Pakistan Economy - News & Updates - Archive

[Contrarian]

Pakistan tops list of 'sex surfers'

IANS[ FRIDAY, JUNE 29, 2007 04:45:11 PM]

NEW DELHI: Surfers in Pakistan search more for 'sex' on Google than in any other country while those in the Indian capital top the list of those hunting for the three-letter word on the Internet.

Google search trends show Pakistan, Egypt and India as the top three countries in the world where surfers look out for 'sex' on the Internet, and those in New Delhi and Chennai hold the top two rankings among global cities.

Cairo in Egypt takes the third spot, according to its 'Hot Trends' report posted on the site. Google trends also show Turkey, Vietnam, Morocco, Iran, Saudi Arabia, Serbia and Montenegro and Indonesia featuring in the list of top 10 countries.

The city list also includes Istanbul and Ankara in Turkey, Rabat in Morocco, Mumbai and Warsaw.

"Hot Trends reflects what people are searching for on Google today, rather than showing the most popular searches overall, which would always be generic terms like weather," says Google.

"Google Trends uses IP (internet protocol) address information from our server logs to make a best guess about where queries originated."

The search engine, however, makes no claim that its trend may be accurate. "We hope you find this service interesting and entertaining, but you probably don't want to write your PhD dissertation based on this information."
http://infotech.indiatimes.com/Pakistan_tops_list_of_sex_surfers_/articleshow/2161237.cms
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LOL, nice going Pakistan

 

[Neo]

SBP says 11.3 percent food inflation 'very high' ​

KARACHI (June 30 2007): Food inflation has touched the highest peak of current year at 11.3 percent during May as against 5.6 percent during the same period of last year. This increase has been attributed to reversal of inflation from negative to positive in some key food items, which include vegetables, fruits, eggs, chicken and different varieties of rice.

State Bank of Pakistan (SBP) has issued inflation monitor for May, which shows that food inflation during the current month has increased by 5.7 percent (over 100 percent increase) as against May 2006.

After this upsurge, food inflation has reached the highest level of the current year during May. Earlier in March, it was 10.7 percent while it stood at 10 percent in February. Statistics show that during May, food inflation was also 1.9 percent higher than in April 2007, as it increased from 9.4 percent in April to 11.3 percent in May.

The SBP said that high food inflation was mainly due to reversal of inflation from negative to positive rates in some key food items, including vegetables, fruits, eggs, chicken, different varieties of rice.

On monthly basis, out of 124 items, 49 items showed decline or no change, 50 items showed increase of up to five percent, seven items showed five to 10 percent and four items showed above 10 percent increase, out of which one item, tomato, showed 120 percent increase.

Some 39 commodities, including eggs, fruits, cooking oil, different varieties of rice, chicken and some vegetables exhibited inflation in the range of 10 to 50 percent in May.

In fruits, prices of plum (Aloo Bukhara), kinnow and tomatoes were pushed by 120 percent, 132 percent and 222 percent respectively during May. On the other hand, inflation (YoY) of 16 commodities like potatoes, green chillies, sugar, ginger, onion, pulse moong and peas either declined or remained the same during the month, the SBP said, and added that rest of the items, having a weight of 39 percent in the food group, exhibited subdued or moderate inflation.

There was an increase in the average price of food items like wheat flour, fresh milk, vegetable ghee, beef and onion, whereas prices of sugar, pulse gram and chicken showed decline during May as compared to prices in April.

The SBP said that in food group, the most important raise was observed in the price of tomatoes that showed a steep YoY increase of more than 200 percent in May and among the selected food items, tomatoes were the most volatile item over the last two years.

On the other hand, during May, the CPI inflation was recorded at 7.4 percent, depicting a rise of 0.3 percent points as compared to 7.1 percent in the corresponding month last year.

The main contributing factor for the rise in overall CPI inflation is food inflation, which was 5.7 percent, more than that of the same month of last year. Non-food YoY inflation decelerated for the third consecutive month and recorded 4.7 percent inflation in May.

Monthly CPI inflation also witnessed increase of 0.9 percent, which was more than the five-year average of monthly increase in May. The SBP said that the extent of one-month increase in food inflation was very high at 1.8 percent as compared to zero inflation in May 2006 and the five-year average monthly food inflation, which was also zero.

Core inflation, based on NFNE (non-food non-energy), declined to 4.7 percent in May from 6.6 percent in May 2006 on YoY basis. Similarly, core inflation, based on 20 percent trimmed-mean, also showed a decline from 6.0 percent in May 2006 to 5.6 percent in May this year.

http://www.brecorder.com/index.php?id=584976&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

KSE-100 index grows by 38 percent in fiscal year 2007 ​

KARACHI (June 30 2007): The Karachi Stock Exchange (KSE), one of the most emerging share markets in the region, witnessed bullish trend during the sixth consecutive year, as the benchmark KSE-100 index grew by 38 percent during FY07, on the back of great foreign investor's interest, strong economic growth of the country and higher earnings expectations of corporate sector.

The KSE-100 index, after breaching through 13,800 points historic level to hit 13,806.38 points intra-day high level, finally closed at its highest ever level of 13,772.46 points during the last trading session of FY07, depicting a net gain of 3,783.05 points on year-on-year basis, as the index stood at 9989.41 points level on July 01, 2006.

