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Friday, July 04, 2014

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NEWS OF THE DAY

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PLP NEWS ALERTS EMAIL No. 155-2014

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NEWS HEADLINES Top Stories ................................................................................................................................................... 5

Qadri seeks to incite civil disobedience ........................................................................................................ 5

Rs 259.35 billion approved for Sukkur-Multan section of KLM .................................................................... 5

14 percent hike in gas tariff approved .......................................................................................................... 7

NOCs for new CNG stations: ECC likely to take up case today ..................................................................... 8

New rules unveiled: retailers must issue invoices from e-cash registers: FBR ............................................. 9

Immovable properties: FBR for early issuance of taxpayer cards .............................................................. 10

Prime Minister takes stock as threats to system grow ............................................................................... 11

Surveillance by NSA: government lodges protest with US ......................................................................... 12

Afghan defence team visits GHQ ................................................................................................................ 14

Steps will push inflation up, but money-printing still possible: ECB ........................................................... 15

Benazir Bhutto International Airport: export of forex except dollar allowed ............................................ 16

Dow tops 17,000 for first time; S&P 500 near 2,000 .................................................................................. 17

Kurds seek independence vote amid Iraq 'chaos' ....................................................................................... 18

THE RUPEE: rising trend .............................................................................................................................. 19

Transmission system cannot endure load beyond 15,000 megawatts: National Assembly body told ...... 20

International air tickets: Airlines unable to deduct four percent advance tax ........................................... 22

Textile exports witness 5.96 percent rise in July-May ................................................................................ 23

MQM invites Musharraf to attend Solidarity Rally ..................................................................................... 24

Acting CEC: CJP administers oath to Justice Jamali .................................................................................... 24

Proclamation of Emergency: witness refuses to confirm authenticity of documents ............................... 25

Curfew imposed after two killed in Myanmar riots .................................................................................... 25

Taliban rocket destroys Karzai's helicopter ................................................................................................ 26

Airport security ramped up over US bomb fears ........................................................................................ 26

Index gains 21 points .................................................................................................................................. 27

LSE index loses 7.35 points ......................................................................................................................... 28

ISE index down by 10.16 points .................................................................................................................. 29

BRIndex30 sheds 13.22 points .................................................................................................................... 29

Business and Economy: Pakistan ............................................................................................................. 30

Debt servicing: foreign reserves decline by $273 million: SBP ................................................................... 30

TCP saves Rs 7.109 billion in fiscal year 2013-14: Dastgir .......................................................................... 30

'Satellite remote sensing can help improve various socioeconomic sectors' ............................................. 32

Sindh chief minister speaks to industrialists ............................................................................................... 33


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Input-output ratios: Manufacturers told to obtain IOCO nod .................................................................... 33

FCCI team's Turkey visit termed successful ................................................................................................ 35

Profiteers, hoarders: KCCI chief asks government to take stern action ..................................................... 36

KP to launch first mines and minerals policy on July 7 ............................................................................... 36

Activity at Karachi and Qasim ports ............................................................................................................ 37


Foreign airlines to resume Peshawar flights from today ............................................................................ 39

Security woes hit PIA .................................................................................................................................. 39

Absence of Railways officials irks visitors ................................................................................................... 40

Rs 259.35 billion approved for Sukkur-Multan section of KLM .................................................................. 41

Cotton and Textiles: Pakistan .................................................................................................................. 43

Prices move up slightly amid slow trade..................................................................................................... 43

Moderate interest in cotton buying witnessed .......................................................................................... 44

Textile exports witness 5.96 percent rise in July-May ................................................................................ 45

Power generation: PTEA demands additional supply of 200 MMCFD gas ................................................. 46

Agriculture and Allied: Pakistan ............................................................................................................. 48

Irsa releases 390,000 cusecs of water into canal network ......................................................................... 48

Daily trading report of PMEX ...................................................................................................................... 48

Gems export declines by 72 percent: PBS .................................................................................................. 49

Salaries & procurement of raw material: MoF likely to release Rs 2.87 billion to PSM ............................. 49

Taxation: Pakistan .................................................................................................................................... 51

Immovable properties: FBR for early issuance of taxpayer cards .............................................................. 51


New tax return form: experts say documentation measures ignored ....................................................... 53

Life and health insurance business: SRB removes sales tax exemption ..................................................... 55

SRB collects Rs 42.485 billion in fiscal year 2013-14 .................................................................................. 56

CBM collects 93 percent of tax target ........................................................................................................ 57

Fuel and Energy: Pakistan ....................................................................................................................... 58

Transmission system cannot endure load beyond 15,000 megawatts: National Assembly body told ...... 58

APCNGA rejects new schedule of 72-hour monthly gas supply ................................................................. 59

Meeting discusses amendments to Ogra ordinance .................................................................................. 60

Federal government asked to improve power distribution system: Khattak warns of long march against Wapda ......................................................................................................................................................... 60

Power shortfall may rise again next week .................................................................................................. 62

Banking & Finance ................................................................................................................................... 63


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Liquid forex stand at $13,990.1 million: SBP .............................................................................................. 63

BR Research: All ....................................................................................................................................... 64

Import patterns continue............................................................................................................................ 64

Jewellery exports: worsening woes ............................................................................................................ 65

The positive side of India-Pakistan pharma trade ...................................................................................... 66

Brief Recordings........................................................................................................................................ 68

'KP government is practising what PTI advocates at the federal level' ...................................................... 68

Miscellaneous News .................................................................................................................................. 71

2013-14: Foreign exchange reserves rise by 50%, data shows ................................................................... 71

ECNEC clears projects worth Rs428 billion ................................................................................................. 72

Ramazan relief: Despite promise, outages could not be controlled........................................................... 74

Automobile portal: Carmudi looking to penetrate online trading.............................................................. 75

Infrastructure: China extends helping hand for development ................................................................... 76

APCNGA warns: ‘Countrywide protest if demands not met’ ...................................................................... 77

Exporter dilemma: PTEA urges govt to supply additional gas .................................................................... 78

Promotion of trade: FCCI terms delegation’s visit to Turkey a success ...................................................... 79

Stringent action needed against hoarders .................................................................................................. 80

OPEN MARKET FOREX RATES ...................................................................................................................... 81

INTER BANK RATES ...................................................................................................................................... 82

Bullion Rates (Gold Prices) in Pakistan Rupee (PKR) ................................................................................... 83


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Top Stories

Qadri seeks to incite civil disobedience July 04, 2014

Pakistan Awami Tehreek (PAT) chief Dr Tahirul Qadri on Thursday announced the launch of a civil disobedience movement to accelerate the process towards ushering in a revolution in the country. Addressing a press conference at Minhajul Quran secretariat here on Thursday, he asked the police and the civil servants to stop following the orders of rulers whom he termed "unconstitutional". "Police and government officers should become protectors of country's interests instead of becoming hounds," Qadri said. According to him he will make an announcement in relation to a 'constitutional and democratic revolution' in the next few days. He said their revolution would not be through a 'tsunami' but on the basis of trust in Allah and with the backing of the people. Qadri also rejected the anti-terror law, saying the rulers wanted to use it against their political opponents. He said the government by making Arsalan Iftikhar as vice chairman of Balochistan Investment Board has turned a thief into a guardian. BR staff reporter adds: He said meetings were under way to finalise a timeframe for "waging a revolution" and a decision in this regard will be made within one week. He said that once corrupt and dishonest politicians were overthrown; there would be nobody to save the brutal police officers. He said that government officials take their salaries from the state and not from Raiwind; hence they should be loyal to the state instead of individuals. He said an 'Awami Revolutionary Council' would be established soon to ensure provision of speedy justice.

Copyright Independent News Pakistan, 2014

Rs 259.35 billion approved for Sukkur-Multan section of KLM July 04, 2014

ZAHEER ABBASI

Executive Committee of National Economic Council chaired by the Finance Minister Ishaq Dar has approved 12 projects worth Rs 440 billion, including Rs 259.353 billion for the construction of Sukkur-Multan section of Karachi-Lahore Motorway (KLM). An official said that some additional projects, which were not on the agenda, were also taken up by the meeting. The ECNEC approved Rs 6.499 billion for the acquisition of land for establishment of free trade zone at Gwadar. The meeting was told that 2281 acres of land would be acquired for the establishment of a free trade zone at the Gwadar port; out of which 1627 acres of land would be acquired from private land owners. The Finance Minister directed that Planning Development


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and Reform Division should monitor physical progress as well as the results that these projects envisaged to achieve. Dar said that submission of the PC-4 must be a regular exercise. The meeting was informed that 10 percent cost of Karachi-Lahore Motorway (KLM) Project's construction of Sukkur-Multan section (387 km) would be provided through Public Sector Development Programme (PSDP) and the rest of cost would come as credit financing through government of China. The project will be completed by October 2017; its executing agency is NHA. The project envisages construction of a 387 km-long, six-lanes Sukkur-Multan section of 1148 km Karachi-Lahore Motorway, including the construction of bridges, interchanges, nullahs etc. The ECNEC also approved the project for land acquisition, affected properties' compensation and relocation of utilities for construction of 959km Karachi-Lahore Motorway (KLM) with a rationalised cost of Rs 51 billion. The ECNEC approved the raising of Balochistan Constabulary project at a rationalized cost of Rs 5.146 billion with an FEC (Foreign Exchange Component) of Rs 200 million to assist police and district administration in maintenance of law and order in Balochistan by recruiting 6,000 additional personnel and merging 4,000 reserve police men to make 10,000-strong force of Balochistan constabulary. The ECNEC also approved flood emergency reconstruction project for bunds and canals (Revised-PC-I) at a cost of Rs 26.905 billion with the financial aid of Rs 19.279 billion by the ADB and the local component by the government of Sindh for strengthening of entire length of banks of river Indus in general and at Tori, SM Bund and FP Bund at Mancher Lake which was damaged by the unprecedented floods of 2010. The ECNEC also considered and approved the project for Evacuation of Power from Wind Power Plants at Jhimpir & Gharo Wind Clusters located in district Thatta and Jamshoro in Sindh with a modified cost of Rs 11.277 billion. The project will be completed in three years and it envisages evacuation of 1756MW of wind power from the two sites through construction of 220 KV and 132 KV double circuit transmission lines. The ECNEC approved the widening and improvement of 250 km of Kalat-Quetta-Chaman Road Section (KQC) of National Highway N-25 with a revised cost of Rs 19.140 billion and an FEC component of Rs 13.920 billion coming as a USAID grant. The ECNEC also approved Hasanabdal (Burhan)-Havelian Expressway (E-35, total length 59.1 km) with a rationalised cost of Rs 30.494 billion including an FEC of Rs 7.592 billion. The ECNEC approved establishment of Information Technology Management Sciences and Telecommunication Institutes at Islamabad at a revised cost of Rs 3.938 billion with an FEC of Rs 613 million. The sponsoring agency is HEC and the executing agency is National University of Science and Technology, Islamabad. The ECNEC, in principle, approved the Prime Minister's (National) Programme for Provision of laptops to talented students (HEC) with a rationalised cost of Rs 4.928 billion to distribute 100,000 laptops in the current fiscal year amongst students. The ECNEC further approved rehabilitation and up-gradation of Trimmu Barrage and Panjnad Headworks (ADB Assisted) with a rationalised cost of Rs 16.8 billion including an ADB loan of Rs 14.9 billion. The ECNEC considered and approved dualization and improvement of 64 km long Mandra-Chakwal Road project with a revised cost of Rs 4.671 billion. The project envisages the


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construction of dual way 2-lanes carriageway between Mandra and Chakwal to facilitate heavy traffic of the section. The meeting was attended by Pervaiz Rashid, Minister for Information, Broadcasting and National Heritage, Ahsan Iqbal, Minister for Planning and Development, Ghulam Murtaza Jatoi, Minister for Industries and Production, Sikandar Hyat Khan Bosan, Minister for National Food Security and Research, Zahid Hamid, Minister for Science and Technology, Mohammad Zubair, Chairman Privatisation Commission, Syed Murad Ali Shah, Advisor to CM Sindh on Finance, Abdul Rahim Ziaratwal, Provincial Minister Balochistan, Federal Secretaries and senior officials of the federal and provincial governments.

Copyright Business Recorder, 2014

14 percent hike in gas tariff approved July 04, 2014

ABDUL RASHEED AZAD

The Oil and Gas Regulatory Authority (Ogra) has approved 14 percent increase in gas tariff for all gas consumers. According to Ogra officials, the regulatory body on the request of Sui-Northern Gas Pipelines Limited (SNGPL) and Sui-Southern Gas Company Limited (SSGCL) approved gas tariff foor the current financial year The body has approved an increase of Rs 58.29 per MMBTU for the gas consumers of SNGPL, which is 14 percent higher than the current tariff. After the approval of new gas tariff for SNGPL consumers, gas price on the network of SNGPL has reached Rs 464.94 per MMBTU, which will increase revenues of SNGPL by Rs 29 billions per annum. The authority has also approved an increase of Rs 22.90 per MMBTU in gas tariff for the SSGCL to fix at Rs 469 per MMBTU. Sources said that the regulatory body had forwarded the decision to Ministry of Petroleum and Natural Resources for final approval, which is authorised not to change the gas tariff of domestic consumers and further enhance the gas tariff for other sectors. Sources said that if the Petroleum Ministry's high-ups decided against increasing the gas tariff, the government would have to subsidise the gas, as final notification will be issued on the advice of the Petroleum Ministry. The Ministry has already forwarded a summary to put the burden of Rs 49 billion on gas consumers on account of Unaccounted for Gas (UfG) and the Authority is likely to announce its decision on Friday (today).



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NOCs for new CNG stations: ECC likely to take up case today July 04, 2014

The Economic Co-ordination Committee (ECC) of the Cabinet to be chaired by Finance Minister Ishaq Dar today (Friday) is likely to take up the case of issuance of NOCs for new CNG stations by Oil and Gas Regulatory Authority (Ogra) despite a government ban. An official of Finance Ministry said the ECC meeting would be held today instead of Saturday (July 5) to deliberate on a six-point agenda with a possibility of distribution of some additional agenda items among the participants during the meeting. One of the agenda items is Cabinet Division's summary on the issuance of NOCs for new CNG stations by Ogra despite the ban imposed by the government. They added the matter was submitted to the ECC meeting in April 2014, which after a detailed discussion was referred to the Law Division for legal opinion as it was under National Accountability Bureau (NAB) investigation. The Cabinet Division had emphasised the need to conduct a thorough probe into 1481 cases where provisional licenses were converted into marketing licenses by Ogra. Ministry of Petroleum has also requested the ECC in a summary that ban on import of CNG cylinders and conversion of kits may be removed because it was encouraging installation of smuggled and unapproved kits in vehicles, which is hazardous for public safety. Kashmir Affairs and Gilgit-Baltistan have also requested that ECC may review its decision dated 15 August 2013 regarding a relaxation in the re-lending and repayment policy of government for foreign-funded projects of Gilgit-Baltistan. The Ministry of Industries and Production has also proposed to the ECC that the price of imported urea may be decreased for one time as special case. The ECC would also take up a Ministry of Commerce summary for removal of a ban on import of live animals from Bovine Spongiform Encephalopathy infected countries. An official said that six proposals have already been distributed to the concerned division by the Cabinet Division. The ECC would also take up a summary for lifting of ban on the import of live animals from countries infected by Bovine Spongiform Encephalopathy (BES). The US, Canada as well as some European countries are pressing Pakistan to review its import policy regarding live animals and animal products.



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New rules unveiled: retailers must issue invoices from e-cash registers: FBR July 04, 2014

SOHAIL SARFRAZ

The Federal Board of Revenue (FBR) has made it mandatory for retailers to install and operate Fiscal Electronic Cash Registers (FECRs) and issue invoices only from these machines to customers. In this connection, the FBR issued S.R.O. 608(I)/2014 here on Tuesday to amend the Sales Tax Special Procedure Rules, 2007. According to the new rules, retailers shall provide seamless and real-time access of their FECRs data to the Board and also allow on-site physical inspection as and when authorised by the Commissioner Inland Revenue having the jurisdiction. The retailers falling in any of the following categories shall be required to be registered as retailer under the Sales Tax Act: A retailer operating as a unit of a national or international chain of stores; a retailer operating in an air-conditioned shopping mall, plaza or centre, excluding kiosks; a retailer who has a credit or debit card machine; a retailer whose cumulative electricity bill during the immediately preceding twelve consecutive months exceeds rupees six hundred thousand and a wholesaler-cum-retailer, engaged in bulk import and supply of consumer goods on wholesale basis to the retailers as well as on retail basis to the general body of the consumers. Provided that the provisions of this Chapter shall remain applicable for retailers who do not obtain registration. The retailers operating as a unit or a franchise or any other arrangement of a national or multinational chain of stores, shall obtain a separate registration distinct from their principal. The provisions of new rules would apply to all persons who make supplies from retail outlets to end consumers, including wholesalers-cum-retailers, whether registered or not, who shall be deemed to be retailers in respect of such supplies and also to persons making supplies of electricity to retailers. The provisions of this Chapter shall not be applicable to the registered persons ie vehicle dealers paying sales tax in the manner prescribed in Chapter VIII and registered retailers exclusively making supplies of goods specified in Chapter XIII, on which extra tax has already been paid in the manner prescribed therein. As per rules, the retailers would be required to pay tax on standard rate. Retailers shall observe all the applicable provisions of the Act and rules made there under, including requirement to file monthly sales tax returns in the manner prescribed in Chapter II of the Sales Tax Rules, 2006. Provided that the retailers making supplies of finished goods to the five sectors specified in Notification No S.R.O. 1125(I)/2011, dated the 31st December, 2011 shall pay sales tax in respect of such supplies at the rates prescribed in the said Notification. The rules said that other retailers shall pay sales tax through electricity bills. Retailers not falling in the categories specified shall be charged sales tax through their electricity bills by the persons making supplies of electricity. Every person making supplies of electricity shall charge and collect sales tax at the rates specified from every retailer having a commercial electricity connection. Provided that sales tax shall not be charged in cases where the person making supplies of electricity receives a written order from the Commissioner of Inland Revenue to the


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effect that the consumer is not engaged in any retail business; or consumer is already registered and paying sales tax through monthly returns. The amount of sales tax charged from retailers shall be shown separately in the electricity bill or invoice issued by the supplier of electric power. The supplier of electric power shall collect and pay the amount of sales tax from retailers in the manner as prescribed in Chapter III. The amount of sales tax charged and collected through the electricity bill in terms of rule 6 shall not be adjustable by the supplier of electric power and shall be paid by him in full to the Treasury. The tax paid through electricity bill by a retailer as prescribed in rule 6, shall be construed as the discharge of final tax liability for the purpose of sales tax and he shall not be entitled for any input tax adjustment or refund therefrom. Every retailer operating under rule 5 shall issue serially numbered invoices or, as the case may be, cash memos in respect of each supply made by him, manually or through electronic cash register, and from such date as may be specified by the Board, the invoices shall be issued through Fiscal Electronic Cash Register. Every retailer operating under rule 5 shall deposit the sales tax due along with his return on monthly basis in the manner prescribed in Chapter II of the Sales Tax Rules, 2006. A retailer operating under rule 6 shall not be required to file monthly sales tax return. A retailer operating under rule 5 shall be subject to audit as per normal procedure. Retailers operating under rule 6 shall not be subject to audit provided they are properly paying the sales tax as specified in sub-section (9) of section 3 of the Act through their electricity bills, the rules added.


Immovable properties: FBR for early issuance of taxpayer cards July 04, 2014

Federal Board of Revenue (FBR) has approached National and Database Registration Authority (NADRA) for early issuance of Taxpayer Cards to compliant taxpayers for imposition of a 2 percent withholding tax on purchase of immovable properties by non-filers of income tax returns. Sources told Business Recorder here on Thursday that the persons not having cards to be issued by NADRA would be subject to a double rate of withholding tax on purchase of property. The cards would be exclusively issued with a view to distinguishing between filers and non-filers of tax returns. A preliminary meeting has been convened between the tax authorities and the NADRA officials at the FBR House. The FBR and NADRA have discussed the modalities for issuance of Taxpayer Cards to filers of income tax returns. If a final decision has been taken in this regard, it would take two months for the completion of the project for issuance of Taxpayer Cards to all the persons covered under the "Active Taxpayers List for Income Tax Deduction at Source". The cards would carry names, CNICs and addresses, etc, of those persons who are filers of income tax returns as per FBR list. The FBR has conveyed to the NADRA officials the authority has the necessary infrastructure


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and expertise for issuance of such cards for which designs have been discussed by both the sides. To impose higher rates of withholding tax on the purchase of property, the FBR will issue taxpayer cards to taxpayers for distinguishing between compliant and non-compliant persons. Till the issuance of Taxpayer Cards to compliant taxpayers, the government will charge a uniform rate of one percent withholding tax on the purchase of property by filers and non-filers of income tax returns. Experts said the advance tax on the sale or transfer of immovable property has been imposed under section 236K Division X and XVIII of Part IV of the 1st Schedule. Through Finance Act 2012, collection of adjustable advance tax at the time of registering or attesting the transfer of an immovable property was imposed on the seller or transferor of the immovable property. Now, a similar adjustable advance tax has also been imposed on the purchaser or transferee of immovable property. The obligation of collecting the adjustable advance tax has been placed on any person responsible for registering or attesting the transfer of any immovable property. Exemption has also been granted to expatriate Pakistanis purchasing immovable property in a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis. Separate rates of collection of advance tax (as percentage of sale consideration) at the time of registering or attesting transfer of any immovable property have been provided for 'filer' and 'non-filer' seller/transferor as well as for purchaser/transferee, they added.


