Pages: 7 profit.com.pk Thursday, 12 January, 2012

Heart of Asiastrategy Page 4-5

An opportunisticaxis Page 3Oversees Pakistanisshow interest in Thar Coalproject Page 7

ISLAMABAD

AMER SIAL

A GITaTEd over the biased powerpoint presentations of Ministry ofWater and Power (MOWP) and its al-

lied departments, national assembly specialcommittee on energy crisis took cudgels onWednesday and directed the ministry tocome straight to the point by giving reasonsfor the power sector crisis and its solutions.

Water and Power development author-ity (WaPda), alternate Energy developmentBoard (aEdB), Private Power and Infrastruc-ture Board (PPIB) and national Energy Con-servation Centre (EnERCOn) gave usualpresentations to the committee encompass-ing their efforts to expedite power generationfor future. But no presentation dealt with cur-rent problems and their solution.

Firing the first salvo, Shahid Khaqanabassi of PML-n said the special committeewas formed after the failure of na commit-tee on water and power to address the issue,

but it too was being led to the same alley asduring the last five meetings of the commit-tee, MOWP failed to quantify the reasons forpersistent power crisis and its remedy.

He said if the government was aware ofthe problem and its solution, then it shouldbe explained to the committee. “don’t ask usfor solutions; simply tell us the reason andits solution,” he complained to the man-darins of power sector entities.” If the gov-ernment has no solution, then it is a seriousissue for the committee to resolve.

defending his team, Secretary Waterand Power Imtiaz Kazi, said they did notprepare the agenda of the committee andcome fully prepared to answer issues raisedin the agenda. He said if the committeewants briefing on specific issues then thatshould be included in the agenda.

Former minister in PM Gilani’s cabi-net, ayatullah durrani of PPP, said fromexperience of working in the government,he could say that there was no cooperationamong various ministries which was fur-

ther intensifying the crisis. Project startedby MOWP is hindered by the petroleumministry, while finance ministry leaves nostone unturned to block projects of petro-leum ministry and so on. He said everyministry wants to create its own fiefdom asnobody could be held accountable.

He said at present, different ministrieswere competing against each other overprojects of national importance, while thecircular debt continues to escalate everyday as the buck was being passed on toeach other. He proposed there should beone energy ministry which could plan andexecute projects without bothering aboutapprovals and financing and its ministerand secretary should be held accountablefor not controlling the crisis.

nawab Yusuf Talpur of PPP said therewas crisis of governance in the energy sectorand it should be addressed on top priority.He also supported the demand of his col-leagues that the committee should only dis-cuss the solutions.

acceding that the power sector wasmired in troubles mainly due to power theftand non recovery of dues, Secretary ImtiazKazi said the government was implementingpower sector reforms, which no doubt wereslow, but the direction was right. He said thegovernment had planned an increase of 12per cent in power tariff during the currentfiscal year, but it got delayed due to court or-ders. However, he said the stay on monthlyfuel price adjustment was vacated and itwould be passed on to the consumers.

When abbasi asked why rich were givensubsidised tariffs for the first three hundredunits, Kazi said it was difficult to determinedifferential tariff, as all the power generatedthrough different fuels were poured into asingle pool to determine the price. abassiproposed the solution was simple that therich should pay whatever the thermal powertariff was while poor should pay accordingto the hydel power tariff, as it would auto-matically induce the people to conserve en-ergy. Kazi said circular debt was

compounding the problem, which he saidwas resulting due to non payment of powerdues by the government departments, lowrecovery and line losses. He said if only thegovernment clears its dues, subsidy will betimely provided and recoveries will improveand the power sector can reach break evenlevel. He said an expenditure of Rs2.3 billiondaily was required to keep the power gener-ation at 9,500 MW with up to six hours loadshedding from the current 10 hours plus.

abbasi asked do they have any authen-tic data on theft, on which the Chief Oper-ating Officer of national Power ControlCentre replied that national Electric PowerRegulatory authority (nEPRa) had al-lowed dISCOs to have line losses of 15 percent, as compared to average losses of 19.5per cent. He said they purchased 84 billionunits in 2010 and sold 82 billion units todISCOs. International bench mark for linelosses was 10 per cent and the availablefuel was only provided to most efficientpower plants, he added.

NA body directs MOWP to give power crisis solution

PM urged to take notice of nine newIndian dams on Indus, Chenab rivers

ISLAMABAD

AMER SIAL

IndIa is building nine new damsof an estimated capacity of 1055MW hydroelectricity generation,on the main Indus and ChenabRivers, in the Indian Occupied

Kashmir (IOK) and unfortunately neitherthe Ministry of Water Power (MOWP), nor

the Ministry of Foreign affairs (MOFa) hastaken up the case with government of India.In an open letter addressed to Prime Minis-

ter Syed Yousuf Raza Gilani, eminent waterand energy expert arshad H abbasi high-lighting the matter of great national im-portance said that despite his repeatedrequests to MOWP no steps have beeninitiated to take up the issue with India.He requested PM to direct MOWP andMOFa to take up the issue of theseprojects and implement recommen-dations with Indian government inthe best interest of Pakistan.

THE LETTER

The letter says, “I humbly re-quest you to call an inquiry intothe matter to identify officialswho are responsible for this grossnegligence. They own a statewithin the state in the MOWPand implement their design todestabilise the country. Theyuse energy scarcity as a toolwhile allowing India to builddams without the requiredscrutiny under the IndusWater Treaty. I expect that youwill take serious note of thisgross negligence of all those

who take the repute of thiscountry for granted and ignoresuch developments in IOK andsecondly of those who do not takenote of the abnormal and unnec-

essary delays in execution of 19 hydropowerprojects, with an installed capacity of 4325MW, initiated under power policy2002.delay of these projects not only weak-ened the rights of Pakistan over Transbound-ary Rivers, but also caused serious energycrisis in Pakistan.” Had these projects beencompleted, the country would have neverfaced the gas crisis, the letter further added.

CREDIBILITY UNDER SCRTUTINY

details of the projects provided in the let-ter say; India is building seven new dams onmain Indus River, along with two other proj-ects on Suru and drass Rivers, in IOK. Theseprojects have been offered to private sectorfor which modalities are being worked out.This work by the Indian side has been initi-ated sans due diligence on the project in theframework of Indus Water Treaty. This is toemphasize that we are left with a very shorttime to plead our case as both projects arelikely to be completed in the next five years.

“despite my repeated communication byfax and e-mail, I have never heard from theadviser or the additional Secretary MOWP.This raises severe doubts on the credibility ofthese officials who appear to be intentionallypaving way for aforementioned projects ofIndia, by ignoring the interest of Pakistan”the letter says adding that the projects onChenab and Indus are classified as run-of-river projects. However, the treaty is not ad-hered to in letter and spirit, as these projectswill have serious consequences for down-stream areas of Pakistan.

ADVERSE IMPACTS

The accumulative live storage of theseprojects would have adverse impacts both interms of causing floods and running Chenaband other rivers dry in the lean period. Itshould also be noted that during the lean pe-riod Pakistan meets the demand of water

from these rivers only. In a detailed meetingwith adviser MOWP and the then additionalSecretary MoWP in 2009, it was elaboratedthat the terms of the treaty explicitly boundsboth countries to exchange all informationand data related to the proposed projects tobe installed on the Indus River System inIOK under article VI.

DAM CLASSIFICATION AND FAILURE

according to ICOLd, dams havingheight of more than 15 meters are defined aslarge dams; therefore, all such dams are tobe registered with the commission for damsafety. The judgment passed over Baglihardam was based on the latest ICOLd bulletinof the commission while deciding the designof the spillways. India has been planning tostart more than 67 dams for hydropowergeneration for a while and all these dams fallunder the category of large dams. Unfortu-nately, dam-failure record of India has beenthe worst, as nine of its dams have collapsed.Jammu and Kashmir area is earthquakeprone hence a minor failure can result in acatastrophe for the downstream areas.

REPEATED REQUESTS

despite repeated requests to the thenadviser MoWP, for Environmental Impactassessment Report of hydropower and otherdevelopment projects being or to be executedwithin watershed of Jhelum, Chenab and

Indus in IOK and Himachal Pradesh (HP),no data or relevant information has beenshared. The report holds immense impor-tance as it quantifies transboundary impactsof such projects, inline with the verdict givenby the International Court of Justice (ICJ);as in the case of Gabcikovo– nagymarosdam dispute between Slovakia and Hungaryon the danube River and paper mill decisionbetween argentina and Uruguay. In Baglihardam case, India in support of the dam’s de-sign, annexed Gabcikovo– nagymaros damdecision in its counter memorial. Therefore,having appraised the decision taken by ICJ,India is bound by law to share EIa of all hy-dropower projects with Pakistan beforephysical executions.

JOINT VENTURE NEEDED

abbasi proposed that both the twocountries, should agree to the fact that en-vironmental threats respect no nationalborders. during the last three decades, wa-tershed in IOK has been badly degraded. Torehabilitate watershed in IOK and HP, bothcountries are to take initiative for joint wa-tershed management in these two states.Glaciers are important and a major sourceof Indus Rivers System; to preserve theseglaciers; there is an immediate need to de-clare all Himalayan Glaciers as “Protectedarea” including immediate demilitarisationfrom Siachen to preserve this secondlongest glacier of the planet, to fall in thewatershed of the Indus River.

g MOWP and foreign affairs ministry fail to take up issue with Indiag India building 7 new dams on main Indus River, along with 2 projects on Suru

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news

Thursday, 12 January, 2012

02

CORPORATE CORNERFarzana Raja informs aboutBISP’s role in socio-economic change

ISLAMABAD: Federal Minister and Chairperson BenazirIncome Support Programme (BISP), Farzana Raja had ameeting with Eng. Wassfi Hassan El Sreihin and SecretaryGeneral afro-asian Rural development Organisation(aaRdO) at BISP secretariat. Farzana Raja explained thevarious initiatives of BISP i.e. Waseela-e-Haq, Waseela-e-Sahat, Waseela-e-Rozgar as well as Waseela-e-Taleemwhich are designed to uplift the living standards of poor andto enable them to achieve financial self-sustainability. Shesaid transparency is the hallmark of the programme atevery level. The recent USaId report has acknowledged thesame fact and confirmed that 98.6 per cent of BISPdisbursements have been received by recipients in atransparent manner, she added. PRESS RELEASE

