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PAK LAW PUBLICATION News Alerts 23 August 2013EMAIL # 193-2013

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13

Daily News

Friday, August 23, 2013

PAK LAW

PUBLICATION

2013

Office # 05, Ground Floor, Arshad Mansion, Near Chowk A.GOffice, Nabha Road Lahore.

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News ContentsTop Stories.............................................................................................................................................5

Profound setback for PTI ........................................................................................................................5

National security: Defence body to think up policy................................................................................6

Pakistan warns India: policy of restraint should not be construed as weakness ...................................7

National Assembly condemns Indian army aggression on LoC ..............................................................9

Over 1.3 million people hit by flash floods: crops on 634,000 acres of land damaged........................10

High flood in Sukkur Barrage ................................................................................................................11

Floods cause havoc in Sindh .................................................................................................................12

Taxation: Pakistan ..............................................................................................................................14

Blocking foreign currencies'' smuggling: FBR, SBP working on new strategy.......................................14

Reduction in customs tariff: exports to Australia likely to be increased: HC .......................................15

WeBOC linkage with government departments: steps taken to ensure security of imports, exports

data .......................................................................................................................................................15

Refund blockage: FBR places strict check on IR Commissioners ..........................................................16

Provision of services: industrial concerns required to pay Punjab sales tax: PRA................................18

Taxation: World...................................................................................................................................21

China to join global fight against tax evasion: OECD ............................................................................21

Business & Economy...........................................................................................................................22

Pakistan’s C/A surplus at $46mn in July 2013.......................................................................................22

Exports in July increase 9.28pc to Rs.210,491 million ..........................................................................22

FBR to facilitate businessmen in tax compliance: Mian Saeed Iqbal....................................................23

Industries & Sectors ...........................................................................................................................25

Shipping activity at Port Qasim.............................................................................................................25

Cotton and Textiles: Pakistan ............................................................................................................26

Prices decline further............................................................................................................................26

Cotton growers advised for timely eradication of bugs .......................................................................27

Precipitous fall in cotton prices ............................................................................................................27

PCGA chief fears new power tariff to jam industrial wheel..................................................................29

Agriculture and Allied: Pakistan .......................................................................................................30

Assistance to flood-hit people: KBP urges government to form commission ......................................30

Crops over 0.44 million acres badly damaged in Punjab ......................................................................30

High flood in Sukkur Barrage ................................................................................................................31

Mangla Dam reservoir level surges.......................................................................................................31

Engro turnaround continues.................................................................................................................32



Flash floods cause massive harm to Basmati rice crop.........................................................................33

Gold import: new schemes approved by ECC.......................................................................................34

Fuel and Energy: Pakistan .................................................................................................................37

APBF urges government to generate revenue in energy sector...........................................................37

Power shortfall rises to 2,300 megawatts ............................................................................................38

Pesco team detects pilferage in commercial buildings ........................................................................38

Fuel and Energy: World......................................................................................................................39

Oil edges up on strong China, Eurozone data.......................................................................................39

Iraq oil exports rebound ahead of expected September drop .............................................................40

Egypt names new chairman of state oil company................................................................................41

Canada Senate calls for rail, pipeline safety review .............................................................................41

Banking & Finance .............................................................................................................................43

SBP mops up Rs 168,350 million through OMO ...................................................................................43

Markets ................................................................................................................................................44

ISE-10 index sheds 71.01 points............................................................................................................44

Stock market slump continues..............................................................................................................44

Politics & Policy ..................................................................................................................................46

Govt providing better health, education facilities: CM ........................................................................46

NA condemns violation of ceasefire along LoC.....................................................................................46

Good relations with India vital for peace, stability in the region .........................................................47

BR Research: All .................................................................................................................................48

Monetary hawks in action soon............................................................................................................48

Engro makes resounding comeback .....................................................................................................49

ABL-Income diversification calling ........................................................................................................50

Golden hue turned July trade blue .......................................................................................................52

Brief Recordings..................................................................................................................................54

Standard Chartered Bank......................................................................................................................54

Miscellaneous News ............................................................................................................................57

Tension with New Delhi: Pakistan refuses to take part in talks on TAPI pipeline ................................57

The great journey: PIA eyes profit during next Hajj operation.............................................................58

Engro Corporation witnesses stellar turnaround in fortunes...............................................................60

Market watch: Stock market continues downward trend....................................................................61

Dawlance to focus on overseas expansion, new markets ....................................................................62

NBP reports dismal earnings amid low-interest environment .............................................................64

Shell earns Rs59.5 million in April-June quarter ...................................................................................65



Heavy rains batter cotton crop .............................................................................................................66

HBL profits fall to Rs10.5 billion in first half of 2013 ............................................................................66

Engro wins Best Corporate Report Awards ..........................................................................................67

KSE stays bearish due to likely tight monetary policy ..........................................................................68

Sindh government to set up marble city in Karachi..............................................................................69

Dr Wilson appointed acting CCP chairman...........................................................................................70

Food exports increase 22.43 % growth in July......................................................................................70

HBL declares Rs 4 per share interim dividend for stakeholders ...........................................................71

OPEN MARKET FOREX RATES................................................................................................................72

INTER BANK RATES................................................................................................................................73

Bullion Rates (Gold Prices) in Pakistan Rupee (PKR).............................................................................74

Gold Rates & Silver Rate from major cities of Pakistan ........................................................................75



Top Stories

Profound setback for PTIAugust 23, 2013

WASIM IQBAL

By winning five of the 15 National Assembly seats in Thursday's by-elections, the rulingPakistan Muslim League (N) took a clear lead. Pakistan People's Party stood second bysecuring three seats while Pakistan Tehrik-e-Insaf secured the third position by bagging twoseats. Awami National Party (ANP), Muttahida Qaumi Movement (MQM) and PakhtunkhwaAwami Milli Party (PKMP) got one seat each, according to unofficial results.

-- Imran-led party fails to retain two NA seats

-- PML-N, PPP, ANP make gains

-- PkMAP retains NA-262, MQM grabs NA-254

The polling on 15 National Assembly and 26 Provincial Assembles seats was held across thecountry on Thursday. The results of NA-5 (Nowshera) and NA-27 (Lakki Marwat) have beenwithheld on the directives of Peshawar High Court. According to ECP, re-polling on ninepolling stations in each constituency will be held in pursuance of PHC directives. The HighCourt had taken notice of media reports that women voters had been barred to cast their votesby some political parties.

The NA-5 and NA-27 seats were vacated by Pervez Khattak of PTI and JUI-F chief MaulanaFazlur Rehman, respectively. After winning three seats, the Maulana retained NA-24 D IKhan. The Maulana had also won the NA-25 (D.I. Khan) seat where by-election has beenpostponed for a few weeks because of terror threats. The PTI chief, Imran Khan won fromthree National Assembly constituencies in the May 11 general elections and decided to retainhis Rawalpindi seat, vacating the two remaining seats. His candidates have been defeated onboth the National Assembly seats vacated by him - NA-1 (Peshawar-1) and Mianwali (NA-71, his home town).

According to unofficial result of National Assembly seats: NA-1 (Peshawar): Ghulam AhmedBilour of (ANP) defeated Gul Badshah of (PTI). Aqibullah Khan (PTI) defeated MaulanaAtta-ul-Haq (JUI-F) on NA-13 (Swabi-II). NA-13 seat was vacated by Asad Qaisar of PTIwho retained his provincial assembly seat and was made Speaker of the KP Assembly.

Asad Umer (PTI) won the NA-48 (Islamabad-I) by defeating Chaudhry Muhammad Ashraf(PML-N). The seat was vacated by PTI's Javed Hashmi who had retained his homeconstituency seat. Muhammad Shafqat Hayat Khan (PML-N) won NA-68 (Sargodha) bydefeating Javed Hasnain Shah (Independent). The NA-68 seat was vacated by Prime MinisterNawaz Sharif who retained his hometown constituency (NA-120 Lahore).

Obaidullah Shadikhel (PML-N) defeated Malik Waheed Khan (PTI) on NA-71 (Mianwali-I).Mian Abdulmanan (PML-N) was declared victorious from NA-83 (Faisalabad-IX) bydefeating Faizullah Kamoka (PTI). On NA-103 (Hafizabad-II), Shahid Hussain Bhatti (PML-



N) defeated Shaukat Ali Bhatti (PTI). On NA-129 (Lahore-XII), Shazia Mubashir (PML-N)defeated Muhammad Mansha Sindhu (PTI). NA-129 was abandoned by Shahbaz Sharif, whoretained his Punjab Assembly seat to become chief minister. Ghulam Noor Rabbani Khar(PPP) won on NA-177 (Muzaffargarh-II) by defeating Muhammad Javed Khan(Independent), the brother of MNA Jamshed Dasti.

Shazia Marri (PPP) won NA-235 (Sanghar-II) seat by defeating Khudabaksh Dars (PML-F).This seat was won by PML-F candidate Pir Sadruddin Shah in the May 11 general elections.Again on NA-237 (Thatta), Shamsunnisa Memon (PPP) registered victory against Syed RiazShah (PML-N). Ali Rashid of MQM was declared unofficially winner on NA-254 (Karachi-XVI). On NA-262 (Qila Abdullah), Abdul Kahar (PkMAP) defeated Qari Muhammad SherAli of (JUI-F).

There was a public holiday in 33 districts where by-polls were being held. The pollingprocess began at 8:00am and continued till 5:00pm without any break. At least 519candidates were in the fray and 8.5 million voters elected their representatives. Some 201candidates were contesting for the National Assembly across the country: 180 candidates for15 Punjab Assembly, 82 for four Sindh Assembly and 27 and 32 candidates for fourconstituencies of Khyber Pakhtunkhwa Assembly and Balochistan Assembly, respectively.

Returning Officers began faxing unofficial results to Election Commission of Pakistanimmediately after counting. Despite a ban on carrying mobile phones, voters used theirmobile openly without any restriction at numerous polling stations. Around 30,000 militarypersonnel were deployed inside and outside sensitive polling stations, according to ISPR.Whereas Commanding Army Officers, were deployed at the polling stations with powers ofFirst Class Magistrates. They were directed by the Commission to act in case presidingofficers fail to exercise their powers in time of need. A total of 7,606 polling stations wereestablished for by-elections. As many as 2,686 polling stations had been declared sensitiveand 1,840 highly sensitive in various constituencies of the country.

Copyright Business Recorder, 2013

National security: Defence body to think uppolicyAugust 23, 2013

ZAHEER ABBASI

Prime Minister Nawaz Sharif has approved the reconstitution of the Defence Committee ofthe Cabinet into Cabinet Committee on National Security (CCNS) with a task to focus on thenational security agenda as well as device a comprehensive national security policy.

The National Security Policy formulated by the CCNS would become the guiding frameworkfor its subsidiary policies - defence policy, foreign policy, internal security policy, and otherpolicies related to national security. The Prime Minister on Thursday chaired the first meetingof the DCC since the new government came into power in June 2013 to discuss the agendarelated to national security.

The CCNS will be chaired by the Prime Minister and would include Ministers of Foreign



Affairs, Defence, Interior and Finance, the Chairman JCSC and Chiefs of Staff of PakistanArmy, Navy and Air Force. The Committee will focus on the national security agenda withthe aim to formulate a national security policy that will become the guiding framework for itssubsidiary policies - defence policy, foreign policy, internal security policy, and otherpolicies affecting national security.

In the context of regional peace and stability, the DCC deliberated in detail on the evolvingsituation in Afghanistan. It was emphasised that a peaceful, stable and united Afghanistanwas in Pakistan's vital interest and would contribute positively to peace and security as wellas progress and prosperity in the region. Pakistan will fully support the internationalcommunity's efforts for peace and reconciliation in Afghanistan. Pakistan will also work tocomprehensively upgrade its bilateral relations with Afghanistan in all dimensions. The DCCreceived a briefing on the situation along the Line of Control (LoC) and took note of thecontinued violations of the cease-fire. Pakistan's policy of restraint and responsibility wasappreciated.

The Committee condemned in the strongest terms the unprovoked firing in the Shaqma sectorwhich has resulted in the Shahadat of Army Captain Sarfraz and offered fateha. It wasstrongly emphasised that the cease-fire should be maintained in letter and spirit. All militaryand diplomatic channels should be used to prevent cease-fire violations. It was emphasisedthat Pakistan will also continue to seek dialogue and resolution of all outstanding issues withIndia peacefully.

In his opening remarks, the Prime Minister highlighted that Pakistan was facing formidablechallenges domestically while far-reaching developments were taking place in the region.The DCC provided the platform to deliberate on these issues and craft an appropriateresponse. Presentations were made by the Adviser to the Prime Minister on National Securityand Foreign Affairs, Foreign Secretary and Director General (MO). The meeting wasattended by Ministers for Finance, Information and Interior, Advisor to the Prime Minister onNational Security and Foreign Affairs, Special Assistant to the Prime Minister for ForeignAffairs, Chairman Joint Chiefs of Staff Committee, Chief of Army Staff, Chief of Air Staffand Chief of Naval Staff.


Pakistan warns India: policy of restraintshould not be construed as weaknessAugust 23, 2013

ALI HUSSAIN

Amid continued cease-fire violations along Line of Control (LoC), Pakistan Thursday warnedIndia that its policy of restraint and responsibility should not be construed as a weakness, andthat its people, leadership and institutions are fully capable of defending the country.

"Pakistan is following the policy of restraint, responsibility, and dialogue in the larger interestof peace in the region. At the same time, the people of Pakistan, the leadership and ourinstitutions are fully capable of defending our territory and interests," said Foreign Officespokesman Aizaz Ahmad Chaudhry while responding media queries during weekly press



briefing. He called upon India to take steps to ensure that "there are no more cease-fireviolations and other provocations so that the cause of peace in the region is not undermined."

"Desire for peace by the leadership of Pakistan is a wise approach...It is important for India tobetter appreciate our policy of restraint and responsibility and not construe it as a weakness."the spokesman said. To a question, he said that the expected meeting between Prime MinisterNawaz Sharif with his Indian counterpart Manmohan Singh next month in New York canprovide an opportunity to discuss the steps needed to reduce tensions, build confidence andimprove relations.

He further said that apart from the existing bilateral mechanisms, UN Military ObserverMission (UNMOGIP) is also there to observe the line of control. He said that UNMOGIP hasa mandate to observe the LoC and the government of Pakistan finds value in the work ofmission. About the possibility of Nawaz-Manmohan meeting, Chaudhry said that he was notin a position to confirm, saying if such opportunity arises, the leadership of Pakistan isprepared to use the occasion to serve the interest of peace.

Regarding Pak-India secretary level talks on water and other issues, he said that thegovernment of Pakistan believes that dialogue process must continue. "Suspending thedialogue or slowing it down does not serve the peace process. In fact it helps those elementswho do not wish to see peace in our region," he added. To another question, he clarified thatholding of dialogue does not mean giving up Pakistan's principle positions on the outstandingissues including the Jammu and Kashmir dispute. "Dialogue is a means to discuss and resolveissues. The Jammu and Kashmir dispute is one of the longest and unresolved issue betweenPakistan and India. We believe serious and meaningful dialogue is needed to resolve this andother outstanding issues," he added.

About the August 06 incident in which five Indian soldiers were killed along LoC, he saidthat Pakistan has investigated the incident and found that Pakistani side was not involved in itand it was also conveyed to the Indian side. He added that it is for the Indian government toinvestigate what happened on its side. "Pakistan which itself has been suffering fromterrorism cannot be held responsible for any acts of terrorism that may have happened on theother side of the LoC," he added. On Afghan President Hamid Karzai's forthcoming visit, hesaid Afghan President is expected to visit Pakistan in the last week of this month and both thesides are currently working on the exact date. He said that summit level interaction wouldprovide an opportunity for the leadership of the two countries to carry forward the process ofconstructive engagement between the two countries.

He said that the two sides will work together to promote the shared objectives of peace andsecurity in the region, adding matters relating to peace and reconciliation in Afghanistan,bilateral relations and regional situation will be focus of discussions during the visit.Responding a query about the expected release of Taliban leader Mullah Abdul GhaniBaradar, he said that the government of Pakistan would continue to extend its support for thepeace and reconciliation process in Afghanistan. In this regard, whatever steps that we deemare helpful will be taken, he added.

About the US government sanctions on Gunj Madrassa in Peshawar, the spokesman said thathe does not have any detail of the matter, adding the US government has put the sanctions onits own. On the situation in Syria, he said Pakistan is deeply concerned at the continuedviolence in the country, adding that Pakistan's position is based on principles of respectingterritorial integrity and unity of Syria and promoting a solution based on dialogue and



engagement. "We have expressed our position in the United Nations Security Council wherePakistan is currently a member," he added.


National Assembly condemns Indian armyaggression on LoCAugust 23, 2013

WAQAR LILLAH & NAVEED BUTT

The National Assembly on Thursday unanimously passed a resolution condemning Indianarmy aggression on the Line of Control (LoC), in which Pakistan Army Captain Sarfraz wasmartyred and a soldier sustained grievous injuries. The resolution was moved by Minister forDefence Production Rana Tanvir Hussain paid tributes to Captain Sarfraz who was martyreddue to unprovoked shelling by Indian army at LoC near Sakardu.

Expressing serious concerns over the continued violations of cease-fire agreement on the LoCby the Indian army, constructive and result-oriented peace process between India andPakistan was demanded in the resolution. The House offered Fateha for the departed soul ofCaptain Sarfraz and prayed for early recovery of the injured soldier.