The FY07 witnessed a major decline in the trading activity level in both ready and future markets due to doubling of CVT and other taxes on stock market transactions in the Budget FY06 and frequent changes in the future market regulation.

Trading volume at ready counter reduced to 211 million shares (Rs 22 billion or $366 million) during FY07 against average daily volume of 321 million shares (Rs 35 billion or $593 million) in FY06.

Similarly, volumes in futures market also declined to 59 million shares (Rs 9 billion or $261 million) in FY07 as against 103 million shares (Rs 16 billion or $261 million) average daily turnover FY06. Cost of carry (that is ready-future spreads) averaged at 6.4 percent during FY 07 versus 13.7 percent in FY06.

In addition, CFS rates also dropped with FY07 averaged at 13.8 percent as against 16.2 percent previously. Open interest in the futures market remained on the lower side at Rs 9.4 billion FY 07 versus Rs 13.2 billion during FY06 due to stick margin requirements and higher utilisation of traditional CFS/Badla. CFS cap raised to Rs 55 billion, leverage via CFS increased to Rs 38 billion ($624 million) on average in FY07 as compared to Rs 22 billion ($365 million) in FY06.

"The gain of 38 percent, (35 percent in US dollars terms), measured by benchmark KSE-100 index, in the outgoing fiscal year FY07 was lower than previous five-year (FY02-05) average of 50 percent but significantly above last 10-year (FY97-06) average gain of 25 percent," said Faraz Farooq, an analyst at First Capital Equities Limited.

Interestingly, market yielded better return in the second half of FY07 (January-June) versus that of the first half of FY07. Against the gain of only one percent in the first half of FY07, stocks provided 37 percent return in the second half of FY07, he added.

He said that the subdued performance in the first half of FY07 could linked to lower GDR pricing of heavyweight OGDC coupled with the introduction of new rules regarding brokers margins and adequacy.

The performance of Pakistan's equity market during FY07 was not at par with Asian Emerging Markets (as defined by MSCI). The returns posted by Pakistan's key bourse, KSE, in FY07 was below the major Asian Emerging Markets, he said and added in FY07, Pakistan market under-performed both MSCI EM (43 percent return) and MSCI EM Asia (41 percent).

As far as other emerging Asian markets are concerned, China's SHCOMP gained 134 percent in local (146 percent in US$) with MSCI (US$) 76 percent, Philippine (PSEI) 67 percent (92 percent in US$) MSCI returns in US $95 percent, Indonesia (JCI Equity) 61 percent (65 percent in US$) MSCI Return in US $76 percent, India (BSE-30) 37 percent (54 percent in US$) MSCI return in US $56 percent, Malaysia (KLCI) 48 percent (57 percent in US$) MSCI 59 percent, Korea (Kospl 200) 33 percent (38 percent in US$) MSCI 32 percent, Pakistan (KSE-100) 38 percent (35 percent in US$) 37 percent, Taiwan (TWII) 33 percent (31 percent in US$) MSCI 24 percent, Thailand (SETI) 15 percent (27 percent in US$) MSCI 27 percent and Sri Lanka (CSE All Shares) 21 percent (13 percent in US$) MSCI 19 percent in FY07.

The MCSI Return (US$) of EM Asia stood at 43 percent in the FY07 while the MSCI Return (US$) of EM (emerging markets) was 41 percent in this period. The highlight of the year was rising quantum of foreign investment inflows into the local, Pakistan equity market attracted $2.5 billion worth foreign buying during the FY07 against the net inflow of $356 million during FY06.

These inflows are inclusive of the three GDRs (OGDC, MCB and UBL) worth $1.5 billion that were floated into the international market. Resultantly, this has improved the float adjusted market cap of Pakistan market from 20 percent in FY06 to 26 percent by the end of FY07.

On the other hand, foreign ownership in the float adjusted market cap has also increased to 30 percent. In 2006, the delivery ration (settlement value divided by turnover) stood at 37 percent as compared to 25 percent during FY06. Besides rising foreign ownership (offshore funds usually take long positions), higher mutual fund and institutional buying and easy availability of funds were the other factors behind improved delivery base buying.

"KSE-100 index registered an amazing return of 38 percent in FY07, as against 34 percent gain in FY06. This took the average 5-year annual return of the index to 48 percent, an outstanding performance by any standard," said Atif Malik an analyst at JS Global Capital Limited.

In contrast to the past, banks single-handedly drove the market with 42 percent return in FY07. On the other hand, all other important sectors under performed the market, with cement showing 21 percent return, fertiliser 17 percent, telecom 6 percent and O&G distribution just 5 percent, he added.

He said that missing among them is E&P sector that disappointed investors with a negative return of 5 percent. Coupled with relatively unimpressive earnings growth in FY07, the tremendous increase in the free float, as a result of offloading 10 percent stake in OGDC by government through GDR, contributed to this bad show of the sector.

Banks have now taken over as the largest listed sector with 31 percent weight in the market total cap, as against 21 percent in June last year, he said and added on the other hand, weight of E&P sector came down to 19 percent from 29 percent in June last year.

Being the largest sector, banks are now even more capable to steer the index further up, going forward. We are 'Over-weight 'on banks as their earnings are expected to grow by 29 percent in 2007 on the back of stable interest spreads. They are trading at 2007E and 2008F PBV of 2.8x and 2.3x, respectively. Similarly, their 2007E and 2008F PE are 12.0x and 10.2x.