Prime Minister takes stock as threats to system grow July 04, 2014

NAVEED BUTT

Prime Minister Muhammad Nawaz Sharif has decided to convene a meeting of top leadership of political parties next week to discuss the role of undemocratic forces in "these testing times" and from a 'democratic front' in defence of the existing system, it is learnt. According to sources, after this meeting, the Prime Minister will also hold a one-on-one meeting with former President and Pakistan People's Party (PPP) Co-Chairperson Asif Ali Zardari, to discuss the present political situation and the threat of a 'long march' on 14 August by Pakistan Tehreek-e-Insaf (PTI). Sources added that the Prime Minister wants to sit with Zardari and the leadership of other political parties to garner support for PML-N government and solicit an assurance that they will not join anti-government forces. The prime Minister also plans to discuss issues relating to Internally Displaced Persons (IDPs) with the country's political leadership. The sources said the leaderships of opposition parties including Pakistan People's Party (PPP), Muttahida Qaumi Movement (MQM), Jamaat-i-Islami (JI), and Awami National Party (ANP), are likely to participate in the meeting. They said the leadership of PTI is unlikely to participate


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in the meeting unless its demand for a vote recount in four constituencies is met. The leadership of Balochistan National Party (BNP) may also refuse to attend the meeting. Pakistan Muslim League-Nawaz (PML-N) sources revealed to this correspondent that Prime Minister Nawaz Sharif is likely to visit Sindh to extend a personal invitation to the PPP leadership. The sources added that the political instability in the country has compelled Pakistan Muslim League-Nawaz (PML-N) to seek support from Pakistan People's Party (PPP). When contacted Pakistan People's party (PPP) Spokesperson, Senator Farhatullah Babar told Business Recorder that the PPP would not become a part of any conspiracy to derail democracy. He said the PPP would accept the invitation for strengthening democracy in the country. Answering a question, he said that Imran Khan has not unveiled a clear and succinct agenda of his 'million march'. "We can not support the PTI's long march as long as it does not make the agenda of long march clear," Babar added. Answering another question, Babar said that the issue of elections can be resolved in Parliament and the National Assembly has already authorised the Speaker to constitute a Parliamentary Committed for electoral reforms.


Surveillance by NSA: government lodges protest with US July 04, 2014

ALI HUSSAIN

Pakistan on Thursday lodged a protest with United States on reported surveillance by National Security Agency (NSA) of its institutions, a political party and individuals, describing the move as contrary to the spirit of friendly relations between the two countries. Foreign Office spokesperson Tasnim Aslam stated in a statement that Pakistan has noted with concern recent media reports indicating that it is among the countries subject to surveillance by US government agencies. "The US Embassy in Islamabad was conveyed today (Thursday) that such an action against Pakistani government departments or other organisations, entities and individuals is not in accord with international law and recognised diplomatic conduct," she said. The US side was further conveyed that surveillance was contrary to the spirit of friendly relations between our two countries, she said, adding that the reference to a political party in Pakistan was surprising. "In the interest of friendly and co-operative ties, we have urged the US to stop such activities," the spokesperson added. US media reports citing a classified document revealed on Monday that NSA had been sanctioned to spy on 193 countries including Pakistan and some international bodies and political parties, which also include Pakistan People's Party (PPP). The spokesperson earlier told in her weekly press briefing that "it is, no doubt, a violation of International Law and we have raised it with the US in the past and we will continue to take up such issues in future". She, however,


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expressed ignorance over whether the US Embassy in Islamabad was also spying on some political parties during the last year general elections. "I don't have any confirmed report of this nature and we don't comment on speculations," she added. To a question, Tasnim Aslam said Jammu and Kashmir is a disputed territory and it is not an integral part of India as claimed by New Delhi. "Our position is that Jammu and Kashmir is a disputed territory. People of the State of Jammu and Kashmir have yet to exercise their right to self determination which has been assured to them by almost 20 resolutions of the UN Security Council. So, we don't accept the accession claimed by India and we don't accept Kashmir as an integral part of India," she added. Regarding the issue of Pakistani prisoners in India, she said, there has been a dispute over the number of these prisoners, adding that according to estimates there are 500 Pakistani prisoners in Indian jails. She said Pakistan handed over the list of prisoners to Indian authorities while Pakistan received list of its prisoners in Indian jails from Indian authorities under the bilateral agreement, binding both the countries to exchange a list of prisoners in each other's country on July 1 and January 1 every year. The spokesperson also regretted the violation of the Line of Control (LoC) by Indian troops, saying that in a recent incident of Indian shelling in Kotli sector a Pakistani soldier was injured. She said a meeting between the local commanders from both the sides was held to discuss the issue. To another query, she rejected Afghan allegations that Pakistani troops are involved in armed clashes in Helmand province, saying Afghan authorities have never presented any evidences in this regard. About the Afghan military delegation which arrived on Thursday, she said that the delegation will discuss the issue of border management with Pakistani officials. She said Pakistan had asked the Afghan government to take matching steps to ensure that terrorists should not escape the ongoing military operation in North Waziristan. "Afghan territory should not be used by terrorists to launch activities inside Pakistan and the Afghan government has been asked to take adequate steps in this regard," she added. To a recent move in which the US and the UK have supported the India's bid to become member of Nuclear Suppliers Group (NSG), she said any effort or step that creates exceptions or which is based on double standards undermines the credibility of international nuclear regime. "Pakistan itself is not a signatory to the Nuclear Non- Proliferation Treaty (NPT). Pakistan and India are nuclear weapon states and that's a reality whether NPT [members] accepts it or not...We have consistently called for non discriminatory access to nuclear technology to Pakistan as well," she added. Highlighting Pakistan's successful track record of adopting nuclear safety for its nuclear assets and civil nuclear energy production units, she said Pakistan also deserves membership of the NSG. Expressing concern on the recent situation in Iraq, the spokesperson said Pakistan wants a peaceful resolution of the issue. She said Pakistan's embassy in Iraq is functional and the ambassador is in touch with all the Pakistanis living in Iraq. She said Pakistani mission had informed the Pakistanis about the situation beforehand and the Pakistanis living in Iraq were shifted to safe places. Regarding the issue of asylum seekers in


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Australia, the spokesperson clarified that these asylum seekers, including those from Pakistan, who have been offered cash so that they could be repatriated to their home countries under a standard policy. About the situation of asylum seekers in Sri Lanka, she said Pakistan mission is in touch with these asylum seekers and with the Sri Lankan government. About Internally Displaced Persons (IDPs), the spokesperson said that Pakistan has not launched any call for international assistance saying the government would help the IDPs as they are our own people. She also rejected the reports of manhandling the women IDPs at checkposts, adding that these people have been displaced temporarily and they will be resettled as early as possible.


Afghan defence team visits GHQ July 04, 2014

An eight-member Afghan military delegation led by Major-General Afzal Aman, Director General Military Operation (DGMO) with representatives from the Afghan National Security Council (NSC), Afghan military intelligence and border police arrived at General Headquarters (GHQ) on Thursday to discuss the Pak-Afghan border co-ordination mechanism. Major-General Aamer Riaz, DGMO Pakistan Army, headed the Pakistani side in the discussion. The delegation was briefed about the border co-ordination mechanism. "Issue of terrorists' sanctuaries in Kunar and Nuristan provinces of Afghanistan and attack on Pakistani border village and posts from those sanctuaries came under discussion," says a statement issued by ISPR. Defence sources said that Pakistan has persistently demanded operation against Taliban operating from Afghan territory while Afghanistan has always denied the charges. Pakistan expressed dismay with the Afghan delegation about the repeated allegations being levelled by Afghanistan about Pakistan breaching its international border. On the other hand, Islamabad denied the allegations terming them completely baseless. During the meeting, cross-border shelling also came under discussion. The Pakistan claimed that Taliban had attacked Pakistani security checkposts on May 21 and 25, 2014; and provocation by them led to a response. "The Afghan delegation was told that Pakistan only fires back in self-defence when Pakistani border posts are physically attacked or fired upon by terrorists from Afghan territory and no indiscriminate firing is carried out," the statement added. The meeting was held in a cordial, congenial and professional atmosphere. Both sides agreed to build further trust, continue to talk under all circumstances and evolve a robust and effective bilateral border co-ordination mechanism. They also agreed to hold their next meeting for which schedule is being finalised. The Foreign Office on Wednesday stated that Pakistan will take up the matter of Taliban hideouts in Afghanistan with the Afghan delegation--a constant source of trouble for Pakistan's areas bordering Afghanistan. At the same time, the matter of Mullah Fazalullah's will also be brought forward. Defence sources said that improvement in Pak-Afghan border management was also on the agenda. Intelligence sharing is another key point that will be discussed between the two sides


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during the visit. Mobility of Taliban is a serious issue and can only be restricted through improved border management and timely intelligence sharing. Sources maintained that the two sides also discussed the issue of Internally Displaced Persons (IDPs) who left North Waziristan Agency (NWA) for Afghanistan, as since the launch of operation Zarb-e-Azb thousands of people migrated to Afghanistan. Sources further said that Pakistan demanded a proper check on these IDPs. With a stronger check on the Afghan side of the border, it would be easier for Pakistan to carry out the operation against the Taliban in the NWA effectively. The Foreign Office official ruled out any chance of hot pursuits on the Afghan territory, saying that Pakistan does not intend to violate the sovereignty and territorial integrity of any country.


Steps will push inflation up, but money-printing still possible: ECB July 04, 2014

A raft of policy measures introduced last month will help lift inflation and support bank lending but the European Central Bank stands ready to create money in future if required, President Mario Draghi said on Thursday. The ECB left interest rates steady a month after cutting them to record lows and pushing the deposit rate into negative territory for the first time - effectively charging banks for holding their money overnight to prompt them to lend to businesses. The measures unveiled in June also included extending the duration of unlimited cheap liquidity for banks until the end of 2016, and offering them a four-year loan plan. Detailing the loan plan, Draghi said banks must use the new funds to lend or else they will be made to pay back the money. He said last month's measures had further loosened the euro zone's monetary policy stance. "The monetary operations to take place over the coming months will add to this accommodation and will support bank lending," he told a news conference after the ECB left its key rate at just 0.15 percent. "As our measures work their way through to the economy, they will contribute to a return of inflation rates to levels closer to 2 percent." The euro zone inflation rate held at 0.5 percent last month, well below the ECB's target of close to but below two percent and in what Draghi has called the "danger zone". If people and firms began deferring spending plans on the basis that they expected prices to fall, an economic downward spiral of the sort suffered by Japan could take hold. The ECB says its sees no sign of that. Draghi said the ECB's Governing Council was united in its willingness to launch into quantitative easing - essentially creating money to buy government or private debt from banks to keep borrowing costs low and boost spending - if inflation headed lower still. Risks to the recovery remained primarily negative, he added. "The Governing Council is unanimous in its commitment to also using unconventional instruments within its mandate, should it become necessary to further address risks of too prolonged a period of low inflation," Draghi said. Few analysts expect that to be remotely possible until late this year. The central


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bank has said last month's moves could take up to a year to take full effect. "Draghi maintained a dovish tone, but the threshold for further near-term easing is high," said Jan von Gerich chief strategist for developed markets at Nordea. The ECB president did little to sharpen the bank's forward guidance on interest rates, saying there was no direct link between the guidance and comments he made last month on unlimited cheap liquidity for banks until the end of 2016. Draghi said the ECB was watching the euro's exchange rate with great attention. Ahead of Thursday's meeting, Prime Minister Manuel Valls had renewed French calls for the ECB to help bring down an "overvalued" euro. "The exchange rate is not a policy target, but it has become important," Draghi said. "It is definitely very important for our outlook on price stability." TLTROs Banks will be charged a 10 basis point premium over the ECB's main funding operations for the TLTROs, or targeted long-term refinancing operations. By offering banks the four-year loans at low rates, the ECB hopes to entice banks to lend more freely, particularly to small- and medium-sized companies in the euro zone periphery. Banks across the euro zone were still digesting the technical provisions of the ECB's announcement, and several said it was too early for them to be specific on whether they would use the scheme and if it would help them boost lending. A spokeswoman for Austria's Raiffeisen Bank International, emerging Europe's second-biggest lender, said the bank had calculated potential use of around 500 million euros. "This doesn't mean we will take 500 million," he added. "It is too early to say but at the moment it does not look unattractive." The head of the Italian Banking Association said on Wednesday the new ECB scheme would be particularly successful in Italy.

Copyright Reuters, 2014

Benazir Bhutto International Airport: export of forex except dollar allowed July 04, 2014

The State Bank of Pakistan (SBP) on Thursday allowed export of foreign currencies, expect dollar, from Benazir Bhutto International Airport, in order to facilitate exchange companies. Sources told Business Recorder that now all "A" category exchange companies can export all foreign currencies including pound, dirham, riyal and other currencies to Dubai via Islamabad Airport, however they will be required to import the dollar equal to the exported currency. In this regard a special counter has been set up at Islamabad Airport, where the SBP officials will monitor the export of currencies. Previously, export of currencies was allowed through Karachi and Lahore airport only. Meanwhile, Malik Bostan, Chairman and Zafar Paracha General Secretary, Exchange companies Association of Pakistan (ECAP), hailed the State Bank of Pakistan's decision saying that it will increase the inflows of dollar to cater for the domestic demand. They said previously it was difficult for exchange companies to bring their millions of


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rupees currency to Karachi or Lahore for the export purposes; therefore it will facilitate the exchange companies to bring more dollars in the country.


Dow tops 17,000 for first time; S&P 500 near 2,000 July 04, 2014

Wall Street's holiday-shortened session ended with multiple records on Thursday, with the Dow topping 17,000 for the first time after the June jobs report came in much stronger than expected. Both the Dow and S&P 500 ended at their third consecutive record highs. The Nasdaq ended at its highest since 2000 and rose for a third straight week. The three major indexes wrapped up a week of solid gains on the day before the Independence Day holiday, when the US stock market will be closed. The US economy added 288,000 jobs in June, racing past the 212,000 that economists had expected. The US unemployment rate fell to 6.1 percent, the lowest since September 2008, confirming expectations that the economy bounced back in the second quarter after a dismal start to the year. Thursday's gains were broad, with nine of the 10 primary S&P 500 sector indexes rising for the day. The only negative group was utilities, down 1.1 percent. The utilities sector struggled as the June jobs data suggested that the Federal Reserve may raise interest rates earlier than had previously been anticipated. Investors favour utilities in a low interest-rate environment because the sector is a dividend play. "The report was very good and a real sign the economy is starting to take off," said David Kelly, chief global strategist at J.P. Morgan Funds in New York, which has about $450 billion in assets under management. "That said, it isn't an unmixed positive for the market because it suggests the Fed will consider raising rates in the first quarter." The Dow Jones industrial average rose 92.02 points or 0.54 percent, to 17,068.26. The S&P 500 gained 10.82 points or 0.55 percent, to 1,985.44. The Nasdaq Composite added 28.19 points or 0.63 percent, to 4,485.93. For the week, the Dow rose 1.3 percent, the S&P 500 advanced 1.25 percent and the Nasdaq climbed 2 percent. With the week's gains, the Nasdaq has gained for seven of the past eight weeks, rising more than 10 percent over that period. The Dow is underperforming other major indexes so far this year, with bluechips up about 3 percent in 2014. Both the S&P 500 and Nasdaq have gained more than 7 percent. About 55 percent of stocks traded on the New York Stock Exchange ended higher, while 64 percent of Nasdaq-listed stocks closed in positive territory. Volume was extremely light in the shortened session, with only 3.49 billion shares traded on all US platforms, according to BATS exchange data. The five-day average is 6.29 billion. The Dow Jones Transportation Average closed at a record 8,294.74, after hitting an intraday all-time high at 8,298.17. PetSmart Inc was the S&P 500's biggest gainer, jumping 12.5 percent to


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$67.28 in its largest one-day advance since May 2012. The rally came after activist hedge fund Jana Partners LLC said it planned to ask PetSmart to explore a sale and reported a 9.9 percent stake in the retailer. Paccar Inc shares rose 5.4 percent to $67.25 after analysts published comments in a research note from a senior executive of Daimler, who said he heard Volkswagen was planning a bid for the truck maker, a claim that Volkswagen denied. Regado Biosciences plummeted 58.4 percent to $2.81 after the Data Safety Monitoring Board started an unplanned review of data from a trial and the company said patient enrolment has been put on hold until the DSMB returns with recommendations.

Copyright Reuters, 2014

Kurds seek independence vote amid Iraq 'chaos' July 04, 2014

Iraq's Kurds set the ball rolling Thursday for a referendum on their long-held dream of independence, ignoring calls for the nation to unite against rampant jihadists or face "Syria-like chaos". Prime Minister Nuri al-Maliki, meanwhile, broadened an amnesty offer aimed at undercutting support for militants who last month conquered Iraq's second city and large swathes of land which the US top general warned government forces would need help to wrest back. Iraqi Kurdish president Massud Barzani told the autonomous region's parliament that it should make "preparations to begin to organise a referendum on the right of self-determination". "It will strengthen our position and will be a powerful weapon in our hands," he said. The prospect of an independent state is made more attractive by what the Kurds say is Baghdad's unwillingness to resolve the issue of disputed territory and its late and insufficient budget payments to the region this year. Barzani said Kurdish forces will not pull out from northern territory they occupied after federal security forces withdrew at the beginning of the jihadist offensive, giving them control of areas they want to absorb over Baghdad's strong objections. Maliki rejected that assertion Wednesday, saying "no one has the right to exploit the events that took place to impose a fait accompli" and that the Kurds' steps towards self-determination had no constitutional grounding. MILITARY STALEMATE On the ground, Iraqi forces were struggling to break the stalemate with militants. After wilting in the initial onslaught, they have since performed better but with limited offensive success. Security forces entered Awja, executed dictator Saddam Hussein's place of birth, after fierce clashes but the government had yet to reclaim the nearby city of Tikrit despite an offensive that has lasted more than a week. The top provincial official has said soldiers were advancing slowly because homes and burnt vehicles on the way into town had been rigged with explosives and bombs were planted along roads. West of the northern city of Kirkuk, a roadside bomb killed one Kurdish peshmerga fighter Thursday and wounded four. The cost of the conflict has been high for Iraq's forces. Nearly 900


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security personnel were among 2,400 people killed in June, the highest figure in years, according to the United Nations. Meanwhile, Washington has contacted Iraqi players and widened efforts to convince key regional leaders to help resolve Iraq's political chaos. President Barack Obama called Saudi Arabia's King Abdullah and Vice President Joe Biden spoke to former Iraqi parliament speaker Osama al-Nujaifi, a prominent Sunni leader. US Secretary of State John Kerry phoned Barzani, stressing the important role the Kurds could play in a new unity government in Baghdad. That is seen as vital to meeting the challenge of Islamic State (IS) jihadists leading the militant offensive.

Copyright Agence France-Presse, 2014

THE RUPEE: rising trend July 04, 2014

The rupee appreciated against the dollar on the money market on Thursday following the decision by the State Bank of Pakistan, in which it had taken decision to permit export of all currencies, dealers said. The SBP has allowed export of dollars and other foreign currencies from Islamabad Airport from July 4 (today), which will definitely help in bringing the rate of dollar down versus the rupee soon. Exchange Companies Association of Pakistan (ECAP) Chairman Malik Bostan lauded the decision announced by the central bank and said it was very old demand which was met today, hoping the Bank would meet all other requests made by the exchange companies. That move would bring down the extra burden of exchange companies, he said, and hoped the rupee would trade in the band of Rs 98.00 and 98.10 versus the dollar in the coming days. INTER-BANK MARKET RATES: The rupee gained nine-paisa in terms of the dollar for buying at Rs 98.58 and it also picked up two-paisa for selling at Rs 98.68, they said. OPEN MARKET RATES: The rupee also gained five-paisa versus the dollar for buying and selling at Rs 99.20 and Rs 99.40. It rose by 20-paisa against the euro for buying and selling at Rs 135.00 and Rs 135.25, they said. In the fourth Asian trade, the dollar held firm above a recent eight-week low on Thursday, supported by hopes for a healthy rise in non-farm payrolls, while the Aussie fell after Australia's central bank chief warned that markets are underestimating the risk of a sharp fall in the currency. Figures from US payrolls processor ADP released on Wednesday added to a string of bullish US data ranging from manufacturing to auto sales, supporting the view that the US economy has bounced back smartly after a first-quarter slump. The dollar was trading against the Indian rupee at Rs 59.58, the greenback was at 3.2055 in terms of Malaysian ringgit and the US currency was available at 6.214 versus the Chinese yuan. Inter bank buy/sell rates for the taka against the dollar on Thursday: 77.63-77.64 (previous 77.63-77.64). Call Money Rates: 05.75-07.50 percent (previous 05.25-07.50 percent).


