8/9/2019 IBP Economic Letter

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economiclettera weekly publication oThe Institute of Bankers Pakistan

Volume 5, Issue No. 15 | April 10, 2010

Markets at a glance

Weekly KIBOR (6months) Foreign Exchange Rates KSE Gold Rate

Review Bid % Oer % GBP () Euro () USD ($) 100 Index (10gm)

Beginning 12.15 12.40 Rs 128.78 Rs 114.38 Rs 84.41 10416 Rs 30,514

Ending 12.11 12.36 Rs 129.01 Rs 112.50 Rs 84.03 10586 Rs 31,028

Change -0.04 -0.04 +0.23 -1.88 -0.38 +170 +514

>>

Pakistan

According to SBP, total deposits o all scheduled banks

stood at Rs.4.42 trillionat end-March 2010 against Rs.4.32 trillion

at end-December 2009, an increase o 2.3%. Gross advances stood lowerby 0.4% to Rs 3.25 trillion against Rs 3.27 trillion during the above periods.Total assets grew by 0.8% to Rs 6.02 trillion against Rs 5.97 trillion at end-March 2010 and end-December 2009 respectively.

The SBP has directed commercial banks anddevelopment nance institutions to provide timely andaccurate inormation to all law enorcement agencies relative to any shadytransaction, as sought by them, lest any money laundering takes place.

The SBP is to progressively raise the export renancerate rom the current 9% to 12.35% bringing it at par with six months

Treasury Bills rate.

The SBP has allowed import LCs or second-handmachinery opened upto June 30, 2010 as eligible or availingrenancing under the Long Term Financing Facility (LTFF).

Pakistans bilateral trade with Turkey is projected toreach a level o $2 bn by 2012 against $782 mn currently, given thegrowth potential between the two countries.

Foreign portolio investment in the bourses o thecountry between July 1, 2009 and April 2, 2010, stood at $443.17 mn

aided by an investment o $156.35 mn in the rst quarter o 2010.

China Mobile Communication Corporation (CMCC),the worlds largest telephony operator, is to invest $ 300 mn in its Zongnetwork in Pakistan during the current year in addition to its investment o$1.66 bn which generated 1,700 direct and 40,000 indirect jobs.

GDP growth is projected to rise next scal (July-June2010-11) against an anticipated 3.3 in the current scal and realized 2%in 2008-09.

Consumption o POL products (ex-non-energy) increasedby 11.2% in the rst nine months o the current scal to 14.82 milliontonnes against 13.33 million tonnes in the same month last scal.

Based on arrivals o phutti (seed cotton) at theginneries, cotton production in the current season is tentativelyestimated to be higher by 12% at 12.69 million bales against 11.33 millionbales last season.

Consumer nancing by commercial banks was lower

by Rs 46 bnoutstanding at Rs.331 bn in the rst eight months o the

current scal against Rs.419 bn in the same period last scal.

The NIB Bank has sold 27% o its shares (6.750 mnordinary shares) o its holding in Fullerton Asset ManagementCompany to NBP at a price o Rs.39.83 per share amounting to Rs.268.9mn.

SPI infation in the week ending April 1, 2010 washigher by 18.24% over the same week last year. The weekly SPImonitors changes in prices o 53 essential commodities, mostly kitchenitems, data or which is collected rom 17 urban centes.

Liquid oreign exchange reserves o the country as on April 3,2010 stood at $ 14.958 bn o which $ 11.062 bn was held by the SBP andthe rest with banks.

International

Moodys Investors Service, an international creditrating agency, has estimated that global Islamic Banking has apotential to reach a level o $5 trillion over the next ew years against itscurrent level o $950 bn.

Home remittances by expatriate Indians amounted to

$55.01 bn in 2009, a rise o 7% over 2008 o $ 51.6 bn. Comparatively,China was at second place with an infow o $48 bn and Mexico was atthird highest place with an infow o $ 26 bn in 2008.

Bangladesh has received its rst-ever credit ratingrom Standard and Poors which has placed it at BB- in view oa strong and stable economic growth outlook notwithstanding high levelso debt and poor revenue collection. It would help the country attract higherlevels o oreign direct investment (FDI). The rating brings Bangladeshrelative to FDI prospects at par with 11 other countries including Indonesia,Vietnam and Philippines and ahead o some other countries including SriLanka and Pakistan.

