Pakistan Economy - News & Updates - Archive

[Janbaz]

In Short: Pakistan's IT firm launches Microsoft centre

LAHORE (February 05 2007): A Pakistani software development firm, Systems Limited has opened three technology centers to leverage its global expertise in delivering the Microsoft development platform to its mortgage lending and servicing clients. The centres are located in Cranbury, N.J., USA Bangalore, India and Lahore, Pakistan.

A typical lender and servicer manage at least 50 service providers on a transaction level, NET based platforms enable quicker and faster deployment of SOA based applications to lower integration and management costs while reducing the mortgage processing time.

Business Recorder.
http://www.brecorder.com/index.php?id=525531&currPageNo=1&query=&search=&term=&supDate=

 

[Introvert]

Bahrain businessmen to take part in Pakistan gala​

MANAMA: Bahrain-based investors are being wooed to key events in Pakistan, one of which begins next week.

Several Bahrain-based businessmen and government officials have already confirmed they will be travelling to the events, which aim to highlight investment opportunities in Pakistan and elsewhere, Pakistan Embassy Minister-Deputy Head of Mission Shaukat Ali Mukadam said.

The Muslim Business and Investment Gala (BIG) will be held in Karachi from Saturday to next Monday, with the aim of providing a platform for investors to explore joint venture, investment and trade opportunities in Muslim countries as well as other participating countries.

"We'd like to extend an open invitation for investors from Bahrain to attend," said Mr Mukadam.

Economic Development Board (EDB) deputy chief executive officer Dr Zakaria Hejris and senior officer, business development Mazen Al Hili are due to attend, along with Bahrain Chamber of Commerce and Industry board member and Asian Committee chairman Othman Al Rayes and businesswomen's committee member Hoda Sankor.

Mr Mukadam also invited traders to Expo Pakistan 2007, which will also be held in Karachi from March 29 to April 1.

The event will cover high-tech products (IT and services, engineering goods, automobile parts), healthcare (surgical goods, cutlery, chemical, pharmaceutical and hospital goods), food products (fruit, processed food, rice, wheat and others), home décor (furniture, carpets, handicrafts and textiles) and fashion (garments, knitwear, woven garments, leather products and more).

"There were seven Bahraini businessmen who visited the expo last year and were highly impressed by the quality of the products and services," said Mr Mukadam.

"We have informed the BCCI and expect a large number of visitors form Bahrain to attend this high profile exhibition."

Bahrain-based Pakistanis or Bahrainis of Pakistani origin are also invited to the Overseas Pakistan Investment Conference in Islamabad on March 5 and 6.

"The objective is to attract foreign direct investment from overseas Pakistanis by highlighting the opportunities and incentives available in Pakistan, said Mr Mukadam.
http://www.gulf-daily-news.com/Story.asp?Article=169373&Sn=BUSI&IssueID=29323

 

[Owais]

Gwadar Port to contribute $42.2 billion in 40 years: concession agreement to be inked today

KARACHI (February 06 2007): The Gwadar Port will contribute $42.2 billion, in terms of investment, revenues and income received from its entire operations to the exchequer, over a period of 40 years. According to sources, the concession agreement is going to be inked on Tuesday, February 6, between the Gwadar Port Authority (GPA).

Which represents the Government of Pakistan, and the Concession-Holder Company (CHC), which is a subsidiary of PSA (Port of Singapore Authority) International PTE Limited.

The agreement has a duration of 40 years. Besides, it regulates the rights and obligations of both parties. The GPA will receive revenues (not profit) from the PSA over a period of 40 years. The investment, revenues and income received from Gwadar port's entire operations are between $23.6 billion to $42.2 billion.

Firstly, the GPA expects $5 billion to $8 billion foreign investment in the area of Multi-purpose (MP) terminal and related equipment's to cost PSA at Gwadar Port which would be $1 billion to $1.5 billion; container terminal and others $2billion to $4 billion; the cost of Free Zone development $1.5 billion to 2.5 billion; while the marine services and others would cost $0.5 billion.