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======================== Open Bid Rs.99.20 Open Offer Rs.99.40 ======================== Interbank Closing Rates: Interbank Closing Rates For Dollar on Thursday. ======================== Bid Rate Rs.98.58 Offer Rate Rs.98.68 ======================== RUPEE IN LAHORE: The Pak rupee showed stability, as it stayed unchanged against the US dollar on the local currency market on Thursday. According to the currency dealers, the dollar resumed trading at its day earlier closing of Rs 99.25 and Rs 99.50 as its buying and selling rates, respectively. The dollar did not observe any change in its demand and supply situation throughout the day. As a result, its opening rates continued to prevail till close of trading, the dealers said. On the contrary, the rupee maintained downward slide for another day and remained under pressure against the British pound. The pound's buying and selling rates were improved from the overnight closing of Rs 169.25 and Rs 169.50 to Rs 169.50 and Rs 169.75, respectively, they added. RUPEE IN ISLAMABAD AND RAWALPINDI: The rupee remained firm against the dollar on the open currency markets of Islamabad and Rawalpindi here on Thursday. The dollar opened at Rs 98.50 (buying) and Rs 98.60 (selling) against same last rate. It did not observe further change in the second session and closed at Rs 98.50 (buying) and Rs 98.60 (selling). Pound Sterling opened at Rs 165 (buying) and Rs 165.50 (selling) against same last rate. It closed at the same rate without further change by the end of evening session.


Transmission system cannot endure load beyond 15,000 megawatts: National Assembly body told July 04, 2014

MUSHTAQ GHUMMAN

Ministry of Water and Power on Thursday made shocking revelations that Pakistan's obsolete transmission system will collapse if more than 15000 MW electricity is transmitted at one time, adding that successive governments did not invest in transmission and distribution system.


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In a briefing to the National Assembly's Standing Committee on Water and Power, Minister of State for Water and Power, Abid Sher Ali and Secretary Water and Power, Nargis Sethi acknowledged that corruption has penetrated the entire power system. Sethi who also disclosed that presently there is no mechanism to determine load. "National Transmission and Dispatch Company (NTDC) should determine actual load of each area as the installed transformers cannot bear the overloading and start tripping," she added. She maintained that over the years, successive governments paid attention to generation, demand and supply but not on distribution and transmission system. "Our dependable installed capacity is 19000 MW but our system cannot transmit more than 15000 MW. If current system is not improved it will collapse one day. We have to revamp the entire system including over billing mechanism. A committee alone cannot do this," she continued. Members of the committee gave a tough time to the Minister and Secretary with respect to loadshedding, over-billing, agriculture tariff and development work. She maintained that the staff (power sector manpower) is not so honest and complained that people also do not cooperate with them. "I have been appointed Secretary Water and Power last month. Please give me a few months I will do my best to resolve fundamental issues," said Sethi, who will retire in December this year. Minister for Water and Power, Abid Sher Ali, said that 25-30 per cent load shedding is being implemented at the time of Sehr and Iftar because of system constraints. He said efforts are afoot to streamline the system and send the corrupt elements behind the bars, adding that detection bills are being issued to consumers to hide theft. Last year, different Discos recovered billions of rupees through detection bills, he added. "We have taken action against Wapda employees who were found involved in wrongdoings. Recently, Mepco CEO has been replaced because of numerous complaints against him," he continued. He directed Managing Director National Transmission and Dispatch Company (NTDC) to expedite work on projects under implementation. Replying to a question raised by Rao Ajmal regarding agriculture tube-wells' tariff, Minister for Water and Power stated that the federal government cannot fix flat rate of Rs 10.30 per unit for agriculture tube wells and the rate has to increase by Re 1 to Rs 1.50 per unit if the provincial government does not provide a subsidy; he suggested to the members of the committee to hold a meeting with Chief Minister Punjab Shahbaz Sharif and request him to continue subsidising agriculture tariff. He said lakhs of meters are defective across the country, which are being replaced. He further stated that the Ministry of Water and Power is submitting progress reports to Prime Minister every week. Answering a question on quality and pricing of transformers, Minister of State for Water and Power informed the committee that the incumbent government has dismantle the cartel of transformers manufactures' who previously sold one transformer at Rs 550,000 and now sell it at Rs 35000 to Rs 400,000. He acknowledged that Discos are facing issues in supply of transformers because local transformer manufacturers have obtained a stay order from the court. In reply to a question regarding arrest of CEO, Lesco, Abid Sher Ali said that FIA is conducting an inquiry into billions of rupee scam and a few officials are already under arrest.



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International air tickets: Airlines unable to deduct four percent advance tax July 04, 2014

MUHAMMAD ALI

Airlines are reportedly unable to deduct four per cent advance tax on international air tickets as the Federal Board of Revenue (FBR) has not communicated a procedure to implement section 236L of the Income Tax Ordinance 2001 so far; it is learnt here on Thursday. Sources said the federal government through Finance Act 2014 inserted section 236L in the Ordinance and made it mandatory for every airline, issuing tickets for journey originating from Pakistan, responsible to collect adjustable advance tax at the rate of 4 per cent on the gross amount of international air tickets issued to passengers booking one way or return from Pakistan. Replying to a question, sources said that although Finance Act 2014 came into force from July 1, 2014, field formations could not communicate a procedure to the airlines on their own because the sub-section (1) of section 236L requires the board to prescribe a mode, manner and time of collection of this advance tax. Therefore, Large Taxpayers Unit (LTU), Karachi has now sent a letter to the board, requesting for the issuance of a procedure or a clarification regarding the Section 236L of the Ordinance, sources said. Sources further claimed that the board had not issued any procedure or clarification regarding the collection of this newly imposed advance tax on international air tickets after the lapse of three days from the date of effect of this section. Sources said that a delay in the issuance of a procedure from the FBR would not only create problems for field formations but it would also land airlines in trouble. According to the Section 236L of the Ordinance, "Every airline, operating in Pakistan, shall collect four per cent advance tax on the gross amount of international air tickets issued to passengers booking one-way or return, from Pakistan". "The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are collected or charged, either manually or electronically." "The mode, manner and time of collection under sub-section (1) and time of collection shall be prescribed by the board and the advance tax collected under sub-section (1) shall be adjustable."



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Textile exports witness 5.96 percent rise in July-May July 04, 2014

TAHIR AMIN

Textile exports witnessed an increase of 5.96 percent in July-May 2014 as compared to the same period of previous year; however representatives of the textile sector termed the increase a usual phenomenon. Textile Industry Ministry officials argued that the share of Punjab province in total textile exports stood at 55 percent, Sindh's 40 percent while the remaining five percent belonged to other provinces. However, due to capacity issues especially in Punjab, where 70 percent textile industry is based, the sector is faced with shortage of electricity and gas hence growth of textile and clothing remained stagnant at around 6-7 percent. The industry is facing 10-hour power and 16-hour gas loadshedding, which is badly hampering the production capacity. According to the Pakistan Bureau of Statistics (PBS), textile exports were $1.2 billion in May 2014 against $1.176 billion during May last year, thus registering an increase of only 1.99 percent. The overall textile exports in the first 11 months of fiscal year 2013-14 were of $12.626 billion as against $11.916 billion during the corresponding period of the year before. Talking to Business Recorder, representatives from textile sector said Pakistan's textile exports had not yet picked up momentum despite grant of Generalised System of Preferences (GSP) plus status by the European Union. Textile exports to the EU were expected to surge by one billion dollar a year after getting the GSP plus status. However, there are several challenges including fluctuations in the prices of raw materials, energy shortages and stiff competition can mar the benefits of the scheme, they added. The exports of several textile items including towel, synthetic textile and cotton yarn are still showing a negative growth as exports of synthetic and silk textile during the fiscal year 2013-14 were of 348.39 million dollars compared to 369.17 dollars in 2012-13, showing a decrease of 5.63 percent. The textile products that witnessed negative growth in trade included cotton yarn export, which decreased by 9.91 percent, from 2,061.091 million dollars last year to 1,856.824 million dollars in 2013-14. The exports of towels decreased from 713.756 million dollars to 699.882 million dollars, showing negative growth of 1.94 percent whereas the exports of tents, canvas and tarpaulin decreased by 26.41 percent by falling from 104.429 million dollars to 76.848 million dollars. According to officials, there was a significant increase in post-January 2014 orders from the EU after getting a preferential status, however these orders are yet to be met due to a short span of time. In addition shortage of utilities particularly power and gas remain the main impediments to increasing output. However, the industry is expecting a significant increase in exports in coming months.


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MQM invites Musharraf to attend Solidarity Rally July 04, 2014

A delegation of Muttahida Qaumi Movement (MQM) headed by Senator Babar Ghouri on Thursday called on former president General Pervez Musharraf and invited him to attend MQM's rally scheduled for July 6 to show solidarity with Pakistan Army, a private TV channel reported. Talking to newsmen after meeting Musharraf, Ghouri said that they were meeting leaders of different political parties on party chief Altaf Hussein's instruction to invite them to attend the rally. He said that hopefully General Musharraf or anyone from his party designated by him will attend the rally. He said that Pakistan Army was fighting a war, which is crucial for survival of the country hence everyone should demonstrate solidarity with the army and stand by it.


Acting CEC: CJP administers oath to Justice Jamali July 04, 2014

Justice Tassaduq Hussain Jillani, Chief Justice of Pakistan administered the oath of the office to Justice Anwar Zaheer Jamali, Judge, Supreme Court of Pakistan, as Acting Chief Election Commissioner of Pakistan at a simple but dignified ceremony. Judges of the Supreme Court of Pakistan, Attorney General for Pakistan, Officers of Election Commission of Pakistan, prominent lawyers and Law officers also attended the ceremony. Syed Tahir Shahbaz, Registrar Supreme Court of Pakistan conducted the proceedings of oath-taking ceremony. Officers and staff of the Supreme Court of Pakistan were also present on the occasion.-PR



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Proclamation of Emergency: witness refuses to confirm authenticity of documents July 04, 2014

KHUDAYAR MOHLA

The defence counsel on Thursday completed cross-examination of two witnesses. A three-member Special court of Justice Faisal Arab, Justice Tahira Safdar and Justice Yawar Ali was hearing a high treason case against former army chief and President Pervez Musharraf. During the course of proceedings, two witnesses from the Cabinet Division recorded their statements. They were Section Officer Kaleem Ahmed Shahzad and retired Deputy Secretary (Ministerial Wing, Cabinet Division) Siraj Ahmed. Kalim Ahmed Shahzad produced the original documents relating to purportedly proclamation of 3 November, 2007 emergency in the country that were purportedly signed by Pervez Musharraf but refused to confirm the authenticity of documents in response to a defence counsel's question. Recording his statement, Shahzad said that an officer of the Federal Investigation Agency (FIA) came to his office on December 4 last year and demanded relevant documents, including a verified copy of the proclamation of emergency and the letter sent by President's House Secretariat. "I was working in the Cabinet Division as Deputy Secretary and on December 4, 9 and 19, 2013. I was asked by the Additional Director FIA Khalid Rasool for certain documents," Siraj Ahmed told the court. The documents, he continued, contained a certified copy of Proclamation of Emergency rule by the then Chief of the Army Staff (CoAS) on November 3, 2007 which was delivered to FIA; and the Provisional Constitutional Order (PCO) No 1 Amended was signed by Musharraf on November 14, 2007. The third document was endorsed by the Cabinet secretary while the fourth Oath of Judges' Offices was signed by Musharraf himself, he said. Responding to a prosecution's question, Siraj stated that the four documents were delivered to Director FIA with the approval of Cabinet Secretary.


Curfew imposed after two killed in Myanmar riots July 04, 2014

Myanmar's second-largest city was put under curfew on Thursday after two people were killed in the latest outbreak of Buddhist-Muslim violence to convulse the former junta-ruled nation. Dozens of armed police were seen patrolling the tense streets of Mandalay where shops were shuttered after angry mobs rampaged through the normally bustling central metropolis for two consecutive nights. Two men, one Buddhist and one Muslim, were killed in violence that continued into Thursday


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morning, police said. It is the latest of several waves of sectarian unrest that have exposed deep religious tensions in the Buddhist-majority nation as it emerges from decades of military rule. "We do not want the situation getting worse," senior Mandalay police officer Zaw Min Oo told AFP, explaining that the 9:00 pm to 5:00 am restrictions were for "security reasons". Inter-communal violence has overshadowed widely praised political reforms since erupting in 2012. The unrest has largely targeted Muslims, leaving at least 250 people dead and tens of thousands homeless. Buddhist rioters, some armed with sticks and knives, attacked a Muslim teashop on Tuesday and surrounding property in downtown Mandalay after an accusation of rape, according to local police. Security forces fired rubber bullets in the early hours of Wednesday to try and disperse the crowds in violence that left at least five hurt.


Taliban rocket destroys Karzai's helicopter July 04, 2014

Taliban insurgents fired rockets into Kabul airport on Thursday, destroying the Afghan president's parked helicopter and damaging three other choppers, officials said, in an attack that underlined security fears in the capital. The two rockets caused no casualties at the airport, which includes a large Nato base as well as a terminal for civilian flights to cities such as Dubai, New Delhi and Istanbul. "Three helicopters were damaged and can be repaired, while President Hamid Karzai's helicopter was destroyed," Major General Afzal Aman, director general of military operations, told AFP.


Airport security ramped up over US bomb fears July 04, 2014

US-bound travellers from Europe and the Middle East faced tighter airport security Thursday due to fears that Muslim extremists are developing new explosives that could be slipped onto planes undetected. The stepped-up security checks were ordered as the US embassy in Uganda warned of a "specific threat" to attack Kampala's Entebbe international airport on Thursday between 1800 and 2000 GMT. Although the embassy did not name any group, al Qaeda linked Shebab insurgents have claimed recent attacks in neighbouring Kenya and Djibouti, and at home in Somalia. US Homeland Security Secretary Jeh Johnson announced the extra security on direct flights to the United States from some overseas airports on Wednesday, without citing evidence of any specific plot. The


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move comes amid broader Western intelligence concerns that hundreds of Islamist radicals travelling from Europe to fight in the Middle East could pose a security risk on their return.


Index gains 21 points July 04, 2014

Stocks closed higher on the back of strong earnings outlook Thursday. The benchmark KSE-100 index gained 21 points or 0.07 percent to close at 29,698 points. Samar Iqbal, AVP at Topline Securities, said that a rangebound session was witnessed with activity remaining dull. Investors stayed on the sidelines in the absence of any triggers. The benchmark-100 index moved up by 0.07 percent, however the volume fell to a 9-month low to 73 million shares. The value declined by 37 percent to Rs 4 billion - 14-month low, she added. HUBC kept on rising after the Supreme Court decided the tax case in favour of the company Wednesday. SSGC and SNGP remained in limelight ahead of ECC meeting to approve Rs 49 billion to be charged from gas consumers to cover gas losses. LPCL also witnessed some activity amid market gossips that the acquisition deal is likely to settle between Rs 19-23, Samar maintained. During the intra-day trading, the index reached 29,754 points highest and 29,612.15 points lowest level. Despite a positive trend, volume at the ready counter decreased to 73.045 million shares compared to 132.539 million shares in previous session. The market capitalisation also fell by Rs 18 billion to Rs 6.999 trillion against Rs 7.017 trillion Wednesday. Fahad M Ali, an analyst at JS Global, said that the bourse witnessed another rangebound and lacklustre day where volumes remained low. LPCL remained the volume leader, whereas HUBCO remained the top pick as it gained 1.6 percent due to PPIB's approval of processing 4,250 MW coal-fired projects which include HUBCO (660MW), he added. Banking sector is expected to be in the limelight in next few sessions as the government has set a borrowing target of Rs 1 trillion (Rs 300 billion PIBs, Rs 700bn T-bills) for 1QFY15, he said. "We expect the market to pick momentum in coming few days where E&P and banking sectors are our top picks," Ali added. Trading took place in 311 companies, of which 132 posted growth, 153 closed with negative signs and that of 26 remained unchanged. Among top 10 volume leader, 6 companies posted positive trend. Lafarge Pak emerged volume leader with 6.13 million shares, up Re 0.19 to close at Rs 16.31. Sui North Gas stood second, up Re 0.77 to close at Rs 23.13 on 4.06 million shares. Sui South Gas closed at Rs 36.63, down Re 0.62 on 3.91 million shares. Byco Petroleum moved up by Re 0.09 to close at Rs 11.12 on 3.9 million shares. P.T.C.L with 3.24 million shares, closed at Rs 25.97, down Re 0.04. Pak Elektron Ltd gained Re 0.49 to close at Rs 26.89 on 2.66 million shares. Hascol Petrole fell by Re 0.27 to close at Rs 85.17 on 2.34 million shares. Hub Power Co rose by Re 1 to close at Rs 61.65 on 2.27 million shares. With a trading volume of 2.11 million shares, B.O.Punjab closed at Rs 8.96, down Re 0.04. Fauji Cement gained Re 0.02 to close at Rs 19.34 on 1.76 million shares.


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Shezan Inter and Indus Motor Co were the top gainers with Rs 44.37 and Rs 26.09 to close at Rs 965.97 and Rs 547.96, respectively. Nestle Pak and Pak Tobacco were the worst losers with Rs 160.00 and Rs 24.61 to close at Rs 8,000.00 and Rs 1,199.00, respectively. Ahsan Mehanti, an analyst at Arif Habib Corporation said stocks closed higher amid thin activity on strong earnings outlook. Moreover, he added that release of Rs 39.7 billion subsidy to ease circular debt in energy sector, favourable Supreme Court decision on pending Rs 1.9 billion HUBC tax refunds, speculations over the outcome of improved CPI data at 8.2 percent YoY for Jun'14 on upcoming SBP policy played a catalytic role in the positive sentiment ahead of corporate earnings announcements despite concerns for dismal impact of revised GIDC levy on fertilizer sector scrips, he added.


LSE index loses 7.35 points July 04, 2014

Bearish sentiments continued to prevail for another day on the Lahore Stock Exchange on Thursday and the equities registered losses amid sluggish trading trend, as investors remained on the sidelines. The LSE-25 index shed 7.35 points to close at 5596.80 against 5604.15 of Wednesday while transaction volume was squeezed to 311,700 shares compared with previous volume of 1.554 million shares. The market was opened on mixed note and kept on moving up and down during early trading hours. Just before close of trading, the market witnessed sharp declines, as investors offloaded their holdings to secure positions. Treet Corporation, Hub Power, Fauji Fertilizer, Fauji Fertilizer Bin Qasim, Pak Gulf Insurance, Nishat Mills, Byco Petroleum, Lafarge Pakistan Cement, and NIB Bank helped market avert more declines. On the contrary, Arif Habib Corporation, PPL, Mari Petroleum, Adamjee Insurance, Sui Southern, Dewan Cement, Dewan Farooq Motors, Bank Alfalah, Bank of Punjab and Pervez Ahmed Securities remained under selling pressure. The losers were slightly more than the gainers, as out of a total of 91 active issues, 10 companies posted gains, 12 suffered declines while 69 companies stayed glued to their day earlier cloisng. Among gainers, Treet Corporation was improved by Rs 3.58, Hub Power gained Rs 2.20, Fauji Fertilizer Bin Qasim was appreciated by Rs 1.69, while Pak Gulf Leasing and Nishat Mills were up by 73-paisa and 62-paisa, respectively. In the minus column, Arif Habib Corporation lost 80-paisa, PPL was declined by 55-paisa while Adamjee Insurance and Sui Southern were down by 45-paisa and 40-paisa, respectively. Sui Southern with trading of 80,000 shares topped the volume leaders followed by Bank of Punjab with 60,500 shares.



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ISE index down by 10.16 points July 04, 2014

Bears retuned in the driving seat at the Islamabad Stock Exchange (ISE) on Thursday, where losers outclassed gainers amid decrease in index. ISE Ten Index showed a decrease of 10.16 points as the ISE Ten Index moved from 4,592.69 to 4,582.53 points. The overall turnover amounted to 83,600 shares as compared to previous volume of 561,500 shares. Total 127 companies participated in buying and selling activity. Majority of stocks (69) closed in negative territory, 58 closed in positive territory, whereas no company remained pegged to its overnight levels. The volume of Sui Southern Gas was 75,000 shares. The volume of Lafrage Pakistan Cement was 6,500 shares. The volume of Pakistan Petroleum was 500 shares.


BRIndex30 sheds 13.22 points July 04, 2014

On Thursday, BRIndex30 opened at 16,755.18. It touched an intraday high of 16,811.18 and an intraday low of 16,710.08 and closed at 16,741.96, which was -13.22 points or -0.08 percent lower than previous close. Total volume was 38,848,400, which was 53.18 percent of KSE All share volume and 77.38 percent of KSE 100 volume. The KSE All Share volume was 73,045,750 and KSE 100 volume was 50,201,950. BR Commercial Banks Index closed at 7,079.60 with a net negative change of -21.16 points or a percentage change of -0.3 and a total turnover of 11,159,900. BR Cement Index closed at 3,249.02 with a net positive change of 1.56 points or a percentage change of 0.05 and a total turnover of 10,441,100. BR Oil and Gas Index closed at 4,143.02 with a net negative change of -8.23 points or a percentage change of -0.2 and a total turnover of 11,061,150. BR Tech & Comm Index closed at 914.39 with a net positive change of 4.46 points or a percentage change of 0.49 and a total turnover of 4,729,000. BR Power Generation and Distribution Index closed at 4,657.12 with a net positive change of 41.55 points or a percentage change of 0.9 and a total turnover of 4,731,500.