The resolution said that the people of Pakistan stand by the civil and military leadership todefend the country. Tahir Iqbal of Pakistan Muslim League Nawaz (PML-N) on a point oforder strongly condemned Indian army aggression on LoC, adding that the Pakistan and Indiaare both nuclear power and such irresponsible attitude of Indian army could lead todevastation. He urged the government to adopt strict stance against the cease-fire agreementviolation at LoC by the India.

"If Pakistan and India enters into war, Pakistan has all the ability to give proper response toher," he said cautioning that this war would not be limited. He said that Pak Army is capableof protecting its motherland and has the ability to give tough time to the enemy, adding thatIndia has set up several consulates in Afghanistan for specific purpose. Sahibzada Tariq Ullahof Jamaat-e-Islami (JI) while paying tributes to Captain Sarfraz, said that the governmentshould adopt strict stance on the LoC violations.

He said that Kashmir issue is being neglected by Pakistan since last five years, adding thatKashmiri people are sacrificing their lives to get rid of Indian occupation, but unfortunatelyour rulers are not pursing the issue actively. Legislator from MQM Sajid Ahmed said thatIndia should first end poverty prevailing in the country. "Neighbours should respect eachother, he said.

Sardar Awais Ahmad Khan Leghari of PML-N on a point of order urged the government tounblock YouTube website on urgent basis so that people can get the desired benefit from it.He said that YouTube is an informative website, which can be used for different purposes-information, entertainment and education etc.

Minister of State for Information Technology and Telecommunication Anusha Rahman Khanwhile responding to the point of order told the House that the YouTube would be opened



after approval of the Inter-Ministerial Committee. The government is working on the issue ofYouTube blockage and a committee consisting of forty members worked on the issue and hasgiven some proposals. The MoIT will submit these proposals to Inter-Ministerial Committee,which has mandate to open the website. The Inter-Ministerial Committee consisting ofmembers from different departments, including PTA, MoIT, Interior Ministry and ISI hadblocked the YouTube in October 2012, she said.


Over 1.3 million people hit by flash floods:crops on 634,000 acres of land damagedAugust 23, 2013

ABDUL RASHEED AZAD

The flash floods triggered by monsoon rains have affected over 1.3 million people, killed 165and injured 855 across the country, besides completely damaging standing crops on 634,000acres of land. Current floods have completely destroyed 13,295 houses, while about 70,000houses have been partially damaged, National Disaster Management Authority (NDMA) said.

Punjab is the worst flood-hit province where standing crops including paddy, sugarcane andmaize on 443,441 acres have been swept away, 122,531 acres in Sindh, 64,000 Balochistanand 4,279 acres standing crops in Khyber-Pakhtunkhwa (KP) have been destroyed.

In Punjab a total 53 deaths have been reported of which 16 in Narowal, four Gujranwala,eight in Sialkot, nine in Rajanpur, two in Muzaffargarh, five in Nankanasab, two in Gujrat,three in Chakwal and four in Chiniot. In KPK, 24 people were killed included three inJughur, one in Bannu, one in FR Lakki, one in Village Mullazai, five in FR Tank Kirri Wam,two in Shahabkhail, one in Palosai Muqar Zai, four in Haripur, two in Karak, three in Swat,one in DI Khan. In Sindh, a total 33 people have been killed by flooding so far of which 16 inKarachi, three in Sukkur, one in Mirpurkhas, one in Umer Kot, six in Hyderabad, one inKhairpur, three in Larkana, one in Kashmore and one in Ghotki. In Balochistan, 18 deadincluded six in Khuzdar, five in Lasbela, one in Loralai, one in Jhal Magsi and three inTurbat/Kech. In Federally Administrative Tribal Areas (FATA) 12 people have been killeddue to rain-related incidents while in Azad Kashmir 25 people.

Some 13,295 houses were completely destroyed in the flooding of which 4,616 in Punjab,5,497 in Sindh, 3,000 in Balochistan, 149 in KP and 33 in Azad Kashmir. Due to flooding atotal 69,904 houses are partially damaged in the country of which 9,557 in Punjab, 708 in KP,1,500 in Balochistan, 367 in Azad Kashmir and 57,772 in Sindh.

So far, 4,655 villages have been affected by the floods including 1,620 in Punjab, 15 in KP,2,678 in Sindh and 342 in Balochistan. According to the latest report of the Federal FloodCommission (FFC) River Indus is flowing in high flood at Guddu, Medium Flood at Sukkurand low flood at Chashma Barrage, whereas River Ravi is in low flood at Balloki and highflood at Sidhnai.

River Sutlej in "Suleimanki-Islam Reach" and River Swat at Charsadda Road Bridge are alsoflowing in low flood. Other main rivers ie Jhelum, Chenab & Kabul are flowing normal. At



present, Tarbela Reservoir has attained its maximum conservation level of 1550.00 feet sinceAugust 20, 2013 whereas Mangla Reservoir is at elevation of 1229.95 feet, which is 12.05feet below its maximum conservation level of 1242.00 feet. The Dam Managementauthorities are advised to take utmost care and vigilance in operation and strictly followfilling criteria and safety guidelines wherever necessary. Today's combined live storageposition of Tarbela, Chashma & Mangla reservoirs is 13.257 MAF as compared to last year's6.922 MAF.


High flood in Sukkur BarrageAugust 23, 2013

After Guddu, Sukkur Barrage also witnessed high-level flood Thursday as the water levelreached above 500,000 cusecs in the major barrage of Sindh, Business Recorder has learnt.Guddu Barrage on Wednesday had witnessed high level flood as upstream of this barrage wasrecorded at 567,418 cusecs and downstream at 542,100 cusecs.

On Thursday, Sukkur Barrage's upstream water flow was recorded at 5,02,000 cusecs anddownstream at 478,000 cusecs, upstream flow at Guddu barrage was recorded at 506,000cusecs and downstream at 487,000 cusecs, Kotri Barrage's upstream flow was 226,000 cusecsand downstream 191,000 cusecs. The water level is surging in Guddu, Sukkur and Kotribarrages on a daily basis. Sindh Irrigation Department has declared high-level flood at Gudduand Sukkur. Hundreds of villages have been inundated and thousands of villagers affecteddirectly or indirectly.

The water level at all three barrages of Sindh is on sharp rise and will further increase in nextfew days which could create havoc in the province, irrigation experts said. The flood waterhas inundated more than 2,000 villages in Katcha areas of Sukkur, Ghotki, Kashmore-Kandhkot, Shikarpur, Khairpur Mir's Larkana and Dadu districts. Thousands of villagershave been displaced from their homes and have been shifted to safer places. Relief campshave been established by local administration near their villages.

Aziz Soomro, an official expert of the irrigation department told Business Recorder thatSukkur and Guddu barrages were facing high-level flood as water is moving forward towardsKotri Barrage while washing over a large number of villages located in Katcha (river banks)areas. He said Guddu and Sukkur barrages could witness more water in next few days if it israin in Khyber Pakhtunkhawa and Punjab.




Floods cause havoc in SindhAugust 23, 2013

IQBAL MIRZA & YASIR BABBAR

Calamities seldom come alone. While people were groaning under the pressure of priceescalation of items of daily use, snap floods let lose their fury, inundating large 'kutcha' areason both sides of river Indus banks, sweeping away hutments and leaving several men,women, children and animals dead. A total of 2.130 villages have been affected and crops on87,388 acres badly damaged.

It is appalling indeed that out of 324,502 persons affected in Sindh, in the 84 relief campsestablished, there are only 7,581 persons in these camps, according to data compiled byNational Disaster Management Authority (NDMA), rest are fighting for survival at their own.

Government machinery, it appears, has collapsed as either it was not prepared for thisholocaust or the infrastructure is not capable to take the load. Those who have braved deathand destruction are sheltering in the open fighting for survival. The biggest threat to theirlives is unavailability of potable water, mosquito attack, spread of diarrhoea, high fever andother diseases. Lack of medical facilities, malnutrition, reasonable safe living accommodationand weak logistics have left the people at the mercy of God. The NDMA says that so far 34persons have died and 17 injured in Sindh. The area affected 331,195 acres and crops havebeen affected on 87,388 acres. A total of 11,015 houses have been partially damaged and5,570 damaged fully.

While Sindh government appears slow Non Governmental Organisations (NGOs) areshowing more enthusiasm and seen playing a positive role in alleviating pain and agony ofthe people. According to founder/chairman Pakistan Relief Foundation (PRF), Haleem AdilSheikh, Sindh is at risk as increased flood water has spread havoc in northern areas. Thenewly established NGO has distributed immediate relief goods in four affected districts.

It has distributed around 2,034 tents in northern Sindh, each tent includes two mosquito netsand one water cooler. These packages were immediately distributed in Khairpur Mir's,Sukkur, Ghotki and Kashmore-Kandhkot districts. The distribution of each package wasclosely monitored by the founder/chairman PRF himself in fields who visited kutcha villagesduring each relief operation.

According to details released by PRF, the distribution points included: UC Sagyun, UC PirHayat Shah, UC Hadal Shah at Khairpur. UC Noraja, UC Sangi, UC Sadhoja, UC Shah Purat Sukkur. UC Hussain Beli, UC Qadir Pur, UC Umar Daho, UC Bagu Daho, UC Chandia atGhotki. UC Haibat and UC Gublo at Kashmore-Kandhkot. The operation to assist 2,000 plusaffected households was completed in three days.

During each visit and distribution, PRF team closely monitored the situation and foundinteresting facts, ie, cause of failure of system which resulted in the inundation of hundreds ofvillages, loss of lives and private infrastructure. During its visit to Razidero the team foundthat the link road of Larkana and Khairpur has only one spill way which is beneath the rampconstructed on Indus River and no pipes installed on the road. This is causing constantlyincreasing difficulty in flow of upcoming six lakh plus water from Punjab.



In Taluka Ghotki another infrastructure needs to be looked after, it is only Shankembankment at Qadirpur which is still controversial because of its design. As a result of thisembankment many villages have come under threat in UC Qadirpur and villages near KariDhandh. Shank band can't resist water as it is considered a hurdle in Indus basin. It was alsofound from local informants that this embankment is not listed in official records of IrrigationDepartment.

It was decided by PRF to support affected people on both sides of Indus and immediatelyrelief operations were started in district Kashmore at Kandhkot. Around 512 tents wereprovided to the affected persons on priority basis in UC Haibat and UC Gublo. Many peoplewere on embankment at UC Haibat near controversial Torhi embankment. Haleem AdilShaikh has requested authorities to start proper co-ordination in rescue and relief operationsin the worst affected areas of Khairpur, Sukkur, Ghotki and Kashmore-Kandhkot. Peoplehave been asked to join hands to: "together we save lives".




Taxation: Pakistan

Blocking foreign currencies'' smuggling:FBR, SBP working on new strategyAugust 23, 2013

SOHAIL SARFRAZ

The Federal Board of Revenue (FBR) and State Bank of Pakistan (SBP) are jointly workingon a new strategy to block smuggling of foreign currencies and to check flight of capital fromPakistan. Sources told Business Recorder here on Thursday that the FBR has suggested theSBP to arrange meeting of all the stakeholders and finalise the strategy aiming at preventingsmuggling of foreign currency.

The joint strategy would give the future roadmap to the agencies at airports, ports and otherstations to effectively check smuggling of foreign currencies. The FBR and otherstakeholders have already taken some decisions to check smuggling of dollars etc resulting inflight of capital from the country. Firstly, in response to State Bank of Pakistan''s letter NoEPD/ 2540/24(1)Misc. EC/2013, it was decided that SBP should be asked to specify andshare its intelligence regarding routes being used for this purpose. The action is being takenby the Federal Board of Revenue, using different law enforcement agencies.

Secondly, the SBP should be asked to share the database regarding the persons visiting themoney changers frequently for business so as to establish the database of the persons engagedin suspicious activities. Thirdly, the judgement of Supreme Court of Pakistan titled "2006SCMR 1609" should be circulated by the Board amongst all the field formations includingModel Customs Collectorates (MCCs) for their information and implementation. Fourthly,the SBP should be requested to assist in capacity building of the customs staff in such affairs.

Fifthly, the access of Personal Identification Secure Comparison & Evaluation System(PISCES) may be made available by Federal Investigation Agency (FIA) to Customs for prescreening frequent travellers. Sixthly, the Model Collectorates of Customs should provide theinformation to FBR, DG (I&I-FBR) and all MCCs, in relation to seizure of foreign currencywhile highlighting unique features (if any) including assortment of currency, method used forconcealment, destination, first statement of the accused, divulging initial informationincluding reasons for such an activity.




Reduction in customs tariff: exports toAustralia likely to be increased: HCAugust 23, 2013

Australian High Commissioner to Pakistan, Peter Heyward has said on Thursday thatAustralia is reducing customs tariff gradually which will support Pakistani export speciallytextile sector. Speaking to the members of Sialkot Chamber of Commerce and Industry(SCCI), he said Australia is not a big market, but has good potential for quality goods.

The Australian HC was of the opinion that Dubai link of Sialkot International Airport is agood beginning which will play significant role in transporting Pakistani goods to Australianmarket. He said offices of "Austrade" are functioning in Lahore, Islamabad and Karachisuccessfully through which Pakistani business community could introduce their products tocapture the Australian market more easily. He disclosed that Pakistani mangoes are beingexported to Australia despite Australia is mango producing country which will help inincreasing the trade volume between the two countries.


WeBOC linkage with governmentdepartments: steps taken to ensure securityof imports, exports dataAugust 23, 2013

The Federal Board of Revenue (FBR) is taking measures to ensure secrecy/security ofimports and exports data while sharing and establishing linkage with other governmentdepartments like Engineering Development Board, Ministry of Commerce, Ministry of Portsand Shipping and shipping lines to avoid any malpractice. Sources told Business Recorderhere on Thursday that the Web Based One Customs (WeBOC) would be linked with all thosegovt departments on real time basis having nexus with customs clearance.

The data linkage between the customs collectorates and other relevant departments wouldalso ensure speedy clearances of imported consignments. The security of data should be thetop priority of the FBR while having real time linkage with govt departments in clearance ofconsignments under WeBOC.

Sources said that there is an element of risk in giving access of sensitive data to such a largenumber of govt departments for which risk management unit of the FBR would takepreventive measures to check any misuse of the linkages. The FBR will provide linkage ofimports/exports data through WeBOC to the Ministry of Commerce, Ministry of Ports andShipping, EDB, health department, Drug Regulatory Authority, Plant Protection Department,Trade Development Authority of Pakistan, Animal Quarantine Department and otherdepartments dealing in imports and exports. For example, Import Policy Order is linked withthe import restrictions on certain items. The linkage of data with the Commerce Ministry or



Trade Development Authority would ensure blockage of ''banned items''.

On real time basis, the data would be shared with the government departments for whichthere is a need of 100 percent data security. Similarly, all banks will be linked with theWeBOC besides shipping lines and Ministry of Port and Shipping. Every organisation havingnexus with customs clearances will be hooked up on WeBOC system. The data sharing onreal time basis requires security to avoid any misuse of the data.

Sources said that when the customs is going for data sharing with such a large number ofdepartments and organisations on real time basis its security is very important. To avoidleakage of information or hacking of data, the FBR has reconstituted the Risk ManagementUnit (RMS), officials added. According to the FBR, in supersession of all previous orders onthe subject, the Risk Management Unit (RMU) for WeBOC is hereby reconstituted; and shallconsist of the following members ie Collector MCC (Appraisement-East), Karachi; CollectorMCC (Appraisement-West), Karachi; Collector MCC (Port Muhammad Bin Qasim),Karachi; Collector MCC (Exports,) Custom House, Karachi; Collector MCC (Preventive),Karachi; Director PCA, Karachi and Director (Intelligence & Investigation-Customs),Karachi.

Abdul Rashid Sheikh, Collector MCC (Appraisement-East), Karachi is nominated asDirector/Convenor (RMU). In that capacity, he shall convene meetings of the RMU onfortnightly basis to ensure timely evaluation of WeBOC, besides taking necessary stepsrequired to meet the risk challenges.


Refund blockage: FBR places strict checkon IR CommissionersAugust 23, 2013

The Federal Board of Revenue has placed a strict check on the Commissioners InlandRevenue for blocking refunds and input adjustments only in cases of collusion to avoidtaxpayers' harassment under new blockage provision introduced through Finance Act, 2013.

Official sources told Business Recorder that the FBR has issued a procedure on Thursday tokeep a vigilant check on the Commissioners Inland Revenue, who may block refunds andinput adjustments on the basis of procedure given in the Finance Act, 2013. It has beenensured that the registered persons should not be unnecessarily harassed by the tax officersfor blocking of refunds and input adjustments. A foolproof procedure has been prescribed bythe Board to ensure that the taxpayers should not face any problems in the field formations bythe Commissioners Inland Revenue.

The procedure has been issued in view of sub-section (4) inserted in section 21 of the SalesTax Act, 1990 through Finance Act 2013. Under Finance Act 2013, a new sub-section (4) hasbeen inserted in section 21 of the Sales Tax Act, 1990 to enable the Board, the Commissioneror an officer authorised by the Board to block refunds and input tax adjustment on the basisof evidence of fake invoices, dummy registrations, and other fraudulent activities.



According to the uniform procedure for actions under Sub Section (4) of section 21 of theSales Tax Act, 1990 issued on Thursday, in order to provide for a uniform procedure foractions to be taken under subsection (4) of section 21 of the Sales Tax Act, 1990, the FBRhas prescribed the following procedure, namely:

The action under sub-section (4) of section 21 of the Sales Tax Act, 1990 shall be initiatedfully when there are reasons to believe that a registered person, with a collusive arrangement,is engaged in claiming fraudulent input tax or refunds, or is issuing fake or flying invoices.