President ABF showsconcern over energy shortageLAHORE: President american Business Forum (aBF)Salim Ghauri has expressed concerns over the energyshortage that is hampering the economic growth of thecountry. He said the power and gas supply to majorindustries in the country has either been cut or suspendedfor indefinite period. This situation is not only detrimentalto the industrial growth, but also having horrific future forthe labour class of the country, he said. Salim deplored thatthe daily wage workers associated with local businesses arefacing financial difficulties. He said the government shouldalso undertake the Iran-Pakistan (IP) gas pipeline projecton fast track basis, and reduce Unaccounted for Gas (UFG)losses from 12 per cent to 6 per cent to ensure supplies totextile and other gas-dependent industries in the short tomedium term. PRESS RELEASE

Schneider Electric acquires TelventLAHORE: Schneider Electric, the global leader in energymanagement, has recently acquired Telvent, a leadingreal-time IT solution and information provider for asustainable world, to meet the needs of cities across theworld. The solution provides cities with an integratedsuite that combines state-of-the-art hardware, softwareand services to improve the efficiency and sustainabilityof urban infrastructures, leading to more liveable spaces.Worldwide, cities of all types and sizes are feeling thepressure to improve infrastructure, expand to meet theneeds of growing populations, and increase theireconomic competitiveness and attractiveness in the globalmarket. PRESS RELEASE

BOK declares profit rates on PLS depositsPESHAWAR: The Bank of Khyber (BOK) (ConventionalBranches Only) has declared profit rates on various PLSdeposits for the half year ended december 31, 2011. Some ofthe rates from July 01, 2011 to december 31, 2011 are:notice deposits Below Rs01 million; PLS 7 to 29 daysnotice deposit 1.25 per cent, PLS 30 days notice deposit1.50 per cent. Rs01 million & above; PLS 7 to 29 daysnotice deposit (w.e.f 01.03.2011) 3.00 per cent, PLS 30days notice deposit (w.e.f 01.03.2011) 5.00 per cent.Special deposits; Special deposit account (Sda) 5.00 percent. Saving account; PLS Saving account 5.00 per cent;and so on. PRESS RELEASE

SNGPL extends gas closure for industriesLAHORE: Sui northern Gas Pipelines (SnGPL) has extended gasclosure for industrial sector. SnGPL spokesman said 50 MMCFdgas was expected from Kunnar Pashaki gas field in the second weekof January, but it has been delayed and as a result, gas supply to theindustrial sector has not been restored in a rotational manner. Thespokesman said as soon as the company starts receiving50MMCFd gas from Kunnar Pashaki, it will consider gradualrestoration of gas supply to industrial sector. STAFF REPORT

Market stages comeback, Index ends flatKARACHI

STAFF REPORT

A FTER losing as many as 69points in the early part of thetrading session, KSE-100

index put together a strong come-back and at one stage was up by 33points before settling for a minor 2point loss to close at 10,930 points.despite the strong comeback, vol-umes continued to disappoint at thelocal bourse as a mere 23m shareswere traded today.

as is the typical case in tradingsessions marred by dismal volumes,index heavy scripts like nESTLE andULEVER were driving the index interms of points, as both stocks com-bined to drag the index down by 58points. Unfortunately, the late trad-ing surge in the Fauji twins andOGdC could not save the local boursefrom a negative ending. With its an-nual Board of directors’ meeting an-

nounced today, FFBL was the marketvolume leader and propelled 3.4 percent higher than its previous close.

KSE 100 index closed down 3points as local investor’s chose tostay sidelined due to the SupremeCourt interim order given yesterday.Local funds were rumoured buyerswhile FII’s were sellers. However,market witnessed a late recovery infertilizer stocks due to the rumours

of healthy year end results and pay-outs by the fertilizer companies. FFCincreased by 2.1 per cent and FFBLby 3.4 per cent. nBP was seen on theweaker scale as the judgment onrental power plant corruption iskept aside that was financed by na-tional bank itself .Volume leaderswere FFBL and HUBC.

With the political uncertaintyraging strong, we expect the market

to remain lackluster until a definiteresolution is offered by the SupremeCourt, said ali Hussain, Senior In-vestment analyst at HMFS. The KSE30 index closed at 10068.49 levelswith the gain of 7.05 points, whileall Share index closed at 7587.83levels after losing 1.11 points. Total122 scrips advanced 87 declined and117 remain unchanged out of total326 scrips traded.

Lahore Chamber calls forwithdrawal of SRO 821(I) 2011

LAHORE

STAFF REPORT

P RESIdEnT of LahoreChamber of Commerceand Industry Irfan QaiserSheikh Wednesday ex-pressed his deep concerns

over FBR’s stance to implementSRO 821(I) 2011 despite repeateddemands of business community forthe withdrawal of the said SRO.LCCI President Irfan Qaiser Sheikhin a statement said that FederalBoard of Revenue must avoid im-plementing any such anti-industrydecision without due consultation ofchambers of commerce in the coun-try for being the main stakeholders.

He said that SRO 821(I) 2011will have devastating effect on busi-nesses as the compulsory require-ment of nTn or CnIC number ofeach and every purchaser or seller is

practically impossible. He saidgiven the literacy rate in the countryand lack of compliance culture ingeneral masses, it will be very diffi-cult to obtain such personal detailsfrom buyers or sellers of the goods.

He said that these and manyother proposed changes in tax re-turns will strangle the already cri-sis-hit businessmen in thecountry. He said Lahore Chamberof Commerce and Industry feelsthat Federal Board of Revenue isshifting its burden of monitoringand tracking of the tax system onbusiness community; which is un-just and unethical.

He said that it is very difficultto understand that why the peoplesitting at helm of affairs at FederalBoard of Revenue do not consultchambers of commerce in thecountry before

formulating business related

policies. LCCI President said thatthe ongoing economic situationdoes not allow any type of new pol-icymaking; rather it calls for incen-tives to the trade and industry forgenerating economic activity.

Irfan Qaiser Sheikh said due tosuspension of supply of gas to theindustry in Punjab a large numberof industrial units had already cur-tailed their productions and exportsin the month of december regis-tered a decline of more than 11 percent. He said that it is a generalprinciple that new laws are alwaysmade and implemented in soothingeconomic conditions but in Pakistanthe situation is totally different andFBR was trying to enforce SRO821(I) when the entire economy wasfacing multiple internal and exter-nal challenges.

He urged federal finance minis-ter dr abdul Hafeez Sheikh to listen

to the genuine concerns of the busi-ness community and help withdrawSRO 821(I) 2011 in the larger inter-ests of the economy.

SECP reappoints nomineedirectors to KSE boardKARACHI: Securities and ExchangeCommission of Pakistan (SECP) has re-nominated Muneer Kamal, Shazad G dada, asifQadir and abdul Qadir Memon on the board ofKarachi Stock Exchange (KSE) for the calendaryear, 2012. These nominee directors had alsoserved on KSE board last year as independentdirectors and their appointment could be seenas a fair balance of the requisite qualificationsand skills. Muneer Kamal, presently vice-chairman of KaSB Bank Limited, has over 28years of extensive experience in the bankingand financial sector during which he has servedlocally and internationally on senior positionsat various renowned banks. Shazad dada, CEOBarclays Bank PLC Pakistan, is a seasonedbanker and a prominent capital marketprofessional. He has over 20 years of majornational and international financial markets’experience. asif Qadir, President and CEOEngro Polymer and Chemicals Limited, hasover 30 years of management and marketingexperience in chemical and fertiliser sector andhas served in key management positions in thechemical giant, Engro Corporation Limited.abdul Qadir Memon, Fellow of the Institute ofTaxation Management Pakistan and PresidentPakistan Tax Bar association, is a seniorresource and renowned tax and corporate lawexpert, possessing an in-depth knowledge aboutvarious aspects and implications of corporatematters and company laws. STAFF REPORT

ISLAMABAD: The Competition Commission ofPakistan (CCP) on Wednesday issued exemption toa joint venture agreement (JVa) between MetroCash and Carry International (Metro) and ThalLimited (Thal) under Section 5 of the Competitionact, 2010 (act). Metro and Thal filed a jointapplication before CCP for the exemption of JVafrom application of Section 4 of the act. Throughthe JVa, the Metro and Thal agreed to restructuretheir respective subsidiaries in Pakistan, namelyMetro Cash and Carry Pakistan (MCCP) andMakro-Habib Pakistan Limited (MHPL),respectively by forming two separate entitiesnamely, OpCo and PropCo. OpCo will carry on thebusiness of wholesale cash and carry distributioninitially through the existing cash and carry centers;whereas the PropCo will own and manage, theproperties owned by MCCP and MHPL. Theexemption was sought from the non-competeclause in the JVa that expanded the scope ofrestraint from the business of the Metro and Thal,"whole sale cash and carry" to include "retailoperations". Therefore, CCP deemed itappropriate to conduct a hearing in the matter.While considering the conditions mentioned inSection 9 of the act for grant of exemption, thecommission observed that JVa will facilitate thegrowth of the wholesale business as the entitieswill be able to combine their resources and takeadvantage of the resulting economies of scale,thereby becoming more competitive andbenefiting the consumers. STAFF REPORT

LAHORE: Managing director Lahore StockExchange (LSE) Mr aftab ahmad Chaudhryinitiated the first step towards nationalfinancial literacy awareness programme foryouth. as part of the young investors scheme(first nation wide campus outreach programmeof its kind), the first seminar was held atEconomics Society, FC College, Lahore. Mraftab ahmed briefed the students that theyoung investor scheme is a national financialliteracy training programme for younginvestors, the primary goal of which is toprovide the young investors with skills to learn,save and invest money. He said young peopleare often confronted with complicated financialdecisions in today’s demanding financialenvironment and financial mistakes in life canhave opportunity costs. In order to cope withthem, they need better financial educationand access to critical resources to makesmarter decisions. The young investor schemeaims at enabling the youngsters to efficientlymanage their finances and cope with toughfinancial decisions. He also highlightedvarious initiatives to be taken by the exchangein future to promote business opportunitiesand investments in various sectors ofPakistan. He informed the students that thereare many opportunities at small and mediumscale still waiting to be tapped. The exchangeis fully equipped to facilitate theseinvestments. STAFF REPORT

CCP grants exemptionto Metro and Thal Limited

LSE’s takes first step forfinancial literacy of youth

Due to suspension of supplyof gas to industry in Punjab a

lot of units have curtailedproductions and exports in

December registered adecline of more than 11pc

ISLAMABAD: CEO OrientAdvertising, Syed MahmoodHashmi, has been reappointedas National Commissioner forPR by Pakistan Boy ScoutsAssociation. PRESS RELEASE

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THE vanguards of democracy in the asia-Pacific region, the United States, Indiaand Japan have come together for a tri-lateral strategic consultation and havedecided upon holding joint naval exer-

cises this year in forming an entente among the trioof nations. Experts are touting this maneuver as amajor reshuffle in the dynamics of the most lucrativezone in the world – as far as the economical ramifi-cations are concerned. The latest strategy is asking fora rebalance towards the asia-Pacific zone and Indian

cooperation as an eco-nomic anchor and ofcourse the hub of securityprovision in and aroundthe fragile Indian Ocean.