Secondly, the GPA to receive revenues from CHC over next 40 years is expected between $17 billion and $31 billion. The expected revenues generated from containers and others would be $10 billion to $18 billion; Free Zone to generate $3 billion to $6 billion; while the MP terminal and others would produce $4 billion to $8 billion revenues during the period.

Thirdly, the GPA would receive income from PSA over the period of four decades between $1.6 billion and $3.2 billion, in which the CHC of containers and others would give $0.9 billion to $1.6 billion (9 percent of CHC revenue); Free Zone $0.45 billion to $0.9 billion (15 percent of CHC revenue); and the MP terminal and others would provide $0.36 billion to $0.72 billion (9 percent of CHC revenues).

The Concession-Holder Company (CHC) will establish separate three operating companies for each of the above business areas. Where appropriate, the CHC can cooperate with strategic partners at the level of the operating companies.

The Port-CHC manages terminal and cargo operation. The CHC will take over the marketing and operations of the current terminal area, which provides 602 metres of berthing and will invest in and expand berthing space in line with demand during the concession period up to a total maximum of berthing space of 14 berths at an area of 4.2 km. These facilities will cater for container cargo and miscellaneous cargo.

The Marine CHC services consist of piloting, tugging, mooring, and vessel traffic control and anchorage management and related marine services, such as bunkering facilities. The CHC shall expand the fleet of pilot and tugging vessels in line with demand.

The AKD Group would have majority CHC and operate the 'Free Zone CHC' and shall develop and operate this area and market its facilities and services. The area set aside within this concession for Free Zone activities related to the port has a size of approximately 923 hectares.

THE ROLE OF GPA: As Port Authority, it will remain responsible for the development and maintenance of common port infrastructure, such as access channels, breakwaters and access roads as well as navigational safety and port security.

The terminal areas under the concession, two terminal areas will be developed including multipurpose terminal area. This terminal includes the existing facilities and the areas will be expanded in easterly direction up to a total length of 4.2 km. It caters for various types of cargoes.

The container terminal area is located along the western and north-western coastline of the 'East Bay' and is to be developed by the CHC. The financial arrangements between the parties are simple and the CHC will pay a fixed share of its revenues to the GPA.

For the cargo operations and for marine services, this percentage is set at 9 percent of the revenues. For the Free Zone business, the percentage is set at 15 percent of revenues. The tax incentives for the CHC are given a complete tax holiday for the first 20 years of the concession. This applies to federal, provincial and local taxes.

The materials and equipment that will be used in the construction and operations of the port will be kept free of taxes. Likewise, the bunker oil used in the port or sold to visiting ships will be kept free of duties. These privileges will remain throughout the concession period.

The purpose of the Free Zone is to develop and operate facilities and businesses that are conducive to and dependent on the development of the port. The companies and business activities that are targeted for operations in the Free Zone, which is a customs-bonded area within the land area of the port, will be given a tax holiday of 20 years.

The concession holder will develop at least 20 percent of required facilities within the Free Zone area. The remainder will be developed by either the concession holder or by other investors.

The exports of goods from the 'Free Zone' into Pakistan are subject to normal import duties. Exports of goods from Pakistan into the Free Zone are subject to normal export duties, if any.

The imports and exports of goods that are only moving through the Free Zone, but do not enter Pakistan (transit and transhipment), are kept free of duties, which is in line with normal practices for such facilities.

THE START-UP: The concession holder has committed that the first ship and the first cargo will be handled in Gwadar port in March 2007. The concession holder has committed to install two additional quayside gantry cranes for the handling of containers within nine months period.

THE SELECTION AND NEGOTIATIONS PROCESS: The international management-consulting firm of Arthur D. Little has overseen the entire process and has acted as technical advisor to GPA during the process. This consulting firm has extensive global experience and expertise in port planning and in negotiations with port and terminal concession holders.

The selection process has followed the normal procedure of invitations for expressions of interests (EoIs), pre-qualification and short-listing of bidders, issuance of tender documents and technical and financial evaluation of tender proposals, followed by negotiations with the winner of the tendering process.