These reasons may include that on physical verification/visit, the registered person is foundnot to exist at the declared address, or it is found that no genuine taxable activity is takingplace at the premises, or there are insufficient facilities for conducting the quantum of taxableactivities which are declared in the sales tax returns.

The reasons may also include that the taxable activity being declared is not reasonablycommensurate with the capital investment declared, the manufacturing facilities, or the sizeand nature of the business. Moreover, the registered person is claiming input tax or refundsout of which substantial portion is claimed against sales tax invoices issued by blocked,suspended or blacklisted persons.

Other reasons may include that the registered person is found to have claimed input taxadjustment or refund against fake or fictitious Goods Declarations, or Goods Declarations ofother persons. Non-filing of sales tax returns in the preceding tax period and onrecommendation of a Commissioner of another jurisdiction that the registered person isengaged in unlawful activities as specified in sub-section (4) of section 21 of the Sales TaxAct, 1990. The FBR said that before issuing any order for blocking of refunds or input taxadjustments of a registered person, the reasons shall be recorded in writing by the Board, theCommissioner or the officer authorized by the Board in this behalf.

The order for blocking of refunds or input tax adjustment shall be in writing and copiesthereof shall be sent to the registered person at his declared address, to the ChiefCommissioner having jurisdiction and to the Central Registration Office, FBR said.

The FBR further said that the action under the said provision shall be initiated by aCommissioner only in case of registered persons falling within his jurisdiction. If theCommissioner has reason to believe that a registered person of a different jurisdiction isengaged in the unlawful activities specified in the said provision, he shall inform theCommissioner holding charge of that jurisdiction to take the appropriate action as per law inrespect of the registered person falling in such jurisdiction. However, the Board may takeaction under the said provision throughout Pakistan, and any officer authorized by the Boardin this behalf may take action to the extent and in accordance with the area of authorisationgranted to him.

After such blocking of refund or input tax adjustment, the Commissioner shall complete therequired investigation expeditiously and issue show cause notice to the registered personwithin ten days of blocking for violation of the relevant provisions of law. In case of blockingby the Board or by an officer authorised by the Board in this behalf, the concernedCommissioner having jurisdiction shall be directed to take appropriate legal action under theSales Tax Act, 1990.

Alter completion of proceedings consequent upon the show cause notice, an appealable ordershall be passed within 20 days, and further legal action shall be taken in accordance with the



relevant provisions of the Sales Tax Act, 1990 and rules made thereunder. In case, no suchorder is passed within 30 days of the date of blocking, the refund claim shall be deemed tohave been de-blocked, the FBR said.

If, after investigation, or after the proceedings conducted after issuance of show cause notice,the Commissioner finds that the person was not engaged in the unlawful activities specifiedin the said provision, he shall forthwith withdraw the order for blocking the refunds or inputtax adjustment against the registered person, the FBR procedure added.


Provision of services: industrial concernsrequired to pay Punjab sales tax: PRAAugust 23, 2013

ZAHID BAIG

Punjab Revenue Authority (PRA) declared on Thursday that all industrialbusinesses/concerns that are providing services in respect of against processing or conversioncharges are required to pay Punjab sales tax. "Any interpretation contrary to this legalposition will not be accepted for the purpose of Punjab Sales Tax," said a notification number06 of 2013 issued here on Thursday.

According to the PRA sources, some business quarters/circles have contended that tollmanufacturing (industrial vending) cannot be treated as services because of the definition ofthe 'manufacture' and 'manufacturer' given in section 2(16) and (17) of the Sales Tax Act,1990.

PRA observed that the description and listing of services given in the First Schedule of thePunjab Sales Tax on Services Act, 2012 is minimum. The Punjab government can levy salestax even on services not mentioned in the said schedule that any transaction which is not asupply of goods, is service, is the major underlying principle of the definition/treatment ofsuch transaction as service.

It further said under item 49 of Part-I of the Fourth Schedule of the Constitution of theIslamic Republic of Pakistan, 1973, the Federation can levy taxes only on sales and purchasesof goods (whether goods are) imported, exported, produced, manufactured or consumed,which means that the Federation cannot levy sales tax simply on the manufacturing orproduction of goods per se. Only their sale and purchase can be taxed. Imports are in factpurchases at the hand of importers and are taxed on the basis of destination principle, thenotification added.

Under section 2(38) of the Punjab Sales Tax on Services Act, 2012, an explanation has beenadded that "a service shall remain and continue to be treated as service regardless whether ornot rendering thereof involves any use, supply or consumption of any goods either as anessential or as an incidental aspect of such rendering." This explanation was/is imperativebecause there are several categories of services where goods are involved for the purpose ofrendering of services. Treatment of goods for processing purposes falls under the use ofgoods for vending purposes.



The notification further stated it is clear from the language of 3(1) of the Sales Tax Act, 1990that Federal sales tax is payable only on the taxable supplies (besides goods imported in toPakistan). Under section 2(41), taxable supply means a supply of taxable goods by animporter, manufacturer, wholesaler, distributor or retailer. Again under section 2 (33), thepivotal principle for any transaction to become a supply is that it must be a sale or the transferof the right to dispose of goods as owner, which means "ownership title" must be transferredfrom seller to buyer, otherwise the transaction is not a supply for the purpose of Federal salestax.

Under toll manufacturing, ownership title of goods is not transferred to the vendor under anycircumstances, which means a transaction for the purpose of toll manufacturing can never betreated as supply. Put more succinctly, the ownership of both input goods (raw materials,semi-finished products or components etc) and output goods (processed or finished products)remains with the principal throughout the performance or the execution of the tollmanufacturing contract, whether written or otherwise.

PRA further observed that the very use of words "conversion charges" in sales tax jargonseveral years back indicates that the goods are not priced for sale purposes between theprincipal and the vendor. No commercial transaction not involving price of goods (whetheractual or open market price) for the purpose of transfer of ownership title can be treated assupply (or sale).

Under the goods-related sales tax regime, the concept of manufacture or manufacturer hasbeen used not for the purpose of taxation as such. Historically, this concept was used tofacilitate categorisation of registered persons for registration, declaration data managementand tax concessions' management purposes. Even a time has been experienced in Pakistanwhen several industrial vendors once started predicating that their industrial processingactivities do not fall in the category of manufacturing and they be treated as engaged inservice business so as to keep them away from sales tax liabilities accruable in respect ofprocessed goods. This eventually culminated in the amendment of the definition of the words"manufacture" and "manufacturer". Such amending measures were adopted only because ofthe fact that during those days the Provinces were not exercising their constitutional rights tolevy and collect sales tax on services at their own level. Now the position has changed andFederal sales tax regime is no more in position to manipulate the thin lines of distinctionbetween "commodity" and "service" in its favour. Under no stretch of imagination sales tax isa "production tax" so far as the constitutional scheme of fiscal powers are assignments inPakistan is concerned.

The notification further said according to the available definition, toll manufacturing isdefined as performing a specific service or services on customers' goods or products againstpayment of agreed charges. The vendor, in fact, on the basis of manufacturing or processinginfrastructure available with him sells to the principals, the facility of availing the production-related benefits from such infrastructure against a specific amount of charges (sometimesinternationally known as vending fee or processing fee). Vending contracts may carrydifferent conditions including delivery of finished products directly to the buyers of theprincipals. Sale invoices are however required to be and are always issued by the principals.The vendors generally issue invoices to their principals only to the extent of service charges,the notification added.

PRA, however, said vendors are entitled to avail tax adjustment in respect of inputs (bothgoods and services-related) used for the purpose of such services subject to the provisions of



the Punjab Sales Tax on Services (adjustment of tax), Rules, 2012. Similarly, their principalsare reciprocally entitled to avail input tax adjustment against their Federal sales tax liabilities,if any, the notification concluded.




Taxation: World

China to join global fight against taxevasion: OECDAugust 22, 2013

China is set to join a group of 50 developed and developing countries in the fight against taxevasion by signing a co-operation agreement at the end of this month, the OECD said onWednesday. The Organisation for Economic Co-operation and Development (OECD), saidthat China would sign the Convention on Mutual Administrative Assistance in Tax Matterson August 27.

In doing so, it would participate "in global efforts to combat tax avoidance and evasion by co-operating with other states in the assessment and collection of taxes". The convention is aframework for the sharing of banking data and ultimately aims to have banks automaticallysupply information to a country on the accounts of its nationals.

The OECD, based in Paris, groups 34 leading democracies. China, which is considered bymany experts to be heavily affected by tax evasion, has in recent years multiplied its co-operation with the United States on the issue of tackling tax havens but has until nowdemonstrated little interest in joining multilateral efforts. Tax evasion and complexavoidance, and in particular tax optimisation by multinational groups, is one of the mainthemes to be brought up at the September 5-6 G20 summit in Saint Petersburg.

Copyright Agence France-Presse, 2013



Business & Economy

Pakistan’s C/A surplus at $46mn in July2013Thursday, 22 August 2013 18:57

Posted by Imaduddin

KARACHI: Pakistan's current account had a surplus of $46 million last month, when the2013/14 fiscal year began, compared with a deficit of $427 million in the same period lastyear, the Central Bank said on Wednesday.

The surplus in the July 2013 current account balance was supported by a lower trade deficitand sharp growth in remittances.

The current account deficit for the 2012/13 fiscal year was $2.3 billion.

Copyright Reuters, 2013

Exports in July increase 9.28pc toRs.210,491 millionThursday, 22 August 2013 16:24

Posted by Imaduddin

ISLAMABAD: Exports from the country in rupees term increased by 9.28 percent during thefirst month of the current fiscal year as against the same month of last year.

Exports during July 2013 amounted to Rs.210,491 million against the exports of Rs.192,624million during July, 2012, according to provisional figures of Pakistan Bureau of Statistics(PBS).

On month-on-month basis, the exports from the Country, however, decreased by 2.82 percentin July 2012 when compared to the exports of Rs.216,588 million in June 2013.

The main commodities of exports during July, 2013 included cotton cloth (Rs.23,317million), knitwear (Rs.20,420 million), cotton yarn (Rs.20,267 million), readymade garments(Rs.18,358 million) and bedwear (Rs.17,157 million).

The other items that witnessed increase in exports in July 2013 were rice other than basmati(Rs.11,675 million),towels (Rs.6,593 million), made up articles (excluding towels, bedwear)Rs.5,802 million), rice basmati (Rs.5,789 million) and cement (Rs.5,174 million).



On the other hand, imports into the country on year-on-year basis increased by 10.90 in July2013 against the imports of July 2012, the PBS data revealed.

Imports into the country during July 2013 were recorded at $ Rs.383,245 million against theimports of Rs.345,581million in July 2012.

On month-on-month basis, the imports in July 2013, however decreased by 1.32 percentwhen compared to the imports of Rs.388,358 million in June 2013.

The main commodities of imports during July, 2013 included petroleum products (Rs.82, 146million), petroleum crude (Rs.47262 million), palm oil (Rs.18,303 million), plastic materialsRs.14,029 million) and gold (Rs.13,556 million).

The other items that were imported during the month included Iron and steel (Rs.8,112million), construction and mining machinery (Rs.7,694 million), electrical machinery andapparatus (Rs.7,150 million), iron and steel scrap (Rs.6,224 million) and other apparatus(Telecom) Rs.5,764 million).

Copyright APP (Associated Press of Pakistan), 2013

FBR to facilitate businessmen in taxcompliance: Mian Saeed IqbalThursday, 22 August 2013 16:10

Posted by Imaduddin

ISLAMABAD: An Advisory Committee comprising representatives of ICCI and RegionalTax Office (RTO) Islamabad may be formed to facilitate taxpayers, to avoid any element ofharassment in business community and to improve tax revenue, said Mian Saeed Iqbal, ChiefCommissioner, RTO, Islamabad while addressing a large number of traders and industrialistsat Islamabad Chamber of Commerce & Industry.

He said the said Committee should hold monthly meetings to analyze development andaddress problems of businessmen with Zafar Bakhtawari as focal person from ICCI. He saidRTO in collaboration with ICCI wants to resolve the issues of restaurants owners/professionals amicably to facilitate them for tax compliance.

Sardar A. Khawaja Commissioner RTO Zone-I, Sarfraz Ahmed Commissioner RTO Zone-II,Masood Akhtar Additional Commissioner RTO and Amir Javed Deputy Commissioner RTOwere also present at the occasion.

The Chief Commissioner RTO Islamabad assured that no harassment measures would betaken and FBR would try to woo taxpayers for tax compliance in collaboration with ICCI. Hesaid ICCI would be taken on board for addressing business community concerns about taxmatters. He said honest officers have been brought in RTO, Islamabad and they have beeninstructed to deal with taxpayers courteously to ensure their dignity. If any tax officer foundinvolved in corruption, he will not be spared.



Mian Saeed Iqbal said tax refund matters are being streamlined with automation of systemand refund cases would now be disposed off within 45 days. He said government iscommitted to improve tax-to-GDP ratio as without tax revenue, no country can grow anddevelop. All government officers have now to file their tax returns along with showing theirwealth statements.

He said many registered taxpayers in Islamabad are not filing tax returns and emphasized thatICCI should play its positive role for tax compliance by all entrepreneurs who are capable topay tax. He stressed that ICCI should help FBR in identifying new taxpayers so that withjoint efforts, we could improve tax revenue.

In his welcome address, Zafar Bakhtawari, President, Islamabad Chamber of Commerce &Industry said businessmen regularly pay tax to strengthen the economy and are ready tocollaborate with FBR for enhancing tax-to-GDP ratio. However, he stressed that governmentshould ensure transparent utilization of tax revenue. He said tangible measures to bringimprovement in people life with tax money would restore the confidence of taxpayers andhelp in better tax compliance.

He said government should develop a fair taxation system as current tax system is quitediscriminatory. He said self-assessment scheme of FBR had helped in improving tax revenueand no measures should be taken that create any harassment in businessmen.

He said the current tax target of Rs.2400-billion can be achieved by expanding the tax baseand assured that ICCI would fully cooperate with FBR to expand the tax base to improve taxrevenue of the country. Many businessmen highlighted their tax related problems and offereduseful suggestions to address issues and improve tax income.

Copyright INP (Independent News Pakistan), 2013



Industries & Sectors

Shipping activity at Port QasimThursday, 22 August 2013 13:34

Posted by Parvez Jabri

KARACHI: A ship carrying containers was berthed at Qasim International Containers Terminal on

Wednesday Aug. 21.

Meanwhile four more ships carrying containers, diesel oil, edible oil and rape seed also arrived at

outer anchorage of Port Qasim during last 24 hours.

Berth occupancy was 55% at the port on Thursday where a total six ships namely CGM Chopin, Ikan

Salmon, Beks Nazik, Arundel Castle, MT. Brizo and Mykines are currently occupying berths to

load/offload containers, cement, fertilizer. furnace oil and edible oil respectively during last 24

hours.

A cargo volume of 93655 tonnes comprises 69998 tonnes imports and 23657 tonnes exports

inclusive of containerized cargo carried in 900 containers (TEUs) was handled at the Port during last

24 hours.




Cotton and Textiles: Pakistan

Prices decline furtherAugust 23, 2013

The spot rate fell sharply for the second day due to strong arrivals of seed cotton, dealers onthe cotton market said on Thursday. The official spot rate dropped sharply by Rs 150 to Rs6,600. Prices of seed cotton per 40 kg in Sindh was down by Rs 150-100 to Rs 2650-2850and in Punjab rates were lower by Rs 200-50 to Rs 2600-2900. In the ready session, pricesalso slid by Rs 100 as about 12,000 bales of cotton changed hands between Rs 6600-6800,they said.

Some analysts were of the view that fall in the Indian rupee caused less buying interestamong the local buyers. They also said that China might start importing yarn from India.Cotton analyst, Naseem Usman said that sharp decline in the NY cotton futures also a factorbehind the low demand by local buyers.

It is most likely that selling pressure might bring down rates in the local market, he added.Other brokers said that expected rains in September might propel ginners to sell unsold stockto make space for new arrivals. According to the Reuters, cotton futures sank almost fourpercent on Wednesday, on track for the biggest two-day drop in more than a year, as aninvestor sell-off continued, with losses picking up on sell stops, dealers said. The most-activeDecember cotton contract on ICE Futures US was down 3.45 cents, or 3.9 percent, at 85.41cents a lb at 11:32 am EDT (1532 GMT) after falling more than four percent to 85.11 cents.

The following deals were reported as 200 bales of cotton from Khipro at Rs 6600, 600 balesfrom Kotri at Rs 6600-6650, 200 bales from Nooriabad at Rs 6650, 400 bales fromHyderabad at Rs 6650, 1200 bales from Tando Adam at Rs 6650-6700, 1600 bales from MirPur Khas at Rs 6650-6700, 2000 bales from Sanghar at Rs 6600-6700, 2000 bales fromShahdad Pur at Rs 6600-6700, 200 bales from Bahawal Pur at Rs 6650, 800 bales fromShujabad at Rs 6700, 200 bales from Tonsa Sharif at Rs 6700, 1600 bales from Burewala atRs 6700-6800, 200 bales from Vehari at Rs 6750, 200 bales from Chichawatni at Rs 6750and 200 bales from Hasil Pur at Rs 6800., they added.