This ‘entente’ is an un-canny throwback to theFranco-British-Russian“Triple Entente” of WorldWar I, which was createdto counter the German mil-itary muscle. almost a cen-tury later, the Germany ofthe 21st century is China,the muscle being flexed bythe asian giant is economicand the menace beingposed is of its wherewithal

in the realm of foreign policy. and another thing rem-iniscent of the early 20th century is the manner inwhich the three countries are vying to counter thethreat of this leviathan of theirs. The aim – like in thecase of Germany – is not to contain China; au con-traire, the US policy is to utilise economic interdepend-ence and the integration of China into internationalinstitutions to put off their hierarchy from hankeringafter taking the helm of all matters in asia. Round oneof the dialogues has been held in Washington, and thenoise being generated from inside the camps is imbuedwith sanguinity as we approach round two in Tokyo.

The word is that australia might also be included

in this strategic triangle, to make it an ominous quadri-lateral, which would be touching all the proverbial cor-ners of the world. However, experts believe that a moreprobable formulation would be of a parallel australia-India-US axis, especially considering the fact that theintended four-party coalition talks are seemingly onthe brink of nosediving into oblivion.

nevertheless, the most important façade that thethree nations should be considering is that for this tri-lateral cooperation to bear the desired fruits, some oftheir respective policies and strategic preferences needto be revisited. Take for example the fact that Tokyohas only established military interoperability withWashington, with new delhi seemingly nowhere insight. Japan must also connect with Indian navalforces to further beef up this three layered sandwich.and yes if Indian and the US forces continue along thesame lines, which has seen them conduct a multitudeof joint ventures in the recent past – the meal wouldbecome all the more scrumptious.

Considering the geographical dynamics, anotherimportant facet as far as the militaristic scheme ofthings are concerned is that Japan and China are sep-arated by an ocean and US is no way near perilousproximity; hence that leaves India potentially donningthe garb of caution, pondering over the ramificationson the southern half of the volatile Himalayan border.That little devil we call history, also divulges an uncer-emonious Sino-Indian bond and hence India mightwant to cover all its bases before it takes a veritableplunge into this strategic triangle. america has ramifi-cations of its own to mull over with the fiscal quagmirethat the country finds itself in. and Obama has recentlyannounced plans for a leaner military and more pro-found dependability regional bondage; so he also hashis plate full ahead of a momentous year on the per-sonal and national fronts.

Hence, all the concerned parties should acknowl-edge their own limitations and those of their partners,before going gung-ho in global matters. The need of thehour for the three countries is to counter the hin-drances that lie ahead before the trilateral companion-ship can evolve into being a seamless bond. Conjuringup flawless military interoperability will be no meantask – especially since there is a void of US-India treatyrelationship – and groundbreaking policy makingwould have to be brought to the fore, if the potential ofthis tripartite relationship is to be realised.

The writer is Texas A&M University graduate whois currently employed with Telenor in the Products -

Commercial Division. He can be reached atsyed.jan@gmail.com

THE deficit continues to benudged at from both sides as im-proved remittances partially off-set dismal year-end exportnumbers, implying the fiscal

deficit will continue to be pressured to thedownside while the rupee’s fall continues. Un-fortunately the cycle is self-perpetuating. Cur-rency weakening will further aggravate thetrade deficit, with the obvious negative spill-over on Islamabad’s fiscal posture, not to men-tion other important economic indicators.

While most measures aimed at expand-ing revenue are medium to long term initia-tives at best, there is still al lot that can bedone to inch out of persistent stagflation. Forstarters, the banking system needs to bestimulated to enhance productive outflowfrom credit markets. Presently, governmentborrowing coupled with collective bankingsector hesitation to increase private sectorlending is compromising much needed in-vestment. and while such arrangements aremade and filtered through the system, indus-try and manufacturing must overcome ex-

cess capacity, failing which the engineeredcredit flow will have little value.

For industry to function, though, rele-vant authorities must put an end to the en-ergy give-and-take among sectors.Financial prudence dictates that in timesof crunch, every possible unit of energyinput should be directed towards avenuesthat generate at least a trifle more in re-turn, while the resulting subsidy togglingcan benefit sectors adversely impacted byrerouting energy units. In today’s Pakistan,that implies reorientation of focus for thebenefit of industry. The importance of in-dustry functioning at this time has directimplications for overall growth, employ-ment and per capita income. domesticconsumers taking a temporary hit in sucha scenario will ultimately benefit morewhen credit flows to right impact targetsand the overall economic situation im-proves. Right now, there should be no big-ger policy concern than stabilising growthand stimulating manufacturing and subse-quently growth and employment.

Revenue trends

China’s economicwherewithal hasbrought the US, Indiaand Japan closer, asunfolding events bearan uncannyresemblance to the past

An opportunistic axis

Syed Omer Jan

E D I T O R I A L

Research before taking the plunge

FLaT after the bloodbathover four sessions thatbrought the KSE-100benchmark below the psy-chological 11,000 points,

was the good news Wednesday.Though around three points down,this still is some recovery from 277points down and hovering around10,700 mid-session Tuesday after thetemporary pull back from the eyeball-to-eyeball confrontation between thegovernment and the judiciary seemed

to be edging towards its denouement.The volumes have remained ex-

tremely thin and values havedropped. This is not likely to improvea great deal in the short term. andunless there is some shocking newsthat sends the bears on a rampage,the market would keep on hoveringbetween here and 11,500.

To those average Joe Investorswho have taken a pasting in this siz-able dip, my commiserations. Butthey need to remember: the possi-bility of a bounce back is alwaysthere, and in the mid-short term(which is over the next six months,as Mr ali Malik, CEO of the Firstnational Equities predicts), it couldclaw its way back to the recent highof 12,000 points. So those who havemade their buying after due dili-gence and in fundamentally strongshares have only to bide time.

The good thing about low values

is that it may provide the prop themarket needs, for cheap buys alwayshold an attraction for all sorts tomake a punt.

despite the gas shortages, thefertiliser remains a popular sectorand on Tuesday the recovery was ledby it – with FFC up by Rs3.49 andFFBQ Rs1.43. To Hammad Malik,senior associate at the First nationalEquities, Fatima Fertiliser (the en-tity that has reportedly suffered theleast owing to friends at the rightplaces) is likely to go up to Rs27 – again of around Rs4 from its currentvalue. It has already touched Rs25some weeks ago, and may indeedstill have some juice. This is a cheapoption where even if there is a fall,it is not likely to be big. But onething needs to be remembered: thecompany has never paid any divi-dend, though it is now said to be inthe black. So there are both good

and bad reportsabout it. Read be-tween the lines andtread carefully.

In the oil sector,the additional publicoffering of PakistanPetroleum Limited isexpected in a few weeks, perhapssome time in February. That is anx-iously awaited, for it might bringsome spark to thus far an otherwisemostly cheerless season. For the mo-ment, the company is going througha ‘size determination’ process. Oncethat is complete the price per share ofthe offering will be revealed. For themoment, it is being traded at Rs164apiece – way short of its recent highof Rs210-220 range.

Mr ali Malik is one analyst whohas a very special knack of findingnuggets at places which most peopleignore. He has come up with two in-

expensive beauties inthe power sector thathave so far neverpaid a dime in divi-dend but are sittingon a sizable stash ofcumulative profitsthat they are bound

to dish out to shareholders this com-ing June. These are: nishat ChunianPower and nishat Power. The groupis a force to reckon with – the largestin the country, the power sector isprofitable and the price at an identi-cal Rs13 apiece for both is a bargain.This is what you call a better than adecent tip – and in such times of tur-moil worth its weight in gold.

That said, dear average Joe In-vestor, do make your own researchbefore taking the plunge.

The writer is Sports andMagazines Editor at Pakistan Today

Agha Akbar

For comments, queries and contributions, write to:

Email: profit@pakistantoday.com.pk Ph: 042-36298305-10 Fax: 042-36298302 website: www.pakistantoday.com.pk

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The good thing aboutlow values is that itmay provide the propthe market needs

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MAHEEN SyEDSub-Editor

Copper politics

This is with regards to the article, “Cop-per politics, and state of economy” pub-lished yesterday. I totally agree withthe writer, that the political confronta-tions and differences have resulted inutter wastage of the lucrative zone. Beit the government of Balochistan or in-deed the federal government; no onehas played their part appositely, ac-cording to the interests of the nation.The procrastination of the governmenthas more often than not curtailed pros-perity in Pakistan, and the Rekodeqproject is one of the most noteworthyexamples of how negligence on the partof the government has cost the nationdearly. and of course there are thephantoms of corruption as well.

ASSAD BALOCH

hydERAbAd

Marble market

This is with regards to the news re-port, “$500b worth Middle Eastmarkets remain untapped” pub-lished yesterday. neglect on the partof the government has made the na-tion suffer on many fronts, and itseems as if the market is unfortu-nately following suit. as highlightedin the news report, the fact that weare actually ignoring invitations ofprominent construction companiesfrom around the globe, defies belief!There is so much that we can learnfrom them, and there is so muchthat we can enhance through cooper-ation with foreign countries. Whenare we actually going to wake up?Things must change.

KHADIjA SARfRAz

LAhORE

AvERAGE JOE INvESTOR

PRO 12-01-2012_Layout 1 1/12/2012 12:24 AM Page 3

EnERGY analysts say the price of oil wouldstart to soar and could rise 50 percent ormore within days, according to new York

Times. In a development that has edged the worldcloser to full-scale war in the Persian Gulf, Europeanpowers stated Wednesday that a tentative ban wouldbe placed on exports to Iran. The European an-nouncement comes on the heels of three very publi-cised long-range missile tests conducted by theIranians earlier in the week.

It marks an escalation of sanctions against Iranfor continuing to pursue nuclear materials en-richment program which many experts and gov-ernment officials believe can only be aimed atthe production of weapons of mass destruction.With more than 16 per cent of the world’s oil

supply passing through a key shipping lane justtwo miles wide in certain places, Iran’s threat to

blockade the Strait of Hormuz has already met withinternational outrage.

Some of the worst criticism has come from Iran’sown neighbours, among them the world’s largest oilproducers who depend on the Strait of Hormuz foraccess to the Persian Gulf on a daily basis. To close the Strait of Hormuz would be an act of

war against the whole world, according to SadadIbrahim al-Husseini, former head of explorationand development at the world’s largest and wealth-iest oil company, Saudi aramco. You just can’t play with the global economy and as-sume that nobody is going to react in this precari-ous situation.

