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Transcript of profitepaper pakistantoday 05th March, 2013
Rs 125.5 billionreleasedunder PSDP ISLAMABAD: The Planning
Commission of Pakistan has so far
released Rs125.5 billion under its
Public Sector Development
Programme (PSDP) against the total
allocations of Rs 233 billion for the
fiscal year 2012-13. Out of the total
funds, Rs 65.4 billion has been
released for 345 infrastructure
development projects and Rs 56.1
billion for 690 social sector projects.
According to data of the commission,
till March 1st Rs 1.2 billion had been
released for 71 other projects and Rs
2.8 billion for the Earthquake
Reconstruction and Rehabilitation
Authority (ERRA). The total size of
the PSDP for the year 2012-13 is Rs
360 billion, including Rs100 billion
foreign aid, which is managed by
Economic Affairs Division and Rs 27
billion special programmes, release
of which are made by the Cabinet
Division or the Finance Division.
According to break up details, the
total cost of 345 infrastructure
projects has been estimated at Rs
2320.3 billion, out of which Rs 211.1
billion have been earmarked in the
2012-13 budget that include Rs 85.6
billion as foreign aid. The cost of the
other 71 projects has been
estimated at Rs 41.3 billion out of
which Rs 3 billion has been
earmarked in the PSDP 2012-13
while Rs10 billion has been
earmarked for ERRA in the current
development programme. The
commission has been following a
proper mechanism for the release of
funds and accordingly funds are
released per the given mechanism.
The commission releases 20% of
funds in the first quarter (July-
September), 20% in
second quarter (October-December),
25% in the third quarter (January-
March) and 35% in the fourth
quarter (April-June). APP
01
BUSINESS
BTuesday, 5 March, 2013
Hungary invested $1.4 billion in
Pakistan’s energy sector. — Hungarian
Ambassador to Pakistan Istvan Szabo
SBP reformats datasubmission forbanks’ unclaimeddepositsKARACHI: The central bank on
Monday notified banks and
Development Finance Institutions
(DFIs) about its decision to revise the
format for uploading unclaimed
deposits or instruments’ data. A State
Bank of Pakistan (SBP) circular said,
keeping in view the difficulty faced by
banks and DFIs in uploading data on
unclaimed deposits for 2012 separately
on Annexure A&D on Data Acquisition
Portal-4 (DAP4), it has been decided to
revise the format combining variables
of both annexure in a consolidated
form. Referring to CPD Circular Letter
No. 01 issued on January 16, the
regulator asked banks to, henceforth,
provide requisite data per revised
Annexure-A.
The details of unclaimed instruments
favouring federal and provincial
governments would also be provided in
the same format by April 15 or by next
working day if the due date happened
to be a holiday, each calendar year, it
said. It said the modified dbf-generator
for Revised Annexure “A” along with
DAP4 user manual and user guide for
preparing the data files for unclaimed
deposits would be available on Data
Warehouse Portal at the “Knowledge
Centre” Tab. STAFF REPORT
KARACHI
STAFF REPORT
The Securities andexchange Commission ofPakistan (SeCP) onMonday unveiled adocument titled ‘Reportof Non-Bank Financial
Sector’ (NBFS) ReformsCommittee’ for public feedback. Prepared by senior SeCP officialsand leading market professionals,the report contains proposed reformsfor the development of the non-bankfinancial (NBF) sector in Pakistan. SeCP Chairman Muhammad Ali,commissioners and leadingprofessionals and businessmen fromthe financial sector attended theceremony.Addressing the ceremony, Ali said itwas imperative that the SeCP andthe State Bank of Pakistan (SBP)work in close cooperation foreffective and seamless regulationacross the financial sector in aglobally integrated market.he said Pakistan’s financial sectorwas bank-centric with NBF sectoraccounting only 4.9 percent(excluding insurance sector) of thefinancial sector’s total assets. Thisdependence on the banking sector,he said, made the country’s financialsystem vulnerable to risks throughlack of diversification and alsorestricted the scope of productinnovation.A strong NBF sector would not onlypromote savings by offeringdifferent asset classes to investors,but will also provide alternativefund raising opportunities toparticipants of the financial system,Ali added. The report highlightedthat more than 70 percent of assetsof the financial sector were withcommercial banks and only ninepercent were with the non-bankingsector, including non-bankingfinance