China and Costa Rica have signed a ree tradeagreement (FTA) under which the two countries would remove alltari barriers on Chinese exports o textiles, chemicals and machinery whileCosta Rica would be entitled to export coee, meat, juice and some otherproducts ree rom any import duty into China.

8/9/2019 IBP Economic Letter

2/2Volume 5, Issue No. 15 | April 10, 2010

a weekly publication oThe Institute of Bankers Pakistan

Editor: Syed Mahdi MustaaPublished by: The Institute o Bankers Pakistan, M.T. Khan Road, Karachi 74200, PakistanPhone: (021) 35689718, 35680783 | Fax: (021) 35683805 | Email: ibp@ibp.org.pk | Website: www.ibp.org.pk

General Disclaimer: IBP Weekly Economic Letter is based on inormation obtained rom local and international print and electronicmedia. IBP has not verifed this inormation and no warranty, expressed or implied, is made that such inormation is accurate, completeor should be relied upon as such. In no circumstance IBP and its team members would be liable or any incidental or consequentialdamage that may incur rom the use o inormation contained in IBP publication(s).

The central bank o Sri Lanka expects the economy to grow ata three-year high o 6.5% this year against the low o 3.5% in 2009. Ithas also orecast GDP growth to be 7.5% per annum during 2011-13. Thecountrys current account decit stood at 9.8% o GDP against the IMFagreed target o 7% to come down urther to 6.5% in 2010 and to 5% in2011. The countrys economy has a size o $ 42 bn.

Spain is to invest 17 bn euros ($ 23 bn) in a rail androad project in part-eort to dent recession and create new jobswhich currently is highest in the eurozone area at 18.8% o workorce.The countrys current account decit is also at a record level o 11.2%which it hopes to bring down progressively to 3% by 2013, the EU pre-scribed limit.

Italys scal decit rose to 5.2% o GDP in 2009 against2.7% in 2008, well above the benchmark level o 3.0% prescribed byEU. The countrys public debt, one o the highest in the world, rose to 115%o GDP as the economy shrank by 5.1% last year.

The EU is considering imposition o bank-tax leviablein its 27-nation bloc across the board as per practice in some othercountries. I imposed on all nancial transactions rate as in Sweden,it would yield about $17 billion and i imposed at the current rate levelo the U.S., it would yield $50 billion. The amount would come handy incase its nancial sector experiences a repeat o the current global nancialcrisis.

The Bank o England (BoE) and the European CentralBank (ECB) have let their key lending rates unchanged at 0.5% and1.0% respectively.

The Reserve Bank o Australia, the central bank o the country,

has raised its key lending rate by 0.25% to a 14-month high level o 4.25%,lest the ongoing recovery uels infation.

The U.S. Treasury has recouped $181 bn out o its bail-outpackage o $700 bn provided in the last quarter o 2008.

Three top auto-markers o the world namely Nissan oJapan, Renault o France and Daimler AG o Germany have signed anagreement under which the three would exchange technology and capitalto cushion themselves against any repeat o possible global recession. Acommon und o 2 bn euros ($ 2.67 bn would be setup over the next veyears or the purpose.

IBP Training Programs This Week

KarachiApril 12-13Eective Business Writing SkillsApril 14

Being an Eective Operations ManagerApril 15Customer Service Excellence or Managers

April 16Operational Risk Management in Banks

--------------------------------------------------------------RawalpindiApril 13-17Certifed Bank Tellers

--------------------------------------------------------------LahoreApril 13Eective Time Management or Improved Ofce ProductivityApril 14Cash Flow Based Lending

April 19-24Certifed Bank Tellers--------------------------------------------------------------PeshawarApril 13SBP Prudential Regulations or Corporate & CommercialBankingApril 15How to Retain Customers in a Current Competitive BankingEnvironment--------------------------------------------------------------IslamabadApril 14Bank Lending: Legal Implication o Securities & TheirDocumentations--------------------------------------------------------------

MultanApril 19Eective Customer Services : A Challenge--------------------------------------------------------------