Pakistan Economy - News & Updates - Archive

[Owais]

OGDCL H1 net seen rising over 20 percent


KARACHI (updated on: February 16, 2007, 14:35 PST): Higher oil prices and increased output are expected to boost half-year earnings for the country's top listed firm, Oil and Gas Development Co. Ltd. (OGDCL), by over 20 percent.

State-run OGDCL, which has a market value of $8.7 billion, produces 59 percent of the country's oil and 25 percent of its natural gas.

The firm is expected to post a net profit of between 24 billion and 26.2 billion rupees for the six months to December 31, according to five analysts surveyed by Reuters. It earned 20.3 billion rupees in the year-ago period.

Analysts also expect OGDCL, which is due to release results on February 21, to set an interim cash dividend of 1.75 rupees to 2 rupees.

The company's crude oil production surged 7 percent to 41,033 barrels per day (bpd) in the first half, while gas output rose 3 percent, said Qasim Shah, an analyst at Global Securities.

"In addition to higher production, the sale prices of oil and gas also jumped 17 percent and 12 percent, respectively," Shah said.

Under a government-regulated wellhead pricing formula, prices that distributors pay for gas from OGDCL's operated Qadirpur, Loti and Dhodak fields have risen over 12 percent in the first six months.

Gas prices paid by distributors are revised every January and July.

EXPLORATION PLAN

OGDCL plans to invest about $2 billion over the next three years on exploration and production activities, with a target to drill 41 new wells in 2006/07.

The company also hopes to enter its first overseas exploration venture in 2007.

"The company has a strong balance sheet with a 32 billion rupees in cash (as of June 2006), which provides enough room to increase its exploration activities," said Faraz Farooq, an analyst at brokerage JS Global Capital Ltd.

Analysts expect a strong set of figures for the full-year, given an aggressive exploration plan.

The firm became the largest company on the Karachi Stock Exchange after listing in January 2004, and has a 8.71 percent weighting in the main index.

The government sold a total of 10.5 percent of OGDCL in two domestic public offerings in November 2003 and January 2007.

The stock stood at 122.65 rupees at 0903 GMT, down 0.55 rupees from Thursday, but up 7 percent since the start of the year. OGDCL shares shed 2.8 percent in 2006, underperforming a 5 percent gain in the broader market.

The state-run firm has estimated proven plus probable reserves of 9.228 trillion cubic feet of natural gas and 164.25 million barrels of oil. It operates 37 wells and 17 exploration sites and has interests in 28 non-operated leases.

OGDCL's key competitors in the exploration business include BP Plc, Pakistan Petroleum Ltd., Pakistan Oilfields, and Italy's ENI.

brecorder.com

 

[Neo]

Worker remittances up 20.96 percent in July 06-January 07

KARACHI: February 16, 2007: Pakistan received an amount of $2,959.35 million as workers' remittances during the first seven months (July 2006-January 2007) of the current fiscal year as against $2,446.52 million in the corresponding period last year registering an increase of $512.83 million or 20.96 percent.

The amount of $2,959.35 million includes $1.40 million received through encashment and profit earned on Foreign Exchange Bearer Certificates (FEBCs) and Foreign Currency Bearer Certificates (FCBCs).

The inflow of remittances during the first seven months of the current fiscal year from USA, Saudi Arabia, UAE, GCC countries (including Bahrain, Kuwait, Qatar and Oman), UK and EU countries amounted to $768.01 million, $552.53 million, $443.87 million, $407.36 million, $247.86 million and $85.61 million respectively as compared to $695.43 million, $384.29 million, $359.85 million, $325.63 million, $236.45 million and $70.71 million during the same period last fiscal year.

Remittances received from Canada, Australia, Norway, Switzerland, Japan and other countries during the first seven months amounted to $452.71 million as compared to $363.72 million in the corresponding period of the last fiscal year.

The monthly average remittances for the period July 2006-January 2007 comes out to $422.76 million as compared to $349.50 million during the same period of the last fiscal year registering an increase of 20.96 per cent.