He said that both halves of FY07 presented a contrasting picture in terms of performance. 2HFY07 stood out as the whole of FY07 return is attributed to this part, with 1HFY07 contributed just 1 percent. Issues related to 2005 crash inquiry, reduced profitability of some important sectors and substantial reduction in OGDC share price in the run-up to its GDR issue mainly explained the market dullness in that part of the year.

"Then came foreign funds whose aggressive entry into local markets, especially in banking sector, led the market to record highs," he added. He said that foreign funds now hold 31.2 percent of free float with US markets touching new highs, abundant global liquidity are turning investors to Asia. Despite rise in policy interest rates, the monetary expansion in the US and Europe is continuing unabated.

This ample liquidity is creating a lot of demand for Asian emerging market equities. Since US stocks are doing well, investors are not so concerned about risk of sharp correction in the Asian emerging markets.

"We believe that foreign funds will continue to reallocate the portfolio in favour of Asia, as the better macroeconomic conditions in the region would lead to handsome growth of Asian corporate earnings," he said.

Like other regional markets, Pakistan equity market has attracted a portion of this increased liquidity flow to Asia. This is testified by the fact that foreign funds now hold 7.72 percent of the market cap, as against 3.28 percent in June FY06. This also includes the current foreign holding (adjusted for conversion) of MCB, OGDC, and UBL GDRs.

Atif Malik said that since the current market free float is 24.9 percent, these funds now effectively hold 31.2 percent of total free float in the market. The FY07 proved a better year in terms of new listing and the amount of capital raised by these new entrants. During the last fiscal year 12 new companies got listed on the stock exchange, as compared to nine companies in FY06, he concluded. In this process, Rs 6.258 billion was raised in FY07 vis-à-vis Rs 3.6 billion n in FY06.

http://www.brecorder.com/index.php?id=584960&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

HBL’s IPO to be largest in Pakistan​

KARACHI, June 29: The HBL’s IPO (Initial Public Offering), which is expected to raise Rs12.2bn, would be the largest offering in Pakistan and it will enhance market capitalisation by over $3 billion, says a brokerage house report.

“HBL’s IPO would be the largest offering in Pakistan in terms of value. Previously, OGDC’s IPO in November 2003, with an offer size of Rs6.9bn ($120.3m), was the largest local offering,” said a JS Research report.

The report said the HBL would enhance market capitalisation by over $3bn.

Since its privatisation in December 2003, HBL, which is Pakistan’s second largest bank in terms of its total assets (Rs565bn or $9.3bn, as on March 31, 2007), has been reaping benefits of country’s booming economy and developing financial sector, the report added.

Accordingly, in the last three years (2004-06), bank’s profitability has improved.

On the asset side, major growth was witnessed in the SME (Small and Medium Enterprise), consumer and agricultural sectors.

HBL, under the privatisation programme of Pakistan, was sold to Aga Khan Fund for Economic Development (AKFED) at a price of Rs22.41bn ($389.7m) for 51 per cent stake in December 2003. The Rs36.08 per share at that time after the reduction in the banks capital in 2004 translates into Rs63.68 per share.

After the takeover, the bank managed to triple its profitability on the back of new management’s aggressive lending policy, restructuring, and efficient deposit mobilisation strategy.

The government is offloading five per cent of its holding (34.5m shares) through local bourses, with a 2.5 per cent (17.3m shares) green shoe option exercisable in case of over-subscription.

The shares are being offered at Rs235 per share.

The bank had 32,770 employees 1991. However, thanks to a drastic reduction in the number of employees in 1997 and a gradual decline from then onwards, the bank touched a low of 14,572 employees in 2006. In 2006 alone, 2,367 employees were retrenched

Although no major change in HBL’s number of branches was witnessed (1,477 branches in 2006 versus 1,470 branches in 2003), administrative expenses of the bank grew by 18 per cent annually in the last three years (2004-06).

http://www.dawn.com/2007/06/30/ebr2.htm

 

[Neo]

FDI flow into Pakistan doubles​

By Farhan Bokhariin Islamabad

Published: June 30 2007

Foreign direct investment into Pakistan has doubled to more than $7bn in the financial year ending today, the privatisation and investment minister said yesterday.

Zahid Hamid said the growth in FDI, which in-cludes portfolio investment, showed that foreign investors were unperturbed by political agitation since March when opposition parties began protesting against the suspension of the country's top judge.

"Despite what people may have called the political noise, foreigners are continuing to come to Pakistan," said Mr Hamid. "These in-vestment numbers show the momentum is continuing."

Mr Hamid said enthusiasm among foreign investors had been raised by the privatisation programme, which had boosted confidence.

The ministry has received $2bn (€1.48bn) in the 2006-07 financial year, compared with a target of $1.25bn to $1.5bn. Most FDI has been in sectors such as banking, telecommunications, oil and gas. Economists said foreign investors appeared to be setting aside concerns that the political turmoil might slow the recovering economy - even though national elections, expected before the end of the year, are likely to be turbulent.

"Foreign investors so far appear to be comfortable with Pakistan risk," said Sakib Sherani, chief economist for Pakistan at ABN-Amro.

"As long as General Pervez Musharraf [Pakistan's president and military ruler] stays in power, foreign investors are likely to stay the course."