The response from the US State department hasbeen no less stern. In a recent interview, david L. Goldwyn, former State department co-ordinator for international energy affairs, said;“If the Iranians chose to use their modest navyand anti-ship missiles to attack allied forces,they would see a probable swift devastation oftheir naval capability. We would take out their frigates.”

In total, 15.5 million barrels of oilpass through the Strait of Hormuz everyday — including crude from Iraq, Kuwait,Qatar, the United arab Emirates, andIran itself. almost 90 per cent of thisdaily volume winds up in asia, withChina being the most ravenous consumerby far. although some military analystshave dismissed these threats as “emptytalk,” Iran does have a history of leverag-ing international influence by disruptingor outwardly attacking ships passingthrough the Strait.

In the 1980s, the Iranian navy minedthe Strait and attacked Kuwaiti tankershauling Iraqi oil into the Persian Gulf, amove that led the Reagan administrationto intervene by escorting and, in somecases, re-designating Kuwaiti shipsunder the american flag. a modern re-peat of what happened during the Rea-gan administration, however, wouldlikely lead to far worse consequences.Given the level of tension in the PersianGulf, any military engagements would

likely lead to widespread hostilities that coulddisrupt global oil prices in ways not seen sincethe 1970s arab oil embargoes.

Energy analysts have already predicted a 50 percent plus jump in oil prices, even if a partial block-ade were to be imposed by Iran’s 250-plus vesselnavy. I have already predicted bullish trend emerg-ing in the energy market since last year. This ismuch anticipated as such a radical shift in pricecould send average gas prices past the $4 mark inthe space of a few days. Of course, the problemwith situations like this one isn’t so much the dis-ruption in commercial traffic as it is the trickle-down effect of the panic to all levels of businessand industry. I don’t rule out the possibility of oiltouching 2008 levels i.e. ranging from $130 to$147 /barrel in 2012.

Oil price spikes have been blamed for entire reces-sions, including one that lasted for most of the1970s when the arab world closed the valve on USexports in protest of the Yom Kippur War in 1973.are we due for another one? It’s impossible to saywhat this standoff will lead to in the long term, es-pecially given that the Iranian Government is mak-ing no friends in their own region. What I can say

with almost total certainty with my connections inthe west is that as long as sanctions against Iran areon the table, oil prices will be creeping upward. asthey have been in the last week, since this heightenedlevel of tension took hold.

This could mean one of two things for investors andcountries to move further into the winter months. Itcould mean higher heating bills, more money spenton gas, more money spent on air travel, even moremoney spent on food and water, as shipping costs goup across the board. For a majority of people glob-ally, this is will be the greatest lasting effect of a grad-ually deteriorating diplomatic climate. For some,however, an increase in oil prices — during a seasonwhen energy costs are already astronomical is apredicament that spells profit.

You see, thousands of miles away from the Per-sian Gulf, a brand-new generation of energy compa-nies is laying the groundwork for a massive industrialresurgence, on american soil. Taking advantage ofthe Bakken Oil Shale formation — massive crude re-serve which remained untouched during the firstgolden era of american oil — these energy companiesrepresent the vanguard in fossil fuel production.

With at least three decades of upward productionon the horizon, north american shale oil will still begrowing many years after the Saudis, the Kuwaitis,the Iranians, and everyone else in the region haspumped their last drop. But don’t wait for OPEC

heavyweights to start running dry. as we are all def-initely heading in that direction, it won’t happenuntil the end of the decade (at the earliest). Instabil-ity like the kind we’re witnessing in the Persian Gulfat this very moment promises to shift the balance ofthe oil market back to north america long before thearab oil empire goes into full-scale decline.

Shan Saeed is a financial market economistwith 12 years of solid global experience based in

Asia Pacific. He has graduated from Uni ofChicago, Booth School of Business, USA and IBA

Karachi. Comments and queries: Blogs atwww.economistshan.blogspot.com

Thursday,12 January,2012

04news

An independent, prosperous,stable and sovereign Afghanistanis in Pakistan’s interest. Wehowever do not want an Afghansolution that could destabilise us

Prime Minister yousaf Raza Gilani

THE summit to place afghanistan at theheart of asia took place in november lastyear in Istanbul. all the neighbouring andregional countries as well as members of

the European Union and north america partici-pated. The building blocks of the “new Silk Road”initiative were discussed, prominent among themroads, railways, mining projects and gas pipelines.The summit floundered over Pakistan’s objections togiving India a pivotal role in the new Silk Road Ini-tiative. The Salala Post naTO attack gave Pakistanthe opening to opt out of the recently held Bonn con-ference which was to endorse the way forward forafghanistan based on an India centric supervisoryrole, a role not acceptable to Pakistan. It is hopedthat in the new engagement with the US, the role ofIndia in afghanistan will be appropriately modifiedto cater to Pakistan’s sensitivities.

FLAGSHIP OF STRATEGIC THINKINGBefore the Salala event, during her recent visit toPakistan to reset the Pakistan US relationship, Sec-retary Clinton along with her high powered team ofmilitary and intelligence leaders spelled out amongstmilitary and political goals the economic goals ofplacing trade and connectivity of the region as ameans of cementing the future of afghanistan as abridge between central and south asia. The new Silkroad Initiative has become the flagship of US strate-gic thinking regarding a stable post war afghanistan.

The concept first articulated by the Central asiaInstitute at the John Hopkins University has beenadopted by the Obama administration as a key ini-tiative. It was carried forward two years ago at theRegional Economic Cooperation Conference onafghanistan (RECCa) held in Istanbul from novem-ber 2-3, 2010 in a paper entitled “The Silk Road Ini-tiative (SRI),” by President Karzai’s top economicadvisor, Sham Bathija,who persuasively ar-

g u e d

for a Eurasian regional trade and transport networkwith afghanistan at its epicenter..

not surprisingly, India has come out strongly infavor of this concept and in the words of its foreignminister Krishna, “afghanistan’s growth strategy(should be) built upon the country’s comparative ad-vantage of abundant natural resources and its strate-gic geographical location.” afghanistan shouldbecome a hub linking Central and South asiathrough pipelines, trade and transit routes.

HISTORy OF THE HuBFor centuries before the ascendancy of the west,afghanistan was part of the vast Islamic regions whichwere basically free trade zones where goods and peoplemoved from one end of the empires to the other with-

out let or hindrances and afghanistan was certainly atthe hub of this movement. However with the advent ofthe Russian and British Empires afghanistan becamea buffer state between the two empires and collapsedinto a wild isolated and impoverished wasteland. dur-ing the cold war afghanistan was a soviet satellite cutoff from the world and later during the afghan jihadand Taleban rule the country was destroyed physicallyand regressed back into medieval times. Since 9/11 thecountry has been devastated with unending violenceand war. Thus the task of converting afghanistan backto a trading hub after centuries of isolation and vio-

lence is going to be a Herculean task and it can-

not be accomplished without Pakistan. GeographicallyPakistan and afghanistan are so intertwined that onlytogether they are at the heart of asia and not individu-ally. It is therefore important that the two countriescome on the same economic and political wavelengthand have convergence of interests and policies. In anearlier article, I had argued that the future of a sustain-able afghan/Pakistan trade relationship depends onPakistani involvement in the exploration and extrac-tion of afghan mineral resources in collaboration withinternational finance and technology. at the momentIndian and Chinese bidders are front-runners for dealsto mine afghanistan’s vast mineral and oil deposits,which is not only worrying Western firms who havehesitated to invest in the war-torn region but also forPakistan which has been left out of the loop.

CONSPICuOuS By ABSENCERecently, afghanistan opened up its massive Iron orereserves estimated at 1.8 billion metric tons with aconcentration of approximately 62 per cent Fe at Ha-jigak, 100 kilometers (60 miles) west of Kabul for in-ternational bidding. Unfortunately, Pakistan wasconspicuous by its absence as were European andamerican companies. afghanistan received four bids,none of which were from the world’s biggest mininggroups. The bids had to be accompanied by plans forthe transportation of ore to international markets. Thebidders included an Indian steel consortium backedby the government of India, two Iranian steel com-panies and a bid by a Canadian company. apartfrom Iran’s bid (since the two countries share aborder) none of the others are viable withoutPakistan’s participation due to issues relat-ing to the transfer of ore. India’s bid forexample is premised on building a rail-way track from Hajigak to the Iranianport of Chahbahar for onward ship-ment to India and thereby strate-gically bypassing Pakistan.

INDIAN CENTRALITy

an Indian newspaperconcluded that whencompleted, this railwaytrack will throw up both tanta-lising geo-political and economicopportunities for India as well as potential for badblood with both friends and foes. It wrote that;1. It will increase Indian leverage in afghanistan and

its strategic presence in the region. In the past,however, new delhi has refuted Pakistani fears

that India is encircling it. 2. It will give afghanistan access to the

sea, thus, reducing its dependenceon Pakistan.

3. It will open opportuni-ties for Indian compa-nies to exploreafghanistan’s min-eral wealth, be-lieved to beworth $1-3t r i l l i o n(Rs50-150l a k hc r o r e ) ,for mu-t u a lbene-f i t .Just

consider: the entire In-dian economy is val-ued at $1.2 trillion(Rs60 lakh crore); 4. It will add tothe economic ration-ale for Indian invest-ment in Chabahar; 5. Once the entirenetwork comprising ofroad, rail and port is in

place, it can become alaunching pad for greater

economic and strategic in-volvement of India in the oil

and mineral-rich Central asia;

THING wITH THE BIDS

The transport infrastructure forthis plan would alone cost around

US$10 billion. In contrast a railwaytrack from Hajigak to Kohat Pakistan

would cost a mere one fourth of the In-dian transportation plan. Moreover the

Indian plan would run afoul of US legisla-tion and sanctions

on Iran. The In-dian bid is alsobeing criticisedby the EuropeanUnion as unfairlysubsidised andfunded by the In-

dian government.On the other hand the two bids from Iran may alsobe problematic because of US concerns, and it re-mains unclear how the Canadian company intendsto transport the ore out of afghanistan. It is possi-ble that due to lackluster response, non viability ofmost of the bids and american rethink this roundof bidding may be cancelled and this would open upan opportunity for Pakistan to put together a pro-posal for exploiting the afghan reserves with Saudiand Gulf financing, western technology and Pak-istani manpower and evacuation infrastructure.The ore could be processed in Kohat which can bedesignated as Pakistan’s Steel City which can easilysupply through the domestic logistic network the 10million ton per year demand of Pakistan and therest can be shipped south to Karachi and Gwadarfor Middle East and global markets and north toChina and east to India. The project could cementafghan/Pakistan economic relationship and createtremendous incentives for promoting peace andreconciliation in Pakistan and afghanistan. It

would also successfully lay the foundation of theheart of asia strategy.