During last month (January 2007), Pakistani workers remitted $391.33 million as against $391.32 million in January 2006.

According to the break up, Pakistan received workers' remittances during January, 2007 from USA ($108.74 million), Saudi Arabia ($69.21 million), GCC countries - including Bahrain, Kuwait, Qatar and Oman ($48.78 million), UAE ($46.84 million), UK ($29.19 million) and EU countries ($10.72 million) as compared to the corresponding receipts from the respective countries during January, 2006 i.e. $109.39 million, $49.05 million, $48.84 million, $58.06 million, $34.77 million and $13.24 million.

Remittances received from Canada, Switzerland, Australia, Norway, Japan and other countries during January 2007 amounted to $77.79 million as compared to $77.52 million during January 2006.

brecorder.com

 

[Janbaz]

World Bank ready to finance all mega water projects

SHAHBAZ RANA
ISLAMABAD - The World Bank hinted at financing all mega water projects including Diamer Basha Dam and Kalabagh Dam to meet ever-increasing energy requirements of the country.
The outgoing Country Director of World Bank, John Wall hinted this while speaking to the journalists on the sideline of “Art for Education” exhibition held at the Country office of the World Bank here on Friday.
“World Bank always supported Pakistan in building major infrastructure including all dimensions of water and we would continue doing this in future and all adequate arrangements would be made in this regard”, replied John Wall on the question of financing the mega water projects in the country.
While commenting on World Bank appointed expert’s verdict about Baglihar Dam dispute, he said that the outcome of the verdict appeared to be useful whereas both the countries seem to be satisfied with the outcome, and they (Pakistan & India) should utilize this opportunity to resolve their differences.
John Wall showed his satisfaction on the pace of development in the country and said that Pakistan has learned how to make progress and World Bank would continue to assist the country in this regard.
Commenting on economic growth in Pakistan, he said domestic and foreign investment has increased many folds, the process of privatization is accelerating and reforms in major areas including telecom, information technology and education have been initiated.
Describing Pakistan’s future as “bright”, John Wall said that Pakistan has improved its image abroad and the confidence of investors has been restored.
“I have achieved all my targets that I set forth while coming to Pakistan and I am very delighted on my performance” answered the outgoing Country Director on asking about his experience while staying in Pakistan.
The new country head of World Bank, Yousufa Crooks- a Muslim and Zambian by origin, would formally take up his responsibilities on March 1st. He reiterated to continue programmes of the outgoing country head and promised to deliver for the betterment of the country.

The Nation.
http://www.nation.com.pk/daily/feb-2007/17/bnews3.php

 

[Janbaz]

