even a single project and hecontinues to underutilise national hydrocarbonresources and impede exploration to justify imports ofcostly fuel. The adviser has the honour to get foursecretaries changed in a short span which if probedwill result in eye-opening revelations, he informed. Hesaid that APCNGA will continue its struggle andprotests unless the politicians stop preferring personalinterests over national interests. ONLINE

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BUSINESSWednesday, 20 February, 2013

Major Gainers

COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERRafhan Maize Prod. 3650.00 3750.00 3700.00 3750.00 100.00 100Sunrays Textile 164.30 172.51 172.51 172.51 8.21 500Engro Corporation 99.16 104.11 101.30 103.43 4.27 18,172,900Packages Ltd. 181.01 189.90 178.00 185.23 4.22 125,500Shell Pakistan Ltd. 138.42 144.00 138.50 141.34 2.92 101,700

Major LosersNestle Pakistan Ltd. 4955.00 4800.01 4800.00 4800.01 -154.99 60Indus Dyeing SPOT 493.53 485.00 468.86 468.86 -24.67 2,900UniLever Pak 10400.00 10452.00 10315.00 10382.50 -17.50 400Pak Oilfields 477.36 478.00 468.46 470.28 -7.08 186,700Philip Morris Pak. 175.59 177.10 166.82 169.35 -6.24 9,900

Volume Leaders

P.T.C.L.A 22.77 22.85 21.64 21.89 -0.88 33,010,500Fauji Cement 8.05 8.23 7.78 7.84 -0.21 29,303,000Jah.Sidd. Co. 18.01 18.49 17.95 18.31 0.30 21,435,000Engro Corporation 99.16 104.11 101.30 103.43 4.27 18,172,900Telecard Limited 5.56 5.70 4.86 5.15 -0.41 16,088,000

Interbank RatesUSD PKR 98.2110GBP PKR 152.1387JPY PKR 1.0494EURO PKR 131.1117

ForexBUY SELL

US Dollar 99.2 99.5Australian Dollar 102 103Canadian Dollar 97.7 98UK Pound Sterling 154.3 155Euro 132.2 132.7Japanese Yen 1.055 1.11Saudi Riyal 26.4 26.7China Yuan 13.5 14UAE Dirham 26.95 27.2

Warid’s offers free callsfor up to 6 weeksLAHORE: Warid Telecom, one of Pakistan’s most

innovative telecommunications companies, today

announced an exciting ‘Muft Hafta’ Offer for its

prepaid subscribers. This unique offer is a first in

Pakistan, and allows customers to enjoy one free

week’s usage per month for the next 6 months.

Customers who activate their new SIMs before

10th March, 2013 or have not used their Warid

SIM since January 31st, 2013 can benefit from

this limited-time promo. With recent changes to

the telecom regime, it has become even more

important to ensure that mobile users are getting

the best possible competitive service and

packages. To this end, the company is pleased to

announce this latest offer which is open to both

existing and new Warid Prepaid and GLOW

customers. The ‘Muft Hafta’ offer can be enjoyed

by customers after the fourth week; that is, the

more the usage, the more Free Minutes customers

will receive. For more details customers can call

100 or visit their nearest Warid Business Centre

or franchise. PRESS RELEASE

Samsung holding MEnAForum 2013 in DubaiLAHORE: Samsung Electronics a global leader in

consumer electronics will be holding a forum

entitled ‘Samsung MENA Forum 2013’. The event

will be taking place at a leading hotel in Dubai,

UAE on February 18, 2013. Samsung MENA Forum

guests will enjoy Samsungs newest 2013 line-ups

and have an opportunity to experience a dedicated

B2B exhibition area. Attendees will further have

the unique opportunity to interact and experience

the latest products and services that define

Samsungs vision for the consumer electronics

industry. Samsungs vision of the future seeks to

enable consumers to discover new worlds of

possibilities. Through its deep understanding of

consumers’ lives and its pursuit of discovery

Samsung will reveal its goal of creating a new

experience for all. PRESS RELEASE

CORPORATE CORNER

02

B

Dr Asim Hussain should demonstrate courage to

admit his failures and stop blaming others as a time

buying effort. — IWCCI President Farida Rashid

Upfront tariff forwind power projectsin Sindh extendedby one year

ISLAMABAD: Prime Minister Raja

Pervez Ashraf has decided to extend the

existing upfront tariff for Wind Power

Projects in Sind, which expired on

December 31, 2012, by another year.

The Prime Minister was presiding over a

high level meeting of the Sindh Board

of Investment at the PM’s Secretariat

on Tuesday. The meeting discussed in

detail the progress made so far in

setting up of thermal power plants with

Thar Coal specification and utilization of

wind corridor in Sindh for production of

electricity. The Prime Minister said that

the energy policy of the government

aims at attracting potential investors in

this sector to generate electricity so

that gap between supply and demand

can be reduced. He said that regulators

should facilitate the investors so that

they are encouraged to invest in this

sector. Investors, he said are being

offered attractive incentives by various

countries and we have to compete with

these countries to convince the

investors to invest in Pakistan, he

added. The Prime Minister said that

government will have to adjust its

policies to keep pace with dynamic

changes to attract foreign investment in

the country. The meeting was

attended by Minister for Water and

Power, Chaudhry Ahmed Mukhtar,

Minister for Defence, Syed Naveed

Qamar, Advisor to the Prime Minister on

Petroleum and Natural Resources,

Minister of State for Finance/Chairman

BOI, Mr. Slaeem Mandviwala, Provincial

Minister for Finance Sindh Mr. Murad Ali

Shah and relevant officials of the

Federal government and government of

Sindh. INP

ISLAMABAD

APP

POLAND is interested in further expand-ing economic and trade relations withPakistan in all fields including energygeneration which would give a new boostto Pakistan-Poland bilateral relations.