INDO-PAK BOTTLENECKSas far as India is concerned it has not hidden itsgreat ambitions to connect with afghanistan andCentral asia for exploiting the riches of the area.Prime Minister Manmohan Singh has said that hecan foresee the day when we can have breakfast inamritsar, lunch in Islamabad and dinner in Kabul.This is a laudable goal but cannot be achieved in anatmosphere of rivalry and animosity between Indiaand Pakistan. The confidence building dialogue thatstarted with the Musharraf-Vajpayee initiative hasseen one sided Indian gains whether in trade or po-litical issues. India has used the last three years tosmother the Kashmir spring with ruthless force,backed off from a deal on Saichen and resisted anymovement on Sir Creek. In the arena of trade, it hassuccessfully scuttled Pakistani exports to India whileIndian exports to Pakistan continue to grow. WithPakistan granting MFn status to India this trend willgrow. India has to come clean on its intent. PaK-ISTan Can EaSILY BRIdGE THE TRadE GaPWITH India if its cement and home textile exportsto India are not hampered by non Tariff Barriers andhigh tariffs. If United States and India want Pakistanto be the gateway for India to reach afghanistan andCentral asia, they must realise that this will be de-pendant on India and Pakistan seriously resolvingtheir historic disputes in an equitable manner.

The writer is a former finance minister

DR SALMAn SHAH

Heart of Asia strategy

The New Silk road Initiative hasbecome the flagship of US strategicthinking regarding a stable post warAfghanistan. The concept firstarticulated by the Central Asia Instituteat the John Hopkins University hasbeen adopted by the Obamaadministration as a key initiative

GEO-STRATEGIC ANALySIS

SAuDI REACTION

uSA REACTION

STRATEGIC OIL ROuTESHAn SAEED

why I am bullish on the energy market

PRO 12-01-2012_Layout 1 1/12/2012 12:24 AM Page 4

EnERGY analysts say the price of oil wouldstart to soar and could rise 50 percent ormore within days, according to new York

Times. In a development that has edged the worldcloser to full-scale war in the Persian Gulf, Europeanpowers stated Wednesday that a tentative ban wouldbe placed on exports to Iran. The European an-nouncement comes on the heels of three very publi-cised long-range missile tests conducted by theIranians earlier in the week.

It marks an escalation of sanctions against Iranfor continuing to pursue nuclear materials en-richment program which many experts and gov-ernment officials believe can only be aimed atthe production of weapons of mass destruction.With more than 16 per cent of the world’s oil

supply passing through a key shipping lane justtwo miles wide in certain places, Iran’s threat to

blockade the Strait of Hormuz has already met withinternational outrage.

Some of the worst criticism has come from Iran’sown neighbours, among them the world’s largest oilproducers who depend on the Strait of Hormuz foraccess to the Persian Gulf on a daily basis. To close the Strait of Hormuz would be an act of

war against the whole world, according to SadadIbrahim al-Husseini, former head of explorationand development at the world’s largest and wealth-iest oil company, Saudi aramco. You just can’t play with the global economy and as-sume that nobody is going to react in this precari-ous situation.

The response from the US State department hasbeen no less stern. In a recent interview, david L. Goldwyn, former State department co-ordinator for international energy affairs, said;“If the Iranians chose to use their modest navyand anti-ship missiles to attack allied forces,they would see a probable swift devastation oftheir naval capability. We would take out their frigates.”

In total, 15.5 million barrels of oilpass through the Strait of Hormuz everyday — including crude from Iraq, Kuwait,Qatar, the United arab Emirates, andIran itself. almost 90 per cent of thisdaily volume winds up in asia, withChina being the most ravenous consumerby far. although some military analystshave dismissed these threats as “emptytalk,” Iran does have a history of leverag-ing international influence by disruptingor outwardly attacking ships passingthrough the Strait.

In the 1980s, the Iranian navy minedthe Strait and attacked Kuwaiti tankershauling Iraqi oil into the Persian Gulf, amove that led the Reagan administrationto intervene by escorting and, in somecases, re-designating Kuwaiti shipsunder the american flag. a modern re-peat of what happened during the Rea-gan administration, however, wouldlikely lead to far worse consequences.Given the level of tension in the PersianGulf, any military engagements would

likely lead to widespread hostilities that coulddisrupt global oil prices in ways not seen sincethe 1970s arab oil embargoes.

Energy analysts have already predicted a 50 percent plus jump in oil prices, even if a partial block-ade were to be imposed by Iran’s 250-plus vesselnavy. I have already predicted bullish trend emerg-ing in the energy market since last year. This ismuch anticipated as such a radical shift in pricecould send average gas prices past the $4 mark inthe space of a few days. Of course, the problemwith situations like this one isn’t so much the dis-ruption in commercial traffic as it is the trickle-down effect of the panic to all levels of businessand industry. I don’t rule out the possibility of oiltouching 2008 levels i.e. ranging from $130 to$147 /barrel in 2012.

Oil price spikes have been blamed for entire reces-sions, including one that lasted for most of the1970s when the arab world closed the valve on USexports in protest of the Yom Kippur War in 1973.are we due for another one? It’s impossible to saywhat this standoff will lead to in the long term, es-pecially given that the Iranian Government is mak-ing no friends in their own region. What I can say

with almost total certainty with my connections inthe west is that as long as sanctions against Iran areon the table, oil prices will be creeping upward. asthey have been in the last week, since this heightenedlevel of tension took hold.

This could mean one of two things for investors andcountries to move further into the winter months. Itcould mean higher heating bills, more money spenton gas, more money spent on air travel, even moremoney spent on food and water, as shipping costs goup across the board. For a majority of people glob-ally, this is will be the greatest lasting effect of a grad-ually deteriorating diplomatic climate. For some,however, an increase in oil prices — during a seasonwhen energy costs are already astronomical is apredicament that spells profit.

You see, thousands of miles away from the Per-sian Gulf, a brand-new generation of energy compa-nies is laying the groundwork for a massive industrialresurgence, on american soil. Taking advantage ofthe Bakken Oil Shale formation — massive crude re-serve which remained untouched during the firstgolden era of american oil — these energy companiesrepresent the vanguard in fossil fuel production.

With at least three decades of upward productionon the horizon, north american shale oil will still begrowing many years after the Saudis, the Kuwaitis,the Iranians, and everyone else in the region haspumped their last drop. But don’t wait for OPEC

heavyweights to start running dry. as we are all def-initely heading in that direction, it won’t happenuntil the end of the decade (at the earliest). Instabil-ity like the kind we’re witnessing in the Persian Gulfat this very moment promises to shift the balance ofthe oil market back to north america long before thearab oil empire goes into full-scale decline.

Shan Saeed is a financial market economistwith 12 years of solid global experience based in

Asia Pacific. He has graduated from Uni ofChicago, Booth School of Business, USA and IBA

Karachi. Comments and queries: Blogs atwww.economistshan.blogspot.com

05

Thursday,12 January,2012

news

civilisAtion links

Our cooperation with

Afghanistan is an

open book. We have

civilisational links, and

we are both

here to stay

MAnMOhAn SInghIndian Prime Minister

historic deAl

Today is a historic day in

Afghan history. This is

the first time that

Afghanistan signs a great

contract for the country’s

oil exploration

WAhIduLLAh ShAhRAnIMining Minister Afghanistan

the oil fActor

Iran is also an extremely big

oil supplier to China, and we

hope that China’s oil imports

won’t be affected, because

this is needed for our

development

ZhAI junChinese Vice Foreign Minister

AfghAn reconstruction

Our policy is full support for

the Afghan people and

Afghan government and

reconstruction of

Afghanistan

MAhMOud AhMAdInEjAdIranian President

THE summit to place afghanistan at theheart of asia took place in november lastyear in Istanbul. all the neighbouring andregional countries as well as members of

the European Union and north america partici-pated. The building blocks of the “new Silk Road”initiative were discussed, prominent among themroads, railways, mining projects and gas pipelines.The summit floundered over Pakistan’s objections togiving India a pivotal role in the new Silk Road Ini-tiative. The Salala Post naTO attack gave Pakistanthe opening to opt out of the recently held Bonn con-ference which was to endorse the way forward forafghanistan based on an India centric supervisoryrole, a role not acceptable to Pakistan. It is hopedthat in the new engagement with the US, the role ofIndia in afghanistan will be appropriately modifiedto cater to Pakistan’s sensitivities.

FLAGSHIP OF STRATEGIC THINKINGBefore the Salala event, during her recent visit toPakistan to reset the Pakistan US relationship, Sec-retary Clinton along with her high powered team ofmilitary and intelligence leaders spelled out amongstmilitary and political goals the economic goals ofplacing trade and connectivity of the region as ameans of cementing the future of afghanistan as abridge between central and south asia. The new Silkroad Initiative has become the flagship of US strate-gic thinking regarding a stable post war afghanistan.

The concept first articulated by the Central asiaInstitute at the John Hopkins University has beenadopted by the Obama administration as a key ini-tiative. It was carried forward two years ago at theRegional Economic Cooperation Conference onafghanistan (RECCa) held in Istanbul from novem-ber 2-3, 2010 in a paper entitled “The Silk Road Ini-tiative (SRI),” by President Karzai’s top economicadvisor, Sham Bathija,who persuasively ar-

g u e d

for a Eurasian regional trade and transport networkwith afghanistan at its epicenter..

not surprisingly, India has come out strongly infavor of this concept and in the words of its foreignminister Krishna, “afghanistan’s growth strategy(should be) built upon the country’s comparative ad-vantage of abundant natural resources and its strate-gic geographical location.” afghanistan shouldbecome a hub linking Central and South asiathrough pipelines, trade and transit routes.