companies (NBFCs),insurance companies, etc.Out of the remaining assets, around17 percent are with the nationalsavings schemes. Keeping in viewthe present composition of thefinancial sector, the report suggestssome revolutionary ideas to reformit. The suggested reforms are aimedat development of an alternatefinancial system by way ofpromoting NBF sector.It is imperative to diversify theinherent systemic risk and providedifferent asset classes to promotesavings as well as cater to thespecific needs of participants throughproduct innovation, the report said.To develop the NBF Sector, in linewith international best practices, thereport proposes implementation ofthe concept of activity basedregulatory regime in Pakistan.In terms of the proposed regime,capital market activities of allentities including that ofcommercial banks and DFIs are tobe regulated by the capital marketregulator (CMR), i.e., SeCP anddeposit taking/financing/lendingactivities of all the financial sectorparticipants would be regulated bythe banking regulator (BR), i.e.,SBP. This recommendation is incontrast with the prevalent conceptof entity based regulatory domain in Pakistan.Other proposed reforms for themutual fund industry includedistribution of mutual fund unitsthrough stock exchanges, reductionin the annual regulatory feeprovided more than 50 percent of afunds’ net assets are held by retailclients, introduction of concept ofexpense ratio, introduction ofmultiple classes of units based onthe investment amount, improvingthe skill set of key personnel such as
fund managers by specifying aminimum criteria among others. Investment finance services arebroken down and redefined as stockbrokerage, investment advisory,corporate advisory, securitiesfinancing and securitiesunderwriting services and eachcomponent has been further defined.Flexibility has been offeredto an entity to bereclassified as non-bank financecompany to obtaineither a full scopeor limited scope.The suggestedregime for IFSoutlines amechanism totransformexistingbrokeragehouses asNBFCs tobecome part ofNBF sector. Theinclusion ofbrokerage servicesin NBF sector isexpected to open up a newera of licensed activities forbrokers including advisory and otherancillary services.To facilitate the launch of the realestate investment trusts (ReITs) inPakistan, the committee hasproposed a reduction in ReIT fundsize to address the issue of capital constraints and allowlaunching of medium-size ReITprojects having better potential forgrowth and return. In order to develop non-bankingfinancial services, the committee, inline with best international practiceshas proposed the implementation ofthe concept of activity basedregulatory regime in Pakistan forcluster one entities. In terms of theproposed regime, capital marketactivities of all entities are to beregulated by the SeCP and deposittaking, financing and lendingactivities of all financial sectorparticipants will be regulated bythe SBP.
WhIle the overall assets of thecountry’s financial sector increasedfrom Rs 5.202 trillion in 2005 to Rs11.107 trillion in 2011, the share ofthe financial sector in terms of GDPis very low at 57.4 percent, saidState Bank of Pakistan (SBP)Governor Yaseen Anwar whileaddressing the SeCP Conference onNon-Bank Financial Institutions(NBFI) on Monday.“The low financial sector to GDPratio and NBFIs declining share infinancial sector assets clearlyunderscores the need for financialsector development anddiversification of financial sectorassets to attract investors withdifferent return expectations and riskappetite and channelise financialresources for the economicdevelopment of the country,” he said.The “shadow banking system” wasdefined as the system of creditintermediation that involves entitiesand activities outside the regularbanking system, he said, adding theemergence of the term reflectedrecognition of the increasedimportance of entities and activitiesstructured outside the regularbanking system that perform bank-like functions.Anwar said the financial system inPakistan was yet to grow to its fullpotential and play a moremeaningful role in the economicdevelopment of the country.“We definitely need to add to its
diversification and depth,” he said.NBFIs can play a meaningful role inthis pursuit, he said, adding that inlight of the global financial crises,we are better informed about thevarious risks that NBFIs/shadowbanking carries with it. “Asregulators we need to remainvigilant to ensure that those risks
are mitigated withoutinhibiting sustainable non-
banking financingmodels,” he said.