===========================================================================The KCA Official Spot Rate for Local Dealings in Pak Rupees---------------------------------------------------------------------------FOR BASE GRADE 3 STAPLE LENGTH 1-1/32"---------------------------------------------------------------------------MICRONAIRE VALUE BETWEEN 3.8 TO 4.9NCL===========================================================================Rate Ex-Gin Upcountry Spot Rate Spot Rate DifferenceFor Price Ex-Karachi Ex. KHI.As Ex-Karachion 21.08.2013===========================================================================37.324 Kgs 6,600 155 6,755 6,905 -150---------------------------------------------------------------------------Equivalent---------------------------------------------------------------------------40 Kgs 7,073 155 7,228 7,389 -161



===========================================================================

Cotton growers advised for timelyeradication of bugsAugust 23, 2013

Punjab Agriculture Department (PAD) has advised the cotton growers that timely eradicationof red cotton bug and dusky cotton bug is very essential as these pests not only causedecrease in production but also severely damages crop quality. According to a PADspokesman, cotton has been sown on an area of 5.78 million acres of land and productiontarget has been fixed at 9.6 million bales.

He said that inferior quality of cotton caused loss of billions of rupees every year. "Cleanpicking, storage, transportation as well as elimination of pests is necessary to get betterquality cotton production," the spokesman added. The spokesman said chances of attack ofred cotton bug and dusky cotton bug increased in high moisture and lower temperature. Hesaid growers had to be vigilant from September to November with regard to elimination ofthose pests. He said growers should also ensure eradication of host plants of those pets andother weeds and spray pesticides in consultation with the local agricultural experts in case ofattack of pest on the crop.


Precipitous fall in cotton pricesAugust 23, 2013

DR ZAFAR HASSAN

After an extraordinary bout of volatility which saw cotton prices rise and fall by Rs 400 to Rs500 per maund (37.32 Kgs) within the short span of a single week, the market is now back tosquare one being the level from which the prices started to climb up. The up and down inNew York cotton futures (ICE) prices tells a similar story.

In Pakistan, the bullish bout in cotton prices was mainly due to the fear that monsoon rainsand floods may have inflicted sizeable damage to the standing crop. Then when thespeculative long positions in New York futures came for profit taking, prices reportedly fellfrom 94 to about 84 cents per pound, nearly a crash seen with in a couple of days time.Pressure on cotton prices has not yet relented.

Over the past week or ten days, there have been torrential rains and furious floods in manyparts of Pakistan. Cotton belt also received heavy rains and many areas adjacent to theriverbeds were inundated. However, as of date no mentionable damage has been reported tothe cotton crop which is projected to yield about 13.25 million bales during the current season(August 2013-July 2014).

There have been some reports that a certain portion of the crop has problem with colourwhich is due to infusion of some moisture or moist weather. It is presently being assessed that



the problem should go away with clement weather. However, in case of continuous rains,quality problems in the fibre may crop up later on. It is believed that if there was rain/flooddamage in the kutcha (riverine) areas to the cotton crop during the previous week, somecountervailing benefits may also have accrued in other areas, thus keeping the balance. Yarnprices are workable even if they are not bullish.

On Thursday, the seedcotton (Kapas/Phutti) prices in Sindh reportedly ranged from Rs 2750to Rs 2850 per 40 Kgs, while in the Punjab they were said to have obtained in the range of Rs2600 to Rs 2900 per 40 Kgs, according to the quality. Lint prices in Sindh were said to haveranged from Rs 6600 to Rs 6700 per maund (37.32 Kgs), while in the Punjab they arereported to have extended from Rs 6650 to Rs 6800 per maund in a stressed market.

It is estimated that by the end of this month, viz 31st August 2013, seedcotton (Kapas/Phutti)equivalent to about two million bales from the current crop will have arrived at the ginningfactories. Business was reported to be sparse as traders and mills were trying to settle theirearlier contracts some of which ran into snags due to heavy and extraordinary volatility in themarket.

In the evening, sales of 200 bales of each cotton from Mirpurkhas and Sanghar and 400 balesfrom Shahdadpur in Sindh, all were said to have been sold at Rs 6650 per maund (37.32 Kgs)in a rather subdued market. Not much business was being reported as prices of cotton hadfallen extraordinarily.

On the global economic and financial front, no solid indication of a meaningful turnaround isbeing reported for any country which could assure us that worst is over. Almost everythingprimarily is revolving around the much anticipated policy of the United States FederalReserve which props up equity markets to the tune of trillions of dollars of easy moneyavailable not only in America but in sundry bourses in the emerging markets and even incountries which are not working on a sound footing.

Take Greece as an example. The German Finance Minister Volfgang Schaseuble hasdivulged early this week that Greece will need another package or doleout to avoid furtherand serious damage to its economy and default during the period 2014 to 2016. EuropeanCentral Bank functionaries will be visiting Greece over the next few weeks and months toplug the hole in the Greek finances.

The economic problem of the peripheral countries in eurozone fails to go away. It is hard tobelieve that a recent betterment in the Chinese manufacturing sector or a marginal increase inthe hitherto unmanageable Eurozone growth will remedy the problem of global growth atlarge.

The very mention of tightening of the interest rates by the US Federal Reserve rattles thestock markets from Brazil to India. Moreover, an outflow of capital from the emergingmarkets and also the other developing countries could result in an economic fiasco in Asianand South American markets. For instance, the Indian rupee has reached a new nadir againstthe US Dollar by sliding down to 64.13 rupees last Tuesday.

Moreover, the Federal Reserve Chairman Ben Bernanke is keeping all his ideas anddecisions, if any, up his sleeve which is irritating the markets and also breeding speculationsin currencies and commodities at large. Unemployment continues to remain higher in theUnited States. Bankers from all over the world were due to meet in Jackson Hole, Wyomingon Thursday and will be keenly watching as to when and how much the economic stimulus



will be cut or curtailed. Among the attendees at Jackson Hole will be Janet Yellen, a leadingcontender for the top job at Federal Reserve to succeed Ben Bernanke. Traders want to learnthe leanings of Yellen to be able to project what she may want if she is inducted to theFederal Reserve chairpersonship.

At approaching weekend, some restraint was seen in share prices which had experienced aseries of losses over the preceding sessions. Investors have naturally been bearish over thepast several sessions as the decisions to curtail stimulus measures will certainly push stockprices over a downward path.


PCGA chief fears new power tariff to jamindustrial wheelAugust 23, 2013

Chairman of Pakistan Cotton Ginners Association (PCGA) Mahesh Kumar has warned thatnew power tariff would jam the wheel of industrial sector and thousands of people maybecome jobless while production cost may increase by 40 percent. In a press statement issuedhere on Thursday, Hamesh Kumar said cotton industry could not afford an increase of Rs 6per unit, because after calculating the taxes and duty it would reach at Rs 8 per unit.

He said that an increase in sales tax and petroleum products had already broken the back oftraders, manufacturers and consumers, adding recent increase in power tariff would ruin theprocess of industrialisation in the country. Mahesh kumar said that levy of equalisationcharges, fuel adjustment surcharge, income tax, electricity duty, and general sales tax had putall the sectors in trouble. Cotton ginning industry was already passing through severeeconomic stress due to fluctuation in prices, non-availability of cotton policy, long durationof loadshedding, he added.

Opposing hike in electricity prices, PCGA Chairman said the decision would directly affectbusiness and trade and trigger further inflation and unemployment in the country. Terming itan anti-masses policy on the part of federal government, he called for revival of the decisionin the best interest of business and industrial communities. "The decision was totally unfairand injustice with business community that is already facing numerous hardships in shape ofterrorism and loadshedding," Mahesh Kumar said. He urged the government to take steps tocontrol power theft and improve the recovery system instead of imposing such unjustifieddecision on business and industrial communities.




Agriculture and Allied: Pakistan

Assistance to flood-hit people: KBP urgesgovernment to form commissionAugust 23, 2013

Kisan Board Pakistan (KBP) has urged formation of a commission supervised by theJudiciary and registered growers' organisations as its members to monitor the assistancebeing extended by the government to flood affectees in the country.

KBP Central President Sardar Zafar Hussein Khan, General Secretary Malik MuhammadRamzan Rohari and Central Secretary Information Haji Muhammad Ramzan in a jointstatement issued here on Thursday said that the information reached to the Board hadrevealed that the official facts and figures regarding havoc played by the recent floods did notreflect the true picture of the damages and losses.

They said assistance announced by the government was also not seen either as hundreds ofthousand of people were stranded under open sky. KBP leaders alleged that transparentassistance division could not be ensured under the present rulers. They demanded acommission supervised by the judiciary and growers' organisation as its members so thatassistance could be reached to the true deserving people.

KBP Central President also convened meetings of all the four provinces to tabulate true factsand figures of flood affectees, pace up the Kissan camps' assistance activities and monitoringthe government support to the affectees. First meeting of Central Punjab will be held onAugust 23 in Lahore, Second on August 24 in Punjab West, third in Sargodha on August 26and fourth on August 27 in Multan.


Crops over 0.44 million acres badlydamaged in PunjabAugust 23, 2013

Punjab Disaster Management Authority issued initial details of losses due to rains and floodsin the province during past two weeks. According to the details, 12 lakh one thousand 71acres of land were affected by rains and floods; crops over four lakh 43 thousand 421 acresarea was badly damaged and 790 persons were injured due to floods.

DG PDMA Punjab Captain (R) Muhammad Asif said 4,616 houses were completelydestroyed while 9,557 houses were partially damaged due to floods and rains whereas 1,620villages and five lakh 48 thousand 594 persons were affected in 20 districts.

DG PDMA further said all out assistance will continue to be provided to the affected persons.



Final report of losses in the flood-hit areas will be compiled after receding of the floodwaters.He said the Administration is regularly serving food three times a day to 3,433 flood-affectedpersons staying at 175 relief camps set up in the flood-hit areas while PDMA is alsosupplying essential items and edibles to the affected ones.


High flood in Sukkur BarrageAugust 23, 2013

After Guddu, Sukkur Barrage also witnessed high-level flood Thursday as the water levelreached above 500,000 cusecs in the major barrage of Sindh, Business Recorder has learnt.Guddu Barrage on Wednesday had witnessed high level flood as upstream of this barrage wasrecorded at 567,418 cusecs and downstream at 542,100 cusecs.

On Thursday, Sukkur Barrage''s upstream water flow was recorded at 5,02,000 cusecs anddownstream at 478,000 cusecs, upstream flow at Guddu barrage was recorded at 506,000cusecs and downstream at 487,000 cusecs, Kotri Barrage''s upstream flow was 226,000cusecs and downstream 191,000 cusecs. The water level is surging in Guddu, Sukkur andKotri barrages on a daily basis. Sindh Irrigation Department has declared high-level flood atGuddu and Sukkur. Hundreds of villages have been inundated and thousands of villagersaffected directly or indirectly.

The water level at all three barrages of Sindh is on sharp rise and will further increase in nextfew days which could create havoc in the province, irrigation experts said. The flood waterhas inundated more than 2,000 villages in Katcha areas of Sukkur, Ghotki, Kashmore-Kandhkot, Shikarpur, Khairpur Mir''s Larkana and Dadu districts. Thousands of villagershave been displaced from their homes and have been shifted to safer places. Relief campshave been established by local administration near their villages.

Aziz Soomro, an official expert of the irrigation department told Business Recorder thatSukkur and Guddu barrages were facing high-level flood as water is moving forward towardsKotri Barrage while washing over a large number of villages located in Katcha (river banks)areas. He said Guddu and Sukkur barrages could witness more water in next few days if it israin in Khyber Pakhtunkhawa and Punjab.


Mangla Dam reservoir level surgesAugust 23, 2013

Water impounding in the raised Mangla Dam on Thursday achieved yet another milestone, asthe level in the Mangla reservoir surged to 1230 feet above sea level. With this unprecedenteddevelopment, the live water storage of the raised Mangla Dam has crossed 6.4 million acrefeet (MAF) mark, resultantly, about 2 MAF additional water is available as of Thursday foragriculture and low-cost hydel electricity generation. The dam has still 0.88 MAF capacityleft to fill in.



Experts said that with this additional quantum of water, benefits to be accrued by theagriculture sector alone are estimated at billions of rupees. In addition, this water will alsohelp generate about 430 million additional units of low-cost electricity, yielding a benefit ofRs 4.6 billion to the national exchequer at the average generation cost of power system ie Rs10.7 per unit. Besides, additional storage capacity now available with completion of ManglaDam Raising Project has also proved instrumental in managing the current floods andavoiding loss worth billions of rupees to national economy.

Chairman Wapda, Syed Raghib Abbas Shah has termed this achievement a result of thecombined efforts made by the Government of Pakistan, the Ministry of Water and Power, theMinistry of Kashmir Affairs & Gilgit-Baltistan, the Government of Azad Jammu & Kashmir,Government of the Punjab and Wapda employees. This was mutually decided last month byall stakeholders to fill the raised Mangla Dam this year up to its maximum level ie 1242 feet,as the Federal Government had promised to pay off the financial liabilities of the projectaffectees for the purpose. Filling of Mangla reservoir up to its maximum level will help store2.88 MAF of additional water and generate about 644 million additional units of electricityfrom the existing Mangla Power House.


Engro turnaround continuesAugust 23, 2013

The Board of Directors of Engro Corporation Limited on Thursday announced the financialresults for the first half ended June 30, 2013. Engro continued its positive turnaround duringthe second quarter of 2013 showing an excellent improvement in results.

Company's consolidated revenues increased by 25 percent to Rs 66,874 million in 1H 2013whilst net profit (attributable to the equity holders of the holding company) was Rs 3,441million as compared to a net loss of Rs 340 million during the same period last year. Thereturn to profitability is mainly attributable to the Fertilizer and polymer businesses increasedproduction and better results.

FERTILIZER: Our fertilizer business reported its highest ever six month revenue of Rs 20.5billion during 1H 2013. It also recorded a highest ever six month urea sales volume of 622KT during 1H 2013, attributable to increased production on the back of continued operationof Enven Plant on Mari gas as well as lower imports and higher off-takes in anticipation ofGST and gas price increase. The increase in sales is 57 percent higher than 1H 2012 volumeof 397 KT.

The company received rota gas from SNGPL for 28 days during second quarter.Subsequently Engro's market share in the total urea market increased to 23 percent in 1H2013 from 14 percent in the same period last year. Market share within domestically-produced urea market also improved to 28%, as compared to 20 percent in the same periodlast year.

FOODS: During 1H 2013, Engro Foods revenue fell by 4.3 percent, driven by a slowdown inconsumer demand and due to distribution issues in certain cities, electoral process in the



country, deteriorating law and order situation and severe power crisis. Despite lowerrevenues, profit after tax was 9 percent higher than the same period last year.

The company is in process of revamping its distribution structure to support the growthtrajectory going forward. The ice cream business reported revenue of Rs 1,441 million, adecrease of Rs 114 million as compared to the same period last year. The industry declinedby 17 percent due to ongoing load shedding. The segment made an operational loss of Rs 125million versus a loss of Rs 166 million in 1H 2012.

The Nara Farm registered a loss of Rs 115 million as compared to a profit of Rs 4.8 million in2012 mainly due to a dip in the value of animals in the international market in the first half of2013 and inflation in animal feed cost. Al-Safa Halal - a halal meat brand, with operationsspread in Canada and North America - posted sales of CAD5.0 million (first half of 2012:CAD5.7 million).

POLYMER: Engro Polymers' revenue grew by 27 percent in 1H 2013 versus 1H 2012.Growth was driven mainly by higher prices and higher VCM exports. Higher sales along withgood margins led to a profit after tax of Rs 425 million as compared to Rs 59 million in 1H2012. Production operations remained smooth throughout the period with VCM productionshowing a 25 percent growth over the same period last year. Most of the VCM was consumedin-house while the surplus production of about 10kT was exported. Total VCM exportsduring the same period last year amounted to 3K tons.

ENERGY: In 1H 2013, the Qadirpur Power Plant dispatched a total net electrical output of796 GwH with a lower load factor versus 1H 2012 due to a turnaround. In June, the entireoverdue receivables of Rs 9 billion outstanding at the beginning of June 2013 were paid byPEPCO as part of a bailout for power sector.

The Sindh Engro Coal Mining Company (SECMC) achieved substantial progress on miningactivities during the last quarter. During the period, SECMC set up a wholly ownedsubsidiary, Thar Power Company Limited. It signed MoU with KESC for supplying 600 MWof electricity and is also in discussions with NTDC.

CHEMICAL STORAGE & HANDLING: Engro Vopak's revenues and profitability arelower versus last year due to revised lower tariffs on paraxylene and acetic acid came intoeffect this year. The company continues to perform well and is well placed to play a role inLNG import to alleviate the gas crisis facing the country.-PR


Flash floods cause massive harm to Basmatirice cropAugust 23, 2013

M RAFIQUE GORAYA

At least 35 percent Basmati rice crop has been destroyed by the recent super flash floods inthe Dek and Aik Nullahs - tributaries of Chenab and Ravi rivers - in the districts of Sialkot,Narowal, Sheikhupura and Gujranwala districts, President Basmati Growers Association told



Business Recorder.

He said the recent floods have once again ruined standing crops on more than 5 lac acres ofPunjab. The Basmati Rice crop being the most affected is a great set back to the country'sexport earnings and the farmer's income. The farmer today has lost his investment and has nohope of any recovery till next year. He said the Aik and Dek Nullahs flowing through thedistricts of Sialkot, Narowal, Sheikhupura and Gujranwala have once again played havoc inthese districts that are basin of world famous Basmati rice.

The Dek Nullah, which is Devak river in Indian Held Kashmir is a tributary of the Ravi Riverbasin with a catchment area of 97 Square Kilometers, it enters Pakistan north west of thetown of Zafarwal in District Narowal and travels along a rather winding course of around 200miles before it falls into the River Ravi below Sharaqpur in District Shiekhupura.