Pak economy moving towards stability: ML

Erum Zaidi
Karachi - Merrill Lynch, renowned global rating agency, has observed that the ongoing economic reforms remain a core priority in Pakistan and this should sustain high economic growth and lead to further financial stability, despite market has under appreciated.
In its report issued on Friday titled the Gross Prophet and Regional Strategy, Merrill Lynch has said that best stocks in Pakistan are Adamjee Insurance, MCB, United Bank and Fauji Fertiliser bin Qasim.
Merrill Lynch hosted the annual New Frontiers Conference in Singapore, with over seven hundred one-on-one meetings between investors and companies from Pakistan, Sri Lanka, Vietnam and Mongolia.
Report said that all the four countries have privatization programs that are helping to boost growth, and stock coverage by brokers remains far behind the rest of the region.
Investors held meetings with the corporate and government officials from Pakistan, Vietnam, Sri Lanka and Mongolia.
The four countries shares in common GDP growth close to +8% this year, above the regional average of +6.7%, but below China, where we expect +9.6%, and India, where we expect +8.6%.
Report said that in Pakistan, one can own 100% of any company in any sector, and in the past 18 months, Standard Chartered has bought Union Bank, China Mobile bought Paktel, and Philip Morris bought Lakson Tobacco.
This year Pakistan State Oil is to be privatized. The banks have been pretty much taken over by foreign players, and all five cellular operators are foreign-owned. Amongst the frontier market Pakistan remains a key OW. In particular the sustained high level of economic growth (+7% plus) is preferred. Its strong demographic potential for consumption also helps while the combination of minimal foreign investment restrictions and an aggressive privatisation program has increased
Pakistan’s access to global capital and improved the country’s financial stability to boot.
Barring an unlikely change to key government and economic personnel in the run up to this year’s elections, Reports foresees no change in the pace of Pakistan’s economic reforms. Under this current assumption of ongoing improvements in Pakistan’s financial stability, it is believed that the market is mis-priced and under-valued. Ideas to fous on would be rural expansion focused companies; Adamjee Insurance, Fauji Fertiliser bin Qasim, MCB and United Bank.
The private sector has enjoyed greater involvement in the running of the economy, resulting in a stronger, more sustainable economic growth. Recognition of this can be witnessed by changes to the slowdown in fiscal expenditure has allowed Pakistan four credit rating upgrades.
Pakistan’s public debt to GDP ratio has now fallen to 54% (was 100% plus) and through continued support of the Fiscal Responsibility Act will fall further. Annual FDI has risen over ten-fold and now stands at USD3.5bn for the first six months of FY07.
After Standard CharteredÆs purchase of Union Bank, most of the banking system is in foreign hands. Unlike in India or Vietnam, there are no foreign ownership restrictions. Foreign companies continue to buy Pakistani companies with recent examples being China Mobile and Philip Morris.
The KSE100 Index has risen from 1,500 in 2001 to over 12,000 now.
There is greater transparency, low valuations while yields remain exceptionally high. Recent significant events include; MSCI recognition (June 2006), Moody’s rating upgrade to B1 and large over-subscribed GDR issues in MCB (December) and OGDC. The government will return to the global bond markets with an issue in February.
Privatisation of state assets is now one of the most advanced globally (2006 IPOs equaled USD1.5bn and in 2007 it will be higher still). Appetite for equities remains high. Pakistan State Oil is next to go while we learnt that the state-owned insurance companies will be available for sale as well.

The Nation.
http://www.nation.com.pk/daily/feb-2007/17/bnews5.php

 

[Janbaz]

PTCL inks accord with Siemens


RECORDER REPORT
KARACHI (February 16 2007): The Pakistan Telecommunication Company Limited (PTCL) has signed contract for a SAP based Enterprise Resource Planning (ERP) system with Siemens engineering company of Pakistan here on Thursday. SAP is the premier provider of ERP solutions world-wide. Under this contract Siemens will implement an SAP based ERP system in PTCL, Ufone and Paknet.

PTCL currently relies on legacy processes and disparate legacy systems most of which are not fully automated. PTCL management views the ERP implementation as an opportunity to revamp the business processes of the company to bring them in line with the requirements of modern telecommunications service provider.

The ERP implementation would touch financial management, supply chain management, human capital management, network lifecycle management, planning and business process optimisation, said a PTCL spokesman.

The entire project was expected to take 20 months. The implementation of ERP was a significant step towards making PTCL an agile enterprise, he added. Additionally, with the ERP system in place, PTCL will make significant gains in making the business of PTCL transparent and consistent, PTCL will have proper controls on budgets and expenditures, inventories and procurement.

Business Recorder.
http://www.brecorder.com/index.php?id=529166&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Industrialisation to check unemployment, poverty: Musharraf

LAHORE (February 17 2007): President General Pervez Musharraf on Friday said that the government was tackling the problems of unemployment and poverty by accelerating the process of industrialisation in the country. "Public sector should formulate the policies and facilitate the private sector in strengthening the industrial base," he said while inaugurating the 'Sundar Industrial Estate', some 25km from here.

Punjab Governor Khalid Maqbool, Chief Minister Pervaiz Elahi, Federal Minister for Industries Jahangir Khan Tareen and a large number of members of business community were present on the occasion.

Terming the 'Sundar Industrial Estate' (SIE) a public-private partnership model in Pakistan, the President said that while setting up industrial estates this model should be emulated in other provinces of the country. He said that Pakistan had become an attractive destination for foreign investment due to incentives offered by the government. He said that availability of cheap and skilled manpower in Pakistan was one of the key attractions for foreign investors.