The tender proposals were received on December 4, 2006 and the negotiation process started on December 27, 2006. The entire selection process was started on September 27, 2006, and completed on February 5 this year.

http://brecorder.com/index.php?id=525606&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Garment export target in jeopardy

KARACHI (February 06 2007): The country's readymade garments exports target of $3,410 million for the current fiscal year (2006-07) is in jeopardy mainly due to the tough competition in international market and high cost of production, trade sources told Business Recorder on Monday.

"Fiscal year target is not possible to be achieved as the readymade industry is faced with tough challenges and increasing problems which have scaled down its export ratio and put a negative impact on its manufacturing growth," an exporter said.

"The aggregate exports of readymade garments from the country currently stand at $1724 million and we have still to fill the remaining gap of $1686 million in five months of the current fiscal year. That is difficult enough," he said.

He said that high cost of production, ie increasing utility charges including gas, electricity, and water, have led the garment industry to a decline, while export duties are also a contributing factor in the declining readymade exports.

"Despite the fact that the exports ratio has gone up by 15 percent during July-December 2006-07 against the corresponding period of last fiscal year, the fiscal target is still difficult to be attained in the remaining months," he observed.

Within two months--February and March--the increasing export graph will certainly plunge because the earlier growth occurred during the peak buying season in the West, while the remaining five months of the fiscal year are believed to be the lean period for garment exports, he said.

"The growth in garment export failed to be capitalised on the high sales season in the West, namely, on Christmas event, and remained lower than expectations. It should have been manifold higher," he added.

Another exporter said that lack of new designs in the readymade products was also one of the genuine reasons that regressed its marketing in the world market. "New designs in readymade garments are believed to be prerequisites for marketing the products in the international market, which is badly missed in our case," he added.

He said that the country's readymade garments are normally refused by the international buyers due to same reason, whereas the other regional countries, including India and Bangladesh, were receiving an extraordinary response in the world market because they had expertise and latest technology in the field of value-added textile sector.

He said that new markets in the world must be explored and in this regard the government should give the exporters incentives with a view to augment textile export manifold and help minimise the growing export decline.

"The new markets of the world could be the Latin America, Caribbean countries and Central American region where so far none of the exporters has marketed readymade garments from Pakistan," he said. Regarding travel barriers in these regions, he said that unlike EU and US, in the said regions no such problems of travelling and immigration were likely to occur.


http://brecorder.com/index.php?id=525636&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Trade deficit likely to peak at $8.8 billion: IMF

KARACHI (February 06 2007): The International Monetary Fund (IMF) has forecast that Pakistan's trade gap could swell further, and hinted a 5 percent increase in it to $8.8 billion-highest level so far--at the end of the current fiscal year, it is learnt.

According to IMF statistics, despite all efforts of the government, the trade deficit could not be controlled. As a result, it might increase by $337 million and touch the highest level so far of $8.819 million by the end of the current fiscal year 2006-07. The country's deficit was 8.442 million in 2005-06.

IMF said that its projections on trade deficit and exports were based on a staff scenario of monetary and fiscal tightening. During the current fiscal year Pakistan's exports would reach $18.819 billion, while imports could amount to $27.467 billion, the report said.

Last year's results also showed that Pakistan had faced highest deficit of the history, which was $8.442 billion. During the current fiscal year (2006-07), Pakistan might achieve its export target of $18.648 billion, increased by around $2.142 billion, or 13 percent, against $16.506 billion of last, estimated statistics said.

Imports might touch the $27.467 billion mark this year against last year's $24.948 billion, depicting an increase of $2.519 billion, or 10 percent. Leading economic analysts have also indicated that during the current fiscal year Pakistan's trade deficit would be higher than last year. They said that the government has failed to control increase in imports, the chief contributing factor to the growing trade deficit.

http://brecorder.com/index.php?id=525621&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

$1 billion may be raised with bond issue: foreign banks' advice to government
ISLAMABAD (February 06 2007): International banks and financial institutions have informed government economic managers that Pakistan can raise $800 million to $1 billion from the global market by issuing sovereign bond to plug the current account deficit.

Government officials are engaged in communication with representatives of international banks and financial institutions for the last three weeks. They want to consult them on the international market hunger for bonds before issuing the sovereign bond.