He said along its course it has ruined 50 percent of the Basmati growing area in the abovedistricts. Basmati exports are already down to 6 lac tons in 2012-13 from 12 lac tons a fewyears ago. This havoc unleashed by the current floods will further reduce the chances ofexport earnings from Basmati Rice and more markets will be lost to India. It is a billion dollarquestion which is hardly going to be answered.

Director General Agriculture Extension Services Punjab Dr Anjum Ali admitted that cropsespecially Basmati rice have been damaged over hundreds of thousands of acres inGujranawala and Lahore divisions by the recent torrential rains and floods in the tributaries ofrivers Chenab and Ravi. He said as the water is receding, the government has startedassessment of the crops damaged by huge tide of water. He said that paddy has been plantedover 4.2 million acres of land in the province.

Malhi said weather abnormalities have to be addressed in a planned manner. Damagemanagement is no answer to the tremendous damage of standing crops, livestock andproperty. The government cannot compensate these losses, but can only pacify by statements.

He said floods have not ravaged these lands for the first time but it is very unfortunate that nolessons were learnt from earlier experiences. There is a complete lack of futuristic planning toaddress these issues. The plan could also include the production of energy and storage offlood water in large lined channels along the course of these Nullahs to be later used forirrigation. The farmers & the rural populace demand that the Federal & Provincialgovernments make a comprehensive drainage plan for channelling these Nullahs to avoidsuch destruction in the future. The farmers hope that the government not only makes detailedplans but also puts them into action to prevent such devastation in future.


Gold import: new schemes approved byECCAugust 23, 2013

The Economic Co-ordination Committee (ECC) of the Cabinet has approved new schemesfor import of gold and a new policy for encouraging investment in the manufacturing of



motorcycles industry with new technology. The Economic Co-ordination Committee (ECC)of the Cabinet met here on Thursday under the Chairmanship of Senator Mohammad IshaqDar, Finance Minister of Pakistan at the Prime Minister''s Secretariat Thursday evening.

The ECC has approved a new policy for encouraging investment in the manufacturing ofmotorcycles industry with new technology.

The salient features of the policy are:

i. At the start of commercial production of new entrants, localisation level shall be kept at aminimum of 25 percent in the first year and 15 percent each for the subsequent four years.

ii. By the end of 5 years, localisation level shall reach a minimum of 85 percent at an averageof at least 15 percent localisation per annum.

iii. The minimum investment entitled for this policy would be $100 million upto thecommercial operation date.

iv. New technology will be defined by the Engineering Development Board (EDB) andrecommended by a committee comprising Chairman, BoI, Secretary, Commerce, andSecretary, Industries, and have to be approved by the ECC. The ECC was given a detailedbriefing on the present state of affairs and financial health of the Pakistan Steel Mills by theSecretary, Industries Shafqat Naghmi.

The ECC directed the Secretary Industries to sit with the Secretary Finance even if they haveto work on weekends and come up with a workable solution. The ECC decided that ban onimport of gold will be lifted on August 31, when the new scheme becomes operative. Therevised scheme for import of gold will have the following salient features.

ENTRUSTMENT SCHEME: The quantity of gold importable by a single party under therevised scheme will be capped at 25kg on revolving basis.

ii. Under the revised scheme a beneficiary is obligated to export the imported gold in theform of value added gold jewellery within 120 days. This time limit previously was 180 days.

iii. Under the revised scheme it will now be mandatory to have a contract notarised from theforeign country''s legal authorities and then the same would also need to be duly attested bythe relevant Pakistan missions abroad. Under the previous scheme, foreign buyers entrustedand sent the gold to the Pakistani exporter on the basis of a plain paper contract.

iv. Under the revised scheme it is now decided to increase the minimum value additionrequirements for plan gold bangles/chains, plain gold jewellery and studded jewellery,respectively to 8 percent, 12 percent and 13 percent . The previous minimum value additionrequirement in SRO 266(I)/2001 was 4 percent, 6 percent and 9 percent.

v. It will be prohibited to sell gold imported under this scheme in the domestic market.Penalties under the prevalent laws will be applicable in case of violation.

vi. Random testing of jewellery export consignments will be done at airports to ensure thatthey are fully in conformity with the declaration made to the customs. Otherwise, penaltiesshall apply for mis-declaration and any violation of the SRO under prevalent laws includingof the Imports and Exports Control Act, 1950



SELF CONSIGNMENT BASIS: Under the current scheme exporters can get 100 percent ofthe export proceeds in the form of gold. This facility defeats the very purpose of encouragingexports in this sector. Therefore, in further under this scheme no more than 50 percent ofexport proceeds will be realised in the form of gold. Resultantly at least 50 percent will needto be repatriated in foreign exchange through normal banking channels.

Under the current scheme the maximum period allowed for realisation of export proceeds inthe form of gold is 240 days and for foreign exchange is 180 days. Now both these periodsare being reduced to 120 days. In order to ensure effective over sight and closer co-ordinationbetween concerned agencies, the import and export of value added gold jewellery under thisSRO will only be allowed from duly notified customs station.

In the area of procedural improvements, inter-alia, the following steps will be taken:

a. Effective information and date exchange between TDAP and Customs will be ensured onreal time basis in order to minimise and eliminate existing loopholes in the system.

b. The internal processing procedures of TDAP and FBR will be streamlined in order topresent circumvention of the requirement of the SRO and for this purpose detailedadministrative instruction are being issued.

c. In addition to other measures, in future higher ranking TDAP officers will be responsiblefor processing requests for registration and import/export authorisation. The final approval inall such cases will come from TDAP Headquarters Karachi. This will ensure thatcircumvention of the legal requirements do not take place in regional TDAP offices.

The revised schemes will not be applicable to those transactions where gold has beenimported under the existing SRO 266. Finance Minister Senator Ishaq Dar has said that thenew scheme for re-export of gold will not be applicable to those who have imported gold orauthorised to import under the existing scheme. The meeting was attended by Minister forInformation, Broadcasting and National Heritage Senator Pervaiz Rasheed, Minister forPlanning & Development Ahsan Iqbal, Minister for Science & Technology Zahid Hamid,Minister of State for Information Technology and Telecommunications Anusha Rahman andheads of different divisions and departments.-PR




Fuel and Energy: Pakistan

APBF urges government to generaterevenue in energy sectorAugust 23, 2013

Rejecting the huge jump in electricity tariff for industry from Rs 9.18/KWH to Rs 14.82under the new energy policy, the All Pakistan Business Forum (APBF) executive committeeasks the government to generate revenue through new investments in energy sector byattracting oversees Pakistanis introducing better regulations as economy cannot grow inpresence of energy crunch.

Addressing the executive committee meeting held here, APBF Chairman Nabeel Hashmi saidaccess to energy is imperative to transform lives but it does not mean to increase power tariffup to 74 percent in one go, saying the move is likely to have serious repercussions on theeconomy and masses. He said the government's move is against its manifesto of economicrevival and poverty alleviation, adding that this step would raise products' prices by at least33 percent. He said average electricity tariff for industry in the region is below 10 centsagainst 14.4 cents in Pakistan, as power tariff cost in China, India, Bangladesh and Sri Lankais 8.5 cents, 11.3 cents, 7.3 cents and 9.2 cents, respectively.

He said industries are already facing deteriorating law-and-order situation; complexity oftaxes, and curtailed supply of gas and now the power tariff hike would further hit the exportsand the revenue. Addressing the meeting APBF Central Vice President Imtiaz Rastgarsuggested the government to evolve a mechanism to become more effective in facilitatinginvestments in the country and for this purpose oversees Pakistanis should be givenmaximum incentives to win their trust. He said overseas Pakistanis are one of the biggestsources to boost economy of the country, adding that Overseas Chinese and Indians havemade huge investment in their respective countries.

He said government failed to attract foreign investment particularly in energy sector, as thepresent process of approval of projects discourages investors. There is need to work on a one-window system where the investor can be provided with all necessary information andfacilities.

"If government serves its overseas Pakistanis and take initiatives by providing themincentives then they can play a vital role in boosting Pakistan's economy through theirremittances and investments for the socio-economic prosperity of Pakistan," he remarked.Imtiaz said such an unprecedented increase in electricity tariff is mounting the cost ofproduction on account of electricity cost, interest rate and high labour cost due tocomparatively lower productivity than that of India, Bangladesh and Sri Lanka.




Power shortfall rises to 2,300 megawattsAugust 23, 2013

Power shortfall has risen to 2,300 MW, leaving many consumers power outages, particularlythe domestic ones. According to the NTDC sources, power generation stood at 13,100 MWagainst a demand of 15,400 MW. Meanwhile, power generation through hydel, thermal andIPPs remained 5,410 MW, 1,810 MW and 5,880 MW respectively.

The domestic consumers are complaining about rising frequency of power outages with everypassing day. They said they were being exposed to power outages repeatedly, especially inthe wee hours. According to them, high humid weather is adding fuel to the fire. Meanwhile,the industrial consumers are also not happy with the situation, saying they are yet facing loadshedding for long hours. There was a general impression that the government would providemaximum relief to the industrial consumers after Ramazan. However, no such relief has sofar been extended to them.


Pesco team detects pilferage in commercialbuildingsAugust 23, 2013

Detection team of Peshawar Electric Supply Company (Pesco) Shahi Bagh Sub-Divisioncarried out meter checking and found several direct connections at Zamir Plaza, Pajagi Road,Peshawar and lodged FIRs with Faqirabad Police Station against the culprits. Similarly, directconnections were also found in Shagai Hindkian, Almasa Town, Pir Bala and, consequently,FIRs registered against the power thieves.

In the meantime Pesco's recovery teams of Lala Sub-Division recovered about Rs 0.4 millionfrom defaulters while power supply to Achini Ring Road was disconnected due to non-payment of the arrears of Rs 350,000. The teams also disconnected power supply todefaulters in Shakar Dara and Banda Khazubi due to non payment of Rs 0.5 million. Powersupply was also disconnected to Khanzada Kili, Bacha Kili, Jamadar Kili and Khan Pur Kiliof Mardan circle due to non-payment of dues.




Fuel and Energy: World

Oil edges up on strong China, EurozonedataAugust 23, 2013

US crude oil rose more than $1 on Thursday, while Brent crude rose less and its premiumover US crude narrowed by more than $1 in a lightly traded session. This week has seenvolatile spread trading in the oil market, with US crude's discount widening from less than $3to above $6, then narrowing again to finish Thursday under $5.

In recent weeks, political tensions in the Middle East and North Africa have bolstered Brent'sprice, but reports of some Libyan ports readying for exports eased supply concerns. "IfLibyan production comes back on line, that's going to drive the spread more narrow. But ifLibya's back online, and there's still geopolitical risk, that's a tug of war," said RichIlczyszyn, founder of iitrader.com in Chicago, Illinois.

Data from the United States, China and the euro zone boosted hopes that energy demandwould improve, but analysts said some in the market were cautious that stronger globalgrowth may prompt central banks to reduce economic stimulus measures. US manufacturingactivity hit a five-month high in August as hiring picked up and new orders increased at theirfastest pace since January, an industry report showed.

Euro zone business activity across has picked up this month at a faster pace than expected,surveys showed, led by Germany which enjoyed growing demand for its exports. Activity inChina's manufacturing sector also hit a four-month high as new orders rebounded, datashowed. This raised hopes the world's No 2 economy may be stabilising after a two-yearslowdown. "From a demand viewpoint, the China news is very supportive" for crude, saidPhil Flynn, an analyst with Price Futures Group in Chicago, Illinois.

"But you're getting to the point where you have to balance good news with the possibility oftaking away some of the stimulus." October Brent crude rose 9 cents a barrel to settle at$109.90. US crude gained $1.18 to settle at $105.03, and continued to rise in post-settlementtrade.

The US crude oil benchmark, West Texas Intermediate, stood at a $4.87 per barrel discountto Brent, narrowing more than $1 from its widest point of the session, $6.08. On Wednesday,the Brent-WTI spread widened to $6.23 for the first time since June, after signs UScompanies were diverting oil to the Cushing, Oklahoma, storage hub for the first time in 12months. Libya's Marsa al Brega port, which local sources said reopened on Tuesday, mayhandle oil cargoes in the next few days, a shipping source close to the trade said.

Libya's oil exports are still close to their lowest levels since the civil war of 2011, with thelargest terminals, Es Sider and Ras Lanuf, blocked by protesters for nearly four weeks.Political crisis in Egypt has also stoked supply worries as the country is home to the SuezCanal and the Sumed pipeline, which together carry around 4.5 million barrels per day of oil



between the Red Sea and the Mediterranean. The Egyptian army has said it will guarantee thesafety of the canal and pipeline, but any disruption could have a major impact on oil prices.


Iraq oil exports rebound ahead of expectedSeptember dropAugust 23, 2013

Iraq's oil exports are unlikely to fall as much as expected when it proceeds with maintenancenext month at its southern terminals, sources told Reuters, while shipping data showed supplyhas risen this month to compensate for the future drop. Investors and European oil refinersare watching the level of Iraq's exports closely as supply disruptions in Libya and reducedflows from Russia have tightened markets, helping to support oil prices near $110 per barrel.

Iraq has sent mixed messages about the impact of September's work on loading facilities atthe Basra terminal on supply. An official from Iraq's South Oil Co said it would cutshipments by up to 500,000 barrels per day (bpd), while an oil ministry spokesman later saidit would not affect exports.

An oil revival in Iraq after decades of sanctions and wars has slowed this year due toinfrastructure and security problems. Unless momentum is regained in the autumn, Iraq is atrisk of its first annual drop in output for three years. "I think the oil ministry is under pressureto calm markets by rescheduling," said Samuel Ciszuk, oil analyst at the Swedish EnergyAgency. "But I do not know if it is possible, and the effect will be further delays to Iraqigrowth."

As such, buyers of Iraqi crude expect the work to go ahead and supply to drop, although theysaid it may not be as much as 500,000 bpd. An Iraqi oil official who declined to be identifiedalso said the reduction would not be as large as that, without giving an exact figure. Onemajor customer expected southern exports to average about 2.0 to 2.1 million bpd inSeptember, up to 300,000 bpd lower than the rate seen so far in August.

The work in September is partly designed to increase export capacity. Shipments will be cutonly during the first two weeks of the month while subsea piping is installed, affecting theloading berths, the Iraqi official said. In August so far, Iraq's exports have risen by about220,000 bpd versus July due to increased flows from southern terminals and after Iraq's StateOil Marketing Organisation (SOMO) allocated extra oil to some customers, trading sourcessaid.

Repeated bomb attacks on the pipeline to Turkey from Iraq's Kirkuk oilfields have continuedto curb the flow in August at around 200,000 bpd - one eeighth of its design capacity Exportsfrom Iraq's southern ports have averaged 2.34 million bpd in August, according to shippingdata, and supplies of Kirkuk from the north some 200,000 bpd, according to industry sources.Iraq said total exports were 2.32 million bpd in July.

"Production is picking up again and exports are running higher in August," the Iraqi oilofficial said. "There is likely to be a slight decline in September when we start to install the



new metering equipment." Shipments are expected to return to normal in the second half ofSeptember while further work on the new metering and manifold platform is carried out, hesaid. The final step is to weld a jacket - due to arrive from Saudi Arabia in November - on topof the new metering equipment, he said. "The work is going ahead - it has to be done," theIraqi official said. "We're doing our best to minimise the reduction of exports."


Egypt names new chairman of state oilcompanyAugust 23, 2013

Egypt has appointed Tarek El Molla as chairman of state-run Egyptian General PetroleumCorp (EGPC), the oil ministry said, a move that is likely to encourage foreign oil companiesoperating there. "Tarek El Molla, who is vice chairman for foreign trade, will carry out theduties of chairman of EGPC," a ministry statement said on Thursday.

Molla, a veteran at EGPC, replaces incumbent Tarek El Barkatawy. Top oil officials havebeen changed a number of times since Egypt's revolution, and this is the third switch atEGPC since the start of the year. Tarek El Barkatawy was appointed around mid-May.


Canada Senate calls for rail, pipeline safetyreviewAugust 23, 2013

Canada's Senate called for a full safety review of pipelines, railroads and other means oftransporting crude oil, in a report Thursday that also urges better responses to spills. "We'vebeen working on these issues for the last nine months and the shocking Lac-Megantic raildisaster has only intensified the need to address hydrocarbon transportation safety," saidSenator Richard Neufeld, chair of the standing committee on energy that produced the report.

"In the years ahead, hydrocarbon production will continue to grow and so will transportcapacity. That's why we believe Canadians need to know more about what the federalgovernment has in place to protect citizens and the environment, and what more can be doneto enhance current practices." The Senate committee began examining energy safety issues inNovember 2012. The release of its report coincidentally comes two months after a runawaytrain derailed and exploded in Lac-Megantic, flattening part of the picturesque Quebec townand killing 47 people.

The committee heard mostly from officials and experts touting pipelines as the safest andmost economical way to transport oil and gas across the continent. A public backlash,however, has delayed regulatory approvals of new pipeline construction in Canada and theUnited States.



The Senate report also points out the need for more public information on the whereabouts ofpipelines and real-time information on spills, going as far as asking Transport Canada tocreate an interactive map on its website. It calls for mandatory audits of rail, pipeline andmarine transportation companies' safety protocols, and boosting spill preparedness andresponse capabilities. It also echoes environmental activists' demands that Transport Canada,in co-operation with the US Department of Transportation, accelerate phasing out DOT-111(or CTC-11A as they are known in Canada) tanker cars, which are increasingly being used totransport crude oil across North America despite warnings as far back as the 1990s that theyare more likely to rupture in crashes than newer pressurised tankers. Finally, it criticisesTransport Canada for failing to enforce minimum liability coverage thresholds to ensure railcompanies have the financial capacity to cover damages caused by a major incident.