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Business and Economy: Pakistan

Debt servicing: foreign reserves decline by $273 million: SBP July 04, 2014

Pakistan's liquid foreign reserves fell by 273 million dollars to reach below 14 billion dollars during the last week because of debt servicing. The State Bank of Pakistan (SBP) on Thursday reported that the country's total foreign reserves declined to 13.99 billion dollars as on June 27, 2014 down from 14.263 billion dollars as on June 20, 2014. During the week ending June 27, 2014, reserves held by SBP decreased by 157 million dollars to 9.033 million dollars compared to 9.19 million dollars in the previous week. During the period under review, SBP has paid 249 million dollars from its forex reserves on account of external debt servicing and other financial payments. Some 148 million dollars were paid to International Monetary Fund (IMF) as a tranche of Stand-Bu Arrangement (SBA) loan. While, during the last week, SBP received inflows amounting 98 million dollars from multilateral and bilateral sources. Meanwhile, reserves held by banks posted a decline of 117 million dollars to reach below five billion dollars. Banks' forex reserve declined to 4.957 million dollars as on June 27, 2014 compared to 5.074 billion dollars as on June 20, 2014.


TCP saves Rs 7.109 billion in fiscal year 2013-14: Dastgir July 04, 2014

MUSHTAQ GHUMMAN

Minister for Commerce Khurram Dastgir said on Thursday that Trading Corporation of Pakistan (TCP) saved Rs 7.109 billion in the financial year 2013 and 2014 due to professional approach, transparency measures, best management practices and timely decisions. Addressing a press conference, he said professional members had been appointed on TCP board of directors keeping in view their vast experience in business and good track record in business community. The most important operations conducted by TCP in support of national economy are: (i) import of urea to meet the local shortages and supply it to the agriculture community at subsidised rates through National Fertilizer Marketing Limited (NFML); and (ii) purchase of sugar from local sugar mills to supply it to the general public at subsidised rates through Utility Stores Corporation (USC).


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TCP imported 1,153,891.423MT urea in 2013-14, of which 863,432.974MT was procured through open, competitive and transparent international tendering process; 223,958MT was imported through SABIC under Saudi Fund for Development's Loan; and another 66,500.449MT urea was bought by using Japan International Co-operation System under Japanese grant. He stated that currently TCP is carrying out import of 350,000MT of urea under Saudi Fund for Development loan. According to the Minister, imported urea is delivered to NFML for onward sale / distribution through its authorised dealers to the farmers country-wide at subsidised rates. The price difference between purchase and sale of urea is paid by the federal government. Commerce Minister stated that the government had imported around 50 percent of the urea through Gwadar port in spite of high incidental costs, on account of transportation, at Gwadar just to support the local economy of Balochistan and to keep the Gwadar port functional. Only TCP ships berth at Gwadar port. In the last financial year, out of total 28 ships of urea, 17 vessels, carrying 648,968 MTs, were berthed at Gwadar port. TCP, in fact, is the only entity that is sustaining Gwadar Port in Balochistan. In 2013-14, TCP procured 411,855MT sugar through open tenders from local sugar mills for supply to the USC for its further sale to the public at affordable price. Here too the price difference is paid by the federal government as subsidy. In compliance with government directives, TCP under the guidance of MoC has taken concrete measures to implement principles of good governance which are as follows; (i) pre-qualifications of firms/contractors have been made a continuous process; (ii) generation and monitoring budget execution report on daily basis; (iii) observance of timetable for timely disposing of the payment cases to the firms by all divisions; (iv) payment through online transfer or cheque to the concerned firm or through courier instead of physical handover to the firm; (v) proper deductions of recovery of loans and advances are ensured from the salaries of the concerned employee; and (vi) all administrative/contractual payments are made as per delegation of power. Security systems in the godowns have been strengthened. Korangi godown has been equipped with security cameras and made operational round the clock. However, reforms in other godowns are in the pipeline. TCP had earned an amount of Rs 106,675,909/- on account of rentals in 2013-14. During the current financial Year, TCP has recovered following long outstanding recoveries: (i) Rs 3, 541.269 million from USC, outstanding since 2008-09 on account of supply of wheat; and (ii) Rs 150.606 million received from NFML, which was outstanding since long on account of excess quantity of urea, transportation, unloading charge.



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'Satellite remote sensing can help improve various socioeconomic sectors' July 04, 2014

Punjab Chief Minister Muhammad Shahbaz Sharif said use of space technology is of utmost importance for socio-economic development of the country. He said satellite remote sensing and GIS applications can help improve various sectors. He said SUPARCO has made tremendous progress in satellite engineering and space technology applications during the last few years and application of space technology for the improvement of different sectors is highly beneficial and commendable. He said Punjab government is fully benefiting from modern technology in different sectors and co-operation with SUPARCO will be further promoted. He expressed these views during a briefing meeting on the occasion of his visit to Satellite Research and Development Center, SUPARCO, here on Thursday. Provincial Ministers Rana Mashhood Ahmad Khan, Col(R) Shuja Khanzada, Chief Secretary, Inspector General Police and Secretary Home were also present on the occasion. The Chief Minister was given a detailed briefing regarding the use of space technology for socio-economic development. He expresses keen interest in the use of space technology in agriculture, urban planning, forestry and other sectors. Shahbaz Sharif said use of modern technology is of paramount importance for speedy development and socio-economic stability of the country. He said Punjab government is fully benefiting from modern technology for the capacity-building of government departments. He said whether it is war against dengue, monitoring of Ramazan bazaars, public health programme or educational reforms, the government is taking full benefit of modern technology. He said use of modern technology in land record computerisation programme is a good example in this regard. The Chief Minister commended the efforts of SUPARCO towards utilisation of space technology in economic development of the country. He said that Punjab government is also interested in applying space technology in agriculture, hydrology, urban development, forestry and environmental management and co-operation with SUPARCO will be further promoted for this purpose. The Chief Minister also appreciated the efforts of SUPARCO regarding satellite remote sensing and GIS applications in geology, mining, urban and rural development, education, health and different sectors and said this technology is directly linked with economic development of the country. He said mutual co-operation between Punjab government and SUPARCO will be further promoted for accelerating the pace of socio-economic development. He said though Punjab Information Technology Board and SUPARCO are already co-operating in different sectors, still there is a need for further co-operation between SUPARCO and different institutions of Punjab for socio-economic development of the province. Shahbaz Sharif said E-governance has been promoted in the province and Punjab Information Technology Board and SUPARCO can collaborate for fully benefiting from this initiative of the Punjab government so that the pace of economic and social uplift could be accelerated in the province. The Chief Minister also visited Satellite Research and Development Center and integrated assembled hall and witnessed the use of space technology. He also recorded his impressions in the visitors' book.


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Sindh chief minister speaks to industrialists July 04, 2014

Sindh Chief Minister Sindh Syed Qaim Ali Shah has assured the industrialists, investors and business community of resolving their problems, providing full security, incentives and infrastructure facilities to ensure development and prosperity of the people. This he said while addressing the industrialists at SITE office here on Thursday after inaugurating two reconstructed concrete roads. The Chief Minister said that industrialists, investors and business communities were instrumental sources of development, as such Sindh government was much focusing to facilitate and provide congenial atmosphere to them. He said that Karachi has its unique importance. It is hub of socio-economic and political activities. It has big industrial sites of the country, with maximum job opportunities that has attracted the influx from the other parts of the country. This has not only burdened its infrastructure but also created civic and law & order problem as well, he added.-PR


Input-output ratios: Manufacturers told to obtain IOCO nod July 04, 2014

The manufacturers of 19 goods availing zero-rating facility have been restricted to obtain clearance from the Input-Output Co-efficient Organisation (IOCO) for determination of input-output ratios and input requirements of finished products. According to the Federal Board of Revenue's special procedure for the goods specified in the Fifth Schedule of the Sales Tax Act issued here on Thursday, the IOCO would determine input-output ratios pertaining to manufacturers of colours in sets, writing, drawing and marking inks, erasers, exercise books, pencils sharpeners, geometry boxes, pens, ball pens, markers and porous tipped pens, pencils including colour pencils, milk including flavoured milk, yogurt, cheese, butter, cream, desi ghee whey, milk and cream, concentrated and added sugar or other sweetening matter, preparations for infant use put up for retail sale, fat filled milk and bicycles. The provisions of the Chapter shall apply to manufacturers of goods specified against S. No 12 of the Fifth Schedule of the Sales Tax Act. Under the conditions and limitations for availing zero-rating facility, the FBR said that the zero-rating of goods specified against S. No 12 of the Fifth Schedule to the Act shall be subject to determination of input-output ratios of the manufacturer by the IOCO, if not already determined under an earlier concessionary notification issued for such goods.


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For zero-rating of the import and local procurement of raw materials, packing materials, subcomponents, components, sub-assemblies and assemblies required for the manufacture of goods specified in S. No 12 of the Fifth Schedule to the Act, the following conditions and procedures shall be observed: Firstly, a registered manufacturer of the goods specified against S. No 12 of the Fifth Schedule, having suitable in-house facilities (applicant), shall submit an application to the Commissioner Inland Revenue having jurisdiction along with the complete list of his annual requirement of inputs he intends to import or purchase for the manufacture of such goods, in the format prescribed in Annex-F to these Rules. Secondly, the Commissioner may approve the declaration of input-output ratio of the applicant in the format prescribed as Annex-G to these Rules, without physical verification in case the input-output ratio of the applicant has already been determined by IOCO under an earlier notification issued for such goods or the declared input-output ratio and input requirements are in accordance with prevailing industry averages. Thirdly, in case the Commissioner is not satisfied with the declared input-output ratios because of their being prima facie not in accordance with prevailing industry averages and the input-output ratios of the applicant have not already been determined by IOCO, he may, after provisionally allowing quantity required for six months, make a reference to IOCO for final determination thereof. After receipt of report from IOCO the Commissioner shall then determine the annual quantitative entitlement of inputs and grant final approval for zero-rated purchases or imports. In case of non-receipt of report from IOCO within four months of the application being forwarded by the Commissioner, he may provisionally allow another six months quantity to the applicant, provided he is satisfied from the records that the previously imported or purchased inputs are being properly consumed in the manufacture of goods specified against S. No 12 of the Fifth Schedule to the Act. Fourthly, in case of input goods to be imported by the applicant, the authorised officer of Inland Revenue shall furnish all relevant information online to the Pakistan Customs Computerised System as per Annex-H to these Rules against a specific user ID and password obtained under section 155D of the Customs Act, 1969. Fifthly, where a registered person supplies input goods to the applicant in terms of an approval granted or as the case may be, he shall issue a zero-rated invoice mentioning the approval number of the buyer besides all the particulars as required under section 23 of the Act. Sixthly, the applicant will be entitled to claim refund of input tax paid on utilities and other inputs which are purchased by him on payment of sales tax, in terms of section 10 of the Act read with relevant provisions of the Sales Tax Rules, 2006. Seventh, the applicant shall maintain complete records of the inputs imported or purchased and the goods manufactured therefrom. Eight, the input goods allowed, as the case may be, shall be imported or purchased before the expiry date of the approval, and shall be consumed within twelve months of the date of their import or purchase. Ninthly, the applicant shall inform the concerned Commissioner Inland Revenue in writing about the consumption of the imported or purchased input goods within ninety days of their consumption. The indemnity bond shall be released on receipt of written


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confirmation regarding consumption of goods by the applicant. Tenth, in case the input goods are not consumed within the period allowed in the approval, the applicant shall pay the amount of sales tax involved, or may seek extension from the Commissioner Inland Revenue under intimation to the Collector of Customs. Eleventh, the concerned Commissioner Inland Revenue, whenever he deems necessary but not more than once in a calendar year, may get the records of the manufacturer audited. In case it is found that the inputs have not been properly accounted for or consumed in the manufacture and supply of goods as prescribed, the Commissioner may initiate proceedings for recovery of the sales tax involved on the unaccounted inputs besides penal action under the relevant provisions of the Act and under circumstances of exceptional nature and for reasons to be recorded in writing, the concerned Commissioner may relax any of the conditions, if he is satisfied that such condition is detrimental to the bona fide purposes of manufacturer's business, subject to such surety or guarantee he may deem appropriate to secure the sales tax and to ensure proper account and utilisation of the imported or locally procured goods.


FCCI team's Turkey visit termed successful July 04, 2014

FCCI delegation visit to Turkey was a total success and as a result a delegation of Istanbul Chamber of Commerce will visit FCCI in the near future while FCCI was also planning three delegations to various countries during the month of August 2014, said Eng. Suhail Bin Rashid, President Faisalabad Chamber of Commerce and Industry (FCCI). He was talking to the FCCI delegation that returned recently from Turkey. Head of Delegation Rashid Munir briefed the President FCCI about his meetings and achievements and said that the Turkish entrepreneurs have not yet fully realised the textile potential of Pakistan as they consider Pakistan as one of the third world countries. He said that we have given a clear message from the platform of Istanbul Chamber of Commerce that Pakistan has made a tremendous progress in the field of textile which was reflected by its textile exports which were earning about US $13 billion per annum. He said Turkish entrepreneurs were surprised to hear that Pakistan was consuming a huge quantity of textile chemicals and dyestuff. He said that some of the Turkish businessmen have agreed in principle to plan a delegation to visit FCCI in the near future. They were inclined to set up distribution offices of their companies in Faisalabad on top priority basis. He said that office bearers of Istanbul Chamber of Commerce hoped that the exchange of delegations between Pakistan and Turkey will continue to explore new avenues of co-operation in different sectors of economy. He also quoted his meeting with the Pakistan Consul General in Turkey and said that he also hoped to hear that the FCCI delegation was a serious one that made full deliberations with the sector-specific persons. However, he regretted that he was unable to arrange more meetings with the businessmen as they were informed of the delegation visit at the nick of the time.



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Profiteers, hoarders: KCCI chief asks government to take stern action July 04, 2014

N H ZUBERI

Voicing serious concern over sky-rocketing prices of almost all essential commodities in Ramazan, President of Karachi Chamber of Commerce and Industry (KCCI), Abdullah Zaki, urged Sindh government and Karachi Municipal Corporation to take stern action against profiteers and hoarders. In a statement issued on Thursday, the KCCI chief noted that prices of all household commodities, fruits and vegetables have been increased by shopkeepers due to lack of efficient price control mechanism, resulting in further intensifying the hardships being faced by the poor masses. Globally, he said, prices of various commodities are immediately reduced and special discounts are also offered to public to welcome the holy month of Ramazan, but unfortunately the greedy profiteers in Pakistan immediately raised prices of kitchen products to get maximum profits and hoarders created artificial shortages of necessary commodities in order to benefit from the situation. He said that although price lists are regularly issued by KMC, no shopkeeper bothered to adhere to the prices quoted in these lists and continue to overcharge the customers. To deal with this issue, he suggested that inspection/ vigilance teams should be deployed at all markets of the city to effectively monitor prices and take indiscriminate action against profiteers and hoarders by imposing fines and sending them to jail. Abdullah Zaki said that all concerned departments of Sindh government and KMC should closely monitor prices of all commodities, particularly fruits, vegetables and other important kitchen items on daily basis and no one should be allowed to exploit the public.


KP to launch first mines and minerals policy on July 7 July 04, 2014

The Khyber Pakhtunkhwa government has prepared its first Mines and Minerals policy, which will be launched on July 07, in Peshawar. PTI Chairman Imran Khan will be the chief guest of the inaugural ceremony. Provincial Minster Mineral Development, Ziaullah Afridi revealed this in a meeting with KP Chief Minister Pervez Khattak at CM Secretariat on Thursday. Provincial Secretary Mines & Mineral Development Mian Waheeduddin and other concerned


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authorities were also present. Chief Minister rejoiced that this unique policy is inclusive and coalescent in all respects that carried new trends for small scale mining as well as large scale mining will be encouraged for the first time besides announcing attractive incentives for the foreign investment for this purpose.


Activity at Karachi and Qasim ports July 04, 2014

The Karachi Port handled 83,615 tonnes of cargo comprising 59,678 tonnes of import cargo and 23,937 tonnes of export cargo including 3,498 loaded and empty containers during the last 24 hours ending at 0700 hours on Thursday. The total import cargo of 59,678 tonnes comprised of 19,249 tonnes of containerised cargo; 6,012 tonnes of general cargo; 13,317 tonnes of coal and 21,100 tonnes of oil/liquid cargo. The total export cargo of 23,937 tonnes comprised of 17,277 tonnes of containerised cargo; 659 tonnes of general cargo; 5,001 tonnes of talcum powder and 1,000 tonnes of oil/liquid cargo. As many as 3,498 containers comprising 1,353 containers import and 2,145 containers export were handled during the last 24 hours on Thursday. The breakup of imported containers shows 365 of 20's and 494 40's loaded while nil of 20's and nil of 40's empty containers, whereas that of exported containers shows 349 of 20's and 338 of 40's loaded containers while 442 of 20's and 339 of 40's empty containers were handled during the business hours. There were seven ships namely ACX Crystal, Chemroute Sky, Oriental Clematis, Osam Jumbo-5, Atlantic, Bofors and Filia Glory carrying containers, oil tankers, tugs and coal respectively sailed out to sea during the reported period. There were four vessels viz. PAC Aries, Chemroute Sky, Ikan Leban and YA Karim-K, carrying containers, oil tankers and general cargo respectively currently at the berths. There were three ships namely PAC Aries, YM Eminence and Neptune-D carrying containers and oil tanker respectively sailed out to sea on Thursday, while another ship namely Chang Hang Run Hai carrying coal expected to sail on Friday. There were five vessels viz. APL Sydney, MOL Dignity, Wan Hai-515, Cosco Kawasaki and Nave Cosmos carrying containers and oil tanker respectively due to arrive on Thursday, while three vessels viz. Kota Hapas, Kota Kaya and Hyundai Vancouver carrying containers respectively are due to arrive on Friday.

PORT QASIM

A cargo volume of 72,632 tonnes comprising 34,782 tonnes of import cargo and 37,850 tonnes of export cargo inclusive 904 loaded and empty containers (TEUs) was handled at Port Qasim during the last 24 hours on Thursday. The total import cargo of 34,782 tonnes includes 12,680 tonnes of edible oil; 8,070 tonnes of canola; 298 tonnes of general cargo and 13,734 tonnes of containerised cargo.


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The total export cargo of 37,850 tonnes includes 32,600 tonnes of crude oil and 5,250 tonnes of containerised cargo. There was one ship namely MV BBC Indiana with general cargo sailed out sea on Thursday morning, while two more ships namely CV CMA CGM Verdi and MT Feng Hai-32 with containers and edible oil are expected to sail on the same day afternoon. A total number of five vessels viz. CV CMA CGM Verdi, MV Iolocos Legacy, MT Izumo Princess, MT Feng Hai-32 and MV BBC Indiana currently occupied berths to load/offload containers, crude oil, canola, edible oil and general cargo respectively during the last 24 hours. As many as eight ships namely APL Oman, Lilly Schulte, ER Denmark, Mega Ocean, Birzo, Feng Hai-32, Al-Soor-II and Khuran with containers, furnace oil, edible oil and diesel oil are currently at the outer anchorage of Port Qasim. There were four vessels with containers, crude oil, general cargo and edible oil took berths at Qasim International Containers Terminal, Multi Purpose Terminal, FOTCO Oil Terminal and Liquid Cargo Terminal respectively on Wednesday. There are four ships namely CV APL Oman, CV Lilly Schulte, CV ER Denmark and CV Mega Ocean with containers due to arrive on Thursday.



MUHAMMAD ALI

Airlines are reportedly unable to deduct four per cent advance tax on international air tickets as the Federal Board of Revenue (FBR) has not communicated a procedure to implement section 236L of the Income Tax Ordinance 2001 so far; it is learnt here on Thursday. Sources said the federal government through Finance Act 2014 inserted section 236L in the Ordinance and made it mandatory for every airline, issuing tickets for journey originating from Pakistan, responsible to collect adjustable advance tax at the rate of 4 per cent on the gross amount of international air tickets issued to passengers booking one way or return from Pakistan. Replying to a question, sources said that although Finance Act 2014 came into force from July 1, 2014, field formations could not communicate a procedure to the airlines on their own because the sub-section (1) of section 236L requires the board to prescribe a mode, manner and time of collection of this advance tax. Therefore, Large Taxpayers Unit (LTU), Karachi has now sent a letter to the board, requesting for the issuance of a procedure or a clarification regarding the Section 236L of the Ordinance, sources said. Sources further claimed that the board had not issued any procedure or clarification regarding the collection of this newly imposed advance tax on international air tickets after the lapse of three days from the date of effect of this section.