Talking to Business Recorder on Monday a senior official, part of the economic team engaged in consultations, said: "We have received very encouraging response from the international banks and financial institutions' representatives for going into the international market for yet another sovereign bond before the closing of the current fiscal year."

After conceiving the idea of plugging the current account deficit by capping money from the sovereign bond, the government had invited officials of 12 international banks and financial institutions.

These included ABN Amro Bank, Citi Bank, American Express Bank, Grindlay's Bank, Deutsche Bank and Standard Chartered Bank. The government plans to select more than one bank from the short-listed ones to act as lead manager for the bond issue. Since the government is facing huge current account deficit this year, it is looking for various options to plug the gap. The bond is an easy way to get some portion of the required money.

The government has already secured from the international market $813 million through OGDC's global depository receipts (GDRs) and another $200 million through MCB's shares, but it still needs at least $1 billion from other than traditional sources to plug the gap for the current fiscal year.

Government officials are, however, giving the impression that they want to float the bond before the closing of the current fiscal year to stay in the world market. But the factual situation demands such move to keep the ball rolling for the economic managers of the government who are making desperate efforts to keep the current account deficit at an acceptable level.

http://brecorder.com/index.php?id=525624&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Pakistan and Iran for early execution of IPI project

TEHRAN (February 06 2007): President General Pervez Musharraf on Monday proposed a plan of action to bring about unity in the ranks of Ummah and to address major decisive issues in the region particularly Palestine, Lebanon and Iraq.

The President in his talks with the Iranian President Mahmoud Ahmedinejad at the presidential complex in Tehran said unity among the ranks of Muslim Ummah will also defuse confrontation between Iran and the United States of America.

Giving details about the talks Pakistan's Ambassador to Iran Shafqat Saeed said bilateral matters between Pakistan and Iran particularly the gas pipeline project was also discussed.

The Iranian President expressed the willingness to initiate implementation of the project immediately. Since the two countries have worked out the pricing mechanism Iran and Pakistan will discuss an early implementation of the pipeline project.

The two leaders also discussed other regional issues including security in the Gulf and Afghanistan. President General Pervez Musharraf is visiting Iran and Turkey to discuss with them the situation in Middle East, particularly with a view to resolve the issue of Palestine.

The two leaders held formal talks, which lasted about seventy-five minutes. These were followed by a one-on-one meeting that covered wide-ranging issues.

The Iranian President welcomed plan and assured the President of all possible assistance on the part of Iran to make it a success.

Later, the Iranian President hosted luncheon in the honour of the President Musharraf and members of his delegation. After the lunch, President Pervez Musharraf along with the Iranian President, met the Iranian supreme leader Ayatullah Ali Khemnai.

During the meeting with Supreme Leader, the President also reviewed the problems being faced by Muslim Ummah. He apprised him of his recent visit to Middle East and South Eastern countries. The supreme leader welcomed Pakistan's efforts to strengthen unity amongst the Muslim countries.

Later, the President left for Turkey. He was seen off at the airport by Iranian Minister for Housing and Urbanisation, Pakistan's Ambassador to Iran and senior officials. Foreign Minister Khurshid Kasuri and Foreign Secretary Riaz Mohammad Khan are accompanying the President.

http://brecorder.com/index.php?id=525612&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

EU direct investment in Pakistan soars
KARACHI: European Union (EU)’s direct foreign investments in Pakistan witnessed an unusual surge during the first six months of the current fiscal year.

State Bank of Pakistan (SBP) released data stated that the EU direct foreign investments in Pakistan during the first six months of the current fiscal year soared by two and a half times as compared to the previous year same period.

It further said that the EU member countries during July-December, 2006 made direct foreign investments in Pakistan amounting to $547 million, while it was limited to $194.1 million only during the same period previous year, which showed a substantial rise by $346.6 million during the period under review.

http://geo.tv/geonews/details.asp?id=1708&param=3

 

[Owais]

British direct investments surge in Pakistan

ISLAMABAD: British direct investments in Pakistan during the first six months of the current fiscal year increased manifold.