But Mr Sherani pointed out that while the scale of foreign investment had gone up, it was still concentrated largely in the service sector, which does not necessarily produce the same job opportunities as manufacturing.

"The types of investments coming in are largely those that will eventually repatriate capital from Pakistan. What you need are investments that create exports so that there aren't pressures from outflows and you need to create jobs," he said.

http://www.ft.com/cms/s/8eca149c-26a6-11dc-8e18-000b5df10621.html

 

[Neo]

Pakistan sees first floating LNG plant by end-2008​

By Reuters
Friday June 29, 2007
NEW DELHI (Reuters) - Pakistan plans to build its first floating liquefied natural gas terminal by end-2008, Energy Secretary Ahmad Waqar said on Friday while on a trip to India.

The 2.5 million-tonnes-a-year floating terminal would be built by local investors, Waqar said, adding they would be also be responsible for sourcing the LNG.

"We are getting an integrated project in which someone who sets up the terminal will also be managing supplies," Waqar, who is in New Delhi to discuss a gas pipeline from Iran to Pakistan and India, told reporters.

Pakistan's state-run Sui Southern Gas Co. Ltd. is seeking bids from companies to build a 3.5 million-tonnes-a-year LNG terminal, which it wants to completed by 2011/12, Waqar said. Pakistan's fiscal year runs from July to June.

"We are now at the bidding stage, and hopefully in next two to three months we should be in a position to finalise the transaction," he said.

http://in.news.yahoo.com/070629/137/6hj5c.html

 

[Neo]

Pakistan's Soft Drinks Industry Is Set to Experience Volume Sales Growth of 30.5% to 2010​

Friday June 29,2007

Research and Markets (http://www.researchandmarkets.com/reports/c61217) has announced the addition of "Pakistan Food & Drink Report Q4 2006" to their offering.

The Pakistan Food & Drink Report provides independent forecasts and competitive intelligence on Pakistan's food & drink industry.

Last quarter, we reported on the state of Pakistan's bottled water industry, which is suffering from high levels of contamination in spite of the disease and health and hygiene scares that already plague the country's domestic water supply. This newly-published Q406 Pakistan Food & Drink Report examines the bottled water market within the broader Asia Pacific region and Pakistan remains a focus, both due to the aforementioned safety issues and due to the general soft drink consumption trends that are currently influencing the market.

Bottled water consumption levels in Pakistan are actually among the lowest of all the regional markets analysed in our overview. The average person consumes just two litres of bottled water per annum, compared to four in India and 10 in China. This is a consequence of the low levels of per-capita income in the country, even in major urban centres, and the restrictions this imposes on the consumption of non-essential food and beverage items. However, in line with a gradually improving economy and the slow, but steady, spread of organised retail, we believe that per-capita consumption levels are set to climb. Pakistan's soft drinks industry is set to experience volume sales growth of 30.5% to 2010 according to our estimates and we believe that the bottled water sub-sector will be the main driver of this growth.

Issues of bottled water contamination are unlikely to negatively impact upon sales of the product in a country where a lack of information, or a lack of alternatives, sees the potentially highly dangerous local water supply often preferred to bottled water anyway. In addition, multinational soft drink manufacturers are pouring money into the industry. The likes of US-based Coca-Cola, its compatriot PepsiCo and Switzerland's Nestle have all taken a strong interest in Pakistan at a time when the country's food, drink and retail industries in general are all actually struggling to attract large-scale multinational investments of this nature. Although these companies all have more profitable product categories, which are their primary concerns in more developed markets, in Pakistan a key element of their business strategy at the present time is a strong presence in the increasingly competitive bottled water industry. Should economic growth continue, the introduction of their added-value, more premium products, will simply prove a bonus at a later date.

Such investment cannot help but drive bottled water sales in Pakistan, while inflows from multinationals also provide much needed jobs and contribute to essential infrastructural developments in the country. However, there is a huge flipside to these advantages - the creation of a population, which can barely afford to spend beyond necessity, reliant on a product that is still considered a luxury item in some of the world's most developed economies. Pakistan's response to this dilemma affects not just its population, but its likelihood of establishing itself as a destination for much sought after food, drink and retail industry investment in the future.

Areas covered:

- Business Environment

- Retail

- Food & Drink

- Tobacco

- Competitive Landscape

Companies mentioned:

- Tapal Tea

- Utility Stores Corporation

- Coca-Cola Beverages Pakistan Ltd

- Nestle Milkpak

- Unilever Pakistan

For more information visit http://www.researchandmarkets.com/reports/c61217.

http://au.biz.yahoo.com/070629/43/1amx7.html

 

[Owais]

Record $7 billion foreign investment this year


ISLAMABAD (updated on: June 30, 2007, 20:37 PST): Minister for Privatization and Investment, Zahid Hamid said on Saturday that the country has set a new record of the foreign investment as it achieved $7 billion of investment this year.

"The upward momentum of the foreign investment continued in the current fiscal year and it touched the $ 7 billion mark which is a record," he told audience at a ceremony to mark NIB Bank's acquisition of a majority shareholding in Pakistan Industrial Credit and Investment Corporation Ltd (PICIC) here.

He said that privatisation, de-regulation and liberalisation are the corner stones of highly successful economic reforms introduced by the government under the leadership of President Pervez Musharraf and Prime Minister Shaukat Aziz.