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Sources said that a delay in the issuance of a procedure from the FBR would not only create problems for field formations but it would also land airlines in trouble. According to the Section 236L of the Ordinance, "Every airline, operating in Pakistan, shall collect four per cent advance tax on the gross amount of international air tickets issued to passengers booking one-way or return, from Pakistan". "The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are collected or charged, either manually or electronically." "The mode, manner and time of collection under sub-section (1) and time of collection shall be prescribed by the board and the advance tax collected under sub-section (1) shall be adjustable."


Foreign airlines to resume Peshawar flights from today July 04, 2014

All foreign airlines, which had suspended their operations at Bacha Khan International Airport, Peshawar, following a firing incident, will now resume their operations from Friday (today). According to reports, the international flights, however, will operate only in daytime owing to security reasons. The reservations of foreign airlines over below-par security at Peshawar airport have been addressed. Security has been beefed up in at and around city's airport.

Copyright Independent News Pakistan, 2014

Security woes hit PIA July 04, 2014

Country's embattled flag-carrier is struggling to hire planes and crew, a PIA spokesman said Thursday, following deadly incidents at two of the country's airports. Pakistan International Airlines (PIA) inducted two Airbus A320s into its fleet earlier this week and is expected to take on two more in the coming months. But its efforts to get planes on "wet lease" - hiring both aircraft and crew from another operator - have been hit by security fears after two serious incidents. Last month, in a brazen commando-style attack, 10 militants stormed Karachi international airport sparking fierce all-night clashes with security forces that left 38 people dead, including the attackers. Two weeks later unknown gunmen opened fire on a PIA flight from Saudi Arabia as it landed at Peshawar airport in the country's restive north-west. Adding to the febrile security environment, the military is nearly three weeks in to a major offensive against Taliban hideouts in North Waziristan, leading to fears of retaliatory attacks elsewhere in the country. PIA spokesman Mashud Tajwar on Thursday said the airline had


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invited bids for the wet lease of four planes in early May, but has so far had no success. "We are facing the difficulties in hiring four aircraft on wet lease because of security issues," Tajwar said. Once a jewel among Asian airlines, state-owned PIA has suffered terrible problems in recent years, with financial losses running to hundreds of millions of dollars and constant flight cancellations. Last year one of its pilots was jailed in the UK for showing up drunk to fly a plane with 156 people on board. In a bid to improve its service, PIA has taken to wet leasing planes. Three that had been supplied by Turkish and Czech airlines were taken back at the end of May. "The three aircraft were hired on wet lease for some months and on May 31st, the agreement was over," a PIA official said on condition of anonymity. The summer is peak holiday season in Europe, which means airlines have fewer planes available to lease out. "Aircraft on wet lease are available when an airline has extra unit available but in the season it is difficult to get one," the official said. Last month PIA also tendered for hiring 10 aircraft on dry lease - with no crew.


Absence of Railways officials irks visitors July 04, 2014

MUHAMMAD SHAFA

Officials of Pakistan Railways, instead of facilitating their subordinates and general public, are often found having informal chats in their offices. During a visit to the City Station on Thursday, this correspondent noted that majority of high ranking officers were not present in their respective offices despite the fact a number of people kept waiting for them for hours together outside their offices for getting their issues resolved. When the peons of such officials were asked about the whereabouts of their officers concerned, majority of them gave a stereo-typed answer saying that "Sir is in a meeting with Divisional Superintendent and I don't how long will he be there." Although the government institutions are often accused of indisciplined and mismanagement, one could visit City Station to see how the Railway officials have been enjoying Ramazan's reduced office hours . An elderly man, who was standing in front of office of the Divisional Commercial Officer for about an hour, told Business Recorder: "He is an employee of Railways and has come there from Hyderabad to get his documents signed from DCO, but he is reportedly busy in a meeting with his colleagues in the office." Similarly, a couple who was also waiting in front of office of Divistional Transport Officer (DTO) in connection with some work also left disappointed saying "they cannot waste their time and energy." Railways Mazdoor Union's President Malik Muqaddar Zaman said that the divisional officers mostly enjoyed their duty timings while visiting each other's offices whereas the poor employees, including women who come from far off places such Kotri, Hyderabad, Dadu and Mirpurkhas to get their problems resolved, are forced to stand outside their offices for


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hours together. "In fact, corruption and mismanagement is the root cause of Railways' failure," he remarked.


Rs 259.35 billion approved for Sukkur-Multan section of KLM July 04, 2014

ZAHEER ABBASI

Executive Committee of National Economic Council chaired by the Finance Minister Ishaq Dar has approved 12 projects worth Rs 440 billion, including Rs 259.353 billion for the construction of Sukkur-Multan section of Karachi-Lahore Motorway (KLM). An official said that some additional projects, which were not on the agenda, were also taken up by the meeting. The ECNEC approved Rs 6.499 billion for the acquisition of land for establishment of free trade zone at Gwadar. The meeting was told that 2281 acres of land would be acquired for the establishment of a free trade zone at the Gwadar port; out of which 1627 acres of land would be acquired from private land owners. The Finance Minister directed that Planning Development and Reform Division should monitor physical progress as well as the results that these projects envisaged to achieve. Dar said that submission of the PC-4 must be a regular exercise. The meeting was informed that 10 percent cost of Karachi-Lahore Motorway (KLM) Project''s construction of Sukkur-Multan section (387 km) would be provided through Public Sector Development Programme (PSDP) and the rest of cost would come as credit financing through government of China. The project will be completed by October 2017; its executing agency is NHA. The project envisages construction of a 387 km-long, six-lanes Sukkur-Multan section of 1148 km Karachi-Lahore Motorway, including the construction of bridges, interchanges, nullahs etc. The ECNEC also approved the project for land acquisition, affected properties'' compensation and relocation of utilities for construction of 959km Karachi-Lahore Motorway (KLM) with a rationalised cost of Rs 51 billion. The ECNEC approved the raising of Balochistan Constabulary project at a rationalized cost of Rs 5.146 billion with an FEC (Foreign Exchange Component) of Rs 200 million to assist police and district administration in maintenance of law and order in Balochistan by recruiting 6,000 additional personnel and merging 4,000 reserve police men to make 10,000-strong force of Balochistan constabulary. The ECNEC also approved flood emergency reconstruction project for bunds and canals (Revised-PC-I) at a cost of Rs 26.905 billion with the financial aid of Rs 19.279 billion by the ADB and the local component by the government of Sindh for strengthening of entire length of banks of river Indus in general and at Tori, SM Bund and FP Bund at Mancher Lake which was damaged by the unprecedented floods of 2010. The ECNEC also considered and approved the project for Evacuation of Power from Wind


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Power Plants at Jhimpir & Gharo Wind Clusters located in district Thatta and Jamshoro in Sindh with a modified cost of Rs 11.277 billion. The project will be completed in three years and it envisages evacuation of 1756MW of wind power from the two sites through construction of 220 KV and 132 KV double circuit transmission lines. The ECNEC approved the widening and improvement of 250 km of Kalat-Quetta-Chaman Road Section (KQC) of National Highway N-25 with a revised cost of Rs 19.140 billion and an FEC component of Rs 13.920 billion coming as a USAID grant. The ECNEC also approved Hasanabdal (Burhan)-Havelian Expressway (E-35, total length 59.1 km) with a rationalised cost of Rs 30.494 billion including an FEC of Rs 7.592 billion. The ECNEC approved establishment of Information Technology Management Sciences and Telecommunication Institutes at Islamabad at a revised cost of Rs 3.938 billion with an FEC of Rs 613 million. The sponsoring agency is HEC and the executing agency is National University of Science and Technology, Islamabad. The ECNEC, in principle, approved the Prime Minister''s (National) Programme for Provision of laptops to talented students (HEC) with a rationalised cost of Rs 4.928 billion to distribute 100,000 laptops in the current fiscal year amongst students. The ECNEC further approved rehabilitation and up-gradation of Trimmu Barrage and Panjnad Headworks (ADB Assisted) with a rationalised cost of Rs 16.8 billion including an ADB loan of Rs 14.9 billion. The ECNEC considered and approved dualization and improvement of 64 km long Mandra-Chakwal Road project with a revised cost of Rs 4.671 billion. The project envisages the construction of dual way 2-lanes carriageway between Mandra and Chakwal to facilitate heavy traffic of the section. The meeting was attended by Pervaiz Rashid, Minister for Information, Broadcasting and National Heritage, Ahsan Iqbal, Minister for Planning and Development, Ghulam Murtaza Jatoi, Minister for Industries and Production, Sikandar Hyat Khan Bosan, Minister for National Food Security and Research, Zahid Hamid, Minister for Science and Technology, Mohammad Zubair, Chairman Privatisation Commission, Syed Murad Ali Shah, Advisor to CM Sindh on Finance, Abdul Rahim Ziaratwal, Provincial Minister Balochistan, Federal Secretaries and senior officials of the federal and provincial governments.



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Cotton and Textiles: Pakistan

Prices move up slightly amid slow trade July 04, 2014

Rates moved up on the cotton market on Thursday in the process of modest trading, dealers said. The official spot rate was higher by Rs 50 t0 Rs 6,350, they added. While, the prices of seed cotton from Sindh at Rs 3300 and Rs 3325, and in the Punjab rates were at Rs 3400 and Rs 3450, they said. In the ready session, about 600 bales of cotton changed hands at Rs 6300-6500, they said. Market sources said mills and spinners were waiting for further increase in the supply of seed cotton so that they would be able to make better deals. Cotton analyst, Naseem Usman said that increase in power shortage in the Punjab is increasing uncertainties among traders. So, that many ginning factories have slowed down operational work. This is that factor, which is propelling mills to make cautious buying, he added. Reuters adds: ICE cotton extended a three-day rout on Wednesday as favorable weather in key growing regions of the United States heightened the prospect of bumper output and traders digested this week's higher-than-expected US government acreage report. The benchmark December cotton contract on ICE Futures US ended down 0.93 cents, or 1.3 percent, at 72.47 cents a lb, hovering not far from the prior day's trough of 72.20 cents, the contract's lowest since late November 2012. The following deals were reported: 400 bales of cotton from Shahdadpur sold at Rs 6300-6400, same figure from Tando Adam at the same figure and same figure from Mirpurkhas at Rs 6350-6400, dealers said.

=========================================================================== The KCA Official Spot Rate for Local Dealings in Pak Rupees --------------------------------------------------------------------------- FOR BASE GRADE 3 STAPLE LENGTH 1-1/32" ---------------------------------------------------------------------------MICRONAIRE VALUE BETWEEN 3.8 TO 4.9 NCL =========================================================================== Rate Ex-Gin Upcountry Spot Rate Spot Rate DifferenceFor Price Ex-Karachi Ex. KHI. As Ex-Karachion 02.07.2014 =========================================================================== 37.324 Kgs 6,350 155 6,505 6,455 +50 --------------------------------------------------------------------------- Equivalent --------------------------------------------------------------------------- 40 Kgs 6,805 155 6,960 6,907 +53 ===========================================================================


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Moderate interest in cotton buying witnessed July 04, 2014

DR ZAFAR HASSAN

Though only 40,000 to 50,000 bales of cotton from the current crop (August 2013 / July 2014) is left unsold with the ginners, domestic mills are showing only moderate interest in purchasing cotton. Therefore the recent current cotton condition has been mostly quiet but some buying emerged on Thursday which induced the Karachi Cotton Association (KCA) to increase the ex-gin price of grade three cotton by Rs 50 per maund. Therefore, trading on the cotton market has been mostly dull in recent days. Depressing international cotton prices are also pressurizing the domestic price. Scattered winds have been blowing over the cotton fields in Sindh since last few days which have reduced the new crop (August 2014 - 2015) seedcotton arrivals. Scattered rains in some Punjab areas have been reported such as in Bahawalnagar, Sahiwal and Chichawatni which should benefit the new cotton crop. These scattered rains have till now been pre-monsoon rains which will be helpful to the new cotton crop. However, overall the meteorological department has predicted below normal monsoon rains for Pakistan during this year. However, the lower quantity of monsoon showers predicted for the forthcoming season (August 2014 - July 2015) should not impact the cotton output in Pakistan adversely as Pakistan relies largely on irrigated supply of water as against the situation in India. As a preliminary projection, the forthcoming cotton crop in Pakistan could yield 13.5 to 14 million bales (155 Kgs) of cotton (August 2014 - July 2015) where as the domestic mills consumption could range from 15 to 15.5 million bales. Exporters could ship anywhere from half a million to one million bales and the domestic mills may import one to 1.5 million bales. Till now, nearly 12,000 bales of new crop (2014 / 2015) cotton has been ginned but movement of cotton will remain relatively slow due to the prevailing month of Ramazan which will cover most of the July, 2014 period. Textile mills sources are reporting deplorable condition of their industry due to increase in the period of closures of their units because the supply of electric power and gas has been further curtailed, particularly in the Punjab. Moreover, further increase in the price of public utilities has added to the cost of doing business tremendously. Thus it is feared that several more textile units may close down or curtail their output sizeably. On Thursday the price of new crop (2014 - 2015) seedcotton from Sindh reportedly ranged from Rs 3300 to Rs 3325 per 40 Kgs, while in the Punjab the seedcotton (Kapas / Phutti) prices are said to have extended from Rs 3400 per 40 kilogrammes. Raw cotton prices in Sindh are said to have ranged from Rs 6350 to Rs 6400 per maund (37.32 Kgs), while in the Punjab they reportedly were prevailing at Rs 6500 per maund showing some stability and steadiness. On the global economic and financial front, better earnings reports, higher employment figures, larger factory output and clear in indications from the United States and the European Central Bank that they will continue to keep interest rates low are keeping investor confidence at a high


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pitch. Thus share price indices in the United States, the Euopean Union and the United Kingdom hit record or near - record levels this week. The central bank chiefs Janet yellen of the United States and Mario Draghi of the European Central Bank, the chief economist of the Bank of England, Andy Haldane, have all said that raising interest rates will be the last line of defence to confront any price bubbles that may be building up in their respective economies. In the United Kingdom, the serious trouble is that house prices are reported to have risen by 12 percent during the previous year, but in London they have risen by a whopping 25 percent. However, the Bank of England presently deems the increase in housing prices to be within the manageable zone. On her part, Federal Reserve Chair said during the previous month that she feels the accommodative monetary policy, the rise in the price of equities and properties and the improving global economy would bring about a wide - based growth around the world. Thus record low interest rates in the USA, the United Kingdom and the Eurozone should be kept intact. While the United States is seeing a strong recovery, it is believed that the Chinese economy is expected to expand 7.4 percent during the second quarter. It may be noted that the employment at the United Kingdom services companies rose by a record last month which notably improved the prospects of economic recovery as it assisted in maintaining the pace of improvement during the second quarter. It is plausible that the European Central Bank may not increase the interest rates till 2018 and both the Federal Reserve in the USA and the Bank of England may continue the low rates of interest till the end of this decade, but the question remains as to who will foot the bill of the enormous costs such policies will entail? And let us not forget the peripheral states of the Eurozone like Spain, Portugal and Greece, or Italy and Argentina for that matter, amongst others, where untold millions of people are facing long periods of incessant unemployment.


Textile exports witness 5.96 percent rise in July-May July 04, 2014

TAHIR AMIN

Textile exports witnessed an increase of 5.96 percent in July-May 2014 as compared to the same period of previous year; however representatives of the textile sector termed the increase a usual phenomenon. Textile Industry Ministry officials argued that the share of Punjab province in total textile exports stood at 55 percent, Sindh''s 40 percent while the remaining five percent belonged to other provinces.


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However, due to capacity issues especially in Punjab, where 70 percent textile industry is based, the sector is faced with shortage of electricity and gas hence growth of textile and clothing remained stagnant at around 6-7 percent. The industry is facing 10-hour power and 16-hour gas loadshedding, which is badly hampering the production capacity. According to the Pakistan Bureau of Statistics (PBS), textile exports were $1.2 billion in May 2014 against $1.176 billion during May last year, thus registering an increase of only 1.99 percent. The overall textile exports in the first 11 months of fiscal year 2013-14 were of $12.626 billion as against $11.916 billion during the corresponding period of the year before. Talking to Business Recorder, representatives from textile sector said Pakistan''s textile exports had not yet picked up momentum despite grant of Generalised System of Preferences (GSP) plus status by the European Union. Textile exports to the EU were expected to surge by one billion dollar a year after getting the GSP plus status. However, there are several challenges including fluctuations in the prices of raw materials, energy shortages and stiff competition can mar the benefits of the scheme, they added. The exports of several textile items including towel, synthetic textile and cotton yarn are still showing a negative growth as exports of synthetic and silk textile during the fiscal year 2013-14 were of 348.39 million dollars compared to 369.17 dollars in 2012-13, showing a decrease of 5.63 percent. The textile products that witnessed negative growth in trade included cotton yarn export, which decreased by 9.91 percent, from 2,061.091 million dollars last year to 1,856.824 million dollars in 2013-14. The exports of towels decreased from 713.756 million dollars to 699.882 million dollars, showing negative growth of 1.94 percent whereas the exports of tents, canvas and tarpaulin decreased by 26.41 percent by falling from 104.429 million dollars to 76.848 million dollars. According to officials, there was a significant increase in post-January 2014 orders from the EU after getting a preferential status, however these orders are yet to be met due to a short span of time. In addition shortage of utilities particularly power and gas remain the main impediments to increasing output. However, the industry is expecting a significant increase in exports in coming months.


Power generation: PTEA demands additional supply of 200 MMCFD gas July 04, 2014

Criticising the massive power load shedding and expressing extreme concerns over the rising electricity shortfall, Pakistan Textile Exporters Association (PTEA) has urged the government to supply additional 200 MMCFD gas to Punjab-based textile industry for power generation for in house consumption to attain competitive edge in international market.


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Commenting over the prevailing situation, PTEA Chairman Sheikh Ilyas Mahmood and Vice Chairman Adil Tahir said that due to severe electricity and gas shortage in the Punjab, the industry is suffering from huge loss while thousands of workers have lost their jobs. If the problem was not resolved on emergent basis, all efforts to promote industrialisation and job creation would prove fruitless, they added. Industrial sector is the main victim of this massive load shedding despite the fact that business community fulfils its national obligations by paying all taxes to the government. They said that loadshedding is adding the woes of business community, while the government is torturing them by enhancing the electricity tariff. It is a sheer injustice that instead of controlling line losses and making arrangements to stop electricity thefts, the authorities were busy in worsening the situation. They said that if immediate measures were not taken to ensure continuous supply of electricity to the industrial units, nothing could stop the industrial wheel from coming to a grinding halt and resultant massive lay-offs. The industry is already passing through a very difficult times and the non-supply of power adding fuel to fire, they added. The PTEA chairman was of the view that Pakistan is endowed with plenty of renewable energy resources like wind and solar, which still remain untapped. The Adoption and deployment of renewable energy resources can play a significant role in contributing towards energy security and energy independence of the country, he argued. There are many options for the government to cope with the energy crisis and one of these is to go for nuclear power generation. He said that there is a world-wide trend of nuclear power generation because of uncertain oil prices. Currently about 436 nuclear power plants, with cumulative net output of 370,326 MW electricity, are operating in 31 countries while Pakistan has only 1.7 per cent share of nuclear power in its total energy mix. He stressed upon the government to speed up the construction of nuclear power plants, which are cost competitive, safe and reliable. Adil Tahir, Vice Chairman, said that another good option for the government to reduce energy crisis is to exploit the huge potential of hydropower generation. Only KPK has the potential of generating 50,000 MW hydropower and the government should build small dams to exploit this potential. For this purpose, private sector should be encouraged by simplifying the process of establishing micro-power stations in potential areas. He stressed that the government should encourage the private sector to come forward and play a proactive role in the development of renewable energy by utilising wind, solar and other renewable energy sources for overcoming the energy insecurity and to keep industrial wheel running. The PTEA urged the government to take war footing measures to overcome this situation as it has created new threats to the future survival of industries and the overall economy.



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Agriculture and Allied: Pakistan

Irsa releases 390,000 cusecs of water into canal network July 04, 2014

M RAFIQUE GORAYA

As the sowing/growing of Kharif cash crops is in full swing , the Indus River System Authority(Irsa) released 3,90,000 cusecs of water into the countrywide irrigation canal network , Wapda water manager told Business Recorder, here on Thursday. They said the water regulatory body is discharging 1,60,000 cusecs downstream the Tarbela dam on the River Indus. River Kabul is contributing 98,200 cusecs of water to the Indus zone to feed irrigation canals emanating from Jinnah barrage, Chashma barrage, Taunsa barrage, Guddu barrage, Sukkur barrage and Kotri barrage. River Chenab is providing 98,700 cusecs of water to Mangla zone. Over 30,000 cusecs water is being released downstream the Mangla dam on the river Jhelum. Punjab Irrigation department is discharging 33,000 cusecs into strategic Marala-Ravi link canal (20,000) and 13,000 cusecs in the Upper Chenab canal. They said that the Sindh province is receiving 2,00,300 cusecs of water at Guddu barrage, 1,16,800 cusecs at Sukkur barrage and 35,555 cusecs water at Kotri barrage. The water manager has stored nearly 6 MAF water in the three reservoirs, ie Mangla, Tarbela and Chashma before the start of Monsoon season. FLOOD SITUATION: According to Flood Forecasting Centre, River Indus is in low flood at Jinnah barrage (2,48,000 cusecs) and at Chashma barrage (2,55,200 cusecs) , River Chenab is in low flood at Marala (98,700 cusecs) and River Jhelum at Mangla (67,000 cusecs). River Kabul is in medium flood at Nowshera 98,200 cusecs.