Government released figures stated that the Britain made direct investment of $460 million in Pakistan during the first six months of the current fiscal year as compared to its mere $87 million direct investments in the same period previous year, which showed a speedy and substantial rise by $373.2 million during the period under review.
http://geo.tv/geonews/details.asp?id=1705&param=3

 

[Neo]

Export to Switzerland up by 45.5pc

ISLAMABAD, Feb 5: Pakistan's exports to Switzerland grew by 45.5 per cent in 2006 over the previous year after remaining stagnant for the last several years.

Official figures compiled by the commerce ministry indicated that exports rose sharply during 2006 to 67 million Swiss francs (CHF) in 2006 from 46 million Swiss francs in 2005.

A positive aspect of this growth was manifold increase in export of non-traditional items.

These included ethanol, which jumped from Swiss Francs 25,400 in 2005 to Swiss Francs 12 million in 2006, a surge of 47,500 per cent.

Dried mushrooms and truffles were other important items whose exports increased by 153 per cent to reach Swiss Francs 6.3 million.

As a result, Pakistan became the second largest supplier of these products to Switzerland after China.

Textiles remained the largest exports with 50 per cent share which increased from Swiss Francs 24.9 million in 2005 to Swiss Francs 33.1 million in 2006.

Home textiles and clothing (other than knitwear) were the main items. Swiss companies imported these items from Pakistan, selling them in Switzerland and Europe under their own brand names and designs. Rice export increased by 36.5 per cent to Swiss Francs 1.2 million in 2006.

Leather items, especially bags and gloves, increased modestly by 5.5 per cent to Swiss Francs 1.9 million, sports goods and footwear, including gaiters and parts, both increased substantially by 72 per cent to Swiss Francs 2.2 million and Swiss Francs 1.2 million, respectively.

The statistics showed that in 2006, Swiss exports to Pakistan fell by 6.2 per cent to Swiss Francs 336 million.

The main Swiss exports to Pakistan were machinery and parts, pharmaceuticals, chemicals, watches, and electronic and other equipment.

These five sectors represented over 80 per cent of exports to Pakistan.

There is a great scope that bio-products offer the best opportunity for Pakistani exporters to Switzerland, as these products are in great demand and most are imported.

Some examples of products that Pakistan should consider are bio-rice, bio-mangoes or bio-cotton, giving particular attention to certification and control of bio brands and quality of products.

http://www.dawn.com/2007/02/06/ebr3.htm

 

[Neo]

Govt trying to introduce drip irrigation in Thar

By Shahid Husain

MITHI: The government of Pakistan has initiated 40 pilot projects on drip irrigation in Tharparkar in February this year in order to resolve water scarcity problem, Dr Sono Khangharani, Chief Executive Officer, Thardeep Rural Development Programme (TRDP), told The News. “When you will visit Tharparkar next year, you will find great transformation in the impoverished land,” he remarked.

He said that a survey in district headquarters Mithi, Nagarparkar and other areas has already been conducted and pilot projects would help estimate the cost of implementing drip irrigation in Tharparkar, which borders the Great Indian Desert where it is already being used successfully. The consultation in drip irrigation will be provided by India while an American company, Acumen will act as a go-between India and Pakistan.

A pilot project on drip irrigation with the help of TRDP, a non-profit and non-governmental organisation, has already been started in Mithi. Drip irrigation, it may be pointed out, is also known as trickle irrigation or micro-irrigation and is an integrated method that applies water slowly to the roots of the plants, by depositing water either on the soil surface or directly to the root zone, through a network of valves, pipes, tubes and emitters.

The goal is to minimise water usage. Drip irrigation may also use devices called micro-spray heads, which spray water in a small area, instead of emitters. These are generally used on tree and vine crops.

Subsurface drip irrigation (SDI) uses permanently or temporarily buried dripper line or drip tape. It is being more widely used for row crop irrigation, especially in areas where water supplies are limited.

After careful study of all the relevant factors like land topography, soil, water, crop and agro-climatic conditions, the most suitable and scientific drip irrigation system and its components are selected for installation.

Drip irrigation was used in ancient times by filling buried clay pots with water and allowing the water to gradually seep into the soil. Modern drip irrigation began its development in Germany in 1860 when researchers began experimenting with sub-irrigation using clay pipe to create a combination of irrigation and drainage systems.