The Minister said due to the prudent reforms and consistency and continuity in the economic policies and good governance, the economy of Pakistan continues to register rapid growth, averaging more than 7 percent during the last four years.

Commenting on NIB Bank's acquisition of a majority shareholding in PICIC, he said it is the policy of the government for providing an enabling environment for private sector investment including physical and technological infrastructure and requisite social service.

Governor State Bank, Dr. Shamshad Akhtar said that Pakistan is leading in banking sector in the region, adding, "Now even some developed countries are viewing our banking sector as role model."

She said the NIB is 10th largest bank and its investment in PICIC will give it a broad-based exposure to our growing economy via financial sector.

The Governor opined that the increasing level of foreign investments is testimony to the growing international confidence in Pakistan.

Speaking on the occasion, Executive Director and CEO Temasek Holdings, Ms. Ho Ching emphasized that Temasek has a positive long term view of Asia.

Over the last 2 years the group has doubled their exposure to Asia from 19% to 39%.

Temasek believes in core principal investment themes, such as transforming economies and Pakistan is certainly one of the most promising countries in this respect.

The Government's courage, wisdom and commitment to free up the economy has given Pakistan a 6 to 8% economic growth over the last several years.

Temasek's earlier investment in NIB Bank and now in PICIC gives us a broad based exposure to this growing economy via the financial sector, she added.

The other theme reflective in Temasek's investment strategy relates to a thriving middle class which is clearly expanding in the economic growth pattern of Pakistan.

She said, through the combined platform of NIB and PICIC, we can benefit from and contribute towards a vibrant economy.

This will be done by providing credit to the families to buy homes, vehicles and household items and also through support to the wave of entrepreneurs, big and small to build their businesses.

Through such innovative services, the new combined bank can help create additional wealth for their clients and build a sustainable franchise.

Pakistan, she said is also blessed with high quality human capital both inside and outside Pakistan.

"We believe that this will be a key comparative advantage that Pakistan will deepen as she invests in education and opens up her market," she added.

With a wealth of talent there's an ample scope for younger generation of Pakistanis to start new businesses, grow new industries and revitalize Pakistan 's traditional industry base.

Madam. Ho Ching said "We see NIB together with PICIC as an emerging champion in the domestic banking space."

The merger of NIB and PICIC will provide a platform to develop many new products and service offerings.


brecorder.com

 

[Owais]

9,700 megawatts more through renewable energy by 2030: AEDB

KARACHI (July 01 2007): National grid would receive additional electricity of 9,700 megawatt (MW) through renewable energy by the year 2030, officials in Alternative Energy Development Board (AEDB) told Business Recorder on telephone from Islamabad.

It is expected that total electricity needs may touch 162,590 MW after 23 years, as its demand is growing between eight to 12 percent annually in the country.

Officials said the country had 19,522 MW total installed capacity contributed by 12,567 MW thermal (64 percent share), 6,493 MW hydel (33 percent share) and 462 MW nuclear (two percent share).

Currently, renewable energy has no share in the total installed capacity but AEDB has projected that national grid would be able to get 700 MW by 2010 and 9,700 MW sharing five percent of the total demand by 2030, they added. To keep the momentum of economic growth, the government has taken various measures to cater energy demands in the future.

They said that AEDB was established in May 2003 to implement government policies, programmes and projects through private sector in the field of renewable energy.

The AEDB was formed to assist and facilitate development and generation of renewable energy to achieve sustainable economic growth besides facilitating transfer of technology and develop indigenous manufacturing base for Renewable Energy Technology, they said.

The AEDB would facilitate installation of 700 MW of wind energy plant near Gharo, Sindh, by 2010 in addition to developing solar products like solar lights, fans, cooker, geyser etc through private sector. In this regard laws and taxes had been designed to encourage self-energy generation by domestic sector, they apprised.

The AEDB has prepared road map for completion of its projects in phases. The short-term or 'lenient phase' would be completed by June 30, 2008, medium-term or 'consolidation phase' by July 2008 to July 2012 and finally long-term or 'maturity phase' by July 2012 onwards, officials said.

They said that unique features of Renewable Energy Policy 2006, including wind risk/hydro risk, guaranteed electricity purchase, setting up of grid station provision is the responsibility of the purchaser, attractive tariff, no import duties on equipment, zero sales tax, net metering, electricity banking, wheeling provisions and grid spill over concept introduced.

The country has the potential of more than 50,000 MW wind energy. Pakistan has 1,045-kilometre long coastline in the south where average wind speed was recorded at 7 m/s only at Gharo Wind Corridor, officials said. They said the government had given incentives to wind farm investors, providing land at reduced rates for wind energy projects.

The federal government has approved the policy guidelines for tariff determination and National Electric Power Regulatory Authority (Nepra) has offered up front tariff of US cents 9.5/kWh to investors. About the present status of wind projects, the officials said the government had issued letters of intent (LoIs) to 84 investors so far for setting up wind farms of 50 MW each on Built, Operate, Own and Transfer basis.

About 23,645 acres of land has been allotted to 15 investors on sub-leased basis in the general wind corridor, officials said, adding that survey and demarcation of another 10,169 acres of land were under way. Power generation licenses have been issued to five companies, including Green Power, New Park, Milergo, Win Power, Tenaga Generasi.