Daily trading report of PMEX July 04, 2014

On Thursday at Pakistan Mercantile Exchange (PMEX) value traded increased by 38.6 percent to PKR 3.6 billion from PKR 2.6 billion recorded a day ago. Number of lots traded was reported at 14,981 and PMEX Commodity Index closed at 3,063. Major business was contributed by crude oil amounting to PKR 2.3 billion, a 34 percent increase when compared to the previous trading day. This was followed by gold (PKR 1.1 billion) and silver (PKR 141 million).



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Gems export declines by 72 percent: PBS July 04, 2014

Export of jewellery plunged by 72 percent to 324.253 million dollars during July 2013 to May 2014, according to official figures. Jewellery export fell by 833.747 million dollars from July 2013 to May 2014 from 1.158 billion dollars in the same period of last fiscal year, Pakistan Bureau of Statistics (PBS) revealed. In May 2014, jewellery export plummeted by 10.41 million dollars (66.16 percent) to 5.325 million dollars from 15.735 million dollars in May 2013, the statistics mentioned. Export of gems went up by 38 percent from1.536 million dollars to 5.593 million dollars from July 2013 to May 2014 from 4.057 million dollars in the same period of last fiscal year, the PBS suggests. In term of volume, export of gems went up by four metric tons (68 percent) to 10 metric tons during July 2013 to May 2014 from six metric tons in the same period of last fiscal year, the statistics mentioned. According to PBS, in May 2014, gems export grew by 58.46 percent from 0.273 million dollars to 0.740 million dollars as compared to 0.467 million dollars in May 2013.


Salaries & procurement of raw material: MoF likely to release Rs 2.87 billion to PSM July 04, 2014

RIZWAN BHATTI

The Ministry of Finance is likely to release Rs 2.87 billion under the Financial Restructuring Package to Pakistan Steel Mills (PSM) within a week for salaries and procurement of raw material. Sources told Business Recorder on Thursday that the third tranche of approved financial restructuring package for the country's largest steel producing plant is scheduled to pay this month and the management is making efforts for timely release of this tranche. The Ministry of Finance (MoF) has already released Rs 6.75 billion to the PSM during THE last two months for the smooth operation and payment of salaries. Some Rs 4.2 billion were paid to the PSM in May and Rs 2.55 billion in June this year. Sources said that the MoF is likely to release the third tranche amounting Rs 2.875 billion of bailout package within a week. This will be utilised for the payment of salary for the month of May and utility bills, besides the procurement of raw material. "The payment of the third tranche is in process and the PSM is expected to get Rs 2.87 billion within next few days," an official said. The third tranche will have Rs 1.375 billion of cash injection, while the remaining Rs 1.5 billion will be paid to National Bank of Pakistan (NBP) for opening the Letter of Credit (LC) for the import of raw material, he informed.


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"Some Rs 750 million will be utilised for the payment of one month salary, Rs 425 million for Utility Bills including water, power, gas and oil, Rs 100 million for gratuity and an amount of Rs 100 million for capital repair of the plant," sources said and added that another or the fourth tranche of Rs 2.875 billion is due in August, 2014. Presently, the country's largest steel manufacturing plant is facing acquit shortage of raw material and coal stocks are almost vanished, while iron ore stocks are for few weeks only. One ship namely "Mega Ocean" carrying some 55,000 tons coal for the PSM arrived at Port Qasim on Thursday evening. This coal has been imported from Australia under long-term agreement and offloading is likely to start today. Another consignment of 55,000 ton coal is expected to reach in next three-four days. In addition, a shipment of manganese ore is also scheduled to reach this month. As per business plan of financial restructuring package, submitted by the newly appointed Chief Executive Officer (CEO) Major General Zaheer Ahmed and accordingly approved by the Economic Co-ordination Committee of the cabinet, the mill is required to run at 20 per cent production capacity in July 2014, instead of some 5 per cent presently. It may be mentioned here that the ECC in it meeting held in April this year approved a Financial Restructuring Package or Bailout Package amounting Rs 18.5 billion for the state owned country's largest steel producing plant for its revival. The PSM for the last few years have faced billions of rupees losses due to mismanagement and incompetent leadership. Monthly losses of the mills stood about Rs 1.5 billion and overall debt and liabilities of the PSM have reached over Rs 100 billion.



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Taxation: Pakistan

Immovable properties: FBR for early issuance of taxpayer cards July 04, 2014

Federal Board of Revenue (FBR) has approached National and Database Registration Authority (NADRA) for early issuance of Taxpayer Cards to compliant taxpayers for imposition of a 2 percent withholding tax on purchase of immovable properties by non-filers of income tax returns. Sources told Business Recorder here on Thursday that the persons not having cards to be issued by NADRA would be subject to a double rate of withholding tax on purchase of property. The cards would be exclusively issued with a view to distinguishing between filers and non-filers of tax returns. A preliminary meeting has been convened between the tax authorities and the NADRA officials at the FBR House. The FBR and NADRA have discussed the modalities for issuance of Taxpayer Cards to filers of income tax returns. If a final decision has been taken in this regard, it would take two months for the completion of the project for issuance of Taxpayer Cards to all the persons covered under the "Active Taxpayers List for Income Tax Deduction at Source". The cards would carry names, CNICs and addresses, etc, of those persons who are filers of income tax returns as per FBR list. The FBR has conveyed to the NADRA officials the authority has the necessary infrastructure and expertise for issuance of such cards for which designs have been discussed by both the sides. To impose higher rates of withholding tax on the purchase of property, the FBR will issue taxpayer cards to taxpayers for distinguishing between compliant and non-compliant persons. Till the issuance of Taxpayer Cards to compliant taxpayers, the government will charge a uniform rate of one percent withholding tax on the purchase of property by filers and non-filers of income tax returns. Experts said the advance tax on the sale or transfer of immovable property has been imposed under section 236K Division X and XVIII of Part IV of the 1st Schedule. Through Finance Act 2012, collection of adjustable advance tax at the time of registering or attesting the transfer of an immovable property was imposed on the seller or transferor of the immovable property. Now, a similar adjustable advance tax has also been imposed on the purchaser or transferee of immovable property. The obligation of collecting the adjustable advance tax has been placed on any person responsible for registering or attesting the transfer of any immovable property. Exemption has also been granted to expatriate Pakistanis purchasing immovable property in a scheme introduced by the Federal Government, or Provincial Government or an Authority established under a Federal or Provincial law for expatriate Pakistanis. Separate rates of collection of advance tax (as percentage of sale consideration) at the time of registering or attesting transfer of any immovable property have been provided for ''filer'' and ''non-filer'' seller/transferor as well as for purchaser/transferee, they added.



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MUHAMMAD ALI

Airlines are reportedly unable to deduct four per cent advance tax on international air tickets as the Federal Board of Revenue (FBR) has not communicated a procedure to implement section 236L of the Income Tax Ordinance 2001 so far; it is learnt here on Thursday. Sources said the federal government through Finance Act 2014 inserted section 236L in the Ordinance and made it mandatory for every airline, issuing tickets for journey originating from Pakistan, responsible to collect adjustable advance tax at the rate of 4 per cent on the gross amount of international air tickets issued to passengers booking one way or return from Pakistan. Replying to a question, sources said that although Finance Act 2014 came into force from July 1, 2014, field formations could not communicate a procedure to the airlines on their own because the sub-section (1) of section 236L requires the board to prescribe a mode, manner and time of collection of this advance tax. Therefore, Large Taxpayers Unit (LTU), Karachi has now sent a letter to the board, requesting for the issuance of a procedure or a clarification regarding the Section 236L of the Ordinance, sources said. Sources further claimed that the board had not issued any procedure or clarification regarding the collection of this newly imposed advance tax on international air tickets after the lapse of three days from the date of effect of this section. Sources said that a delay in the issuance of a procedure from the FBR would not only create problems for field formations but it would also land airlines in trouble. According to the Section 236L of the Ordinance, "Every airline, operating in Pakistan, shall collect four per cent advance tax on the gross amount of international air tickets issued to passengers booking one-way or return, from Pakistan". "The airline issuing air ticket shall collect or charge advance tax under sub-section (1) in the manner air ticket charges are collected or charged, either manually or electronically." "The mode, manner and time of collection under sub-section (1) and time of collection shall be prescribed by the board and the advance tax collected under sub-section (1) shall be adjustable."



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New tax return form: experts say documentation measures ignored July 04, 2014

The newly-introduced tax return form for Tax Year 2014 has not been able to grasp the documentation measures taken by the government through Finance Act, 2013. Experts told Business Recorder on Thursday that tax return form is unable to cater for the crucial issue for examining exemption claimed on account of agriculture income, set-off of losses and wealth statement requirements. A Lahore-based tax lawyer Waheed Shahzad Butt has written a letter to Member Inland Revenue wherein these issues were communicated under objections/suggestions in proposed income tax return form such as ignorance of government's documentation measures through Finance Act, 2013 in case of agricultural income as exempt source versus addition under section 111 of the Income Tax Ordinance, 2001, misreading/non-reading of Finance Act, 2013 in case of Set off of Losses and issues in wealth statement requirements. Suggestions forwarded to the Member IR states, "certain amendments in the Income Tax Rules, 2002 have been announced under Notification dated 30.06.2014. There are certain issues in the proposed tax return form which needs modification: 1. GOVERNMENT'S DOCUMENTATION MEASURES THROUGH FINANCE ACT, 2013 IGNORED - AGRICULTURAL INCOME - EXEMPT SOURCE VS ADDITION U/S 111: Proposed return is unable to grasp the crucial issue to examine exemption claimed on account of agriculture income. Certain amendments have been introduced by the present Government through Finance Act, 2013 to cater this issue. Proposed return form also failed to cater the major changes introduced in section 111 through Finance Act, 2013 by the present Government to tax the income misclassified under the umbrella of Agricultural Income. Taxpayer could not be allowed to misclassify his taxable income under Federal legislation as being exempt from income tax under the blanket of agricultural income thereby to avoid payment of lawful taxes. Declaring agricultural income different under one Legislation (provincial) than other Legislation (federal) is against the ethics and in violation of income tax law. It appears the provisions of section 111 of the Income Tax Ordinance, 2001 as amended through Finance Act, 2013 have not been consulted while issuing present SRO to devise tax return form for Tax Year 2014: [Provided that where a taxpayer explains the nature and source of the amount credited or the investment made, money or valuable article owned or funds from which the expenditure was made, by way of agricultural income such explanation shall be accepted to the extent of agricultural income worked back on the basis of agricultural income tax paid under the relevant provincial law.] In the return form only a single column for declaration of "Agricultural Income" has been devised, how an Officer of Inland Revenue will judge, what is quantum of Agricultural income


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declared under the Provincial Laws and what was the amount of Agricultural Income Tax Paid to the exchequer under provincial levy? It is the primary obligation at the part of FBR functionaries to cross examine/reconcile the data of agricultural income with the concerned provincial taxation authorities but the official responsible to devise the income tax return form have miserably failed to cater the documentation measures taken by the present Government through Finance Act, 2013, therefore, to avoid futile litigation (hide and seek game between taxpayer and IR officials to seek data of agricultural tax) it is strongly suggested that following vital information may be added in the return form: Agricultural Income (Exempt under Income Tax Ordinance, 2001) Rs...... Agricultural Income (Taxed under Provincial Agr-Income Tax Law) Rs...... Agricultural Income tax paid (under Provincial Agr-Income Tax Law) Rs...... MISREADING/NON READING OF FINANCE ACT, 2013 - SET OFF OF LOSSES It appears while devising proposed tax return for Tax Year 2014 certain amendments made by the present Government in the statute book have been skipped by the FBR. Section 56 of the Income Tax Ordinance, 2001 was modified vide Finance Act, 2013 in the following manner: ...the person shall be entitled to have the amount of the loss set off against the person's income, if any, chargeable to tax under any other head of income except income under the head salary or income from property for the year Income under the head salary or income from property shall not be available for set off but while devising tax return form following formula has been devised: Total Income [2+3+((12+13+14+15+16)if>0))+17] Income/(Loss) from Property Income/(Loss) from Business 2. WEALTH STATEMENT REQUIREMENTS Through Finance Act 2013, it was made compulsory by the present Government for all taxpayers to submit wealth statement irrespective of amount of their income declared in tax returns. Every resident being an individual or member of an AOP filing return of income, or statement under sub-section (4) of section 115 was required to file wealth statement along with reconciliation of wealth statement. This mandatory filing of wealth statement was made effective from the Tax Year 2013 onwards, however, condition was waived through SRO 978(I)/2013 for tax year 2013 only. It also appears the provisions of section 116 of the Income Tax Ordinance, 2001 as amended through Finance Act, 2013 have not been consulted while issuing present SRO to devise tax return form for Tax Year 2014: Every resident taxpayer [being an individual] filing a return of


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income for any tax year shall furnish a wealth statement [and wealth reconciliation statement] for that year along with such return The law on the issue is very clear but it appears following guide lines issued by the FBR is nothing but outcome of cut and paste activity: All Individuals, including members of AoPs or directors of companies, whose last declared or assessed income or the declared income for the year is equal to or more than PKR 1,000,000 or the final tax paid is equal to or more than PKR 35,000, must file Wealth Statement. In the light of above, it is requested to examine the amendments made by the present Government through Finance Act, 2013 (especially documentation measures), avoid cut and paste policy and aforementioned suggestions/objections be considered while finalising the tax return form for Tax Year 2014: tax lawyer added.


Life and health insurance business: SRB removes sales tax exemption July 04, 2014

The Sindh Revenue Board (SRB) has removed the exemption of sales tax on life and health insurance business and only individual life premium up to Rs 0.5 million per annum has been exempted. Insurance Association of Pakistan (IAP) has sought the attention of the SRB through a letter recently issued from Life Committee, IAP to Syed Mushtaq Kazimi, Advisor tax Policy, SBR for revising the proposals in the Sindh Budget 2014-2015 about the removal of exemption of sales tax on life and health insurance business, which would have a serious impact on life insurance penetration and the insurance business specially group life, high net worth customers and single premium policies. According to the letter, in Pakistan, the insurance sector has always been neglected area. There has been very little emphasis on the importance of life insurance from the government perspective. However, for the last few years the government has been taking solid steps in order to boost the growth of this neglected area. A tax rebate on life insurance was introduced in 2011 and further improved in 2012. This tax credit on life insurance premium is available up to maximum of Rs 1 million in a tax year. This mean levying sales tax on the life insurance premium would dilute the impact created in the form of tax credit relief. Accepting the nature of life insurance as medium of savings, it seems wrong in principle to subject it to General Sale's tax. Savings need to be encouraged not discouraged, if Pakistan is to attain the goal of self-reliance. It is pertinent to mention that Life Insurance premium remains exempted at the federal level and also exempted by the SRB through notification SRO Leg (1)/2011 dated 1st July, 2011. Furthermore, it is important to note that small part of life insurance premium is used to provide


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protection against the risk of death or disability and the bulk constitute savings of the policyholders. Levying the GST on life insurance premium would therefore be similar to levying sales tax on new bank deposit or new investment in mutual funds which is obviously not right. The net result would be certain no further investment in life insurance as an individual would want to make savings where a large proportion is immediately taken away by the state. The official of the IAP said, "Several meetings have been conducted after the issuance of notification but the government is not accepting the proposals of removal of exemption. Due to this step taken by the government the life insurance industry, which was growing at the rate of 25 to 35 per cent, will likely to collapse in near future." Moreover, it is informed that life insurance industry is contributing around Rs 3 to 4 billion per annum in the State Revenue as withholding agent and corporate tax payer.


SRB collects Rs 42.485 billion in fiscal year 2013-14 July 04, 2014

Sindh Revenue Board (SRB) achieved another milestone by collecting Sindh sales tax of Rs 42.485 billion during the financial year 2013-14, which includes the figure of Rs 3.089 billion of Sindh sales tax which was inadvertently and incorrectly deposited by the taxpayers with FBR. The collection of Rs 42.485 billion during 2013-14 represents an increase of 8.832 billion or (+) 26.25 percent over the collection of Rs 33.653 during 2013-14. Another milestone was also achieved by collecting sales tax of Rs 4 billion during the month of June 2014, which represents the highest ever collection during any month since July 2011. It is pertinent that SRB started collecting Sindh sales tax on services from July 1, 2011, before which Sindh sales tax on services was collected by FBR. As against the Sindh sales tax collection of Rs 15.356 billion by FBR during 2010-11, the revenue of Rs 42.485 collected by SRB during 2013-14 represents an increase of Rs 27.129 billion or (+) 176.67 percent. SRB attributes this milestone performance and success to the continued trust, confidence and co-operation of its taxpayers, to the extraordinary devotion and dedication of SRB staff and to the continued support that it received from Sindh Government. SRB is committed to continue making relentless efforts and also to continue assistance and facilitation to taxpayers with a view to achieving the ambitious target of Rs 49 billion for the year 2014-15.-PR



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CBM collects 93 percent of tax target July 04, 2014

The Cantonment Board Multan collected over Rs 140 million against set target of over Rs 150 million for fiscal year 2013-14 which amounts to 93 percent of the target. An official source told this news agency on Thursday that CBM collected 73 percent in property tax, 103 percent in sewage, 71 percent in water and 126 percent in lease rent heads. They achieved 91 percent in hoarding and 103 percent under Cantt fund properties' heads, he said adding that some of tax payers had submitted tax of the properties in advance. This time, the source added, they got 20 percent more tax as compared to 2012-13 target.

Copyright Associated Press of Pakistan, 2014


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Fuel and Energy: Pakistan

Transmission system cannot endure load beyond 15,000 megawatts: National Assembly body told July 04, 2014

MUSHTAQ GHUMMAN

Ministry of Water and Power on Thursday made shocking revelations that Pakistan''s obsolete transmission system will collapse if more than 15000 MW electricity is transmitted at one time, adding that successive governments did not invest in transmission and distribution system. In a briefing to the National Assembly''s Standing Committee on Water and Power, Minister of State for Water and Power, Abid Sher Ali and Secretary Water and Power, Nargis Sethi acknowledged that corruption has penetrated the entire power system. Sethi who also disclosed that presently there is no mechanism to determine load. "National Transmission and Dispatch Company (NTDC) should determine actual load of each area as the installed transformers cannot bear the overloading and start tripping," she added. She maintained that over the years, successive governments paid attention to generation, demand and supply but not on distribution and transmission system. "Our dependable installed capacity is 19000 MW but our system cannot transmit more than 15000 MW. If current system is not improved it will collapse one day. We have to revamp the entire system including over billing mechanism. A committee alone cannot do this," she continued. Members of the committee gave a tough time to the Minister and Secretary with respect to loadshedding, over-billing, agriculture tariff and development work. She maintained that the staff (power sector manpower) is not so honest and complained that people also do not cooperate with them. "I have been appointed Secretary Water and Power last month. Please give me a few months I will do my best to resolve fundamental issues," said Sethi, who will retire in December this year. Minister for Water and Power, Abid Sher Ali, said that 25-30 per cent load shedding is being implemented at the time of Sehr and Iftar because of system constraints. He said efforts are afoot to streamline the system and send the corrupt elements behind the bars, adding that detection bills are being issued to consumers to hide theft. Last year, different Discos recovered billions of rupees through detection bills, he added. "We have taken action against Wapda employees who were found involved in wrongdoings. Recently, Mepco CEO has been replaced because of numerous complaints against him," he continued. He directed Managing Director National Transmission and Dispatch Company (NTDC) to expedite work on projects under implementation.


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Replying to a question raised by Rao Ajmal regarding agriculture tube-wells'' tariff, Minister for Water and Power stated that the federal government cannot fix flat rate of Rs 10.30 per unit for agriculture tube wells and the rate has to increase by Re 1 to Rs 1.50 per unit if the provincial government does not provide a subsidy; he suggested to the members of the committee to hold a meeting with Chief Minister Punjab Shahbaz Sharif and request him to continue subsidising agriculture tariff. He said lakhs of meters are defective across the country, which are being replaced. He further stated that the Ministry of Water and Power is submitting progress reports to Prime Minister every week. Answering a question on quality and pricing of transformers, Minister of State for Water and Power informed the committee that the incumbent government has dismantle the cartel of transformers manufactures'' who previously sold one transformer at Rs 550,000 and now sell it at Rs 35000 to Rs 400,000. He acknowledged that Discos are facing issues in supply of transformers because local transformer manufacturers have obtained a stay order from the court. In reply to a question regarding arrest of CEO, Lesco, Abid Sher Ali said that FIA is conducting an inquiry into billions of rupee scam and a few officials are already under arrest.