In 1913, E B House at Colorado State University succeeded in applying water to the root zone of plants without raising the water table. Perforated pipe was introduced in Germany in the 1920s and in 1934; O E Robey experimented with porous canvas hose at Michigan State University. With the advent of modern plastics during and after World War II, major improvements in drip irrigation became possible. A new technology of drip irrigation was then introduced in Israel. The method was very successful and subsequently spread to Australia, North America and South America by the late 1960s.

Today drip irrigation is widely used across the globe to accrue benefits with minimum use of water. It is already being used in Balochistan, especially in orchards and offers great scope in other parts of the country.

“The farmers will get loans through micro-credit schemes and wells, hand pumps and tube wells will be used as extraction sources of water,” says Khangharani. Experts believe that given the acute shortage of irrigation water, Pakistan urgently needs to adopt drip irrigation. “In other countries, 90 per cent of agriculture is based on drip irrigation,” says Peter Bosshard, Policy Director, International Rivers Network (IRN), an independent, non-profit organisation based in California.

With 40 per cent of water being wasted in Pakistan, essentially due to mismanagement and theft, fresh water availability in the country has fallen from 5,200 cubic metres per capita in 1947 to less than 1,000 cubic metres currently, making it one of the most parched nations in the world. No wonder, the Pakistan Council of Research in Water Resources (PCRWR) has come up with a media campaign of Rs155 million for water conservation in the country.

http://www.thenews.com.pk/daily_detail.asp?id=41622

 

[Neo]

Tuesday, February 06, 2007

Pak energy demand to reach 361MT of oil equivalent by ’30

By Fida Hussain

ISLAMABAD: Pakistan’s energy demand has been estimated to reach 361 million tonnes of oil equivalent (MTOE) by 2030 and this huge surge could pose a serious threat to the future development programmes, a senior government official told Daily Times.

Without ensuring the security of energy supplies, the development programmes would collapse, said the official. The cumulative oil and gas exploratory effort in Pakistan so far has been very small. He said that an official study indicated that less than one well per 1000 kms is drilled in Pakistan against the world average of 10 wells in the same distance.

The official said that 302 wells have been drilled during the last 14 years around 22 well per year, which resulted in a net addition of 13.7 MTOE in oil reserves and 125.3 MTOE gas reserves. Under the government’s energy security plan 2005, the government is planning to drill approximately 990 exploratory wells during 2005-30. The government will also intensify the offshore exploration efforts, the official said.

According to a recent study of the Planning Commission (PC), due to the rising oil prices in the international market, the oil and gas exploration will become an attractive sector for foreign as well as the local companies.

Pakistan has onshore and offshore sedimentary area of 827,268 square km, according to the PC. The conventional recoverable oil and gas resources potential of Pakistan, based on volumetric yield method, has been estimated as 3,622 MTOE or 27 billion barrels of oil and 6,8850 MTOE or 282 trillion CFT of gas. This oil and gas potential corresponds to 0.75 percent, respectively of the world resource potential.

According to the study, some three percent of the estimated oil and 15 percent of the estimated natural gas potential resources have been discovered so far in Pakistan from some 620 exploratory well drilled over the past 40 years. The study says that if cumulative production was allowed, the remaining recoverable proven reserves of oil are only 41 MTOE while that of the natural gas are significant at 612 MTOE.

More than 85 percent of oil and 50 percent of coal used in Pakistan is imported. The use of coal, nuclear and new renewable energy sources of wind and solar is small compared to the present world average shares, the study says.

The expansion of production by the major oil suppliers would require capital investment in Africa and the Middle East (ME) alone of $45 billion a year over the next three decades, up from the current $8 billion a year. This is a huge amount, and the oil rich African and Middle Eastern countries will need foreign partners to bridge the funding gap and spread the investment risk, the study says.