HISTORy OF THE HuBFor centuries before the ascendancy of the west,afghanistan was part of the vast Islamic regions whichwere basically free trade zones where goods and peoplemoved from one end of the empires to the other with-

out let or hindrances and afghanistan was certainly atthe hub of this movement. However with the advent ofthe Russian and British Empires afghanistan becamea buffer state between the two empires and collapsedinto a wild isolated and impoverished wasteland. dur-ing the cold war afghanistan was a soviet satellite cutoff from the world and later during the afghan jihadand Taleban rule the country was destroyed physicallyand regressed back into medieval times. Since 9/11 thecountry has been devastated with unending violenceand war. Thus the task of converting afghanistan backto a trading hub after centuries of isolation and vio-

lence is going to be a Herculean task and it can-

not be accomplished without Pakistan. GeographicallyPakistan and afghanistan are so intertwined that onlytogether they are at the heart of asia and not individu-ally. It is therefore important that the two countriescome on the same economic and political wavelengthand have convergence of interests and policies. In anearlier article, I had argued that the future of a sustain-able afghan/Pakistan trade relationship depends onPakistani involvement in the exploration and extrac-tion of afghan mineral resources in collaboration withinternational finance and technology. at the momentIndian and Chinese bidders are front-runners for dealsto mine afghanistan’s vast mineral and oil deposits,which is not only worrying Western firms who havehesitated to invest in the war-torn region but also forPakistan which has been left out of the loop.

CONSPICuOuS By ABSENCERecently, afghanistan opened up its massive Iron orereserves estimated at 1.8 billion metric tons with aconcentration of approximately 62 per cent Fe at Ha-jigak, 100 kilometers (60 miles) west of Kabul for in-ternational bidding. Unfortunately, Pakistan wasconspicuous by its absence as were European andamerican companies. afghanistan received four bids,none of which were from the world’s biggest mininggroups. The bids had to be accompanied by plans forthe transportation of ore to international markets. Thebidders included an Indian steel consortium backedby the government of India, two Iranian steel com-panies and a bid by a Canadian company. apartfrom Iran’s bid (since the two countries share aborder) none of the others are viable withoutPakistan’s participation due to issues relat-ing to the transfer of ore. India’s bid forexample is premised on building a rail-way track from Hajigak to the Iranianport of Chahbahar for onward ship-ment to India and thereby strate-gically bypassing Pakistan.

INDIAN CENTRALITy

an Indian newspaperconcluded that whencompleted, this railwaytrack will throw up both tanta-lising geo-political and economicopportunities for India as well as potential for badblood with both friends and foes. It wrote that;1. It will increase Indian leverage in afghanistan and

its strategic presence in the region. In the past,however, new delhi has refuted Pakistani fears

that India is encircling it. 2. It will give afghanistan access to the

sea, thus, reducing its dependenceon Pakistan.

3. It will open opportuni-ties for Indian compa-nies to exploreafghanistan’s min-eral wealth, be-lieved to beworth $1-3t r i l l i o n(Rs50-150l a k hc r o r e ) ,for mu-t u a lbene-f i t .Just

consider: the entire In-dian economy is val-ued at $1.2 trillion(Rs60 lakh crore); 4. It will add tothe economic ration-ale for Indian invest-ment in Chabahar; 5. Once the entirenetwork comprising ofroad, rail and port is in

place, it can become alaunching pad for greater

economic and strategic in-volvement of India in the oil

and mineral-rich Central asia;

THING wITH THE BIDS

The transport infrastructure forthis plan would alone cost around

US$10 billion. In contrast a railwaytrack from Hajigak to Kohat Pakistan

would cost a mere one fourth of the In-dian transportation plan. Moreover the

Indian plan would run afoul of US legisla-tion and sanctions

on Iran. The In-dian bid is alsobeing criticisedby the EuropeanUnion as unfairlysubsidised andfunded by the In-

dian government.On the other hand the two bids from Iran may alsobe problematic because of US concerns, and it re-mains unclear how the Canadian company intendsto transport the ore out of afghanistan. It is possi-ble that due to lackluster response, non viability ofmost of the bids and american rethink this roundof bidding may be cancelled and this would open upan opportunity for Pakistan to put together a pro-posal for exploiting the afghan reserves with Saudiand Gulf financing, western technology and Pak-istani manpower and evacuation infrastructure.The ore could be processed in Kohat which can bedesignated as Pakistan’s Steel City which can easilysupply through the domestic logistic network the 10million ton per year demand of Pakistan and therest can be shipped south to Karachi and Gwadarfor Middle East and global markets and north toChina and east to India. The project could cementafghan/Pakistan economic relationship and createtremendous incentives for promoting peace andreconciliation in Pakistan and afghanistan. It

would also successfully lay the foundation of theheart of asia strategy.

INDO-PAK BOTTLENECKSas far as India is concerned it has not hidden itsgreat ambitions to connect with afghanistan andCentral asia for exploiting the riches of the area.Prime Minister Manmohan Singh has said that hecan foresee the day when we can have breakfast inamritsar, lunch in Islamabad and dinner in Kabul.This is a laudable goal but cannot be achieved in anatmosphere of rivalry and animosity between Indiaand Pakistan. The confidence building dialogue thatstarted with the Musharraf-Vajpayee initiative hasseen one sided Indian gains whether in trade or po-litical issues. India has used the last three years tosmother the Kashmir spring with ruthless force,backed off from a deal on Saichen and resisted anymovement on Sir Creek. In the arena of trade, it hassuccessfully scuttled Pakistani exports to India whileIndian exports to Pakistan continue to grow. WithPakistan granting MFn status to India this trend willgrow. India has to come clean on its intent. PaK-ISTan Can EaSILY BRIdGE THE TRadE GaPWITH India if its cement and home textile exportsto India are not hampered by non Tariff Barriers andhigh tariffs. If United States and India want Pakistanto be the gateway for India to reach afghanistan andCentral asia, they must realise that this will be de-pendant on India and Pakistan seriously resolvingtheir historic disputes in an equitable manner.

The writer is a former finance minister

Heart of Asia strategy As far as India is concerned it has nothidden its great ambitions to connectwith Afghanistan and Central Asia forexploiting the riches of the area.Prime Minister Manmohan Singh hassaid that he can foresee the day whenwe can have breakfast in Amritsar,lunch in Islamabad and dinner inKabul. This is a laudable goal butcannot be achieved in an atmosphereof rivalry and animosity betweenIndia and Pakistan

OIL PRICE IN 2012

PROLONGED RECESSION

PROSPECTS FOR INvESTORSSTRATEGIC OIL ROuTE

Energy analysts have already predicted a 50per cent plus jump in oil prices, even if apartial blockade were to be imposed byIran’s 250-plus vessel navy. I have alreadypredicted bullish trend emerging in theenergy market since last year. This is muchanticipated as such a radical shift in pricecould send average gas prices past the $4mark in the space of a few days

PRO 12-01-2012_Layout 1 1/12/2012 12:24 AM Page 5

top 5 perForMers sector wiseSyMBOL OPEN HIGH LOw CuRRENT CHANGE vOLuME SyMBOL OPEN HIGH LOw CuRRENT CHANGE vOLuME

Food ProducersAbdullah Shah 4.51 4.51 4.50 4.51 0.00 1Adam Sugar 18.74 18.65 17.80 18.55 -0.19 5,621AL-Abbas Sugur 86.06 89.99 89.99 89.99 3.93 1,500AL-Noor Suger Mills 50.63 50.63 48.10 50.63 0.00 106Baba Farid 39.00 39.00 37.05 39.00 0.00 5

Household GoodsAL-Abid Silk Mills 24.50 25.50 24.50 24.50 0.00 1Diamond Ind. 8.20 8.93 8.20 8.20 0.00 1Pak Elektron Ltd. 3.49 3.64 3.35 3.40 -0.09 18,006Singer Pakistan 15.94 15.94 14.94 15.94 0.00 1Tariq Glass Ind. 8.20 8.30 8.01 8.22 0.02 3,417

Personal Goods(Colony) Thal 1.15 1.15 1.10 1.10 -0.05 610Ali Asghar Textile 0.50 0.64 0.45 0.50 0.00 79Amtex Limited 1.25 1.37 1.23 1.31 0.06 19,439Artistic Denim Mills 22.10 22.50 22.15 22.50 0.40 1,045Azam Textile 1.08 1.55 1.25 1.34 0.26 7,522

Future ContractsAHCL-JAN 27.22 27.50 27.25 27.40 0.18 24,000ATRL-JAN 108.02 109.00 107.26 108.36 0.34 107,000DGKC-JAN 19.69 19.90 19.51 19.75 0.06 113,000ENGRO-JAN 96.11 96.70 95.30 96.05 -0.06 390,500FFBL-JAN 42.15 43.78 41.70 43.59 1.44 724,000

Pharma and Bio TechAbbott Laboratories 100.32 101.50 100.99 101.50 1.18 4,010Ferozsons (Lab) Ltd. 73.62 74.00 73.62 73.62 0.00 52GlaxoSmithKline Pak. 65.24 66.25 65.31 65.87 0.63 665IBL HealthCare 16.07 16.09 15.30 15.77 -0.30 3,881Sanofi-Aventis 139.73 146.00 138.00 139.73 0.00 2

Fixed Line TelecommunicationP.T.C.L.A 10.03 10.30 10.03 10.25 0.22 965,945Pak Datacom Ltd 34.50 36.00 32.78 33.75 -0.75 2,100Telecard Limited 0.80 0.80 0.76 0.77 -0.03 27,104Wateen Telecom Ltd 1.73 1.87 1.73 1.78 0.05 56,020WorldCall Telecom 0.94 1.05 0.91 1.01 0.07 907,573

ElectricityGenertech 0.35 0.35 0.27 0.28 -0.07 12,385Hub Power Co. 33.68 33.75 32.85 33.34 -0.34 2,346,089Japan Power 0.56 0.65 0.60 0.65 0.09 56,402K.E.S.C. 1.80 1.90 1.71 1.88 0.08 299,154Kohinoor Energy 16.00 16.47 16.00 16.00 0.00 5

BanksAllied Bank Ltd 54.12 54.90 52.01 54.02 -0.10 117,197Askari Bank 9.94 10.05 9.89 10.01 0.07 168,339B.O.Punjab 5.54 5.69 5.42 5.53 -0.0 181,099Bank Al-Falah 11.41 11.45 11.30 11.31 -0.10 67,277Bank AL-Habib 28.86 29.49 28.52 28.67 -0.19 33,201

Non Life InsuranceAdamjee Ins 46.90 46.89 46.20 46.73 -0.17 1,374Atlas Insurance 36.02 36.25 36.00 36.25 0.23 6,148Century Insurance 6.77 7.00 6.40 6.95 0.18 7,021EFU General Ins 38.90 39.00 38.90 38.90 0.00 14Habib Insurance 9.61 10.00 10.00 10.00 0.39 5,001

Life InsuranceAmerican Life 14.50 14.50 13.50 14.50 0.00 2East West Life Assur 1.40 2.34 1.40 1.40 0.00 1EFU Life Assur 65.53 68.80 65.53 65.53 0.00 157