About tariff negotiation with these companies' officials said that Nepra had offered the upfront tariff of 9.5 cents/KWh, 10.23 US cents/kWh to New Park and Green Power's, respectively. While, Win Power and BEL had filed for tariff petition and Tenaga Generasi was willing to accept 9.5 cents, they said.
http://brecorder.com/index.php?id=585396&currPageNo=2&query=&search=&term=&supDate=

 

[Owais]

NIT assets’ value mount to a record level

KARACHI: National Investment Trust (NIT) assets’ value mounted to a record level of Rs98.36 billion in aggregate at the end of June 27.

NIT press release issued here said that the value of the assets previous year in the same period aggregated to Rs64.30 billion, while the per unit price was at Rs43.07. Similarly, the value of the NIT assets during the current fiscal year recorded a surge by 53 percent, while the unit price by 45 percent.

NIT financial results for the current fiscal year were expected next week and it is hoped that the aggregate value of the Fund would continue surging extraordinarily.

http://geo.tv/geonews/details.asp?id=8275&param=3

 

[Neo]

High interest rates stunt LSM growth ​

KARACHI (July 02 2007): The country has missed its large-scale manufacturing (LSM) growth target of 12.5 percent by 4 percent in the wake of high interest rates and increased cost of doing business in the country, reliable sources said.

The LSM is the second largest sector of the economy accounting for over 20 percent of Growth Domestic Production (GDP) has shown poor performance during fiscal 2006-07.

Experts believe that despite government's best effort, its growth target could not be achieved and final growth figures will be around 9 percent.

Sources said that final figures of LSM growth will be around 8.5-9 percent in last fiscal 2006-07 against the target of 12.5 percent, depicting a decline of 3.5-4 percent during 2006-07.

Official statistics show that 8.5 percent growth was achieved during July-April of fiscal 2006-07, which is around 1.4 percent less than last fiscal year's achievement of 9.9 percent.

Although the government claimed in the Economic Survey that overall manufacturing continued to show a robust growth in 2006-07, it did not concede that the country was failing to achieve its annual growth target, sources said.

Satistics show that the LSM growth has been declining for the last three years due to high interest rates, besides increasing cost of production. Around 97 percent decline witnessed in the LSM growth during the fiscal 2005-06, as it stood at 9.9 percent in 2005-06 as compared to 18.7 percent in the fiscal 2004-05.

"Several factors have contributed to missed growth target of LSM, including difficulties in the textile sector, reduced production of cotton crop. Besides, lower than expected scale of operations of oil refineries are the main reasons behind the decline in the LSM growth," the analyst said

Textile and cooking oil sectors are the major parts of LSM and both have showed poor performance during the last fiscal year, the decline in raw cotton production and high cost of production has badly hit textile industry, he added.

Since high raise in the international palm oil prices put negative impact on the ghee sector, vegetable ghee and cooking oil also showed a lackluster performance.

In addition, high imports of used cars and increase in car-financing rates in the fiscal year also dampened the performance of the domestic auto sector, therefore, the auto sector performance has been far less impressive during 2006-07 as compared to previous five years due to the fall in domestic demand for cars, the statistics said.

The main contributors to the LSM over thr last year are in the textile group: cotton cloth by 7.0 percent, cotton yarn by 11.9 percent, in the food, beverages and tobacco groups cooking oil 6.8 percent, sugar 19.6 percent and cigarettes by 4.14 percent during July-April of last fiscal year. Similarly, the cement sector grew by 21.11 percent and in the automobile group jeeps & cars by 3.0 percent, LCVs 17.04 percent, motorcycles by 12.30 percent and tractors 11.40 percent during July-April 2006-07.

On the other hand, some sectors such as petroleum and fertiliser showed negative growth. In the case of fertilisers, nitrogenous and phosphatic fertilisers growth declined by 0.08 percent and 3.10 percent respectively. Petroleum products declined by 5.59 percent.

Traditionally, the large scale manufacturing (LSM) data of 100 items is compiled and made available for public by the Federal Bureau of Statistics on a monthly basis The SBP in its third quarterly report indicated that LSM target would not be achieved.

http://www.brecorder.com/index.php?id=585806&currPageNo=1&query=&search=&term=&supDate=

 

[Neo]

SBP targets 10 million microfinance borrowers by 2013 ​

KARACHI (July 01 2007): The State bank of Pakistan is targeting 10 million borrowers of micro finance by 2013. This was stated by SBP Director on Microfinance and SMEs Qasim Nawaz while talking to Aaj Markets. He said that by 2010, three million borrowers would be reached and the remaining seven million were targeted during following 2-3 years.

Qasim, while talking on MFB prudential regulations, elaborated that it had been suggested to eliminate MFB from tax regime for at least 5 years, as currently they are being taxed at the rate of commercial banks.

He said that with this incentive more internationally operating NGOs would come to Pakistan, as amendments had been suggested in prudential regulations to enhance the status of NGOs and to acquire licence from SBP to become banks. He added that only licensed banks could raise deposits and re-invest them.

Cash reserve Requirement of these banks, according to MFB regulations, would be decided by the State Bank of Pakistan. He said that by law MFBs would be able to access home remittances directly and could deliver at the doorstep of the customer. He added that the objective was to extend the outreach, and the beneficiaries could benefit at large and borrowers.