APCNGA rejects new schedule of 72-hour monthly gas supply July 04, 2014

The All-Pakistan CNG Association (APCNGA) on Thursday rejected the new schedule of 72 hours per month supply of natural gas to CNG outlets across Punjab and termed the move `a conspiracy to ruin the sector'. Speaking at a press conference, representatives of APCNGA alleged that a powerful lobby was behind the plan, who wanted to double the profits of private power plants by providing them the gas allocated for CNG sector, which would eventually lead to complete elimination of the world's largest CNG sector worth Rs 450 billion. Central Chairman of the APCNGA, Pervaiz Khan Khattak, said that the new schedule announced by SSGC was also a part of the unholy plan which would be fought tooth and nail for survival of millions of families. The CNG body urged the government to increase gas supply and reduce gas loadshedding for CNG sector till July 10, otherwise the owners of CNG stations would be left with no option, but to take to streets against the decision. Senior Vice Chairman (SVC) of APCNGA Brigadier Iftikhar, Chairman Supreme Council Ghiyas Paracha, Abid Hayat, Chaudhry Salahuddin, Ashar Aleem and other leaders were also present on the occasion. Pervaiz Khattak said: "We will never allow pushing million beyond poverty line for the benefit of 80 influential families of Punjab, come what may, as business for 72 hours in a month in which half of the hours are wasted in load-shedding is nothing but a cruel joke." "If decision is not taken back and our demands are not met until July 10, we will have no option but to protest the move with full might," he warned.


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He said that different departments have opposed patronage of private power plants and provision of gas to them on subsidised rate, while Supreme Court has issued judgement against these plants but to no avail. It was amazing that the sector paying highest taxes and tariff is deprived of natural gas which is being diverted to those `addicted' to subsidised gas despite the fact that all the sectors excluding CNG have had alternate to gas. Electricity tariff, taxes and price of all inputs is being increased frequently while pressure has been reduced intentionally to destroy the sector, he lamented. The leader of the CNG sector said that hundreds of CNG filling stations have been closed across the stretch of Punjab while thousands are on the verge of closure, but it is yet enough to draw the attention of the policymakers.


Meeting discusses amendments to Ogra ordinance July 04, 2014

A meeting regarding proposed amendments of OGRA ordinance was held with Zahid Hamid, Federal Minister for Science & Technology, in the chair here on Thursday. The meeting was attended by Saeed Ahmad Khan, Chairman OGRA, senior officers of Ministry of Petroleum & Natural Resources and the Cabinet Division. The proposed amendments in the Ordinance were discussed in detail. The amended Bill will be presented in the Economic Co-ordination Committee (ECC) meeting for approval. -PR


Federal government asked to improve power distribution system: Khattak warns of long march against Wapda July 04, 2014

Khyber Pakhtunkhwa Chief Minister Pervez Khattak has asked the Ministry of Water and Power to rectify its system. While holding the federal government responsible for massive loadshedding, over-billing and outdated power distribution system in KP, he warned that he would bring the people of the province to streets and lead long march against Water and Power Development Authority (Wapda) if it did not mend it ways. Talking to media persons in Nowshera after returning from Islamabad, the chief minister asked


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State Minister for Water and Power Abid Sher Ali to make thieves and looters of his ministry accountable instead of abusing Pakhtuns. He urged Ali to concentrate on his ministry, warning that Wapda's failure in bringing improvement in its system would force the people of KP to stage sit-ins and long march against it. He said that he would himself lead that long march if the problem was mot solved. He accused Abid SherAli of deteriorating the situation further instead of pacifying the enraged people. He said that PTI-led provincial government was carrying forward the agenda of change in the province, which had ushered in a uniformed development. The Chief Minister said that they were extending full co-operation to Peshawar Electric Supply Company (Pesco). "But it is a matter of high concern that 50 percent electricity is stolen while the remaining is wasted in line losses," he added. He said that no action was being taken against kunda mafia and power theft. Khattak said the KP govt transferred funds to the tone of billions of rupees for bringing improvement in transmission system, installation of new transformers and prevent overloading of the system. But, he said, Wapda is short of power transformers while both Wapda authorities and federal government are hiding the facts. He said that for arresting frauds and theft in Wapda, FIA had launched a high level investigation and its all stores had been sealed off. He said that his government had advised federal government to invest in generation of cheap electricity, which will help in overcoming the prevailing energy crisis. He said that the construction of several small and big dams including Basha and Dasu dams was the need of hour. The KP chief minister said that injustices were being meted out to the people of Khyber Pakhtunkhwa, as despite generating cheap hydel power, the federal government was levying different surcharges and they were even denied provision of power to meet their requirements. The second tragedy, the chief minister said, is the installation of old power transformers in grid stations, which are not capable to bear the additional load. He said that he had demanded of the federal minister to correct the system, rescue the poor from over-billing and massive loadshedding. Otherwise, he said, he as chief minister of the province would bring the people of the whole province to the streets to stage long march against the stubborn policies of Wapda. To a question as to why resignations were sought in a meeting of PTI members of National and Provincial Assemblies presided over by Imran Khan, the chief minister said that no such issue was discussed in the meeting and the meeting was about August 14 long march. He said that the people of Khyber Pakhtunkhwa had given heavy mandate to PTI and no rigging had taken place here, otherwise, their opponents would have moved to the courts. He said that the PTI mandate was reaction to corruption, loot and plunder, nepotism, destruction of institutions and wrong policies of the previous rulers. He said that they were endeavouring to bring about a change in the system. He vowed that he would make Khyber Pakhtunkhwa a model province of the country, adding that KP government will complete its tenure.



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Power shortfall may rise again next week July 04, 2014

Power shortfall is likely to surge against by next week when temperature would be on the higher end due to end of cloudy spell. It may be noted that power shortfall had reduced to 3000MW early this week with drop in mercury. The current week has also witnessed a few impressive spells of rain besides heavy presence of clouds in the sky. Resultantly, demand for electricity remained on lower ends that pulled the difference between demand and supply considerably. Prior to it, sizzling weather had triggered demand two weeks back when power shortfall had touched to 4000MW. Chances of further increase were high but a drop in mercury and early monsoon reversed the shortfall again to a manageable level. Meanwhile, the industrial consumers are not happy with the situation. The Punjab-based textile industry is up in its arms, as the Discos are observing 10 hours a day load shedding on independent feeders. Resultantly, the mills have closed down one shift production while laying off the workers.



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Banking & Finance

Liquid forex stand at $13,990.1 million: SBP Thursday, 03 July 2014 17:52

Posted by Imaduddin

KARACHI: The total liquid foreign reserves held by the country stood at $13,990.1 million on June, 27, 2014.

According to the break-up of the foreign reserves position, foreign reserves with State Bank of Pakistan stood at $9,033.2 million and net foreign reserves held by bank were $ 4,956.9 millions, a State Bank press release here Thursday said.

During the week ending June 27, 2014, SBP's Liquid FX Reserves had decreased by $ 157 million to $9,033 million compared to $ 9,190 millions of previous week.

During the same period the SBP has made payments of US$ 249 million from its reserves on account of external debt servicing and other official payments, which includes $ 148 million paid to IMF under stand by arrangements.

The SBP received inflows multilateral and bilateral sources amounting to $ 98 millions during the week.

Copyright APP (Associated Press of Pakistan), 2014


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BR Research: All

Import patterns continue July 04, 2014

BR Research

The eleven-month import numbers are out and they don reflect any substantial shift from the broad composition observed in 10M FY14. Data released by Pakistan Bureau of statistics continue to show an increase in capital expanding imports--such as machinery--along with a corresponding decline in consumption oriented imports that kept total imports in 11M FY14 almost at the same level as that in the year-ago period. However, there have been some noteworthy developments on month-on-month basis. After peaking in March and April, the imports of edible oil-palm and soybean-tanked substantially in May 2014. Palm oil imports fell by 11 percent month-on-month basis, whereas that of soybean declined by 90 percent. As mentioned earlier in these columns (See BR Research column Imports in check, May 29, 2014), this had to happen as the buying spree in March-April was only a seasonal uptick due to Ramazan-related preparations. On that note, however, consumers would like to see a decrease in retail level prices of edible oil, as the landed cost of palm and soybean oil fell by 9 and 19 percent (year on year), respectively in 11M FY14. Meanwhile, machinery imports continue on its upward trend, rising 4.5 percent month on month in May and 22 percent year on year. Mays jump in machinery imports came on the back $34 million of power generation machinery imports and $26 million of telecom machinery imports. The rise in latter was led by other apparatus ($17 million) followed by $9 million worth of mobile imports. It should be noted, however, that on 11M basis imports of other telecom apparatus are down 29 percent, whereas that of mobile is marginally up by 3 percent. What is intriguing is the continuous decline in motor car imports in both CBU and CKD segments. PBS data reveals that import of completely built cars is down 44 percent year on year in 11M FY14, whereas that of CKD is down 9 percent. The former is understandable in the light of stricter auto import regulations, but the latter is intriguing considering that auto sales is, in fact, marginally up during the comparable period. Finally, the mother of all imports in Pakistan, petroleum, remained under control in May; in fact, it fell 5 percent month on month, with the 11M year on year comparison down by 2.5 percent. While full year petroleum import number can be expected to stay within limits, that for the ensuing months is expected to rise 5 percent on average, thanks to the drama in the Middle East.


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Jewellery exports: worsening woes July 04, 2014

BR Research

A little less than a month since the budget speech and the government may already be humbled. While the Finance Minister announced a 4.24 percent year-on-year growth in exports over the 10-month period, the figure has taken a dip and now stands at 3.5 percent over the 11-month period compared with close to 6 percent during the corresponding period of last fiscal year. Sifting through the data, one sees the most significant decline in the other manufactures group. This export group has most negatively been affected by the decline in jewellery exports, down by 72 percent for the 11-month period. Calculations based on official statistics suggest that this is the most significant 11-month decline over the last five years. Indeed, jewellery exports have by and large supported exports through the last five years, with FY11 being the only exception. The significant blowback to jewellery exports, however, has been under discussion through much of the year since the issuance of the now infamous SRO 760. In an earlier BR Research column, (Behind jewellery exports, dated November 27, 2013), it was highlighted how the SRO had created bottlenecks hindering jewellery exports. To recall, not only have imports been restricted time and again but the process has grown cumbersome. Exporters need to have the contract endorsed from the foreign countrys high commission and then follow the same procedure with the respective Pakistan High Commission in the export destination. Further, the time for value addition has been brought down, along with increases in the VAT. However, Habib-ur-Rehman, Chairman All Pakistan Gems Merchants and Jewellers Association (APGMJA), notes that since the SRO issuance, things have gotten even worse. While industry representatives support the governments decision to cap gold imports at 25 kg, they are also insistent on being allowed to bring back 100 percent of their export proceeds through the conventional banking channel (as against 50 percent in the form of gold imports obligated under the SRO). During the third quarter of FY14, only 85 kg of gold was imported, out of which 75 kg was exported back after value addition by jewellers, stresses Habib. Consequently, the government took note and late in March, gold import restrictions were eased after numerous meetings in Islamabad. In the intervening time, the country had lost much of the export market to India despite lower prices of Pakistani jewellery, he adds. Exporters have also been discouraged by a myriad of other factors. Notably, the TDAP has now been assigned additional regulatory roles, such as monitoring of export payments. This has led to increased time for processing of export applications. More importantly, exporters are growing increasingly worried by notifications from FBR. At the


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time of import, the full value of gold is registered under Goods Declaration. At the time of exports, however, the value of gold is nullified so that only value addition on the commodity can be registered. In order to avoid procedural hassles from the ensuing discrepancy, exporters were forced to export on their own incorporating the value of gold in the Goods Declaration along with value addition. The large amounts led to increased notices from FBR, in turn further discouraging exporters. And then there were terrorist attacks and political upheavals that have persistently shattered investor confidence in the country. Cathay Pacific and Emirates were the only two cargo carriers for gold traders; one has suspended operations altogether in the country, the other has halted in Peshawar. Reportedly, traders are now in initial talks with Etihad Airways. Further, the international gold exhibition, earlier set to be organised in October this year to make up for lost international markets, was cancelled as news of terror attacks on the countrys largest airport broke out. The issue of jewellery trade, once one of the leading export drivers for the country, has been under duress for much of the year and appears to require immediate redressing particularly in the light of declining export growth. Does finance ministry have a right fix this time?

The positive side of India-Pakistan pharma trade July 04, 2014

BR Research

According to the economic think tank, Indian Council for Research on International Economic Relations (ICRIER), there is an untapped trade potential of USD1.6 billion between India and Pakistan. Exploring this untapped potential can lead to boosting the trade and competitiveness of the two countries, a recent study done by ICRIER pointed out. According to the study, the pharmaceutical market of India ranks as the third largest in the world in terms of volumes and in terms of value, it stands at fourteenth. During 2011, Indias pharmaceutical market was estimated at USD 21.7 billion. On the contrary, Pakistans pharmaceutical industry is the tenth largest in Asia Pacific and was valued at USD1.63 billion (2011). This reflects that Indias pharmaceutical market is nearly thirteen times the pharmaceutical sector in Pakistan. Opening up of bilateral trade can enable Pakistan to get a hold of a market which is many multiples of its own and has yielded remarkable results over the past many years. Research and development remains at the core of a pharmaceutical sectors competitiveness. The study highlights that India spends nearly 6-8 percent of its revenues on research and development while the 30 leading Indian pharmaceutical companies spend almost 20 percent of their turnover on research and development. By joining hands with India, that is considered to be a big regional


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player in the pharmaceutical market, Pakistan can potentially rack up the benefits of Indias growing research and development capacities and experiences. By the same token, since the pharmaceutical market in Pakistan lacks the presence of FDA approved plants for testing purposes, access to Indian pharma market having 150 FDA approved plants could even make it possible for Pakistan to use those laboratories and even save costs. Also, with little FDI flow between the two countries, high bilateral trade can also lend a hand in boosting bilateral FDI in the long term, the study added. While the fears and apprehensions of small pharmaceutical players are justified, trading with Indian drugs will lead to survival of best quality medicines by fuelling competition in the industry, according to ICRIER. But to make that happen, removing trade barriers including wiping out the negative Indian import list maintained by Pakistan needs to be seen in a new light.


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Brief Recordings

'KP government is practising what PTI advocates at the federal level' July 04, 2014

Following are excerpts on fiscal matters from BR Research's recent sit-down in Islamabad with Asad Umar, a former Engro CEO and currently an elected MNA and top leader associated with the Pakistan Tehreek-e-Insaf. BR Research: How can we judge the quality of government spending when actual spending is shrouded in mystery? Asad Umar: You raise an important point. For the past six years in particular, the government figures for fiscal deficit have not been achieved. Similarly, there is lower spending on development compared to the budget--and there are massive variations there. Is there any point then in delivering budget speeches? Twenty-four SROs with a cumulative impact of Rs 238 billion were issued last year alone. Electricity price increases were never mentioned anywhere in the budget, nor were renewal of tax exemption schemes. These are massive budgetary decisions, big numbers, which are no longer part of the budget document. I am not talking about the quality of the decisions here; I am only referring to the meaningfulness of the budgetary exercise. BRR: Has your position evolved on the power tariff rationalisation issue? Your post-budget response in the parliament seemed to suggest you are now against it. AU: Our position has been the same. But sequence is critical to reform. There was a time in the '90s when the government of Pakistan used to borrow from the SBP on tap for 6.5 percent. And inflation in Pakistan, for decades, has averaged around 9-10 percent. So they were borrowing at a steep negative interest rate, which was a bad thing that needed to be changed. Later realising that the rate should be determined by the market, they made that change without fixing their fiscal problems first or setting up a liquid debt market in the country. Suddenly T-bills' rate shot up to 17.5 percent in mid-'90s. That made the government fall into deep debt, frantically print currency notes. So, sequence has to be right. We don't change out positions based on politics. PML-N issued its energy policy in August last year. I went on air and said that this policy is in the right direction. There was only one thing I critiqued: they were doing the wrong sequence of reforms. They front-ended tariff increases. Look at our document and it clearly shows how, over time, losses can be brought down to zero and load shedding eliminated. BRR: So you are saying that decrease in power subsidy is the wrong way to start power sector reforms? AU: I won't use the word 'subsidy'--that's a false definition; because the economic value of electricity in Pakistan is between 10 and 11 rupees per unit right now. The rest is corruption and


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incompetence. You cannot charge that premium to consumers or pass on inefficiencies to them. Through front-ending tariff increases, export sector has been made more uncompetitive. And from an industrial point of view, it is also more difficult for the import-substitution industry to compete. From an individual point of view, it is a moral issue. They are doing it just wrong. While consumers pay the price of inefficiencies, what about the guys who created this mess? How many people have been prosecuted? How many are in jail? The answer is zip. Those who inflicted this cost got away scot-free and the rest of the country pay the price. This, in economic terms, is called creating a moral hazard. You also need to look at this issue through a practical point of view. When you jack up tariffs, problems of thefts and pilferages increase. Daily cost of such losses was billion rupees a day around the time elections were taking place last year. After the government took over, there has now been 78 percent price hike amid claims of governance by an experienced team. What is the result? Those losses are still a billion rupees a day. Receivables have gone up; technical losses have increased. BRR: How much time will your energy sector plan take? AU: Four years-if we do all the right things. The details are available online. We convinced Imran Khan not to play as populist on this issue, to avoid making claims of premature resolution. He has remarkably stuck to that courageous position. It is possible that we may not deliver on that timeline, but we will never say something which we believe can't be done. BRR: What priorities does the latest Khyber-Pakhtunkhwa (KP) budget reflect? AU: We are focused on raising 75 percent additional revenues in FY15 compared to the previous budget. Specific measures include agriculture tax increases of 200-400 percent for medium- to large-sized landholders and orchard owners. There is an agriculture tax increase of 400 percent for the largest farmers. GST on provincial services has been cut from 16 percent to 15 percent. We have added five new services to the tax regime where the GST has been fixed at a lower, 10 percent. We plan to bring the rest of GST on services down to 10 percent as well in a few years. On the expenditure side, the single biggest increase is for education, followed by police, due to security issues facing the province. Among social welfare measures, the KP government will provide to BISP-eligible families Rs 10per Kg subsidy on flour, and Rs 40per liter subsidy on cooking oil. So, there is social welfare, education, tax on large farmers, cut in GST--we try and do what we believe is right. We are doing at the provincial level what we advocate for the Federal Government. BRR: Last year (FY14), the KP government had budgeted Rs 24 million in agriculture taxes--this year, it has budgeted Rs 79 million under this head. Are you satisfied with that? Also, why is indirect taxation increasing in the province's budget when in fact the government's focus should be on direct taxation? AU: I am not satisfied with the agriculture tax target. But we also need to realise that agriculture is small part of KP's economy. However, if we do the right things, we can take the provincial agriculture tax collections to Rs 300-400 million in two to three years, which is what our plan is. That's obviously lower than Punjab's annual agriculture tax collections, but Punjab has a huge


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agro-base. The indirect tax increase situation is prevalent across the provinces, so that's not something unique to the KP province. This had to happen after the devolution as provinces had to deal with a completely new system. Direct tax collections have just started and at least three years are needed to tilt the ratio towards direct tax collections. BRR: At the provincial level what in your view are the reforms--and sequencing of reforms, to take your term-that will be necessary to make them active producers in the oil, gas and power sector? AU: KP has tremendous potential for power generation. Under the existing schemes of things, for injecting electricity into the NTDC grid, KP would get only 11 percent of it back. This shows that there is no incentive for the KP government to do anything substantial on power generation. The whole country will win if you are able to have a more direct incentive for KP to use more of its power generation. Our proposal was for the Federal Government to give us the generation and distribution business and pay for four years of transition losses and then we would take it over. The Federal Government did not agree to this and only offered us PESCO ownership. The KP Chief Minister had a follow up letter written to the Prime Minister but no encouraging response has come. It has been six months so far. Bottom line is that provinces have to be incentivised to take ownership of the resources. The whole country will benefit. If you allow a province to take 50 percent of the gas that comes out of it, suddenly there is so much more incentive to really put the foot on accelerator. But, sadly, the Eighteenth Amendment spirit is not being followed. Look at the GIDC law that was passed. It is a shameful law, an absolute violation of the Constitution. BRR: Can these issues be addressed in the next NFC? AU: We can fix these issues through NFC. But that will take a long time. These are snap decisions. If it is something that is considered important by all major political forces, we will get it done. BRR: Still, what should the next NFC focus on in your opinion? AU: I think the main focus now has to be on these resources and the sharing of benefits of these resources. In, strictly my personal view, I don't think there is much room left in the federal balance sheet for an increase in federal transfers. If there is, then it should be contingent. That is, link higher federal transfers to incremental provincial tax revenues--or make it part of the equation.



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Miscellaneous News

2013-14: Foreign exchange reserves rise by 50%, data shows By Kazim Alam

Published: July 4, 2014

KARACHI:

Foreign exchange reserves held by the State Bank of Pakistan (SBP) increased by more than 50% in 2013-14, data released by the central bank on Thursday showed.

Although foreign exchange reserves held by the SBP recorded a week-on-week nominal decrease of 1.7% on June 27, their year-on-year increase clocked up at 50.3%, with the reserves reaching $9,033.2 million on the second-last day of 2013-14.

Foreign exchange reserves held by the central bank amounted to $6,008.4 million at the end of 2012-13, SBP data shows.

Total liquid foreign reserves held by the country, including net foreign reserves held by banks other than the SBP, stood at $13,990.1 million, up 26.9% from $11,019.6 million recorded at the end of 2012-13.