Pakistan’s appetite for energy is a part of Asia’s growing demand for reliable flow of reasonably priced oil and gas. Asia’s oil consumption will surpass North America’s consumption by 2010, reaching nearly half of the total world demand by 2020. This realisation has generated an intense race buying into reserves in present and future oil and gas producing fields.

http://www.dailytimes.com.pk/default.asp?page=2007\02\06\story_6-2-2007_pg5_1

 

[Neo]

H1 earnings to be announced today: Indus Motors expected to post growth of 12 percent

By Farhan Sharif

KARACHI: Indus Motor’s board meeting for the announcement of the earnings of the first half of the financial year 2007 results is scheduled to be held on Tuesday.

The research analyst and market participants expect the half-year earnings to be higher from comparable period, however a decline is likely in second quarter of the current financial year.

“For the first half we expect Indus Motor to post net income of Rs 1.2 billion versus that of Rs 1.07 billion previously, with a growth of 12 percent,” said Farhan Aziz, an analyst at Jahangir Siddiqui Capital Markets Limited.

This translates into earning per share of Rs 15.3 compared to Rs 13.66 recorded during the first half of the financial year 2006. With the announcement of financial results an interim cash dividend of Rs 6 per share is also likely as against Rs 5 per share previously.

The volumetric sales growth of 21 percent in first half of the current financial year over the corresponding period of previous year would be the main driver behind earnings growth, while the gross margins are expected to show slight increase amid some improvement in the rupee against yen parity.

Alone in the second quarter of the financial year 2007, the company is expected to announce net profit of Rs 573 million with earning per share of Rs 7.30 versus Rs 607 million with Rs 7.72 earning per share, representing a decline of 6 percent.

Lower earrings in second quarter of the current year would mainly arrive from the expected fall in the other income in the wake of decline in customers’ advances.

Besides, on quarter-on-quarter basis, the second quarter’s profits would be down by 9 percent versus Rs 629 million with earning per share of Rs 8.01 posted in first quarter of the current financial year.

This decline is attributable to lower unit sales 13 percent down on quarter on quarter basis, as the production activity at Indus Motor plant was halted due to a maintenance shutdown in the month of December.

http://www.dailytimes.com.pk/default.asp?page=2007\02\06\story_6-2-2007_pg5_6

 

[Neo]

Tuesday, February 06, 2007

‘Pak can upgrade competitiveness ranking soon’

By Sajid Chaudhry

ISLAMABAD: Pakistan can upgrade its world competitiveness ranking from the existing 91 spot to 60-65 by 2010, with an improvement of 6-8 rankings per year during 2006-2010, Arthur Bayhan, Chief Executive Officer Competitiveness Support Fund informed Daily Times on Monday

The Competitiveness Support Fund (CSF) is an independent body established to reposition the Pakistan’s economy on a more competitive global footing. It is a joint venture of Pakistan’s Ministry of Finance and the United States Agency for International Development (USAID) USAID has contributed nearly $12 million to the fund for initial three years.

He disclosed that the CSF is supporting to improve competitiveness of Pakistan’s industrial products but would also extend cooperation to improve the competitiveness of Pakistan’s growing services sector. The Competitiveness Support Fund has developed an action plan to improve Pakistan’s ranking on the Global Competitiveness Index (GCI). Globalisation is a reality that countries can no longer escape and competitiveness is the only way to benefit from globalization and not become a victim, he added.

The World Economic Forum’s Global Competitiveness Report is the most influential ranking of country competitiveness and affects Pakistan’s image in the world among business, government and financial leaders, he said. The true understanding and monitoring the rankings is important because improved competitiveness leads to sustained economic growth, which has proven to be effective in poverty reduction.

He informed that according to the World Competitiveness Ranking 2006 report out of total 125 countries Pakistan is ranked at 91 with India at 43, Turkey 59, China 54, Kazakhstan 56, United States 6 and Finland 2. He informed that global competitiveness index components for 2006 in Pakistan reveals that its institutions are ranked at 79, infrastructure at 67, macro economy at 86, market efficiency at 54, technological readiness at 89, innovation at 60, business sophistication at 66 and Education at 104 out of 125 countries.

Pakistan ranked 67th on the Business Competitiveness Index of Michael Porter. However, Pakistan ranked 91st on the Global Competitiveness Index up from 94th place in 2005.