Financial ServicesAMZ Ventures A 0.38 0.42 0.28 0.38 0.00 2,988Arif Habib Investmen 14.36 15.36 14.36 14.36 0.00 4Arif Habib Ltd. 14.20 14.49 14.10 14.48 0.28 11,825Escorts Bank 1.69 1.69 1.35 1.69 0.00 10F. Nat.Equities 2.72 2.80 2.72 2.72 0.00 4

Equity Investment InstrumentsAL-Noor Modar 4.07 4.00 3.85 3.85 -0.22 25,300Allied Rental Mod 22.45 22.45 21.34 22.45 0.00 200Atlas Fund of Fund 5.30 5.50 5.50 5.50 0.20 1,000B.F.Modaraba 4.00 3.85 3.70 3.80 -0.20 500B.R.R.Guardian 2.35 2.40 2.40 2.40 0.05 2,042

MiscellaneousCentury Paper 13.00 13.20 12.06 13.06 0.06 17,652Security Paper 36.00 36.00 35.70 36.00 0.00 1,101Pakistan Cables 32.00 33.55 32.50 32.99 0.99 1,770P.N.S.C. 11.83 12.00 11.50 12.00 0.17 6,325Pak.Int.Con. SD 70.00 72.50 70.25 70.69 0.69 522,752TRG Pakistan Ltd. 1.14 1.20 1.12 1.15 0.01 166,325Murree Brewery 63.53 64.55 64.50 64.55 1.02 1,012Shakarganj Food 4.50 5.10 4.50 5.10 0.60 2,000Shezan Inter. 110.07 111.25 110.00 110.07 0.00 125Pak Elektron Ltd. 3.54 3.59 3.50 3.58 0.04 81,826Tariq Glass Ind. 8.03 8.38 8.01 8.12 0.09 17,119Grays of Cambridge 23.00 23.00 22.99 23.00 0.00 2Pak Tobacco Co. 53.63 55.50 52.01 52.41 -1.22 6,284Shifa Int.Hospitals 27.64 28.99 27.00 28.26 0.62 2,269Hum Network Ltd. 17.01 17.01 16.44 17.01 0.00 50Dreamworld 524.33 524.33 498.12 524.33 0.00 11P.I.A.C.(A) 1.93 2.03 1.81 1.99 0.06 14,379Sui North Gas 15.80 16.10 15.80 15.90 0.10 30,741Sui South Gas 18.49 18.80 18.50 18.79 0.30 2,599American Life 14.00 14.00 13.76 13.83 -0.17 600East West Life Assur 1.05 1.50 1.07 1.09 0.04 3,000AKD Capital Ltd. 22.60 23.68 22.60 22.60 0.00 1Pace (Pak) Ltd. 1.30 1.40 1.26 1.30 0.00 56,051Netsol Technologies 8.44 8.55 8.29 8.37 -0.07 17,193

SyMBOL OPEN HIGH LOw CuRRENT CHANGE vOLuME

Oil and GasAttock Petroleum 412.96 414.00 412.00 412.47 -0.49 1,744Attock Refinery 107.37 108.25 106.73 107.66 0.29 295,757Burshane LPG 24.50 24.99 23.50 23.50 -1.00 1,002Byco Petroleum 6.80 6.85 6.73 6.79 -0.01 100,878Mari Gas Co. 85.87 86.15 85.15 85.51 -0.36 10,847

ChemicalsAgritech Limited 15.50 15.62 15.01 15.50 0.00 155Agritech(PREF)(R) 0.01 0.14 0.01 0.01 0.00 1Arif Habib Co SD 27.25 27.46 27.15 27.27 0.02 207,852Clariant Pakistan 149.44 151.00 148.80 149.07 -0.37 875Dawood Hercules 37.96 37.90 36.85 37.10 -0.86 146,986

Industrial metals and MiningCrescent Steel 19.01 18.99 18.10 18.13 -0.88 10,510Dost Steels Ltd. 1.15 1.18 1.06 1.15 0.00 4,505Huffaz Seamless Pipe 8.16 8.49 8.01 8.49 0.33 2,410Int. Ind.Ltd. 31.37 32.09 31.42 31.42 0.05 801Inter.Steel Ltd. 10.13 10.80 10.02 10.13 0.00 7

Construction and MaterialsAl-Abbas Cement 2.60 2.70 2.42 2.60 0.00 203Attock Cement 51.25 52.95 51.00 52.95 1.70 6,398Bal.Glass 1.70 1.70 1.70 1.70 0.00 1,500Berger Paints 13.90 13.90 13.60 13.90 0.00 98Cherat Cement 8.60 9.47 8.26 8.60 0.00 12,003

General IndustrialsCherat Packaging 26.02 26.75 26.02 26.02 0.00 210ECOPACK Ltd 3.60 3.70 3.70 3.70 0.10 1,814Ghani Glass Ltd 40.10 41.00 40.10 40.10 0.00 1MACPAC Films 7.99 8.00 8.00 8.00 0.01 1,000Packages Limited 78.17 81.00 78.00 80.01 1.84 9,945

Industrial EngineeringAdos Pakistan 5.50 5.80 5.30 5.30 -0.20 1,000AL-Ghazi TractorsXD 179.10 180.90 179.10 179.10 0.00 5AL-Khair Gadoon 5.50 5.60 5.50 5.50 0.00 45Dewan Auto Engg 0.61 0.61 0.60 0.61 0.00 20Ghandhara Ind. 6.40 6.59 6.40 6.58 0.18 1,136

Automobile and PartsAgriautos Industries 56.27 55.51 55.50 55.50 -0.77 963Atlas Engineering 58.00 58.00 58.00 58.00 0.00 1,917Atlas Honda Ltd. 120.00 120.00 119.00 120.00 0.00 41Bal.Wheels 26.12 26.12 26.00 26.12 0.00 100Dewan Motors 1.80 1.90 1.80 1.85 0.05 28,336

BeveragesMurree Brewery Co. 110.49 111.43 109.00 111.18 0.69 1,170Shezan Int’l 150.02 150.00 145.05 145.58 -4.44 203

Mutual Funds

Fund Offer Repurchase NAv

Alfalah GHP Cash Fund 501.2900 501.2900 501.2900 Askari Islamic Asset Allocation Fund 114.7196 111.8516 111.8516Askari Islamic Income Fund 103.6501 102.6136 102.6136 Askari Sovereign Cash Fund 100.6900 100.6900 100.6900 Atlas Income Fund 519.3500 514.2100 514.2100 Atlas Islamic Income Fund 519.0900 513.9500 513.9500Atlas Money Market Fund 516.9700 516.9700 516.9700 Atlas Stock Market Fund 453.1500 444.2600 444.2600 Crosby Dragon Fund 82.9800 81.3500 81.3500 Crosby Phoenix Fund 102.5100 102.5100 102.5100 Dawood Islamic Fund 0.0000 0.0000 0.0000Faysal Income & Growth Fund 103.9600 102.9300 102.9300Faysal Islamic Savings Growth Fund 101.4000 101.4000 101.4000 Faysal Money Market Fund 101.1400 101.1400 101.1400Faysal Savings Growth Fund 101.4400 101.4400 101.4400 First Habib Cash Fund 100.8800 100.8800 100.8800 First Habib Income Fund 100.8900 100.8900 100.8900 First Habib Stock Fund 101.4400 99.4500 99.4500 HBL Income Fund 98.8551 98.8551 98.8551 HBL Islamic Money Market Fund 100.2278 100.2278 100.2278 HBL Islamic Stock Fund 105.1082 103.0473 103.0473

Fund Offer Repurchase NAv

HBL Money Market Fund 100.2768 100.2768 100.2768 HBL Multi Asset Fund 87.0103 85.3042 85.3042 HBL Stock Fund 97.6745 95.2922 95.2922 IGI Income Fund 101.8987 100.8898 100.8898IGI Stock Fund 112.3545 109.6141 109.6141 JS Principal Secure Fund I 121.5000 111.5200 117.3900 JS Principal Secure Fund II 104.1200 96.5000 101.5800 KASB Cash Fund 0.0000 0.0000 100.1087Lakson Equity Fund 106.3763 103.2779 103.2779 Lakson Income Fund 102.2115 100.7009 100.7009 MCB Cash Management Optimizer Fund 100.5994 100.5994 100.5994MCB Dynamic Cash Fund 103.2259 101.6775 101.6775 MCB Dynamic Stock Fund 83.2931 83.2931 85.4288 NAMCO Income Fund 108.2753 108.2753 108.2753 National Investment Unit Trust 26.55 25.74 25.74PICIC Income Fund 101.3261 101.3261 101.3261 UBL Capital Protected Fund II 106.7800 101.4400 106.7800UBL Islamic Savings Fund 100.4576 100.4576 100.4576 UBL Savings Income Fund 101.9855 100.9757 100.9757

Markets

Thursday, 12 January, 2012

06

top 10 sectors

42% 02%Construction & Materials

Chemicals Industrial Transportation

13%Electricity

09%02%

Fixed Line Telecommunication

01%Equity Investment Insturments

Financial Services

06%Banks15%Oil & Gas07%Personal Goods03%

International Oil PriceWTICrude Oil

$101.42

BrentCrude Oil

$113.28

STOCK MARKET HIGHLIGHTS

Index Change Volume Market ValueKSE-100 10930.49 -2.69 19,706,601 1,217,607,296LSE-25 2867.31 11.98 668,379 21,315,705ISE-10 2353.24 +38.55 20,807 1,632,101

Major Gainers

Company Open High Low Close Change TurnoverColgate Palmolive 611.43 642.00 641.00 641.97 30.54 87Mithchells Fruit 81.98 86.07 84.99 86.07 4.09 907AL-Abbas Sugur 86.06 89.99 89.99 89.99 3.93 1,500National Refinery 220.32 225.20 221.00 223.94 3.62 217,711Fauji Fertilizer 155.79 159.79 154.26 158.98 3.19 1,928,689

Major Losers

UniLever Pak Ltd. 5308.57 5311.00 5180.00 5188.05 -120.52 92Nestle PakistanXD 2910.73 2940.00 2830.00 2844.22 -66.51 78Millat Tractors Ltd. 371.87 370.00 365.51 368.41 -3.46 2,523Salfi Textile 41.27 40.00 39.21 39.21 -2.06 621Faisal Spinning 44.10 42.25 42.25 42.25 -1.85 500

Volume Leaders

Fauji Fert 41.94 43.53 41.45 43.37 1.43 3,290,838Hub Power Co. 33.68 33.75 32.85 33.34 -0.34 2,346,089Fauji Fertilizer 155.79 159.79 154.26 158.98 3.19 1,928,689National Bank 43.44 43.55 42.71 42.88 -0.56 1,307,141Engro Corp 95.38 96.18 94.25 95.51 0.13 1,195,179