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The country saw its foreign exchange reserves dwindle quickly in the first half of the last fiscal year. They hit rock bottom at the end of January when they amounted to just $3,180.3 million, thus signifying the import cover of less than one month.

Subsequently, a series of actions from the finance ministry, including arm-twisting of exporters to make them bring back their export proceeds to the country without waiting for the stipulated limit of 120 days, strengthened the level of SBP-held foreign exchange reserves.

According to data compiled by Elixir Securities, the performance of the country’s external account – which consists of a basket of economic measures relating to international transactions — remained strong during the first 11 months of 2013-14. It posted a surplus of $5.7 billion, which is up 1.6 times on a year-on-year basis.

“Major improvement was evident in financial and capital accounts, as both turned positive, while the current account deficit increased by a mere 3% year-on-year,” research analyst Ujala Adnan wrote in a recent note issued to clients.

Capital account balance increased to $1.7 billion in July-May, up 580% from $255 million recorded in the comparable 11-month period of 2012-13. Similarly, financial account balance


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clocked up at $4.5 billion in the first 11 months of 2013-14 as opposed to a negative $75 million recorded in the same months of the preceding fiscal year.

While the sale proceeds of the Eurobond issue kept the financial account positive, heavy capital inflows from bilateral and multilateral sources spurred the capital account surplus in the outgoing fiscal year, she said.

Pakistan received foreign direct investment (FDI) of $1.36 billion in the first 11 months of 2013-14, which is 2.5% higher than the FDI received during the comparable period of the preceding fiscal year. However, the increase in foreign portfolio investment (FPI) over the same period was disproportionately highly mainly because of the Eurobond issue.

Pakistan attracted $2.3 billion in FPI during the July-May period, which is about 22 times higher than the FPI of $102.3 million received in the comparable 11 months of the preceding fiscal year.

“The external account strengthening seems sustainable under the umbrella of International Monetary Fund’s standby arrangement programme worth $6.7 billion, privatisation programme, 3G spectrum auction, loans from the World Bank, Asian Development Bank (ADB) and other bilateral and multilateral sources,” Adnan noted, adding that the planned issue of $500 million worth of Islamic bonds in the international market will improve foreign exchange reserves further.

As opposed to net external inflows of $4.6 billion in 2013-14, the government has projected net external inflows of $5.4 billion in the current fiscal year. The government’s projection of loans appears to be ‘achievable,’ according to KASB Securities, based on the successful Eurobond issue in the last fiscal year that is currently trading at a significant premium.

“Despite ambitious projections on the external front, we believe the realisation of project/programme loans as well as successful Eurobond and Sukuk bonds can boost foreign exchange reserves,” it said, noting that total liquid foreign exchange reserves are expected to increase to $17 billion by the end of the current fiscal year.

Published in The Express Tribune, July 4th, 2014.

ECNEC clears projects worth Rs428 billion By Shahbaz Rana


ISLAMABAD: The country’s top project sanctioning authority on Thursday approved a dozen development schemes worth Rs428 billion, including few projects of the Pakistan-China Economic Corridor, settling a row over the alignment of the corridor by approving the eastern route.

The Executive Committee of National Economic Council (ECNEC) also approved a project to strengthen the Balochistan Constabulary by inducting 6,000 additional personnel.


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The committee headed by Finance Minister Ishaq Dar green-lighted the construction of the Sukkur-Multan section of the Karachi-Multan-Lahore Motorway (KLM) project. The approval came just days before a Pakistani delegation is set to leave for China to discuss financing issues of the infrastructure and energy sector projects that will be completed under the corridor.

The Sukkur-Multan project will be completed at a cost of Rs259.4 billion, 90% of which will be funded by China, according to a finance ministry handout issued after the ECNEC meeting. The remainder will come from the Public Sector Development Programme (PSDP). The project, which envisages the construction of a 387-kilometre-long six-lane motorway stretch, will be completed by October 2017 and will be executed by the National Highway Authority (NHA).

At a cost of Rs51 billion, the ECNEC also approved the project for land acquisition, compensation for affected properties and relocation of utilities for the construction of KLM.

With this approval, the issue of the Pakistan-China Corridor has been settled once and for all. In order to address security concerns, the government had decided to change the corridor’s alignment from the old western route – which passes through some restive areas – to a new eastern route. The decision had prompted much agitation by parliamentarians from Khyber-Pakhtunkhwa and Balochistan.

ECNEC also approved acquisition of land for the establishment of a Free Trade Zone at Gwadar at a cost of Rs6.5 billion. The project envisages acquisition of 2,281 acres of land, 1,627 acres of which would be acquired from private land owners, according to the finance ministry.

The body also approved the ‘Widening and Improvement of the 250km-long Kalat-Quetta-Chaman Road Section of the National Highway N-25’ with a revised cost of Rs19.2 billion. At a cost of Rs30.5 billion, it also cleared the Hasanabdal (Burhan)-Havelian Express.

ECNEC approved a Rs5.2 billion project to strengthen the Balochistan Constabulary. The project envisages recruiting 6,000 new personnel, who will be joined by 4,000 reserve police personnel to make a 10,000 strong constabulary force. This force will be tasked with ensuring security along the route of the Pakistan-China corridor.

The committee also approved the Flood Emergency Reconstruction Project for Bunds and Canals at a cost of Rs26.9 billion, Rs19.2 billion of which will come from a foreign loan. The body also approved the project for evacuation of power from the wind power plants at Jhimpir and Gharo wind clusters located in Thatta district and Jamshoro in Sindh, with a modified cost of Rs11.3 billion.

ECNEC approved, in principle, the ‘Prime Minister’s Programme for Provision of Laptops to Talented Students (HEC)’ at a cost of Rs4.9 billion. It envisages distributing 100,000 laptops among students studying in any public sector higher education institute across the country this year.

The body also cleared the ‘Rehabilitation and Upgradation of Trimmu Barrage and Panjnad Headworks’ with a rationalised cost of Rs16.8 billion, Rs14.9 billion of which will be loaned by the Asian Development Bank.


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It also approved the ‘Dualisation and Improvement of the 64km-long Mandra-Chakwal Raod Project’ at a revised cost of Rs4.7 billion. The project was originally cleared by former Prime Minister Raja Pervaiz Ashraf but became controversial afterwards.


Ramazan relief: Despite promise, outages could not be controlled By Our Correspondent


ISLAMABAD:

The government has acknowledged its failure to end electricity outages during Sehr and Iftar, saying 20% to 30% areas are still facing power cuts because of a poor and defective transmission system.

“Pakistan has an old transmission system which was unable to deliver required electricity,” Abid Sher Ali, State Minister of Water and Power, told the National Assembly Standing Committee on Water and Power in a meeting chaired by Mohammad Arshad Khan Leghari.

“Sometimes our demand exceeds 15,000 megawatts, but the transmission infrastructure is unable to cope with this pressure, leading to breakdown of feeders.”

The Asian Development Bank (ADB) and Japan International Cooperation Agency (Jica) had also withdrawn funds approved for upgrading the power transmission system following failure of the National Transmission and Dispatch Company (NTDC) to utilise the money, he said.

Ali expressed fear that the entire transmission system would collapse if the government tried to avoid power cuts and ensure uninterrupted supply. However, he stressed that different initiatives were being undertaken to improve the transmission and distribution system.

Commenting on foreign financing, Ali said installation of transformers was delayed unnecessarily and even funds, which were approved by the ADB and Jica, were not utilised.

The prime minister has constituted a committee to probe why funds were not spent on upgrading the transmission system and the money went back to the ADB and Jica. It will also submit its report to the parliamentary committee on water and power.

At the beginning of Ramazan, the government pledged that it would not resort to power outages during Sehr, Iftar and Taraveeh timings to facilitate the consumers.

To implement the plan, it asked Pakistan State Oil (PSO) to supply 22,000 tons of furnace oil to power plants every day in a bid to enhance generation. Earlier, PSO was providing 18,000 to 20,000 tons per day.


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The government also released Rs40 billion to the power producers and PSO – a major importer of oil – to ease the strain on their finances.

Just before the start of Ramazan, PSO defaulted on payments to international fuel suppliers as it could not retire five letters of credit by the deadline. This pushed up oil premiums, making the suppliers reluctant to provide oil without advance payments.

Subsidised power

Ali alleged that the subsidised electricity being provided to agriculture tube wells in Balochistan was being illegally used in hotels, though farmers were paying the bills. “We have found several cases where subsidised electricity for tube wells was used for commercial purposes.”

He ruled out any further reduction in power tariff for agriculture tube wells, saying instead that they were considering proposals to increase the tariff.

As the government was suffering a loss in electricity production, he said, the privatisation of plants would start from April next year.


Automobile portal: Carmudi looking to penetrate online trading By Shahram Haq


LAHORE: With the expansion of e-commerce in Pakistan, traditional ways of trading are changing too, and among others, automobile sector is one of them.

Carmudi, a venture of Rocket internet, the world’s largest incubator, is also benefitting from the growing e-commerce market of Pakistan. The company is operational in the country since January 2014 and is claiming a 200% month on month growth. It caters to all segments but is especially popular in the population segment under the age of 30.

“We target Pakistan with a clear vision to win this market; there is no point to be number two for us,” Carmudi global Managing Director Stefan Haubold told The Express Tribune. “Pakistani market has a potential to grow, especially after the spectrum auction for 3G and 4G has been successfully completed. This auction will not only benefit our portal but the business environment of the country in general. Modern way of doing business should have some requirements and for Pakistan, access to 4G spectrum is the first requirement.”

The company has raised $10 million from their investors a couple of months back only to penetrate more aggressively in Asian markets. The management is anxiously waiting for people to get access to 3G or 4G technology in Pakistan, after which they see a dramatic change for

http://www.carmudi.pk/


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online business and intend to capture this opportunity. The company is ready to pump in the money required for the portal to access the top position.

Though the venture has some common Standard Operating Procedures which they implement in all countries but the portal adapts to the market. “There are many different things in different economies which need to be understood first. For instance, some markets are more inclined towards reconditioned cars than new ones and some are opposite. We understand the flexibility of the market and our local officials deal with the market sentiments accordingly,” he said.

Talking about the competition of automotive portals in Pakistan, Haubold said that they are in this market for six months only. Their competitors had an edge for being the first automotive portal in Pakistan. “We have a lot of ground to cover and still very long way to go. We have some issues but will fix them over the time.”

Carmudi is operational in 20 countries but for the management the Asian region (excluding India) is their biggest market because they make biggest impact in such markets. “The population of around 1 billion is the major reason; the younger population with an urge to adopt modern trends is another reason for us to spend aggressively in Asian markets,” said Haubold.


Infrastructure: China extends helping hand for development By APP


ISLAMABAD: Pakistan and China have embarked upon an extensive programme for infrastructure development in Pakistan.

According to Radio Pakistan, sources in the Ministry of Planning and Development said that a number of projects are at different stages of planning and execution.

The funding for them would be made by China Development Bank, Export Import Bank of China and other financial institutions.

These projects include the Karakoram Highway Phase-II from Raikot to Islamabad. This 480 kilometre (km) long portion will be built at a cost of Rs379 billion.

The Multan-Sukkur section of Karachi-Lahore Motorway would be constructed at a cost of Rs246 billion, the project is likely to be initiated this year.

There is another plan for the rehabilitation and upgradation of the 1736-km long Karachi-Lahore-Peshawar railway track. It will amount to $3.65 billion — all these projects will be completed by the end of 2017.


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A dry port will be constructed at Havelian at a cost of $40 million, sources added.


APCNGA warns: ‘Countrywide protest if demands not met’ By Our Correspondent


ISLAMABAD:

All Pakistan CNG Association (APCNGA) while rejecting the new load management plan for the industry, warned of a countrywide protest in case the government does not reverse its decision.

APCNGA Central Chairman Pervaiz Khan Khattak criticised the new schedule that allots gas for 72 hours a month to CNG outlets across Punjab, terming it “a conspiracy” hatched to destroy the sector. “It’s a plan devised to increase the profits of private power plants by providing them gas allocated to the CNG sector and eventually eliminate the Rs450-billion industry. If the decision is not taken back and our demands not met until July 10, we will have no option but to protest,” he told a press conference.

Khattak said that they would never allow this decision that affects millions of people for the benefit of 80 influential families of Punjab as business for 72 hours a month, out of which half the hours are wasted in load shedding, is nothing short of a cruel joke. If CNG stations are allowed to work 4 am to 2 pm, it will resolve the main issue and the masses would not face any problems, he said.

Different departments have opposed patronage of private power plants and provision of gas to them on subsidised rates while Supreme Court has issued judgement against these plants but to no avail, he pointed out.

Former chief justice Iftikhar Muhammad Chaudhry, in his verdict clearly stated, “As far as captive power plants are concerned, the policy must be revised. They cannot be allowed to supply gas at much higher rates than National Electric Power Regulatory Authority without any justification. Therefore, the supply of gas to captive power plants should be revised to a lower priority and not at a subsidised rate.”

Hundreds of CNG filling stations had been closed across Punjab but it had no effect on the policymakers. Khattak said plotting against the CNG sector is enmity with the masses as the sector provides jobs to millions. Eighty million people use CNG-converted vehicles for transportation while government earns billions in taxes from the sector. He demanded the incumbent ministers to fulfil their promises.



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Exporter dilemma: PTEA urges govt to supply additional gas By Imran Rana


FAISALABAD: Criticising the massive power load-shedding and concerns over rising electricity shortfall, the Pakistan Textile Exporters Association (PTEA) has urged the government to supply an additional 200 millions of cubic feet per day (of gas) to the Punjab-based textile industry.

The industry bargained that the additional power would help it gain a competitive edge in the international market.

PTEA Chairman Sheikh Ilyas Mahmood and Vice Chairman Adil Tahir said on Thursday that due to the severe electricity and gas shortage in Punjab, the industry is suffering huge losses. If the problem was not resolved immediately, all efforts to promote industrialisation and job creation will prove fruitless, they added.

The industrial sector is the main victim of the massive load-shedding despite the fact that business community fulfils its obligations by paying taxes. The association said the government was just making it more difficult for the business community by raising the electricity tariff.

“Instead of controlling line losses and making arrangements to stop electricity thefts, the authorities are busy in worsening the situation,” said PTEA. “If immediate measures are not taken, nothing could stop the industrial wheel from coming to a grinding halt.”

Renewable energy is the way to go

The PTEA chairman was of the view that Pakistan is endowed with plenty of untapped renewable energy resources. There are many options for the government to explore in its bid to resolve the power crisis, stressing that one of these was to go for nuclear power generation. Currently about 436 nuclear power plants, with a cumulative net output of 370,326 megawatt (MW) electricity, are operating in 31 countries, while Pakistan has only 1.7% share of nuclear power in its total energy mix.

Mahmood also stressed upon the government to speed up the construction of nuclear power plants, which are cost competitive, safe and reliable.

Meanwhile, the vice chairman added that another option for the government is to exploit the huge potential of hydropower generation. “Only Khyber-Pakhtunkhwa has the potential of generating 50,000MW hydropower energy and the government should build small dams there. For this purpose, the private sector should be encouraged by simplifying the process of establishing micro-power stations in potential areas,” he concluded.



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Promotion of trade: FCCI terms delegation’s visit to Turkey a success By Our Correspondent


FAISALABAD:

Earlier this month, the Faisalabad Chamber of Commerce and Industry’s (FCCI) delegation visited Turkey, which turned out to be a success and as a result, a delegation of Istanbul Chamber of Commerce will visit the FCCI in return.

“The FCCI is planning another three delegations to various countries during August,” said Engineer Suhail Bin Rashid, president of FCCI.

He was speaking to the FCCI delegation that recently returned from Turkey.

The head of delegation Rashid Munir briefed the FCCI president about his meetings and achievements. “The Turkish entrepreneurs have not yet fully realised the textile potential of Pakistan as they consider Pakistan as one of the third world countries.”

He said that Istanbul Chamber of Commerce was informed of Pakistan’s tremendous progress in the textile sector.

“Pakistan’s textile exports are earning about $13 billion per annum,” he said.

He told the president that Turkish entrepreneurs were surprised to hear that Pakistan was consuming a huge quantity of textile chemicals.

He said that some of the Turkish businessmen have agreed to plan a delegation to visit the FCCI in the near future. They were inclined to set up distribution offices of their companies in Faisalabad on a top priority basis.

He said that the office bearers of Istanbul Chamber of Commerce hoped that the exchange of delegations between Pakistan and Turkey will continue to explore new avenues of cooperation in different sectors of the economy.

He also quoted his meeting with Pakistan’s Consul General in Turkey and said that he also hoped to hear that the FCCI delegation was serious and had made full deliberations with the sector-specific persons.

However, he regretted that he was unable to arrange more meetings with the businessmen as they were informed of the delegation visit at the nick of the time. But he assured to extend full courtesy to the next delegation from the FCCI.



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Stringent action needed against hoarders By Our Correspondent


KARACHI: Karachi Chamber of Commerce and Industry (KCCI) President Abdullah Zaki expressed deep concerns over the exorbitant hike in prices of household commodities and has urged the Sindh government and the Karachi Municipal Corporation (KMC) to take stringent action against profiteers and hoarders.

Zaki said in a statement on Thursday that prices of all household commodities, especially fruits and vegetables, have been fearlessly raised by shopkeepers due to the lack of an efficient price-control mechanism, further intensifying the hardships being faced by the poor masses.

“Global prices of various commodities are immediately reduced and special discounts are also offered to the public, but unfortunately in Pakistan, the profiteers immediately raise prices of kitchen products to get maximum profits and hoarders create artificial shortages of necessary commodities in order to benefit from the situation,” said the KCCI president.

He also mentioned that although the price lists are regularly issued by KMC, no shopkeeper bothers to adhere the prices quoted in to these lists and continues to overcharge the customers. To deal with this issue, he suggested that vigilance teams should be deployed at all markets of the city to effectively monitor prices and take action by imposing heavy fines or sending them to jail.

Zaki concluded by saying that all concerned departments of Sindh government and KMC should closely monitor prices of all commodities and other important kitchen items on a daily basis and no one should be allowed to exploit the public.



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OPEN MARKET FOREX RATES Updated at: 4/7/2014 6:39 AM (PST)

Currency Buying Selling Australian Dollar 92.5 92.75 Bahrain Dinar 261.75 262 Canadian Dollar 92.5 92.75 China Yuan 15.8 15.95 Danish Krone 18 18.15 Euro 135 135.25 Hong Kong Dollar 12.5 12.65 Indian Rupee 1.6 1.65 Japanese Yen 0.97 0.98 Kuwaiti Dinar 349.5 349.75 Malaysian Ringgit 30.2 30.35 NewZealand $ 84.5 84.75 Norwegians Krone 16.3 16.45 Omani Riyal 256.2 256.45 Qatari Riyal 27 27.25 Saudi Riyal 26.35 26.6 Singapore Dollar 79.75 80 Swedish Korona 14.55 14.7 Swiss Franc 109.75 110 Thai Bhat 3 3.05 U.A.E Dirham 26.95 27.2 UK Pound Sterling 169.5 169.75 US Dollar 99.25 99.5


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INTER BANK RATES Updated at: 4/7/2014 6:39 AM (PST)

Currency Bank Buying TT Clean

Bank Selling TT & OD

Australian Dollar 92.2 92.38

Canadian Dollar 92.11 92.3

Danish Krone 18 18.03

Euro 134.19 134.46

Hong Kong Dollar 12.68 12.71

Japanese Yen 0.9648 0.9668

Saudi Riyal 26.21 26.26

Singapore Dollar 78.77 78.93

Swedish Korona 14.65 14.68

Swiss Franc 110.51 110.74

U.A.E Dirham 26.76 26.82

UK Pound Sterling 168.66 169.01

US Dollar 98.3 98.5


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Bullion Rates (Gold Prices) in Pakistan Rupee (PKR) As on Fri, Jul 04 2014, 02:15 GMT

Metal Symbol PKR for 10 Gm

PKR for 1 Tola

PKR for 1 Ounce

Gold 24K XAU 41,812 48,718 130,051

Palladium XPD 27,182 31,672 84,547

Platinum XPT 47,381 55,207 147,375

Silver XAG 668 779 2,079

Gold Rates in other Major Currencies

Currency Symbol 10 Gm 1 Tola 1 Ounce

Australian Dollar AUD 453 528 1,410

Canadian Dollar CAD 451 526 1,403

Euro EUR 312 363 970

Japanese Yen JPY 43,322 50,477 134,748

U.A.E Dirham AED 1,558 1,815 4,846

UK Pound Sterling

GBP 247 288 769

US Dollar USD 424 494 1,319

* These rates are taken from International Market so there may be some fluctuation from Local

Market.

http://www.forex.pk/bullion-rates-gold-24k-xau-pkr.php

http://www.forex.pk/bullion-rates-palladium-xpd-pkr.php

http://www.forex.pk/bullion-rates-platinum-xpt-pkr.php

http://www.forex.pk/bullion-rates-silver-xag-pkr.php

http://www.forex.pk/bullion.php?base=AUD&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=CAD&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=EUR&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=JPY&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=AED&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=GBP&curr=XAU&type=ounce

http://www.forex.pk/bullion.php?base=USD&curr=XAU&type=ounce

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