Copyright Agence France-Presse, 2013



Banking & Finance

SBP mops up Rs 168,350 million throughOMOThursday, 22 August 2013 16:26

Posted by Imaduddin

KARACHI: State Bank of Pakistan (SBP) on Thursday mopped up Rs 168,350 millionthrough open market operation (OMO) in Government of Pakistan Market Treasury Billsunder repo sale.

The bids received for 7-days repo sale figured Rs 170,350 million. The rate of return is 8.55percent per annum, said SBP statement here.




Markets

ISE-10 index sheds 71.01 pointsThursday, 22 August 2013 19:10

Posted by Imaduddin

ISLAMABAD: The Islamabad Stock Exchange witnessed a bearish trend on Thursday as theISE-10 index was down by 71.01 points to close at 4281.38.

A total of 2,500 shares were traded, which were down by 74,800 shares as compared toprevious day's trading of 77,300 shares.

Out of 135 companies, share prices of 39 companies recorded increase and those of 96registered decrease. No company remained stable.

The share price of Murree Brewery increased by Rs. 8.95, while that of Pakistan Oilfieldsdecreased by Rs. 14.32.

Dewan Sulman Fibres and Pakistan Oilfields remained the top trading companies with 2,000and 500 respectively.


Stock market slump continuesThursday, 22 August 2013 19:08

Posted by Imaduddin

KARACHI: The Karachi Stock Exchange (KSE) bench mark 100-index closed lower on fourth

consecutive day of this week on Thursday.

KSE-100 index decreased by 300.95 points to close at 22714.32 while its 30-index decreased by

238.18 points to 17636.70.

Out of total 357 active scrips, 88 moved up while 249 shed values and 20 remained unchanged.

Significant increase of Rs 8.95 was recorded in the stocks of Murree Brewery to close at Rs 319.95

while the stocks of Pak Gum increased by Rs 7.50 to close at Rs 157.50.

Nestle Pak and Bata (Pak) lost their per share value by Rs 310 to close at Rs 5990 and Rs 84 to close

at Rs 1665 respectively.

Most active trading of 22280000 shares was recorded in Fauji Cement.



Total market turnover remained at 28981396 shares as compared to previous 34499330 shares.

In future trading value of 13 scrips moved up while that of 105 moved down.




Politics & Policy

Govt providing better health, educationfacilities: CMThursday, 22 August 2013 16:21

Posted by Imaduddin

SUKKUR: The Chief Minister (CM) Sindh, Syed Qaim Ali Shah has said that government is taking

measures to improve life of masses and paying attention to provide better health and education

facilities to the people of remote areas of the province.

Talking to people from different walks of life at circuit house Khairpur late Wednesday evening, the

CM said that they would handle the flood situation in Sindh as they had provided relief to the flood

affected people in year 2010.

He said that PPP believes in betterment of people and is providing basic facilities to the people at

their door step.

The CM said new local government system will further improve the life of a common man and

introduce record development projects in the province.

Earlier, the CM met with the traders, notables, PPP workers and others, heard their problems and

issued directives to the authorities concerned for the redressal of problems. Earlier, he also

condoled with MPA Naeem Ahmed Kharal on the death of his cousin.


NA condemns violation of ceasefire alongLoCThursday, 22 August 2013 12:57


ISLAMABAD: National Assembly on Thursday condemned continued violation of ceasefireby the Indian forces along Line of Control and called for constructive engagement.

Unanimously adopted resolution paid glowing tributes to Capt Sarfraz of Pak Army who wasmartyred due to unprovoked shelling on LoC near Sakardu on Tuesday.

This House condemns this act of aggression and also expresses serious concerns on continuedviolation of ceasefire across LoC by the Indian army, the resolution presented to the Houseby Minister for Defence Production Rana Tanveer Hussain stated.



The House also called upon India for a constructive and result oriented process ofengagement.

Members across the divide also prayed for early recovery of soldiers injured in shelling andresolved that people of Pakistan fully stand behind civil and military leadership to defend theterritory of Pakistan.


Good relations with India vital for peace,stability in the regionThursday, 22 August 2013 12:55


ISLAMABAD: International Relation Expert Dr. Nazir Hussian said that good relations with India is

vital for peace and stability in the region.

Talking to Radio Pakistan, he added that the important thing in Prime Minister's speech was Kashmir

issue.

Regarding Prime Minister Nawaz Sharif's speech to Nation, Dr. Nazir said that peace in Pakistan is

connected with peace and security in Afghanistan.

Dr. Nazir said that after long time Kashmir issue was touched in Nawaz Sharif's speech which is good

news.

He said that some factors are traditionally parts of our foreign policy like establishing and

maintaining friendly relations with neighboring countries, Muslim World and ties with US and China.

Political analyst Dr. Rasool Bakhsh Raees said there is no doubt that Nawaz Sharif will pursue peace

with India as he had proceeded and succeeded during his previous tenure.

He said that government want to resolve all the issues including ceasefire and current tension with

India through dialogue.

Regarding Nawaz Sharif's address to nation, Dr Rasool Bakhsh said that current government has

realized that security and peace of Afghanistan cannot be detached from Pakistan's law and order

situation, adding that Pakistan will sincerely play its role in Afghanistan issue.

Regarding Kashmir issue, Dr Rasool Bakhsh said that from the beginning, Pakistan Muslim League-

Nawaz has the stance over Kashmir that it is outstanding issue between Pakistan and India.




BR Research: All

Monetary hawks in action soonAugust 23, 2013

BR Research

The central bank has finally announced the date to release the pending monetary policy: itscoming this Tuesday. As this date is just a week before entering into a new IMF programme,there are some who are speculating that the MPS decision may be influenced by the fund.

The analyst community, however, is by and large tilted towards status quo. In a recent surveyconducted by BR Research, all of the 13 respondents said they did not expect any change indiscount rate, on the premise that higher inflation numbers in July were due to the Ramzaneffect. Majority of them expect monetary hawks to dominate at the helm of central bank laterthis year, owing to rebound in inflation primarily due to tariff rationalization.

Its a 50-50 on rate hike or no change now. But, going forward, monetary tightening isinevitable. Given the inelasticity of private credit to interest rates movement, any increase indiscount rate would harm the government and benefit the banks. Mind you, despite the 500basis points decline in interest rates in the last two years, private credit remained in the redzone last fiscal year.

With the policy rate staying at 9 percent, real interest rates are still in positive territory as theinflation is fiddling around 8 percent. Latest weekly sensitive price index suggests that CPI inAugust may remain below 9 percent. So, there is a good reason for central bank to adopt await-and-see approach. Plus, the inflation is triggered by cost push factor while there is nosubstantial demand pull factor to increase prices.

With massive government borrowing (Rs611 billion) from the central bank in the first fiveweeks of this fiscal year, some economic demand ought to be created going forward.However, there is no immediate need to curb it.

In addition, the current account was marginally in surplus in July, which gives more credenceto the view that the SBP need not be hawkish right now. But the overall balance-of-paymentis down by $820 millions, which warrants some attention from the doves to change theirmind in coming policy reviews.

The most important factor for the central bank to assume its tightening stance in the future isbased on the inflationary impact of massive upward revision in electricity and gas tariffs.This impact is surely going to be on CPI before the next policy review in two months.

By then, the fund programme would have started and we already know that the IMF is alwayskeen on tightening the monetary stance to put brakes on the fall in reserves and discouragegovernment borrowing from the banking system. Some analysts expect inflation to reach 11percent by the end of this year, so 150-200 basis points increase in policy rate this year isimminent.

If the ongoing political tension in the Middle East worsens, oil prices might move northward



in the short term. If that happens, it would be a double whammy for Pakistan as it is not onlygoing to fuel inflation but also put strain on the current account.

Meanwhile, the law-and-order situation is anything but deteriorating; hence, foreign directinvestment is going to remain elusive. Though the worst is over for forex reserves, theelusiveness of FDI coupled with slowing pace of growth in remittances may mean thatforeign reserves will remain tested. The only respite on this front is the IMF and inflows fromother multilateral agencies.

The bottom line rests with government officials dominating the board of central bank, forthey may push the status quo on Tuesday to ease the fiscal deficit. But, their influence isgoing to fade with IMF coming up with its stick and with inflation dragon out in the future.Hence, hawks are going to dominate most of this year.

Engro makes resounding comebackAugust 23, 2013

BR Research

Talk about turnarounds. Pakistans largest conglomerate Engro Corporation has just made amassive one. Engro managed to put up an impressive show in 1H CY13, having witnessed alacklustre 1H CY12. Change in fortunes in its core fertilizer business was the key driver forthe impressive showing.

With better availability of feedstock gas during the period, Engro Fertilizers produced 13percent more urea and sold even more-more than 50 percent up year on year. Though the ureaprices remained stable during the period, it was better availability and diversion of gas to thenew more efficient Enven plant which enabled Engros higher gross margins (40%) on itsfertilizer business.

Fertilizer business has reclaimed the lead position in terms of revenue contribution to theCorporation. The 31 percent contribution to Engros revenue is significantly higher than theone-fourth it contributed same period last year. Better margins due to gas diversion strategyand higher production-coupled with lower financial charges-led to a healthy bottom line, insharp contrast to a woeful one last year.

Engro Foods-the Corporations flag-bearer last year-was not as exemplary. Its revenuecontribution to Engro Corporation dropped from 37 percent last year to 28 percent this year.Engro Foods UHT segment faced pressure during the period owing to supply chainbottlenecks, which the Company expects to iron out going forward. That said bottom linecontribution of 29 percent is still healthy despite a not-so-stellar performance.

The power generation business continues to be the cash cow and is expected to take thenumber 2 slot in terms of bottom line contribution, surpassing the foods business. EngroPowerGens plants run on very high efficiency and the recent payment of Rs8.97 billion to theCompany on account of circular debt settlement would do a world of good for its financialsgoing forward.

The rice business is believed to have performed well. Phosphate sales have increased as well.These two segments could propel Engro Eximps earnings. Another silver lining is a



meaningful contribution from Engro Polymer after a long while, as PVC prices have shapedbetter and finance costs have reduced significantly.

Engro will keep an eye on feedstock gas price which is expected to be increased soon. TheCompany is confident that it has the pricing power to pass on the entire impact and stillcompete with imported urea. The inherent advantage of concessionary feedstock for its newplant puts it at a favourable position relative to its peers-offering Engro more leverage withurea pricing.

====================================================ENGRO CORPORATION====================================================Rs (mn) 1HCY13 Y/Y chg 2QCY13 Y/Y chg====================================================Sales 66874 25% 35573 17%Cost of sales 48807 21% 26710 18%Gross profit 18068 41% 8863 13%Gross margin 27% 25% -Other income 1009 -4% 734 53%Finance cost 6845 -11% 3784 -8%PAT 3827 NA 1812 631%EPS (Rs) 6.83 3.19----------------------------------------------------Source: KSE notice====================================================

ABL-Income diversification callingAugust 23, 2013

BR Research

Top line growth amid dropping discount rate catches sight. But, more striking than this is thefact that top line growth comes on the heels of low-yielding investments and not advances.

During the first half of 2013, investments of the fifth largest commercial bank boasted astaggering growth of 45 percent year on year. Conversely, advances remained muted,plopping down the banks ADR to 46 percent in 1H CY13 from 57 percent in thecorresponding period of last year.

However, unlike the case with other banks where investments battered top line, Allied BankLimited (ABL) could garner a 7 percent top line growth despite an asset portfolio which ishighly inclined in favour of investments.

The top line growth, hardly seen in the current results season, couldn produce a trickle-downeffect owing to the banks rising cost of funds. During 1H CY13, the proportion of low-costdeposits (CASA) fell to 71 percent from 75 percent in the corresponding period of last year.Resultantly, ABLs spread ratio fell by almost 100 basis points.

On the positive side, ABL, already enjoying the lowest infection ratio among its big fivepeers, was able to further cut its non-performing loans by 6 percent year on year in 1H CY13.



This, coupled with proactive loan coverage in the previous periods, allowed ABL to booksignificantly low provisioning expenses for the period, thereby providing some favour to thebottom line.

The positive situation was, however, turned around by the hideous non-mark-up income.Once the bottom line savior, non-mark-up income drastically dropped this time around. Thismainly was the effect of a plunge in the dividend income among other factors.

Consequently, the bottom line lost its ground by 17 percent year on year in 1H CY13.

With the industry experts eyeing discount rate reversal any time in the current fiscal year, thebanks are expecting a massive growth in their top lines. However, ABL, which managed topost modest top line growth amid low discount rate, needs to focus more on other matters,especially low-cost deposit mobilization and efficient income diversification.

====================================ALLIED BANK LIMITED - KEY INDICATORS====================================Indicators 1HCY13 1HCY12====================================Infection Ratio 8% 8%Coverage Ratio 90% 84%Spread Ratio 40% 41%Capital Ratio 9% 8%IDR 51% 44%ADR 46% 57%CASA 71% 75%ROA 0.8% 1.2%ROE 10% 14%------------------------------------Source: Company Accounts===============================================================================================Allied Bank Limited (Consolidated P&L)===========================================================(Rs mn) 1HCY13 1HCY12 chg===========================================================Markup Earned 26,153 24,384 7%Markup Expenses 15,761 14,373 10%Net Markup Income 10,392 10,011 4%Provisioning/(Reversal) 31 281 -89%Net Markup Income after provision 10,360 9,730 6%Non Mark-up / Interest Income 5,056 7,084 -29%Operating Revenues 15,416 16,814 -8%Non Mark-up / Interest Expenses 7,467 7,282 3%Profit Before Taxation 7,949 9,532 -17%Taxation 2,361 2,792 -15%Profit After Taxation 5,588 6,741 -17%EPS (Rs.) 5.37 6.48 -17%-----------------------------------------------------------Source: Company Accounts===========================================================



Golden hue turned July trade blueAugust 23, 2013

BR Research

Pakistans foreign trade figures for July lacked vigour. As per the data maintained by thePakistan Bureau of Statistics, the July trade deficit increased by 6 percent year on year,reaching $1.71 billion. Apparently, there is a touch of gold, of the negative kind, in thesefigures, which has blemished an otherwise decent monthly trade performance.

It is surprising to note that the July exports registered only 2.65 percent year-on-year growthwhen major exporting groups produced solid gains. Thanks to the higher exports of non-Basmati rice, fisheries, fruits, sugar and meat products, the food group exports increased byover 22 percent, thereby contributing nearly one-fifth of total exports.

Similarly, the textiles group exports grew by nearly 11 percent in July over last year, thusfetching about three-fifth of overall exports proceeds. As expected, low value-added productslike cotton yarn and cotton cloth did well, and so did Pakistans flagship value-added items inthe bed wear and readymade garment segments.

In addition to that, all major manufacturing segments-like cement, engineering goods, sportsgoods, leather and footwear, surgical goods, chemicals and pharma products-showed healthyyear-on-year growth in July. When nearly all exporting categories did well, question is:where did the hemorrhage arise from?

It was the jewellery export that dented the overall export gains, as its proceeds were 91.5percent, or nearly $174 million, lower compared to July last year. That turned the overallexport growth lackluster.

The golden touch was visible in July imports as well. The monthly imports rose by 4.16percent year on year, despite drawdown in dollar imports of food groups (24 percent),transport group (61 percent), textile group (10 percent), petroleum group (5 percent) andmachinery group (1.5 percent). The $153 million bump in imports, over July last year, camemajor from higher imports of gold, plastic materials and medicinal products.

The case of gold imports is interesting, which $29 million per month in FY13. But, comparedto $11 million last July, Pakistan spent $135 million this July on its gold imports. After Indiaput a variety of curbs on its gold imports this year, gold has reportedly been smuggled therefrom Pakistan. Pakistani government has imposed a 30-day ban on gold imports, which iscurrently in effect.

Clearly, the gold imports did not help increase re-exporting in the form of value-addedjewellery in July (similar pattern is observed for most of FY13). That has resulted in doubleblow to the trade balance. Imagine that if jewellery exports and gold imports-two minor itemsin the overall trade mix-had thrown up same dollar values this July as last year, Pakistanwould have recorded export growth of 11 percent, an import growth of less than 1 percent,which would have led to a 12 percent reduction in trade deficit.

Meanwhile, the resolution of circular debt, which has improved the refineries liquidityposition, was visible in July trade data. Petroleum crude shipments were 26.9 percent higher,



while POL shipments were 3.4 percent lower compared to June-further cementing theinherent inverse relationship between the two segments. With their pending dues paid up,refineries are said to be now operating at higher capacities, importing more crude oil andprocessing it to cater to local POL demand.

Recent higher prices of imported petroleum products and rupee depreciation have also forcedthe oil marketing companies to cut back on the POL imports, in order to avoid exchangelosses. That has further increased the reliance on local refineries.

In the absence of non-recurring incidence of gold import hike, trade deficit may ease a little.However, the petroleum shipments are also expected to increase due to rising demand fromthe power producers and commercial users in the coming months. Meanwhile, export growthin major categories, like textiles, remains dependent on the availability of electricity and gasto the producers.