The SBP governorbriefly outlined four
major constraintsthat the NBFI
sector inPakistanfaced.Althoughthere hadbeen anincreasingeffort by
NBFIs tobroaden the
range of theirbusiness activities
and product base,thereby diversifying their
revenue streams, the sector wasyet to make a breakthrough in thisregard, said Anwar.Second, the sector was fragmentedand each NBFI is trying to create itsniche market in pursuit ofestablishing a sustainable revenuestream, he said. In this regard, mostcompanies are concentrating onfinancial advisory and other fee-based income segments.“Unfortunately, the sector is yet tocapitalise on the huge opportunitiesoffered by previously relativelyuntapped areas like SMes,consumer, and agriculture segmentsto enhance avenues for funddeployment,” he said.Thirdly, Anwar said, the sectorneeded to develop and diversifysources of funding for sustainablegrowth. This would require a shiftfrom traditional sources for lendingto clients.The NBFIs needed to developcapital market instruments to poolfunds from a diverse set of investorsto ensure certainty to the source andcost of funding, he added.Fourth, he said, there was a need tostrengthen the oversight andregulation of NBFIs to reduce therisks emanating from “shadowbanking”.As observed by Financial StabilityBoard (FSB), the objective of thisexercise should be to ensure thatshadow banking was subject toappropriate oversight and regulationto address bank-like risks tofinancial stability emerging outsidethe regular banking system whilenot inhibiting sustainable non-bankfinancing models that do not posesuch risks, said Anwar.
PAKISTAN has enough leveragemaking it optional for cash-strappedIslamabad to opt for the much-speculated-upon fresh IMF bailoutpackage, said Anwar.“Most of the articles contributed
(recently) in local newspapers aremisleading,” Anwar told reporters on the sidelines of theSeCP conference.“Yes, we are engaged with the IMF,
but it is our decision to go for a loanpackage when the time is right,” headded. Time, the SBP governorbelieves, is not ripe for asking theinternational lender for a freshbailout package as economicchallenges in the country are“manageable”.“This does not mean things are
perfect. But the challenges we arefacing are manageable,” he said.Asked about the possible impact ofthe ever-worsening law and ordersituation in the country, thegovernor said it would take its tollon the country in terms of offshoreinvestment.As for local investors, bankers,experts and other marketparticipants, they were well awareof the resilience of Pakistan’seconomy, especially the bankingsystem, he said.“Those who know our markets knowour banking system is very resilientand that our fundamentals are strong,” he said in response to a question.Illustrating his claim, Anwar saidnot even a single bank had failedduring the last five years, unlike the 1990s when several bankshad defaulted.If analysed against the backdrop ofcountry’s Balance of Payment(BOP) situation, which mostlypushes economic managers towardsthe IMF, the tall claims made by the SBP governor seem to carrysome weight.According to official data,Pakistan’s dollar reserves stood at $13.185 billion till February 22. Ofthe total, $ 8.227 billion belong tothe central bank. A week earlier, tillFebruary 15, the country possessed$ 13.058 billion, of which $ 8.141billion were held by the SBP.“We still have enough reserves,” isthe statement the governmentofficials, including the SBPgovernor, have been making whenasked if the country had enough ofthe greenback to repay the half-paidloan it had secured in 2008 from the IMF under a stand-byarrangement (SBA).According to the central bank, fromJuly 2012 to February 26 this year,Pakistan has “successfully” repaid $3.232 billion to the IMF under theSBA. The balance amount to becleared until September 2015 standsat SDR 3.239 billion.The next, 11th, installment worthSDR 258.4 million is due to be paid in May.The economic managers have beenrepetitive in reminding theinquisitive media that all the IMFrepayments have been budgeted and,therefore, pose no risk to stabilityon a macroeconomic level.What can be more comforting is thatthe country’s BOP list, despite allodds, lies in the green zone.According to the central bank,during the first seven months of thecurrent fiscal year, the country’scurrent account witnessed a surplusof $ 62 million against a hugedeficit of $ 2.79 billion that thecountry had braced in last year’scorresponding period.Major stimulus, according to SBP,was the trade gap which narroweddown during the review period to $8.77 billion against FY12’s $ 9.41billion with exports growing to $14.17 billion from $14.04 billionand imports remaining subdued at $22.94 billion compared to $ 23.46billion of last year.The resumed inflows from theUnited States on account ofCoalition Support Fund (CSF)happen to be another positive for thecountry’s current account surplus. Since August last year, the country’sCSF receipts have been counted at $1.86 billion, of which $ 1.18 billionwere reimbursed in August and $688 million in December.Another relieving head for theeconomic managers is the ever-burgeoning worker remittances thatduring July-Jan FY13 amounted to $8.207 billion compared to $ 7.436billion of FY12.