The Ambassador of Poland in Pakistan, Dr An-drzej Ananicz has stated this during a meeting withZafar Bakhtawari, President Islamabad Chamberof Commerce & Industry (ICCI) here on Tuesday.He said that Pakistan and Poland need to work to-gether in order to identify possible fields of coop-eration and to provide proper information tobusiness communities of both the sides.

Anna Chakori, Head of Economic section ofPolish mission in Islamabad was also present onthe occasion. Dr Andrzej said that Poland has well-developed and diversified economy as its drivingforce is small and medium scale businesses,adding that Poland is currently one of the fastestgrowing country within the European Union (EU).

He said that Poland has advantage of usingcoal as the primary raw material in productionof their energy and three largest Polish coalmining firms extract around 100 million tonnesof coal annually.

“Therefore, Poland could provide assistance toPakistan in power generation through coal of

which the country has very huge reserves asPoland has great expertise in generating energythrough coal”, he maintained.

Dr Andrzej said that a Polish Oil & Gas Com-pany exploited natural gas in District of Dadu inSindh and gas production will be started in May2013 which would help Pakistan to meet its en-ergy needs. The Polish Ambassador said that bi-lateral agreements and MoUs have becomeinstruments of strengthening relations between thetwo nations and said that Polish Embassy in Pak-istan would do its best to meet challenges and sup-port any proposals and ideas, which would helpachieve common goals.

In his welcome address, Zafar Bakhtawari,President ICCI said that deep friendly ties exist be-tween Pakistan and Poland, however, these rela-tions need to be changed into trade and economiccooperation. The ICCI President said that Pak-istan always attaches great importance to its re-lations with Poland which is an importantcountry in Europe and also the member of EUas Poland has supported Pakistan at GSP plusstatus and to create market access for Pakistanigoods in European markets.

Regarding the issue of ban on Pakistan’s fish-eries products, Bakhtawari said the export whichwas discontinued in 2008 should also be resumedwhich would further enhance the current volumeof trade between Pakistan and Poland.

Polish envoy calls forimproving Pak-PolandEnERGY CooPERAtion

KARACHI: Mark Lowcock, permanent secretary Department for International Development,

addresses a seminar on booming global economy. STAFF PHOTO

ISLAMABAD: Mr Attaullah Khan, Chairman Bank of Khyber (BOK) Board of Directors (BOD) &

Additional Chief Secretary Government of Khyber Pakhtunkhawa presiding over 118th BOK

BOD. (From L-R) Mr. Zahid Sahibzada – Company Secretary, Mr. Asad Muhammad Iqbal –

Member BOK BOD, Mr. Bilal Mustafa Managing Director BOK, Mr. Attuallah Khan – Chairman

BOK BOD, Sahibzada Saeed Ahmed – Member BOK BOD & Secretary Finance Government of

Khyber Pakhtunkhawa, Mr. Sajjad Ahmed – Member BOK BOD & Mir Javed Hashmat Executive

Director BOK.

DYL Motorcycles sign deal with Ehsanullah Afghan Limited

KARACHI: DYL Motorcycles, Pakistan and Ehsanullah

Afghan, Afghanistan have signed an agreement to

establish a motorcycle manufacturing facility in

Afghanistan. The agreement will strengthen the already

close cooperation between DYL & EAL, as both are

engaged since 2009 in motorcycles sales in Afghanistan.

The motorcycle industry in Afghanistan expects a strong

growth and new TCA agreement will further enhance the

business of M/s.EAL in Afghanistan in providing a

affordable and high quality motorcycles in Afghanistan.

The signing ceremony held at DYL head office in Karachi

where Mr Yunus Dawood, the CEO, DYL Motorcycles and

Mr.Jalat Khan Achakzai, the CEO, Ehsanuallah Afghan Ltd

inked the agreement. DYL group is renowned name in the manufacturing and marketing of

motorcycles/lube and parts. EAL has a strong base of marketing channels in Afghanistan, now after this

agreement EAL will also establish strong footing in manufacturing side as well. PRESS RELEASE

ISLAMABAD

APP

Representatives of about twenty (20) Ko-rean investment companies are scheduledto visit Pakistan from February 27 toMarch 2 to explore investment opportuni-ties in various projects of the country.

During the visit the delegate represen-tatives of these companies are scheduledto hold meetings with the concerned quar-

ters of the projects, sources of Board of In-vestment (BOI) said.

According to details, the companies in-clude Samsung Constructions and TradingCorporation that will hold meetings for in-vestment in LNG offshore receiving terminalproject, CNG bus project through PPP modeand power projects. The company has alsobeen requested to invest Karachi-Hyderabadexpressway and Karachi-Port Qasim ele-vated expressway, the sources added.

Lotte Group would explore projects inpetrochemical sector while Wisdom will beseeking investment opportunities in agri-culture sector by utilizing the strengths ofboth the countries as Pakistan has rich agri-culture and dairy resources while Korea hasadvanced food processing technology. Sim-ilarly, Six-Group Company would be look-ing projects in LNG and Steel market andis also expected to take part in the tenderfloated by Sui Southern Gas Company. Ko-

rean Railroad would seek investment po-tential in supplying unused locomotives toPakistan in addition to providing simulatorsand training for locomotives’ driversthrough KOICA grant. ECO-One wouldlook investment opportunities in Auto rick-shaw market, while Korea Water ResourceCorporation (K-Water) is interested inhydro power sector and consortium withDaewoo E&C in Hydropower project andLower Palos Valley project.

KOREAN INVESTORS TO VISIT PAKISTAN IN LAST WEEK OF FEB

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