===================================================PAKISTANS FOREIGN TRADE (SNAPSHOT)===================================================

July 2013$ (mn) % chg % chg

year- monthon-year -on-month

===================================================Exports 2,095 2.65 (4.64)Rice 174 34.0 6.2Cotton Yarn 202 15.6 8.1Cotton cloth 232 16.2 3.9Knitwear 203 1.0 7.6Bed wear 171 9.6 12.2RMG 183 16.3 6.5Jewelry 16 (91.6) (15.9)Imports 3,814 4.16 (3.19)Petroleum products 818 (17.3) 1.6Petroleum crude 470 29.5 26.4Gold 135 1,119.9 235.2Trade Deficit (1,719) 6.07 (1.35)---------------------------------------------------Source: Pakistan Bureau of Statistics===================================================



Brief Recordings

Standard Chartered BankAugust 20, 2013

RECORDER REPORT

Standard Chartered Bank is the largest and fastest growing international bank, operating inPakistan since 1863. Starting with Karachi, SCB, to date, has a branch network of 132branches in 29 cities across the country. SCB's core businesses in Pakistan are in ConsumerBanking and Wholesale Banking. SCB is honoured to be the first international bank to get anIslamic Banking licence and to open the first Islamic Banking branch in Pakistan.

FINANCIAL PERFORMANCE 1Q CY13: Owing to an enhanced focus on investmentamid low interest rate backdrop, the top line of the largest international bank in Pakistan lostits grounds by 2 percent year on year in the first quarter of 2013. In 1Q CY13, the Advances-to-Deposit Ratio (ADR) of SCB dropped to 46 percent from 56 percent in the correspondingperiod of yesteryear. Conversely, during the similar period, Investment-to-Deposit Ratio(IDR) surged to 54 percent from 49 percent.

The bias towards investments is substantiated by low credit appetite from the private sectorand bank's yearning for low non-performing loans (NPLs). However, SCB doesn't appear tobe benefited of the move as its NPLs surged by 3 percent year on year in 1Q CY13. In theabsence of fresh advances, higher NPLs took infection ratio to 20 percent in 1Q CY13 from19 percent in the similar period of last year.

Although the bank garnered a higher proportion of low-cost deposits in 1Q CY13, yet lowinterest rate backdrop and the enhanced floor rate on saving deposits, plopped SCB's spreadratio down to 62 percent from 64 percent in 1Q CY12.

Parking more funds in government securities and high provisioning in the earlier periodsallowed SCB to reverse its provisions against bad debts plunged by 38 percent year on yearduring the period giving some respite to the bottom line. Despite significant drop, theprovisioning ratio still stands at a satisfactory 90 percent. However, the drop in non-mark-upincome and rise in mark-up expenses stole the charm battering the bottom which ended updropping by 10 percent year on year.

SUMMING UP PAST PERFORMANCE (CY11-12) SCB's top line witnessed a plunge of2 percent year on year in 2012 that came on the heels of lower discount rate compared to2011 and higher concentration of low yielding investments in its asset portfolio.

Despite a drop in top line and net interest margin, the bank was able to boast a growth of 9percent. The bottom line growth was propelled by a 21 percent year-on-year drop inprovisioning expense and a massive growth in non-mark-up income particularly gains on saleof securities.

NPLs grew by 5 percent during the period. However, fresh loans advanced during the yearwere able to hold the infection ratio at a level similar to 2011. The bank's coverage ratiotouched an impressive mark of 89 percent in 2012.



Wholesale banking income was slightly impacted due to the reduction in interest ratesresulting in lower net interest margins. SCB's low-cost deposits witnessed a rise of 19 percenttaking the bank's CASA ratio to 88 percent from 83 percent in 2011. However, that couldn'tprevent SCB's spread ratio from declining.

Administrative costs increased by only 4.7 percent despite ongoing inflation and investmentsin the franchise. The cost to income ratio, however, remained more or less the same at 52%.During the period, the bank's cost of funds decreased to 4.15 percent despite increase inminimum profit on savings accounts.

FUTURE OUTLOOK: Banking sector already being beaten-up by incessant rate cuts, hikein floor rate on saving deposits and the imposition of calculation of profit on the averagebalance of saving deposits, was given another shock by SBP in the recent monetary policyannounced on June 21.

By further reducing the discount rate by 50 basis points to 9 percent, the already withered netinterest margin of the banking sector is expected to drop by further by 15-30 basis points.This might pave way for the banks to turn its gaze towards the high yielding private sectorwhich might be accompanied with the opportunity cost of proportionally higher toxic assets.

For banks like SCB with phenomenal cost-cutting measures in place, private sector lendingmight yield a staggering bottom line growth.

However, the long-term outlook seems bright as after entry into a fresh IMF programme amidCPI rebounding again; it is highly anticipated that discount rate would pick up. This would bea good omen for the banking sector and might encourage it to ignore private sector anddabble in risk-free government securities.

The risk-free lending, though an ultimate safe-haven from NPLs and an excellent earningavenue given muted private sector credit appetite shouldn't be used by the banks as aneverlasting money minting source. The efficiency of a bank lies in how it lends excessively toprivate sector, yet, does away with toxic assets.

===========================================================Standard Chartered Bank===========================================================SCB - Key Indicators===========================================================Indicators CY11 CY12 1QCY13Infection Ratio 19% 19% 20%Coverage Ratio 86% 89% 90%Spread Ratio 64% 62% 62%Capital Ratio 15% 14% 12%IDR 44% 49% 54%ADR 58% 54% 46%CASA 83% 88% 88%======================================================================================================================Standard Chartered Bank (Pakistan) Limited===========================================================Rs (mn) CY11 CY12 1QCY13



Markup Earned 32,825 32,214 7,545Markup Expenses 11,908 12,338 2,865Net Markup Income 20,917 19,876 4,681Provisioning/(Reversal) 4,507 3,579 464Net Markup Incomeafter provisions 16,410 16,298 4,217Other Income 6,193 7,312 1,592Operating Revenues 22,602 23,610 5,809Other Expenses 14,016 14,287 3,647Profit Before Taxation 8,586 9,322 2,162Taxation 3,033 3,276 765Profit After Taxation 5,553 6,046 1,397EPS (Rs) 1.41 1.54 0.36===========================================================



Miscellaneous News

Tension with New Delhi: Pakistan refuses totake part in talks on TAPI pipelineBy Zafar Bhutta / Creative: Munira Abbas

ISLAMABAD:

The repercussions of the boiling tension between Pakistan and India on the Line ofControl are being felt in all spheres of life as talks on a crucial transnational gaspipeline in New Delhi have been postponed, apparently dealing a blow to the UnitedStates.

The US has been pressing Pakistan to go ahead with the Turkmenistan-Afghanistan-Pakistan-India (TAPI) gas pipeline and shelve the Iran-Pakistan pipeline project because of a standoffwith Tehran over its alleged nuclear programme.

According to sources, the US had invited Pakistan to participate in talks on the TAPI pipelinein India on August 22, but Islamabad refused to attend apparently because of tension withNew Delhi, leading to postponement of the dialogue.

“A representative of the US State Department and Chevron officials, who were visiting Indiato discuss issues pertaining to the pipeline, had asked Pakistan to join them, but Pakistan’srefusal caused the talks to be put off,” a source familiar with the development said.

US firm Chevron is interested in financing the pipeline, which will pass through war-tornAfghanistan, and is seeking a stake in developing gas fields in Turkmenistan.

Sources revealed that the Joint Working Group on the project met in Dubai on August 18-19and a follow-up meeting would be held in New Delhi some time later.

The countries participating in the project have agreed to hire the Asian Development Bank(ADB) as transaction adviser to raise funds to meet the escalating cost, estimated to exceed$10 billion compared to earlier forecast of $7.5 billion because of delay in kicking off work.

In a fresh development, Afghanistan has signed a gas sale and purchase agreement to becomepart of the project, abandoned earlier by Kabul, saying it was only interested in transition fee.These developments took place in Ashgabat, Turkmenistan in the first week of July.

The participating countries have also negotiated the transaction adviser fee for the ADB.Earlier, the bank sought $100 million in fee and $50,000 per month as retaining cost of theproject. On the insistence of participating countries, which asked the ADB to bring the feedown to $30 million, the bank agreed on $50 million.



“This issue is still to be settled with the ADB, which will be hired as transaction adviser togenerate the entire cost of the project,” an official said, adding the four countries had alsoagreed to contribute $5 million as token money to the TAPI Company.

Afghanistan had earlier refused to contribute funds, saying it did not need the gas to besupplied by the pipeline. Now that Kabul has signed the gas sale and purchase agreementwith Turkmenistan for import of 500 million cubic feet per day (mmcfd), it will alsocontribute $5 million, according to sources.

During July talks, the issue of security in Afghanistan also came under discussion. Kabulassured the meeting that it would protect the pipeline despite a volatile security situation.

Under the original plan, Pakistan will get 1.365 billion cubic feet of gas per day (bcfd) fromTurkmenistan, India will also receive the same 1.365 bcfd and Afghanistan will get 0.5 bcfd.

Turkmenistan will supply gas through a 1,800km pipeline that will reach India after passingthrough Afghanistan and Pakistan.

Published in The Express Tribune, August 23rd 2013.

The great journey: PIA eyes profit duringnext Hajj operationBy Saad Hasan

KARACHI:

Pakistan International Airlines (PIA) is aiming to book a profit during its next Hajjoperation, breaking away from past experience ending up with a loss despite runninghundreds of flights and transporting thousands of passengers it ended up with a loss.

“Thankfully the government realised this year that a raise in airfare was needed to meet thecost of fuel and rupee’s depreciation,” said Managing Director PIA Muhammad JunaidYunus, at a press conference.

“This year, we are looking at not just achieving a break-even point but going a little bitfurther,” he said, adding that the national-flag carrier might be able to book a 5% operationalprofit, but cautioned that he “can’t give the exact number because a lot of factors are involvedand the outcome could be different.”

PIA will transport 70,024 pilgrims to Saudi Arabia in 160 flights during the pre-Hajjoperations which start on September 9 and end on October 19.

Hajj flights will take off from Karachi and Quetta in the southern region, and from Lahore,Sialkot, Multan, Islamabad and Peshawar in the northern region.

Contrary to general perception that airlines do roaring business during Hajj, PIA officials saythe carrier spends excessively to make the journey comfortable despite minimal revenue per



seat. In almost every case, the flight that takes Pakistani pilgrims to Saudi Arabia comes backempty.

Yunus said that PIA incurred a loss on account of the Hajj flights last year because thegovernment allowed only a Rs1,000 increase in airfare. “This time, it has been raised byRs10,000 so airfare in southern region is Rs87,500, while airfare in northern cities isRs97,500.”

The number of pilgrims travelling via PIA in 2013 has come down by 20% over last yearafter Saudi authorities decreased the quota of pilgrims, he said. “Consequently, we’ll beflying 46,500 people under the government scheme with 23,345 pilgrims using private Hajjoperators,” said Yunus. Last year, the airline flew over 80,000 pilgrims.

Every year, the Saudi government allocates quotas and this year, a little over 151,600Pakistanis will take Islam’s most revered journey.

Under an arrangement between Islamabad and Riyadh, half of the Pakistani pilgrims areflown by PIA and other domestic carriers like Shaheen Air while the other half are catered toby Saudi Airlines.

Yunus said that this year private airline Air Blue refused to become part of the operations.“We must realise that this is national obligation more than a commercial operation for us.”

PIA will eventually carry more than 70,000 pilgrims as it is gearing to serve passengers fromMyanmar and two African states.

The 160 flights to Saudi Arabia will be operated on two Boeing-747s and as many B-777aircrafts, which have a seating capacity of 503 and 329 passengers respectively. Twoadditional aircraft of the same make will be on standby to deal with any eventuality. The MDalso made it clear that PIA will not be leasing aircraft for Hajj operations this year but will beusing aircraft from its own fleet.

Saudi aviation authorities impose penalties on airlines which miss flight schedules and PIAhas decided to avoid that.

PIA has asked intending pilgrims to go through the guidelines carefully especially noting thenew restriction on carrying more than five litres of Zamzam.

PIA’s post Hajj operation will run between October 19 and November 18 2013.

MD’s plea

It was during the press conference on Hajj operation that the issue of constant technicalfailure of PIA aircraft was brought up by some journalists. Visibly distraught, Junaid Yunussaid PIA engineers should be appreciated for keeping such an old fleet in the air.

“There will always be technical failures when you are operating 20-year-old planes. All ofour planes are that old except for the ATRs and B-777s. We need to bring down the averageage to 5-6 years,” he said.



“And this is where I need your help. Please don’t blame us for flight delays when the weatheris not on our side. Airlines around the world face delays but somehow that becomes a bigissue here.

“Don’t push us to land when there is a storm. Already new airlines are coming up in Pakistan.This kind of competition can be disastrous. I have avoided it so far, not letting anyonecompromise safety. We won’t repeat the two Islamabad tragedies,” he said, referring todeadly crashes of Air Blue and Bhoja Air planes.


Engro Corporation witnesses stellarturnaround in fortunesBy Our Correspondent

Published: August 22, 2013

KARACHI:

On Thursday, Engro Corporation announced a spectacular turnaround in fortunes asthe company reported a profit of Rs3.83 billion in the first half of 2013, compared to aloss of Rs340 million in the corresponding half of 2012, attributable to a rebound in itsfertiliser and polymer divisions.

According to a notice sent to the Karachi Stock Exchange, consolidated revenues of thecompany clocked in at Rs66.9 billion, up 25% over the corresponding half of 2012. Theresult announcement was not accompanied by any payouts.

Fertiliser division

Engro’s fertiliser business reported highest-ever six-month revenue of Rs20.5 billion duringthe period. It also recorded a highest-ever six-month urea sales volume of 622,000 tonsduring the half, attributable to increased production on the back of continued operation of itsbillion-dollar Enven plant on the Mari gas network as well as lower imports and higher off-takes in anticipation of the general sales tax (GST) and gas price hikes. The growth in sales is57% higher than corresponding first half’s volume of 397,000 tons.

The company received rota gas from the Sui Northern Gas Pipelines (SNGPL) for 28 daysduring the second quarter. Subsequently, Engro’s market share in the urea market increasedto 23% in first half of 2013 from 14% in the same period last year.

Foods division

During the first half of 2013, revenue of Engro Foods fell 4.3%, driven by a slowdown inconsumer demand and due to distribution issues in certain cities, electoral process in thecountry, deteriorating law and order situation and severe power crisis, said a press statement



of the company with the results. Despite lower revenues, profit was 9% higher than the sameperiod of last year.

Engro Foods is in the process of revamping its distribution structure to support the growthtrajectory going forward. The ice cream business recorded revenue of Rs1.4 billion, adecrease of Rs114 million as compared to the same period last year.

Polymer division

Engro Polymer and Chemicals recorded a growth of 27% in revenues during the period,mainly attributable to higher prices and higher vinyl chloride monomer (VCM) exports.Higher sales along with good margins led to a profit of Rs425 million compared to Rs59million in first half of 2012. Production operations remained smooth throughout the periodwith VCM production showing a 25% growth over the same period of last year. Most of theVCM was consumed in-house, while surplus production of about 10,000 tons was exported.

Energy division

In first half of 2013, the Qadirpur power plant dispatched a total net electrical output of 796gigawatt hours (GwH) with a lower load factor.

Sindh Engro Coal Mining Company (SECMC) set up a wholly-owned subsidiary, TharPower Company. It signed agreements with KESC for supplying 600MW.


Market watch: Stock market continuesdownward trendBy Our Correspondent

KARACHI:

The stock market continued its downward trend for another day as investors rid theirportfolios of volatile stocks.

The Karachi Stock Exchange’s (KSE) benchmark 100-share index fell 1.31% or 300.95points to end at 22,714.32 points.

“Selling pressure was witnessed across the board, as NBP (-5.0%) and ENGRO (-3.7%)failed to meet the market’s earnings expectations.” Said Mujtaba Barakzai of JS Global.

“Concerns over a potential hike in discount rate in the upcoming monetary policy also keptinvestors concerned, particularly in the cement sector.” He added.

The government is set to release its monetary policy on Aug 27, 2013. Investors expect thegovernment to increase discount rates in an effort to meet the pre-requisites set by theInternational Monetary Fund (IMF) for its assistance program. As a result investors havebeen avoiding the banking sector which will be hit adversely by the move.



“A depreciating currency ahead of government repayment to IMF worth $480 millionpersuaded local institutional selling to wipe off earlier gains. National Bank of Pakistan (NBPPA -5%) despite beating market expectations on its half yearly earnings witnessed lowerprice limit as investors believe the anticipated rate hike has already been priced in.” saidHarris Ahmed Batla of Elixir Research.

Batla added that “Reported institutional selling remains evident in oils and cements afterflawed rumors of cement price increase, while retail plays continued to churn volumestrading red.”

Trade volumes fell to 217 million shares compared with Wednesday’s tally of 252 millionshares.

Shares of 345 companies were traded on Thursday. At the end of the day 85 stocks closedhigher, 228 declined while 32 remained unchanged. The value of shares traded during the daywas Rs10.2 billion.

Fauji Cement was the volume leader with 22 million shares losing Rs0.26 to finish atRs14.42. It was followed by Bank of Punjab with 19 million shares gaining Rs0.08 to close atRs12.59 and National Bank with 13 million shares losing Rs2.7 to close at Rs51.47.

Foreign institutional investors were net sellers of Rs483 million, according to data maintainedby the National Clearing Company of Pakistan Limited.


Dawlance to focus on overseas expansion,new marketsBy Farooq Baloch


KARACHI:

After dominating Pakistan’s home appliances market for years, Dawlance is planningon international expansion. With consistent growth in revenues, the company is alsoplanning to list on the Karachi Stock Exchange, The Express Tribune has learnt.