The lower rankings on the GCI reflect inclusion of low health and education indicators in the country. He said that Pakistan can improve by 6-8 rankings per year and its rankings can improve 60-65 by 2010. He said that the CSF has developed an action plan to improve Pakistan’s global competitiveness ranking which includes initiatives like promoting broad understanding and support for government’s economic reform agenda, holding provincial government leadership workshops, arranging presentations on competitiveness to business leaders and orientations for local and international press, communicating priorities to the relevant ministries and institutions and ensure timely provision of data to international sources and ensuring accurate implementation of the executive opinion survey for the next global competitiveness report by March 2007.

The focus of the CSF activities on high impact areas is to prepare and publish the first annual State of Pakistan’s Competitiveness Report and carry out competitiveness analysis to recommend specific actions with high potential impact beginning with: motorcycle industry, food processing sector, fishery, automotive industry and gender contribution to economic growth.

He informed that CSF has signed MoUs for cooperation with the Higher Education Commission to commercialise research for knowledge-based enterprise development. The MoU with Pakistan Agriculture Research Council is for cooperation in the area of agribusiness. The MopU with government of Sindh is on cluster development and with World Economic Forum. The CSF-HEC joint initiatives are to commercialise the applied research and link the private sector with university research, promote the knowledge-based enterprise sector by facilitating international patent registrations from Pakistanis and Pakistani institutions and to organise for the first time, trade fairs highlighting the science and technology-based projects developed at the universities to attract private-sector investors looking for innovative products and systems to commercialise.

http://www.dailytimes.com.pk/default.asp?page=2007\02\06\story_6-2-2007_pg5_12

 

[Janbaz]

LTU collects Rs50bn revenue

By Mushfiq Ahmad
KARACHI: The Large Taxpayers Unit (LTU) Karachi has almost reached the target of revenue collection set for the fiscal 2006-07 in the first six months, according to final statistics available here.

The LTU Karachi posted a phenomenal growth of 116 per cent in net collection of income tax in the first six months of current financial year compared to the corresponding period of previous year.

The net collection of LTU Karachi neared Rs50 billion in July-December period of 2006-07 against Rs23 billion collected in the same period of previous year. The whole fiscal year’s target is Rs51 billion.

The growth is much larger than the growth of revenue collection recorded at the national level during the period under review.

The collection of income tax on different heads registered growth. Refunds also remained on the higher side. Officials attributed the strong growth in the collection of income tax to booming economy as well as the culture of facilitation at LTU Karachi.

They said the taxpayers had become more inclined to pay taxes and the department did not have to run after taxpayers. They said that especially the major companies’ enhanced profitability contributed significantly to the growth in tax collection.

Besides tax reforms introduced by the government, the establishment of LTU was a landmark step to facilitate the taxpayers, they added. The high growth in income tax collection, they said, was evidence that the stakeholders were satisfied and accepting the policies of the government, particularly the tax reforms.

The figures indicate that collection of advance tax posted a phenomenal growth of 187 per cent in the first six months, rising to Rs32.046 billion from Rs11.147 billion collected in the same period of previous year.

The collection of tax with returns also registered an increase of 58 per cent in the period under review by shooting up to Rs17.551 billion from Rs11.120 billion collected the previous year.

The recovery of withholding tax was Rs5.722 billion, depicting a growth of 62 per cent over Rs3.538 billion collected in the corresponding period of previous year.

The number of refunds issued during the period under review showed growth of 28 per cent. The LTU Karachi issued Rs8.336 billion in refunds in the first six months compared to Rs6.503 billion issued last year.

The major heads of tax collection of LTU are salary, dividends, securities, non-resident services, supply/contract/services, rent, petrol pump operators, brokerage/commission, stock exchange commission, cash withdrawal from banks and transport.

The LTU Karachi has more than 500 major income taxpayers of the country. On the other hand, gross collection of sales tax registered an increase of 6.2 per cent, rising to Rs12.272 billion from Rs11.552 billion in the same period of previous year.

However, it fell short of the target of Rs13.317 billion for the first half of the current financial year.

The collection of federal excise duty (FED) was also up by 39.5 per cent from previous year, as it rose to Rs8.42 billion from Rs6.041 billion. The LTU failed to achieve the target under this head as well.

The News.
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