SECP unveils roadmap for diversificationof non-bank financial sector
GDP SHARE OF FINANCIAL SECTOR
IMF BAILOUT, OPTIONAL
PRO 05-03-2013_Layout 1 3/5/2013 1:10 AM Page 1
BUSINESSTuesday, 5 March, 2013
Khushhalibank honours
Malala Yousufzai with
LADIESFUND Khushhali
Bank Idol Award
KARACHI: The Dawood global Foundation in
partnership with Dawood Capital Management Ltd.,
the 5h LADIESFuND® Women’s Awards for Pakistan
ceremony was held today at The Mohatta Palace
Museum, Karachi, with 300 of the most influential
women in Pakistan in attendance. Chief guests
included First Women Bank Ltd. President Shaqfat
Sultana and Poetess of Pakistan Zehra Nigah, who
was also the Lifetime Achievement Winner. This
event was sponsored by KhuShhALIBANK Ltd., OBS,
First Women Bank Ltd., Burj Bank, 21st Century,
gSK, Atlas Asset Management Ltd, hESCO, JS
Investments Ltd., et al. highlight of the event was
when Malala Yousufzai was announced
KhuShhALIBANK Idol Award winner and her Award
was accepted by two of her friends Shazia Ramazan
and Kainat Riaz, who had been injured alongside
Malala and had flown to Karachi with their families
for this special occasion. PRESS RELEASE
PTCL’s annual reportearns SAFA’s award
ISLAMABAD: Pakistan Telecommunication Company
Limited (PTCL), the largest Information
Communication Technology (ICT) service provider in
Pakistan, has won distinction for the country, with
South Asian Federation of Accountants (SAFA)
conferring the ‘Best Presented Accounts Award 2011’
to the company, in the category of ‘Communication
and Information Technology’. The award is presented
to companies that exceed industry standards in
quality and transparency of financial reporting
parameters. SAFA, consisting of the institutes of
chartered and management accountants in the SAARC
countries, holds these awards every year for different
categories on the basis of evaluation of the published
annual reports of companies across the South Asian
Region to improve transparency, accountability and
governance in financial reporting. PRESS RELEASE
Coca-cola announces Rs7b investment in multan
LAHoRe: Coca-Cola Beverages Pakistan Ltd. held a
ground-breaking ceremony of its new greenfield
project in Multan. The ceremony was inaugurated by
Senior Advisor of Chief Minister Punjab Zulfiqar
Khosa, and attended by a huge gathering, including
key government officials, media personnel, local
dignitaries and Coca-Cola employees. The greenfield
project in Multan is one of the three greenfield
projects being set up in the country by Coca-Cola
Pakistan. A total amount of $379million will be
invested over the next three years, with the funds
being utilized for expanding the business and bringing
about infrastructure and systemic improvements in
the Coca-Cola system. PRESS RELEASE
Sikander Mustafa Khan is
the new PBC ChairmanKARACHI: The Board of Directors of the Pakistan
Business Council (PBC) elected Sikander Mustafa
Khan as the new Chairman of the PBC. The members
of the PBC had earlier elected a 13 member board
which besides Sikander Mustafa Khan includes; Abdul
Razak Dawood, Ali S. habib, Aliuddin Ansari, Asif
Saad, Atif Aslam Bajwa, Bashir Ali Mohammad, Ehsan
Malik, hussain Dawood, Iqbal Lakhani, Muhammad Ali
Tabba, Shabbir Diwan & Syed hyder Ali. The newly
elected board appreciated the efforts of the previous
board members for enhancing the image of the PBC
as Pakistan’s premier business policy advocacy forum
and especially thanked the outgoing Chairman Ali S.