Stressing the need for diversification of Pakistan's industrial base he said that focus on textiles, which forms only 6 percent of total world trade, would not help in boosting the country's exports. He emphasised the need to give importance to other sectors, like engineering, that accounts for 61 percent of world trade.

Musharraf said that Pakistan could benefit from the system of segmentation of supply chain by producing parts of automobiles and machinery being produced in other parts of the world, especially n the developed nations.

About the potential in dairy and livestock sectors, he said that agri-business sector needed to be developed through research and development and value-addition techniques.

He said that world-renowned dairy firm, Nestle, was setting up the world's biggest milk plant in Kabirwala, near Khanewal. He said that Pakistan is the largest milk producer in the world. He asked the dairy sector people to go for value-addition in its products so that it could earn quantum jump in foreign exchange through exports.

Referring to the establishment of Embryo Transfer at Technology Centre in Okara, he said that adoption of latest technology could help increase milk production in the country threefold. He said that promotion of livestock sector in Balochistan and Cholistan (Punjab) would not only enhance meat and milk production in the country but would also help improve the life of the common man in those areas.

Talking about the need to keep the current account of the country in the positive, the President said that remittances from abroad, which stood at a meagre level of $900 million in 1999-2000, were likely to touch $5 billion mark this year. He said that the country was all set to attract foreign direct investment worth $5 billion during the current fiscal year.

He said that exports of South East Asian countries were same as those of Pakistan in 1960s, but now the exports of these nations stood at $100 billion each, he added. He stressed that the country should not show complacency and should make efforts to enhance exports to the level of $100 billion, as it was quite possible.

About economic growth rate, Musharraf said Pakistan would maintain the economic growth rate of 7-8 percent. About the revenue collection target, he expressed optimism that revenue collection would reach the level of Rs 900 billion during the current fiscal year against the target of Rs 815 billion.

On next year revenue target, he hoped that the country would achieve the target of Rs one trillion next year. He said that there was need to broaden the tax base while bringing down the tax rates. Referring to total outlay of Public Sector Development Programme (PSDP), which hovered around Rs 70 billion during 1990s, he said it has shot up to the level of Rs 415 billion during the year 2006-07. Referring to the use of revenue generated in the country, he said that all revenue collected was being spent on the development in the country.

http://www.brecorder.com/index.php?id=529493&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

New petroleum policy to attract huge investment: minister

ISLAMABAD (February 17 2007): Federal Minister for Petroleum and Natural Resources Amanullah Khan Jadoon has said that the new petroleum policy would attract huge investment in onshore and offshore exploration sector as a result of providing more incentives and facilities to the investors.

Presiding over a high level meeting to give final touch to the drat Petroleum Policy - 2007 here on Friday, the minister expressed satisfaction over the ongoing oil and gas exploration and production activities in onshore and offshore areas of the country.

He said that opening of new seventeen blocks would further accelerate the development activities in the petroleum sector providing enormous opportunities of investment to the investors.

He said that all out efforts would be made to accomplish the target of drilling of 100 wells during the current year which would not only help to enhance the oil and gas productivity but also to cut down the oil import bill of the country to great extent.

Advisor to the Prime Minster on Energy Mukhtar Ahmed, Secretary Petroleum Ahmad Waqar, Director General (Oil) Sabir Hussain Director General (Gas) Saeedullah Shah, Chief Executive Officer, Government Holdings Khurshid Anwar and senior officials of the ministry also attended the meeting.

http://www.brecorder.com/index.php?id=529593&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

PPIB to produce 34,885 MW power by 2020

ISLAMABAD (February 17 2007): Planning has been finalised to generate 34,885 MW power through 59 projects of various nature by 2020, Private Power Infrastructure Board (PPIB) Chairman Khalid Rehman said on Friday.