SBP is considering enhancing NRSP (National Rural Support Programme) status to National Microfinance Bank. It also plans to provide PPF with credit enhancement tools, where NGOs could borrow from PPF more than 2-3 times for one rupee of a loan. He stressed on improvising governance at Khushhali Bank to make it profitable to the extent where it should become operationally sustainable and its role could be maximised.

The objective is that the top three institutions should facilitate MFBs to raise more and more deposits. He said that with these three top Microfinance institutions and 5 MFBs in private sector, achieving the target of 10 million borrowers was not difficult.

He said that three private sector MFBs are working on national and two on district levels and it is needed to create an environment for MFBs where they can access resources from commercial banks.

Qasim said that at present a microfinance loan ranges between Rs 13-14000 and after three years it is likely to reach up to Rs 20,000. He said that in next few years banking system would need Rs 46 billion additional resources, which are likely to be raised through equity or through commercial bank support.

He said that for maximum outreach it has been proposed to access services of Pakistan Post, where microfinance banks and institutions are not required to open their branches but can access Pakistan Post services. This would help in cost cutting of newly established MFBs.

He said that it is planned to use mobile phone technology to access loan and to repay instalments. A proposed regulatory regime in consultation with Pakistan Microfinance Network (PMN) is placed on SBP website for recommendations.

He said that subsidies should be considered only in areas where acute poverty exists and financing is not possible through cost recovery concept. This is called difficult terrain. In non-difficult terrain financing will be provided on cost recovery concept only.

Talking of the credibility of the system, he said that no leakages had been reported so far. It is estimated that Pakistan is a market of 30 million microfinance borrowers. In 2006, only 0.75 million borrowers were reached, and up to March 2007 the number has crossed 1.13 million borrowers.

He added that the recovery rate of these 1.13 million borrowers was 98 percent. However, efforts were going on to eliminate 2 percent also. He said that misuse was not likely as the size of the loan is small, and added that NGOs were working on community basis and social pressure of the group would eliminate any such incidents.

http://www.brecorder.com/index.php?id=585363&currPageNo=2&query=&search=&term=&supDate=

 

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Pakistan’s Liquid Foreign Reserves: Forex reserves touch $15.5 billion​

* Higher inflows support local currency
* $650m of UBL GDR yet to be received

By Arshad Hussain

KARACHI: The country’s reserves have touched $15.5 billion during the outgoing fiscal year (2006-07), rising 23 percent or $3 billion, which is the highest level in the last seven years. Furthermore, the central bank has yet to receive $650 million for UBL’s GDR.

On June 30, 2006, total country’s reserves stood at $12.623 billion, central bank data said, but this year the higher inflows of the remittances and direct investment supported country’s reserves at a record level.

“Owing to the higher inflows in the inter-bank market, the local currency remained flourishing against the US currency and it stabled against the other currencies also,” said a banker of a privatised bank.

Bankers have been eyeing the level of Rs 60.50 since the last one year. In 2006-07, the rupee gained only 19 paisas or 0.31 percent to Rs 60.38 for buying and Rs 60.39 for selling. The dollar closed at Rs 60.19 in the interbank market on June 30, 2006.

In the mid of last year, bankers said, the greenback was appreciating only because of higher demand of fuel in the international markets. During July-May, the country had paid $6.63 billion as against the import of petroleum products.

Several times in the last fiscal, the local currency attempted to cross the mark of Rs 61 and it did, but with the help of the central bank, it (greenback) moved down again. The market experts said the local currency was stable against all the listed currencies for the last four months only because of the higher inflows of the greenback.

The State Bank’s data shows that the country’s reserves stood at $15.182 billion on June 23, 2007, but the bankers said the banks received a payment of around $250 million through the sale of PICIC and $100-$150 million of telecom sector in last few days, which were not included in the total reserves of the central bank.

“The total reserves had touched $15.5 billion in the outgoing fiscal,” a banker said. “The reserve would continue its upward trend during 2007-08 following the undergoing privatisation programme of the federal government.”

The central bank will have to receive $650 million against the Global Depository Receipt (GDR) of the United Bank Ltd (UBL).

With the successful completion of UBL’s GDR issue, the government should be able to issue GDRs of National Bank of Pakistan (NBP) and KAPCO. The government would issue these GDRs in the current fiscal year.

The country had received $5.627 million in the head of foreign investments including portfolio investment in the local bourses during July-May 2006-07, while it received $4.988 billion remittances from the overseas workers during the same period.

http://www.dailytimes.com.pk/default.asp?page=2007\07\01\story_1-7-2007_pg5_6

 

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IT services export increases 56%​

By Romail Kenneth

KARACHI: The IT and IT-related services export has registered significant increase of 56 percent so far during the financial year.

Export targets for the year 2006-07 was $108 million as compared to last year’s target of $72.21 million.

The country is on track for a year-on-year growth of 50 percent, said Ashraf Kapadia, President of the Pakistan Software Houses Association. He said that we are confident that we will achieve the target of $108 million set by the government for 2006-07.

With growth comes certain challenges and we need to proactively address these challenges otherwise we may not be able to sustain the explosive growth, he said.

He felt one of the biggest challenge that we face is the image of Pakistan. Unfortunately, the perception of Pakistan is far beyond from reality. The travel advisory issued by US and other governments is a major problem, which hinders clients to visit Pakistan. Although once the client visits Pakistan, their perception is entirely changed.