habib for his services. Sikander Mustafa Khan is also
Chairman Millat Tractors and has previously served as
Vice Chairman of the PBC. PRESS RELEASE
Intel Helps Developers
Simplify the ‘Internet of Things’
LAHoRe: Intel Corporation recently announced
several new advancements in support of the Intel
Intelligent Systems Framework, including a
ecosystem growth, framework-ready products and
two new software tools designed to help reduce
time-to-market and costs for developers. To simplify
the deployment of intelligent systems, which
comprise what is frequently called the “Internet of
Things,” Intel recently released the Intel Intelligent
Systems Framework. The framework is a set of
interoperable specifications designed to address
connecting, managing and securing intelligent
devices in a consistent and scalable manner. “In just
less than 6 months since the Intel Intelligent
Systems Framework was released, we’ve seen
impressive support and adoption from this rapidly
expanding ecosystem,” said Naveed Siraj, Country
Manager, Intel Pakistan. PRESS RELEASE
Silkbank AnnouncesAnnual Results
The Board of Directors of Silkbank Limited, in their
meeting held on March 01, 2013, announced the
annual results of the Bank for the year ended
December 31, 2012, showing growth in the asset and
the deposit sides of the business. The Bank
significantly improved the deposit mix through
increase in low cost current and saving accounts as
well. The Bank also made strategic investments in
new business lines and successfully launched its credit
card and Islamic banking business, during the year
which was received positively by the market. The
investments related to the launch of new businesses,
coupled with an industry wide one-off provisioning
resulted in the Bank posting a loss of Rs.344 million
for the year. however, with the revenue pipeline from
new businesses and the existing product portfolio, the
Bank is well positioned to increase revenues and
declare profits in the year to come. PRESS RELEASE
About The Coca-Cola Company
The Coca-Cola Company (NYSE: KO) is the world’s
largest beverage company, refreshing consumers
with more than 500 sparkling and still brands. Led
by Coca-Cola, the world’s most valuable brand, our
Company’s portfolio features 15 billion-dollar brands
including Diet Coke, Fanta, Sprite, Coca-Cola Zero,
vitaminwater, Powerade, Minute Maid, Simply,
georgia and Del Valle. globally, we are the No. 1
provider of sparkling beverages, ready-to-drink
coffees, and juices and juice drinks. Through the
world’s largest beverage distribution system,
consumers in more than 200 countries enjoy our
beverages at a rate of 1.8 billion servings a day.
With an enduring commitment to building
sustainable communities, our Company is focused
on initiatives that reduce our environmental
footprint, support active, healthy living, create a
safe, inclusive work environment for our associates,
and enhance the economic development of the
communities where we operate. PRESS RELEASE
‘Discover your shade’
LAHoRe: Alkaram Textiles launched their dazzling
spring / summer collection volume 1, 2013 in
Alkaram galleria, Y Block, DhA, Lahore . Each theme
is an exploration in design and color inspired by
seven selected moods which personifies an alkaram
woman. A wide array of distinct themes is made
available in one collection which includes Nouvelle
Collection, Vintage Collection, Summer Tribes,
Intricate Patterns, hand Crafted, Avant garde and
Splendor Shade. The concept was brought to life at
A.K galleria, Y block, D.h.A, where top notch models
like Marium Shah, Sana Khan, Nooray, Anoshay
Asad, Aleezay Rasul, Anoshay looked spectacular in
different shades of alkaram’s collection. Aside from
the models, seven renowned personalities such as
Aasma Mumtaz, Asfa Nabeel, Sara Shahid, and
Frieha Altaf were adorned in extravagant apparels in
various hues by alkaram. PRESS RELEASE
STARfALL initiates FIRST LEGO®
STARfALL has initiated FIRST LEgO® League (FLL –
www.firstlegoleague.org) robotics program, an
international robotics competition, for the first time
in Pakistan. STARfALL is the Operations Partner of
FLL in Pakistan. For very first time in Pakistan a
global event of robot games is being held in