Talking to CNBC Pakistan, he said an investment of around $34 billion is expected in the power sector during the next 13 years. 47 projects having ability to generate 11,000-mw power through hydro, thermal, gas, and coal would start production by 2016.

He said first project having capacity of 1500 mw would be operational in 2008. While another 500 mw power-producing plant would be ready by the first quarter of 2009. As many as 40 percent local and regional businessmen are among the investors. Currently feasibility study of five plants was continuing and that of seven more will be undertaken soon.

According to estimates the country has the potential to produce 40,000 MW power through hydel source. Currently only 5000 to 6000 mw power is being produced through this source.

http://www.brecorder.com/index.php?id=529604&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Poland keen to invest in coal mining

KARACHI (February 17 2007): Poland is keen on investing in several projects particularly coal mining in the country. Poland Consul General Ireneusz Maklas said this at a meeting with Irfanullah Khan Marwat, Sindh Minister for Mines and Minerals here on Friday.

Maklas said that his country was interested in investment and establishment of joint ventures with Pakistani companies as well as supply of mining machinery. Maklas said: "Poland wish to return in Pakistan to become active after 20 years in mining sites of Sindh and Balochistan."

Sindh Minister gave a detailed briefing to the diplomat on coal, granites and marble reserves in Sindh. He welcomed the Polish investment offer and assured of assistance in this regard. The foreign investment would generate employment opportunity and benefit the people of the province, he added. The minister said that Pakistan and Poland have 45 years of cordial relations and co-operation.

"Pakistan is very important partner for Poland in South Asia while Poland is interested in further development of relations with Pakistan in all fields," he said.

Marwat said that Polish company Kopex SA specialised in complex realisation of investment starting from projects management through building, modernisation, providing with machinery and equipment.

He said that a delegation of Polish businessmen interested in import of granite and marbles would visit Karachi in March or April. The delegation is also interested in establishing joint ventures and delivering special machinery to cut granite and marble, he said.

http://www.brecorder.com/index.php?id=529521&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

Musharraf opens Sundar Industrial Estate

LAHORE: President Pervez Musharraf has declared that the Sundar Industrial Estate is of highest global standard and an example of industrial vision of the government, which it aims to replicate in other provinces of the country.

He was speaking at the inauguration of the Sundar Industrial Estate. He said this estate has already attracted investment from many multinationals. He said the government has initiated such mega industrial estates on the strength of its economic policies that has put Pakistan on an accelerated growth path.

Musharraf said a dent has been made on poverty but more efforts are needed to eradicate it. He said industries in Sunder would provide employment to 700,000 people that would divert unemployed attention from extremism towards constructive activities.

The president praised Punjab Chief Minister on completion of industrial estate in record time. He said this is without doubt the best industrial estate of the country. He appreciated the installation of water treatment plant in Sunder that would keep the environment clean. He asked the industrialists to pay higher wages to the workers in the new industries being established besides ensuring better education and health facilities for them and their families.

He hoped that people would have access to better education after establishment of new universities in Punjab.

Earlier, Punjab Chief Minister Chaudhry Pervaiz Elahi said that the Sunder Industrial Estate was established in accordance with the industrial vision of the president. He said 55 industries in the just completed estate are operational including $30 million industry established by Pepsi International.

He said many pharmaceutical, chemical, pesticide, plastic and food beverage industries have also started production in this estate. He said many multinationals are establishing their plants here.

http://www.thenews.com.pk/daily_detail.asp?id=43155

 

[Neo]

Pak spinning mills efficient than India, China

Some deficiencies still remain

By Mansoor Ahmad

LAHORE: Werner International has termed the productivity, technology, testing equipment and wastage recovery the main strengths of the local spinning industry while labour productivity, quality control and raw material utilisation are its main weaknesses.

The US-based consultants were assigned the task by the federal government to assess the strengths and weaknesses of the spinning, weaving, processing and knitwear sectors of the textile industry in a bid to find out reasons for low exports of textiles.

Werner consultants, who visited a cross-section of spinning mills having modern and old machines and technology, found that 49 per cent of the spinning machines were less than five years’ old, 14 per cent had age of 5-10 years and only 20 per cent were more than 15 years’ old.