Bullion MarketPer Tola (PKR) Per 10 Gm (PKR) Per Ounce US$

Gold 24K 55,119.00 47,306.00 1,635.00Gold 22K 51,608.00 44,245.00 –Silver (Tezabi) 1,004.00 861.00 35.05Silver (Thobi) 1025.00 880.00 –

Interbank RatesUS Dollar 89.9848UK Pound 139.1075Japanese Yen 1.1691Euro 114.9196

Buy SellUS Dollar 90.50 91.50Euro 114.45 116.47Great Britain Pound 138.67 140.77Japanese Yen 1.1652 1.1792Canadian Dollar 88.27 90.85Hong Kong Dollar 11.47 11.74UAE Dirham 24.55 24.82Saudi Riyal 24.06 24.29Australian Dollar 92.34 95.25

PRO 12-01-2012_Layout 1 1/12/2012 12:25 AM Page 6

Thursday,12 January,2012

news

07

We are going for 3G and wewill be the first to competefor a 3G license, we have nooption but to succeed

PTCL CEO and President, Mr walid Irshaid

KARACHI

STAFF REPORT

STaTE Bank of Pakistan (SBP)and Pakistan Telecommunica-tion authority (PTa) Wednesdaysigned a Memorandum of Un-

derstanding (MoU) to develop an appro-priate technological and regulatoryframework to promote mobile banking inthe country. The MoU was signed by In-ayat Hussain, Executive director SBP anddr Muhammad Saleem, director GeneralCommercial affairs PTa in the presenceof SBP Governor Yaseen anwar and PTaChairman dr Mohammed Yaseen. Themain objective of the MoU is to develop anappropriate technological and regulatory

framework through a consultative processto strengthen mobile banking with a viewto supporting the provision of bankingservices as authorised by SBP.

Under this collaboration, PTa and SBPwill act as facilitators by means of regula-tory oversight and issuance of license toThird Party Service Providers (TPSP) andsetting performance benchmarks throughstandardised Service Level agreement(SLas) between telecom operators orTPSPs and the authorised financial institu-tions for carrying out financial transactionsin a prudent manner through mobile bank-ing, under relevant legislative structure.

The MoU is meant to develop a cohe-sive regulatory framework, in consulta-tion with all the stakeholders and to assist

each other in achieving the common ob-jective of providing the low cost mobilebanking services. In order to coordinatesmooth implementation of mobile bank-ing and to resolve any disputes among thestakeholders, a SBP-PTa Joint Coordina-tion Committee shall be constituted com-prising firstly four officials from SBPincluding the Executive director (BPRG),director-Banking Policy and Regulationsdepartment, director-Payment Systemsdepartment and director- InformationSystems and Technology department.

The committee would be jointlyheaded by the Executive director (BPRG),SBP and director General (Commercialaffairs), PTa. To monitor the progress,representatives of both the parties shall

meet on a quarterly basis and suggestmeasures to improve or further expand theframework as and when the need arises.

Speaking on the occasion, GovernorState Bank of Pakistan Yaseen anwar saidover 0.8 million branchless banking ac-counts have so far been opened while theaverage number of transactions per day isaround 0.18 million and the average ticketsize per transaction stands at Rs3,700.

He said the agent network underbranchless banking umbrella had exceeded20,000 agents, who have helped to chan-nelise 50 million financial transactionsworth more than Rs190 billion while thenumber of bank branches at present wasonly ten thousand (10,000). He said theseagent outlets are spread across several cities,

towns and smaller villages in Pakistan.anwar said technology has made it possiblefor banking industry to offer a wide gamutof services such as e-Banking, Branch-less/Mobile Banking, Electronic ClearingSystems, Electronic Funds Transfer, SmartCards, plastic cards of various forms etc.

appreciating the initiatives of Pak-istan Telecommunication authority (PTa)and the Ministry of Information Technol-ogy (MOIT) to promote and develop theemerging field of branchless and mobilebanking in the country, he said that it isalso heartening to note that PTa is alsoplaying an important role by encouragingit’s regulatees to play their due part in pro-vision of smooth and efficient BranchlessBanking services.

SBP, PTA sign MoU to promote mobile banking

OverseesPakistanis show interest

Car sales up 20pc to81,931 units in 1HFy12KARACHI: Car sales during 1HFY12 improved byhealthy 20 per cent to 81,931 units compared to 68,099units in the same period last year, said nauman Khan,an analyst at Topline Securities. “apart from June-Julydeferred sales were affected on account of reduced taxstructure in federal budget, the yellow cab schemeannounced by Punjab government has also played itsdue role in this volumetric growth,” said nauman Khan.In december, Khan said car sales dipped by 6 per centto 11,214 units compared to 11,924 units in precedingmonth, as buyers prefer to defer orders due to year endphenomenon. However, sales in december showed aphenomenal growth of 25 per cent as against the samemonth last year. On company wise basis, Pak SuzukiMotor Company Limited (PSMC) continued to showrobust growth of 32 per cent in 1HFY12 to 50,718 units,versus 38,320 units seen in the same period last year.This growth trajectory primarily stems from highersales of Mehran and Bolan, up 47 per cent and 36 percent respectively, on account of taxi scheme launchedby Punjab government, while comparatively newaddition in PSMC product offering, Swift, also lend itsdue hand. Swift sales increased by 2 folds to 3,247 unitsin the period under review, while it is contributing 6 percent to overall PSMC volumetric sales. Overall,company has been able to improve its market share by6pps to 62 per cent in this period. On the other handIndus Motors’ sales grew by 7 per cent to 24,066 unitscompared to 22,408 units in the same period last yearwith company’s flag ship product, Corrala, depicting thesame growth trend. despite launch of new variants bythe company in 1600cc segment and CnG vehicles(Eco), Corolla sales showed declining trend on accountof reduced farmer income amid falling cotton prices.despite recovery in volumetric sales, strained marginson account of continuous appreciation of Japanese Yenand high regulatory risk, we maintain “Market-weight”stance on local assemblers. STAFF REPORT

Investment to GDPratio dipsKARACHI: The security situation in Pakistan is beingconsidered as one of the biggest hurdle for foreigninvestors. One positive change that, according toanalysts, has emerged in last few months is theconsiderable improvement in law and order situation ofthe country. “This can be gauged by the fact that thefrequency of suicide blasts had reduced by 34 per cent in2011,” said Farhan Mahmood of Topline Securities. This,the analyst said, would somehow provide a breather tolocal and foreign investors where political and ongoingenergy issues were already hampering the investmentclimate. “Pakistan investment to GdP ratio has fallen to13.4 per cent in 2011 from a high of 22.5 per cent inFY07,” he said. Referring to the data compiled byPakistan Institute of Peace Studies (PIPS) Mahmoodsaid, a total of 45 suicide attacks took place at differentplaces in Pakistan in 2011 compared to 68 blasts/attacksoccurred during 2010. “This translated into a massivedecline of 34 per cent, thanks to the prolonged militaryoperation in border part of Pakistan and afghanistan.”Moreover, there is a marked improvement in thesecurity situation over the last 2 years, as frequenciesof blasts have reduced to almost half. Interestingly,suicide attacks have reduced significantly overall thelast couple of months. “This is primarily due to theongoing peace talks by US and Pakistan with theinsurgent groups, according to media reports,” theeconomic observer viewed. STAFF REPORT

Thar Coal project

KARACHI

ghuLAM AbbAS

aFTER successful testing of under-ground gasification of coal projectstarted by dr Samar Mubarak atThar, oversees Pakistanis have

showed their interest in giving financial as-sistance to the important project, which wasfacing a financial predicament.

OvERSEES INTENTafter the news appeared in media regard-ing financial constraints faced by the onlysuccessful project – touted as having thepotential of at least 100 megawatts elec-tricity – the oversees Pakistanis have theirflaunted their willingness to providearound $115 million to the project. Thiswas said by dr Mirza Ikhtiar Baig, advisorto Prime Minister on Textile while ad-dressing a conference on ‘We need Crisisor Growth’ here at Federation House onWednesday. However, he said dr Samarinformed that government has already re-leased the required installment to theproject as the project was in need of theamount to keep the developing worksgoing on. However, oversees Pakistaniscould send related machinery and equip-ments to the project, he reiterated. Theunderground gasification project was onlysuccess story of the year, a veritable ray ofhope for the nation, he said.

TEXTILE, TERRORISM AND TAXESTalking about textile industry, Baig said eventhough the sector was facing multi-prongedchallenges – especially the energy crisis –the exports have still showed a growth of 15per cent during the last six months. In spiteof the shortage of energy, demand of whichhas been increased by 60 to 65 per cent inthe last 10 years, a single megawatt has notbeen added by the successive governments.Baig also said the crisis-hit country shouldcome out of the war on terrorism which hashampered national progress with the loss of$ 265 billion. Talking about corruption, mis-management, tax evasion and non-imposi-tion of taxes which have veered the country’seconomy towards a sticky situation, drShahid Hasan Siddiqui, chairman and chiefexecutive of Research Institute of IslamicBanking and Finance, Karachi, said themuch debated national ReconciliationOrder (nRO) has caused the nation withlosses to the tune of Rs45 billion.

PRESENT GOvT’S PERFORMANCEThe present government inaugurateddiamar Bhasha dam for the second timein 2011 since it was already inauguratedby former President Musharraf in 2006causing a jump in the cost of the ap-proved mega project, he said. dr Shahid

who is also a renowned economistclaimed that Pakistan was losing Rs1,200 billion annually because of corrup-tion and another Rs1, 900 billion be-cause of tax evasion and non-impositionof taxes by the present government. Inaddition, around Rs300 billion losseswere being made due to corruption in thepublic sector enterprises. according toTransparency International and WorldBank, he said, at least 40 per cent of thedevelopment budget of the country wasbeing misappropriated.He further claimed that the present govern-ment is not serious about Iran-Pakistan GasPipeline and it was waiting for a US sanctionon the project. Whatever developmentshown by the government so far was nomore than a political point scoring andpropaganda. He alleged that the hiddenforces were trying to separate Gawadar(Balochistan) which could b an alternativestrait to the Bandar-e-abbas which hasIranian domination.

ATTENDEESThe conference was also addressed bySardar Showkat Papulzai PresidentBalochistan Economic Forum, Pervez as-ghar, director General, national Centerfor Maritime Policy and Research BahriaUniversity Karachi, and others while JaanJamali deputy Chairman Senate alsomade a telephonic address.

g want to give $115 million to undergroundgasification project g NRO caused Rs45 billionlosses to the nation: Dr Shahid Hassan

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