A large number of companies of all shapes and sizes make up the IT sector in Pakistan. IT is now mainstreamed into every aspect of industrial and economic activity in Pakistan. Apart from being used in large-scale organisations, IT is now deployed in many small and medium enterprises.

All this is making the IT Industry grow at a phenomenal rate of 50 percent year-on- year, making IT the most vibrant, dynamic and exciting sector in Pakistan. There are many major ongoing IT projects in the public as well as private sector.

http://www.dailytimes.com.pk/default.asp?page=2007\07\01\story_1-7-2007_pg5_7

 

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Over two million severely hit: •Balochistan death toll 100 •15 districts affected •Loss estimated at Rs10bn​

QUETTA, July 1: Balochistan has suffered a loss of around Rs10 billion because of cyclone and flood which severely affected over two million people in 15 districts and destroyed roads and communication network.

More deaths were reported from different areas of the province on Sunday. The provincial government confirmed over 100 deaths and said that the toll could increase as a large number of people were still missing.

Prime Minister Shaukat Aziz visited the flood-hit areas of Turbat and said the federal government would provide adequate help and cooperation to the Balochistan government for rehabilitating the affected people.

He said the government would also welcome cooperation and help from the international community and non-governmental organisations.

He said that the communication system would be restored immediately in the flood-hit areas to ensure supply of relief goods to the affected people.

Frontier Corps Inspector General Maj-Gen Saleem Nawaz briefed the prime minister on the extent of destruction. Balochistan Chief Minister Jam Yousuf, Chief Secretary, K.B. Rind, federal Minister Zubaida Jalal and provincial Minister Syed Eshan Shah were present.

Provincial Home Secretary Tariq Ayub and provincial Relief Commissioner Khuda Bakhsh Baloch told reporters that 15 out of 29 districts had been affected by the cyclone and flash floods and the situation was quite bad in eight districts where personnel of the army and Frontier Corps were engaged in rescue and relief operation.

Thousands of marooned people were rescued and taken to safe places.

The most affected districts are Turbat, Gwadar, Nasirabad, Jaffarabad, Jhal Magsi, Bolan, Kharan, Khuzdar, Washak and Nushki. More bodies were found in the Nal area of Khuzdar district where 10 villages have been washed away by flash floods caused by a breach in a dam on Friday night.

Officials confirmed that 42 bodies had been recovered. Tahir Bizenjo, a former senator of the National Party, claimed that 50 bodies had been found while hundreds of people were missing.

“Nothing is left in the villages. All mud-houses have been washed away,” Mohammad Aslam, a resident of Nal, told Dawn by telephone. The officials confirmed a large number of deaths in the area. They said casualties had also been reported in Jhal Magsi, Awaran, Kharan, Bolan, Kalat, Turbat, Sibi districts and other parts of Balochistan.

Heavy rains continued in Jhal Magsi, Nasirabad and Jaffarabad areas, causing flash flood and breaching Dori canal near the Magsi Kot area. Several dozen villages were submerged in water gushing out of the canal.

“Floodwater entered nine union councils following the breach in the canal,” Relief Commissioner Khuda Bakhsh said, adding that the situation in the Bagh Head area of Jaffarabad district had worsened.

The officials said that rains also lashed Bolan district and the Bolan river was in high flood. Gas supply to Quetta and four other districts have remained suspended for four days.

Many houses collapsed in the Mach area. Four members of a family died when roof of their house collapsed on Sunday morning.

Reports reaching here also said that thousands of mine workers were stranded in coal mines areas of Mach, Degari and Surrang as all roads had been washed away.The situation in Jhal Magsi was the same and several thousand people marooned after floodwater entered the township after washing away of a dyke around the Jhal Magsi town built for flood protection.Provincial Home Secretary Tariq Ayub told reporters that according to initial estimates, Balochistan suffered a loss of around Rs10 billion as all roads, communication system and other infrastructure had been completely destroyed. “Losses could be between Rs9 and Rs10 billion,” he said, adding that around two million people of 15 flood- and cyclone-affected districts severely affected and tens of thousands rendered homeless.

About the relief operation, he said the provincial government had decided to dispatch 10 medical teams to the affected districts. He said that the teams would be sent by helicopters.

He said that personnel of the armed forces engaged in relief and rescue work had evacuated 300 marooned people from Jhal Magsi and 250 from Jaffarabad. He said that on Sunday an aerial survey of Nal Tehsil, Kharan, Noshki and some other parts was conducted for a massive relief operation.

The home secretary said that a meeting with NGOs was scheduled for Monday to ask them to support the relief operation. He also said that the Dori Shakh river at Kot Magsi in Jaffarabad district had overflown it banks breached and it might affect nine union councils, adding that the authorities had warned more than 40,000 people to leave their homes.

He said the federal government had been asked to provide tents for shelter-less people and the prime minister had assured all possible cooperation in this regard.

Meanwhile, the railway authorities have restored train service between Quetta and the rest of the country on Saturday night after removing boulders that blocked the main track. The Quetta-Chaman railway track was also cleared for traffic.

Meanwhile, President Gen Pervez Musharraf on Sunday said that the federal government would provide help to the Balochistan government for rehabilitating the cyclone- and flood-affected people of the province.

Talking to Chief Minister Jam Mir Mohammad Yousuf, the president said that he would soon visit Balochistan to review the losses.

http://www.dawn.com/2007/07/02/top1.htm