The efficiency and working hours of spinning machines were found to be above global benchmark and much above those attained by spinners in China, India and Turkey.

The consultants declared that globally mills were equipped with new technology with half the spinning industry had machines aged less than five years. They said that except for blending (polyester yarn), technology was perfectly suitable and efficient.

“It has good spinning geometry for medium to fine counts. Spinners have installed foreign material detection system and their combing production is excellent. Carding of yarn is good.” However, the consultants pointed out that the use of Chinese rings affected the quality.

The report appreciated the fact that all mills had well-equipped laboratories, but said there was excessive testing in some mills.

The process control standards were either absent or had wide standards and quality management ranged from reasonable to unimpressive. It stressed the need of training personnel in quality control aspects.

The report was critical of preventive maintenance, declaring that there was no long-term planning as everything was based on monthly overhauling. The consultants were convinced that the instructions of machine manufacturers were not being followed.

“There is no record of interventions and overhauling practices were obsolete for modern machines, though barring one mill the machines were in good order.” Overstaffing in maintenance was also pointed out.

The consultants were also highly critical of raw material management. They pointed out lack of care in managing expensive raw materials that frequently lay outside without protection.

“Only 3-4 per cent of the cotton bales are tested and the storage is by lots instead of quality. The control of characteristics is done only at the time of issuance of bales. With limited blend engineering, there is no blending method to ensure consistency.”

Energy consumption efficiency, according to the report, is below 60 per cent of international benchmark, while labour productivity is less than 30 per cent of best international standard.

Labour efficiency, according to industry experts, is low because automated operations were not adopted in Pakistan due to availability of cheap labuor. Complete automation reduces the labour force by 10 times from 500 to 50.

The News has learnt that the consultants made their assessment after a survey of eight units in each sector over three days. The consultants, according to sources, are to be paid $3,000 per unit. The total fee for 32 units would come to $96,000.

The fee for the spinning and weaving sectors would be shared evenly by the All Pakistan Textile Mills Association and Export Development Fund. The total consultancy fee for processing and knitwear sectors would be provided by the EDF.

It was further learnt that the assessment of spinning and weaving sectors had been completed and reports submitted to the government. The reports on processing and knitwear sectors were pending.

Two weeks ago, Federal Textile Minister Mushtaq Cheema told Lahore media that final decision on the proposed textile package would be taken after receiving the reports of foreign consultants.

http://www.thenews.com.pk/daily_detail.asp?id=43161

 

[Neo]

Saturday, February 17, 2007

Pakistan’s competitiveness: CSF report sets 60-65 rank target by 2010

By Sajid Chaudhry

ISLAMABAD: The Compe-titiveness Support Fund (CSF) has set a goal of moving Pakistan from its rank of 91 in the world to a rank ranging between 60 to 65 by the year 2010.

The State of Pakistan’s Competitiveness Report 2007 released by Competitiveness Support Fund (CSF) recently has suggested for improved competitiveness and a comprehensive approach in this regard.

The State of Pakistan’s Competitiveness 2007 report has stressed upon the need to keep inflation within the single digit figure, reduction in budget deficit and continued growth in foreign currency reserves to ensure financial security of the country.

Pakistan can position itself in the world economy as a country in full compliance with the international standards. This will also help improve Pakistan’s image and “brand name” abroad.

The report has presented a snapshot of Pakistan’s competitiveness in year 2007. It has indicated both country’s strength and weaknesses. It has suggested a comprehensive approach for improving the competitiveness of Pakistan. The report reveals that improvement in competitiveness, in turn, will enable the government to achieve its ambitious target of high economic growth, increased employment and continued rapid progress in poverty reduction. The report has suggested that a series of presentations should be made based on the results and findings of this study and feed back from these groups should be elicited.

This input should be incorporated into revised set of priorities and initiatives for a proposed “Competitiveness Agenda 2007-2008”.