Pakistan. A pilot program was launched in Lahore in
2011, this program concluded in June 2012 with the
National Championship Event held at LuMS (Lahore
university of Management Sciences). About 40
children participated in the pilot program and it was
very well received by the local community, the
feedback from academia and industry was very
encouraging. This year Islamabad and Karachi region
was added along with Lahore. Regional championship
event held in January-February 2013 in all three
cities followed by Pakistan National Championship
event in March 2nd, 2013. PRESS RELEASE
CORPORATE CORNER
02
B
We wish to expand the bilateral trade volume between the two
countries up to $5 billion over the next few years. —
Ambassador to South Korea Shaukat Ali Mukadam
Major Gainers
COMPANY OPEN HIGH LOW CLOSE CHANGE TURNOVERSanofi-Aventis Pak 374.84 393.58 370.00 393.58 18.74 900Sunrays Textile 214.00 224.70 224.00 224.70 10.70 1,000Philip Morris Pak. 192.79 202.42 194.00 202.42 9.63 2,800Indus Motor Co 307.32 319.00 302.00 316.45 9.13 27,900Bhanero Tex. 300.00 305.00 300.00 305.00 5.00 300
Major LosersSapphire Textile XD 242.37 230.50 230.50 230.50 -11.87 500Pak Gum & Chemical 173.45 182.12 164.78 164.78 -8.67 32,800Murree Brewery 154.63 148.51 147.50 147.50 -7.13 4,600Millat Tractors XDXB 515.00 515.00 500.00 507.91 -7.09 19,600Gillette Pak 147.00 140.00 140.00 140.00 -7.00 500
Volume Leaders
Lotte PakPTA 7.24 7.96 7.29 7.69 0.45 30,127,500Fauji Cement 8.54 8.63 8.34 8.40 -0.14 17,241,500P.I.A.C.(A) 7.09 7.49 6.18 6.77 -0.32 15,003,500Telecard Limited 6.97 7.20 6.55 6.83 -0.14 8,738,000Maple Leaf Cement 17.50 17.65 16.75 16.92 -0.58 7,459,500
Interbank RatesUSD PKR 98.1529GBP PKR 147.4649JPY PKR 1.0484EURO PKR 127.5203
ForexBUY SELL
Australian Dollar 103 105Canadian Dollar 98.5 99China Yuan 13.5 14Euro 132.8 133.2Japanese Yen 1.055 1.11Saudi Riyal 26.5 26.7U.A.E Dirham 27 27.25UK Pound Sterling 153.4 154.4US Dollar 99.05 99.3
KARACHI
STAFF REPORT
ALThOugh cement exports
marked a record increase of
15.40 percent in February,
local sales remained almost
stagnant showing a nominal growth of
1.16 percent compared to the preceding
month of January. The country’s overall
cement despatches increased by 4.01
percent to 21.207 million tonnes during
the first eight months of FY13
compared to the corresponding
period of FY12. The growth,
according to industry experts,
is not enough to provide
comfort to cement
manufacturers. In February,
cement units located in the
northern part of the country
dispatched 1.556 million
tonnes of cement to the
domestic market and
exported 0.444 million tonnes,
most of it to Afghanistan and
other destinations through
sea, while exports to India
were only 0.032 million
tonnes. The south-based
mills provided the domestic
market with 0.397 million
tonnes of cement while its
exports were 0.209 million tonnes. The
total cement despatches in February
was 2.610 million tonnes which was
nominally lower than the January 2013
figure of 2.646 million tonnes. Industry
experts are pinning hopes on economic
revival to spur cement consumption
after the elections. “The cement
industry was established to fulfil local
demand, based on projections of
growth in 2003,” said a cement
manufacturer. unfortunately, he said,
the growth remained much below
projections after 2008 that resulted in
huge idle capacities. he said India was
not in the feasibilities when industries
were planned. however after thaw in
relations between the two countries it
looked like the best prospect for cement
exports. he said much has been said
about the impediments to exports to
India most of which need action from
the Indian side. unfortunately, he
added, the Pakistani trade negotiators
have been unable to convince Indians
to remove their non-tariff barriers and
mindset towards Pakistani products.
The manufacturer said Afghanistan
remained a good market for Pakistani
cement but with the gradual withdrawal
of western forces from the country,
prospects of growth had diminished.
Taha Khan Javed, an analyst at Taurus
Securities, said the increase in exports
was a welcome change after low
exports numbers witnessed in January.
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