The report says that it is important to reduce the obstacles to formation of new businesses and growth of small and medium enterprises. The time and cost of bringing things from port of Karachi to the factory floor must be reduced.

It further states that the government should focus on continued progress in judicial reforms and effective application of rule of law to commerce, including enforcement of contracts and the fair resolution of disputes. It says to begin with preparing a new generation of business managers and entrepreneurs who can lead Pakistan forward to new levels of competitiveness in coming years. Pakistan firms must lead the way as export champions and position themselves as compliant with global labor, consumer and environmental standards.

Failure to adopt world-class labour standard will risk erosion of confidence from international investors and buyers, who increasingly insist on rigorous adoption and enforcement of such standards.

The framework for competitiveness requires active efforts by both government and private sector. While the government implements its reforms in the macro-economic and microeconomic business environment, private sector leaders must also respond improving business strategies and operation including corporate governance, compliance with global standards and human resource management.

It will require that business leaders reposition their companies and their industries in the world markets. At the same time, it is necessary to begin preparing a new generation of business managers and entrepreneurs who can lead Pakistan forward to new levels of competitiveness in coming years.

The leaders in the banking industry must build on impressive recent gains in efficiency that has resulted in lower spreads between deposit rates and loan rates. They must develop new products that further improve access to credit that can expand home ownership, free up dead capital and allow families to improve their dwellings and standard of living.

The financial access should be expanded without risking the health of the financial sector, by improving credit risk reporting through means such as credit bureaus. This will require revisiting federal legislation and credit bureau regulation.

The industries and their education and training providers need to work together to define skills gap, skill standards, current deficiencies and new training programs. All universities and vocational training schools need to improve their placement programs and industry out reach. Support for patent registration will help Pakistan individuals and institutions to register international patents and to boost their investment in research and development. Policies also required to lead to rapid expansion in utilization digital technologies, in this regard Pakistan must join the international “one child one computer” programme.

http://www.dailytimes.com.pk/default.asp?page=2007\02\17\story_17-2-2007_pg5_1

 

[Owais]

$11.3 billion foreign exchange inflows seen in 2006-07

ISLAMABAD (February 18 2007): $11.3 billion foreign exchange inflows - about $6 billion in foreign private investment and $5.3 billion through workers remittances - are expected during FY 2006-7. This was stated by Economic Advisor and head of the Data Office of Ministry of Finance Dr Ashfaque Hasan Khan while giving an exclusive interview to the Business Recorder here on Saturday evening.

Because of strong foreign exchange inflows, the widening current account deficit is not a problem since the country's balance of payment has been surplus, he maintained "The government acknowledges that due to domestic demand supporting growth momentum in the neighbourhood of 7 to 7.5%, the current account deficit has widened," he added.

"But as long as this deficit can be financed preferably through non-debt creating inflows such as foreign direct investment (FDI) portfolio investment, GDRs, privatisation proceeds, and grants and assistance, there is nothing to worry about external side of the economy," the advisor emphasised.

He said that large current account deficit could be a problem if it could not be financed through inflows and foreign exchange reserves used to meet the external account gap, resultantly the foreign exchange reserves decline."

"In Pakistan, we are witnessing massive surge in foreign private investment of about $6 billion which is not only financing the deficit but also adding to foreign exchange reserves this year," Dr Ashfaque asserted.

He said that the inflows of the worker's remittances in the first seven months of the current year, amounting to $2.959 billion also remained extremely buoyant showing an increase of 21% comparing with the corresponding period of the last year.

He said that total foreign investment in Pakistan during July-December 2006 amounted to $2.496.7 billion, whereas excluding the privatisation proceeds, it amounted to $2. 363.5 billion. When viewed against last year's figures for the same period the current performance appeared to present a totally different picture as total investment with and without privatisation registered an impressive growth of 68.6% and 92.8% respectively, the advisor said.

He said that portfolio investment on the other hand stood at $627.1 million as against $359.3 million last year - an increase of 74.5%; US has been the largest investor in Pakistan, accounting for 31.9% of the total FDI in the first six months followed by UK (24.7%), UAE (10.8%), Switzerland (3.7%), Kuwait (2.2%), Netherlands (2.0%) and other states.

He said that financial businesses along with communication sector have been the major attractions of foreign investors in Pakistan, accounting for 27.6% and 26.5% respectively, followed by energy sector (oil & gas and power) 21.7% and trade 5%. Three-fourth of the FDI has therefore, come to these sectors.

http://brecorder.com/index.php?id=529814&currPageNo=1&query=&search=&term=&supDate=

 

[Owais]

Telecom sector attracts $9 billion investment: Prime Minister

ISLAMABAD (February 18 2007): Prime Minister Shaukat Aziz has said that as a result of government's policies of deregulation, privatisation and liberalisation the telecom sector has attracted an investment of 9 billion dollars, which includes the cost and up-gradation of equipment, equity and license fee.

The Prime Minister said this while reviewing the performance of the telecom sector in a high-level meeting which was attended by Minister for Information Technology Awais Ahmed Leghari, Minister of State for Information Technology Ishaq Khakwani, the Secretary Information Technology and other senior officials.

The Prime Minister said the telecom sector has become a major employer of skilled jobs as its exponential growth has resulted in creation of 80,000 jobs directly and 500,000 jobs indirectly.

He appreciated the efforts of the Ministry of IT and the regulatory authority for their systematic and sustained implementation and management efforts to totally transform and modernise the telecom sector.

The Prime Minister said people are the major beneficiaries of the telecom sector's success story as 70 percent of the country's population has access to improved telecom services at substantially reduced tariffs.

He said the apprehension that privatisation of the PTCL will turn a public monopoly into a private monopoly has also proved to be totally unfounded. The public now has the choice of multiple telephone service providers at competitive rates, he added.

The Prime Minister said it is not often realised that access to telecom services gives a sense of pride and confidence to the people as it provides instant connectivity across the country and the world.

During his presentation about the telecom sector, Secretary IT said the telecom sector constitutes 2 percent of the GDP which is expected to rise to 3 percent in the next three to four years. The country has 50 million phones including cellular and fixed lines, he added. He informed the meeting that the teledensity has increased from 4 percent in 2003 to 35 percent in 2007.

The Secretary IT informed the meeting that the current revenue of Rs 200 million from the telecom industry is expected to increase at a rate of 20 percent per annum. The government receipts from the telecom sector in the shape of taxes, dividends and indirect revenues amount to Rs 80 billion per year, he added.

http://brecorder.com/index.php?id=529866&currPageNo=2&query=&search=&term=&supDate=

 

[Owais]

Portfolio investment up $28.5 million in a single day

KARACHI (February 18 2007): Portfolio investment, as represented by Special Convertible Rupee Accounts (SCRAs), increased by about $28.5 million on February 15 and reached another record level of $535.3 million, according to SBP February 16 update on the subject.

Earlier, it had reached the year's highs of $519.3 million and $523 million on February 12 and on 13, respectively, before dipping to $506 million on February 14 due to continued profit taking at the stock market.

On February 15, over $18 million was invested by US investors, followed by $10 million by UK and $0.2 million by Hong Kong investors, besides a small amount from Qatar. However, Switzerland withdrew about $0.1 million on the same date. Total fresh investments during the first half of February are reported to be around $154 million, shared by USA ($117.3 million) and UK (over $57 million), besides a small contribution originating from Qatar.

The overall positive impact of these fresh investments was partly neutralised by disinvestment amounting to $20.5 million, including those by Swiss investors ($12.8 million), UAE ($3.5 million), Hong Kong ($1.8 million) and Australian and Singapore ($1.2 million each) besides a small amount by German investors.

On the stocks market front, the usually representative KSE-100 Index, which had stood at 11,105 points on January 1, reached a record high of 11,867 points on February 8 but continued slipping thereafter to reach 11,630 points on February 12 and further to 11,510 points on February 15 as selling pressure held its sway in the country's bourses during the intervening days. The foreigners preferred to buy shares at the ruling low prices expecting revival of the market in coming days.


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