Dawlance understands the Pakistani market very well but it also wants to learn about andpenetrate international markets, Hasan Jameel, Dawlance’s General Manager Sales andMarketing, said in an interview at the company’s headquarters earlier this week. “For acouple of years, we will be focusing more on exports,” he said.

Arguably, the largest (white goods) household appliances brand in the country, Dawlance isalready exporting its products to 11 countries in the sub-continent, the Middle East andAfrica. White good refers to appliances like refrigerator, freezer, split air conditioner,microwave oven and washing machine.



“We want to expand in the countries we are already exporting to and enter new markets at thesame time,” Jameel said.

The company has identified some new markets in Africa and South America, which havesimilarities to Pakistani markets. “India will be a huge market if the two countries canliberalise trade in the categories we deal in,” he added.

The company’s plan for international expansion comes on top of a strong performance in thedomestic market. Dawlance, according to Jameel, leads in at least three categories namelyrefrigerator, microwave oven and structured washing machines.

The company is growing both in terms of revenue and volumes. It is even considering listingon the KSE, he said.

As far as listing is concerned, Jameel said, Dawlance has become a big company in terms ofsales and volumes. Listing is the next logical step, he said but didn’t give any details ortimeframe, only saying another department was dealing with that aspect.

Dawlance’s sales grew 25% between financial years 2008 and 2012. The company earnedRs19 billion in revenues in financial year 2013, Rs1 billion higher than what it had earnedduring 2012.

The company’s basic objective is to become a global brand, which is one of the main reasonsfor the international focus.

“If you talk about exports, we are still in a learning phase,” he said. “We have not yet tappedthe full potential of the Pakistani market but we want to take advantage of internationalmarkets.”

The GM further said by competing internationally, they can learn new things, especially inthe area of research and development. If the company improves in R&D, he said, this willbenefit the country as it will bring technology back home.

Dawlance has already launched two latest products – inverter-based ACs and low-voltage-starter refrigerator. The inverter-based ACs save 35% of energy compared to conventionalACs while the LVS refrigerators can start at as low as 135 volts.

These products have received good response so far, he said. However, the company is tryingto merge its R&D with that of international suppliers for products more suitable to Pakistanimarket – the company imports compressor kits and inverter-based ACs.

Dawlance has already taken the first step towards international expansion. “We have startedparticipating in international exhibitions,” Jameel said. The company has displayed itsproducts in international exhibitions in Dubai and China and, according to him, the responseso far is very good.



“We are ahead of the competition both locally and internationally on performance grounds,”he said.


NBP reports dismal earnings amid low-interest environmentBy Our Correspondent


KARACHI:

National Bank of Pakistan (NBP) has suffered a hit to its profits in the first half of 2013– amid the low-interest rate environment – reporting consolidated earnings of Rs6.92billion, a fall of 30% compared to what it earned in the corresponding period a yearago.

Continuously shrinking net interest margins as the central bank pursued an expansionarymonetary policy during the period ie slashing interest rates amid falling inflation, andabnormally high provisioning expense has reversed the fortunes of the bank which reportedstellar earnings in 2012.

According to a notice sent by the bank to the Karachi Stock Exchange, core income of thebank – net interest income – witnessed a drop of 4.7% due to decline in the discount rate andescalating interest expensed upon the savings rate paid on average balance.

Total provisions were reported at more than double, 122% to be exact, over the previouscorresponding period at Rs7.4 billion, with provisioning against bad loans contributing thehighest as it grew by 2.5 times to Rs6.53 billion, compared to Rs2.57 billion in the first halfof 2012.

Resultantly, net income from core operations of the bank were reported 28% lower atRs13.09 billion.

Non-core income (earnings from fees, dividends and investments) was the silver lining forthe bank as it witnessed growth. NBP recorded 20% higher non-interest income of Rs14.1billion, owing to a booming stock market as it made Rs2.78 billion by trading securities, andhefty profits earned from joint ventures. Share of profit from joint ventures was 20 timeshigher at Rs383 million.

After talking to the bank’s management, Elixir Securities reported that NBP’s non-interestincome remains trivial going forward as the bank does not plan to expand.

On the contrary, NBP was planning to re-launch Islamic banking under the product name‘Aitmaad’ by the end of third quarter of 2013 by aggressively adding Islamic branches to itsnationwide branch network. The bank is targeting to add 100 Islamic branches in 2013.




Shell earns Rs59.5 million in April-JunequarterBy Our Correspondent


KARACHI:

Shell Pakistan Limited posted a profit of Rs59.53 million for the third quarter (April-June 2013), a major improvement over the loss of Rs1.764 billion it incurred in sameperiod last year.

As a result, losses for the six month period from January to June 2013 fell by 96% to Rs65.8million compared with Rs1.988 billion suffered in first half of 2012.

The multinational petroleum company was able to record better performance on back ofhigher sales and a tight control over its expenses, especially financing costs.

Fiscal results, which were released to the Karachi Stock Exchange, came along with adetailed statement of Shell Pakistan’s Chairman and CEO Omar Sheikh who complainedabout tough business conditions in the country.

“We continue to be affected by very low regulated fuel margins, an unfair turnover taxmechanism and continued financing cost of government receivables,” he said.

During first half of the year, the company received Rs1.526 billion from government underdifferent heads but it still awaits payment of over Rs6.9 billion in sales tax refunds, petroleumdevelopment levy, subsidies and imported purchases. These receivables have been pendingfor one to 10 years.

Referring to the April 2013 raise in margin on petrol and diesel that oil marketing companiesget in rupee terms on sale of a litre of fuel, Sheikh said “Currently, these margins are not at alevel sufficient to cover steadily rising direct costs of operations and high cost of financingrequired for investment in stocks and business assets,” adding that these regulated marginsstand lowest in the region.

Shell’s statements highlighted the continuous repercussions of turnover tax, which is eatingthe industry’s profit.




Heavy rains batter cotton cropBy Imran Rana


FAISALABAD:

Recent flash floods due to heavy rains have destroyed the cotton belts of southernPunjab and Sindh, increasing the prospects of a shortage of the commodity andescalation in its prices in addition to hurting cotton-based exports.

Within days of floods destroying the crops, the price of cotton has jumped by 13% to Rs7,000per 40 kilogrammes against the previous rates of Rs6,200, according to market sources. Dueto floods the targets for main Kharif crops might not be achieved this year, which will alsoaffect agriculture output that contributes about 23% in the total national output.

Rao Babar Ali, a farmer hailing from South Punjab said that every year rains start inSeptember in South Punjab. But early rains in the southern belt have already destroyed atleast 15% of the cotton crop, and if the rains continue the situation would be more alarming.

Heavy rains cause various diseases in the cotton crop and a large quantity of water does notbenefit cotton yields, he added.

Agricultural experts also fear further damages to cotton as well as other crops in SouthPunjab and Sindh, as the Meteorological office has already forecasted above average amountsof rain in September.

So far floods have destroyed almost 15-20% of the cotton crops, 10% rice, 30% sunflower,40% onions, half of the tomatoes and green chillies along with other crops, they said.

They added that cotton production in cotton growing districts of south Punjab namely Dera-Ghazi Khan, Multan, Muzafargarh and Layyah have been affected by 15% and in Rajanpurthe ratio is 60%.

The cotton growing districts of Sindh along with the south Punjab border are badly hit by therecent rains. In Sindh 20% of the cotton belt was also destroyed by the floods, they added.


HBL profits fall to Rs10.5 billion in firsthalf of 2013By Our Correspondent


KARACHI:



Keeping up with the banking sector, Habib Bank (HBL) reported a fall in earningswhich were 11.3% lower at Rs10.52 billion in the first half of 2013 as non-conduciveinterest rate environment for banks and imposition of floor at 6% on saving and termdeposits on monthly average balances hurt earnings growth.

According to the notice sent by the bank to the Karachi Stock Exchange, the bank’s coreoperations suffered, falling 10% to Rs26.24 billion, compared to Rs29.11 billion in thecorresponding half of 2012 as net interest margins for the whole sector contracted during theperiod due to the SBP’s expansionary monetary policy. The bank also announced interimcash payout of Rs4 per share for the semi-annual period.

In the period, the bank recorded 45% fall in total provisioning expense at Rs1.2 billion, whereprovisioning for bad loans registered a decline to Rs1.2 billion from Rs2.78 billion in thecorresponding period of last year. Reversals against off-balance sheet obligations helped thebank contain provisioning expenses. Thus, HBL was able to pocket Rs25 billion from coreoperations.

According to the published accounts, HBL’s non-interest income remained flat, clocking in atRs8 billion, a meagre 3% growth over the corresponding half of last year. Even though thebank managed to boost its income from fees and advisory services, and capital gains onequities, all the growth was offset by a massive decline in income from dealing in foreigncurrencies.

Expenses of the bank also kept the bottom-line under pressure as it increased 10% to Rs17.2billion in during the period, where admin expenses climbed to Rs17 billion, and analystsbelieve that this was due to aggressive expansion strategy that the bank is pursuing.

Moreover, HBL paid taxes on a lower rate (36.5%) in the first half of 2013, which is 420basis points lower than 38.8% rate on which the bank paid its taxes in the correspondingsemi-annual period of 2012.

Furthermore according to a press statement issued by the bank post-result, the bank registereda modest 3.6% growth in deposits to Rs1.26 trillion in the period.


Engro wins Best Corporate Report AwardsBy Our Correspondent


KARACHI:

Engro Corporation was declared the overall winner in the Best Corporate ReportAwards 2012 in a ceremony organised by the joint committee of the Institute ofChartered Accountants of Pakistan (ICAP) and the Institute of Cost and ManagementAccountants of Pakistan (ICMAP) on Thursday.

Best corporate report awards were given in the categories of banking, chemicals, sugar andcement, engineering, fuel and energy, non-banking financial institutions, textiles, non-



government organisations (NGOs) and miscellaneous to recognise excellence in corporateand sustainability reporting while promoting transparency through timely, factual and reader-friendly annual reports.

Among commercial banks, MCB Bank, Allied Bank and Askari Bank received the first,second and third awards, respectively, for best corporate reports in 2012. In the category ofchemicals, Fauji Fertilizer, ICI Pakistan and Fauji Fertilizer Bin Qasim were the top threeaward-receiving companies.

Top three slots in the energy and fuel category went to Hub Power Company, PakistanPetroleum and Pakistan State Oil. Among the NBFIs, first three positions were secured byArif Habib Corporation, First Habib Modaraba and Jubilee General Insurance.

Addressing the ceremony, former finance minister Salman Shah said all problems that thecountry faces emanate from lack of investment. Saying that the investment-to-gross domesticproduct ratio has declined to 11% from 24% in 2007, Shah said it translates into $40 billionworth of lost investment opportunities.

In the category of miscellaneous, Engro Corporation, Engro Foods and Rafhan MaizeProducts were awarded the best corporate report awards. Nishat Mills was the recipient of thetop award in the textile category.

The Citizens Foundation secured the best corporate report award in the category of non-profitorganisations.

Addressing the gathering, AKD Securities CEO Farid Alam said the quality of financialreports prepared by Pakistan’s development finance institutions (DFIs) is low.

“Although we gave certificates of merit to encourage DFIs in the past, they don’t participatein these awards actively,” Alam said, while urging them to try and improve their financialreporting standards.

The ICAP-ICMAP joint committee also launched another category under the name ofSustainability Awards and Certificates last year. Its top three recipients for 2012 were LuckyCement, Fauji Fertiliser and Attock Refinery.


KSE stays bearish due to likely tightmonetary policy

KARACHI - The Karachi stocks market on Thursday remained bearish on the back of whatthe equity analyst viewed the investors’ concern for a possible upward revision in thediscount rate by the central bank.This southward movement of the equity market the analysts said was despite the positiveslike hopes for the approval of $1.5 billion World Bank’s loan for economic stabilization and a$46 million surplus the country saw in its current account balance during July, the first monthof FY14.The State Bank of Pakistan, which in its last monetary policy statement on June 21 slashed



the discount rate to 9 percent owing to declining inflation and low private sector credit, iswidely being expected to increase the cost of borrowing at least by 50 basis points given thecurrent rising trend in CPI inflation which in July was recorded above 8.3 percent. Themonetary policy decision for the next couple of months is due to be unveiled next week.Reacting strongly to the negative the Karachi Stocks Exchange saw all of its indicatorssetting in the red zone with the benchmark KSE 100-share index losing 300.95 points to closeat 22,714.32 points compared to Wednesday’s 23,015.27 points. In percentage terms, the lossstands out to 0.31 percent. The intraday high and low, respectively, was recorded at23,100.72 and 22,539.48 points.“(The) stocks continued bearish trend amid growing fears for possible hike in (the) SBPpolicy rate announcement due next week,” commented senior equity analyst Ahsen Mehanti.Besides, renewed concerns for rising circular debt in the energy sector, uncertain Pak-Indiarelations, limited foreign interest and growing political uncertainty on the day of by-electionsplayed a catalyst role in the bearish sentiments at the Karachi bourse, said Mehnati, a directorat Arif Habib Securities. The free-float KSE 30 index shed 238.18 points and closed at17,636.70 points as against 17,874.88 points of Wednesday.The trading volume at the ready-counter was recorded at 217.488 million shares compared to252.124 million traded on the previous day. The value of traded shares also declined to Rs10.263 billion from Rs 10.668 billion. Of the total 357 scrips traded only 88’s gained in termsof value, 249 devalued and 20 remained unchanged. The market capital was another head thatmarked a negative trend by shrinking to Rs 5.615 trillion compared to Rs 5.684 trillion of theprevious trading session.Fauji Cement appeared as a volume leader of the day by counting its traded shares at 22.280million. In terms of value, however, the cement giant saw its shares deprecating from Rs14.68 to Rs 14.42. Bank of Punjab, NBP, Engro Foods, Maple Leaf, Lafrage Pak, EngroPolymaker, Telecard Limited, PTCL and Pakgen Power were other scrips which were tradedamid the day’s bearish trend. On the future market, 28.98 million shares were traded against34.49 million of Wednesday. “Consolidation continued post major earning announcementsamid concerns for rising economic uncertainty, higher government debt and falling globalcommodities,” said the analysts.

Sindh government to set up marble city inKarachi

KARACHI - Muhammad Zubair Motiwala, chairman Sindh Board of Investment (SBI), hassaid that marble city project is being established in Karachi on 300 acres of land to strengthenthe provincial marble sector.He said the zone would offer multiple opportunities for the value addition and processing forentrepreneurs being based on high End technology, innovation and services. This he saidwhile presiding 4th Board meeting of Sindh Stone Development Company (SSDC) at hisoffice.Zubair Motiwala who is also the chairman of SSDC, which is developing the marble city,said the creation of this enclave will not only boost the export volumes from existing $60million to a minimum $250 million.The chairman said that it would also help bring in more FDI. He said the marble city is one ofthe priority projects of the Sindh government and SBI is committed to materialie this projectat earliest. Motiwala said that a high demand exists in the international market for Pakistanimarble, but it could not be satisfied due to dearth of modern technology.Zahid Hussain Memon, secretary Mines and Minerals, said that the establishment of theproject is a good omen for the sector. He said that while establishing the marble city, it is also



important that the mining policies are also made entrepreneur friendly. He also said that theinvestors should be incentivised and facilities shall be provided for the granite and stoneentrepreneurs of Sindh. Muhammad Riazuddin, director general Sindh Board of Investment,said that the development of marble city will not only create jobs but will also uplift the socioeconomic conditions of the surrounding areas.Haroon Rashid, director SSDC, said that the marble city project is a long awaited demand ofthe local marble entrepreneurs. He said that a secure and enabling environment wouldfacilitate in attracting the foreign investment from countries such as Italy, China and Turkey.Earlier director projects SBI, Abdul Azeem Uqaili, informed the forum the current status ofthe project. He said that the consultancy firm has been engaged as per SPRRA rules. Theconsulting consortium will carry out the feasibility study with technical viability, transactionanalysis, commercial development plan and other technical and transaction related activities.A presentation on project status and way forward was shared by the consultancy firm M/Searnest and young.

Dr Wilson appointed acting CCP chairmanISLAMABAD - Dr Joseph Wilson has been appointed as the chairman of the CompetitionCommission of Pakistan (CCP) on acting charge basis with immediate effect and until furtherorders. According to the press statement issued by the commission, Prime Minister NawazSharif ordered to appoint Dr Joseph Wilson as the Chairman CCP, who has over 21-yearexperience of public service, law practice, teaching and research in regulatory laws. DrJoseph Wilson has been serving as a founding Member of the Competition Commission ofPakistan since its establishment in 2007. He has supervised Monopolies and Trade Abuses,Mergers and Acquisitions, International Affairs, Strategic Policy, Research and ExemptionsDepartments at the commission. Prior to joining the commission, he was an associateprofessor of law at the Lahore University of Management Sciences (LUMS), Pakistan, wherehe taught "competition law" in addition to other courses.

Food exports increase 22.43 % growth inJulyISLAMABAD - Food group exports from the country during the first month of the currentfinancial year posted growth of 22.43 percent as compared to the same month of last year.Different food commodities worth $389.319 million exported during the month of July 2013as compared to $ 317.997 showing an increase of 22.43 percent. According to data ofPakistan Bureau of Statistics (PBS), rice export from the country increased 33.98 percent inmonth of July 2013 as compared to the same month of last year. During the period underreview 292,564 metric tons rice worth $173.814 million was exported as against 196.819million valuing $129.72 million in month of July 2012. However, the exports of basmati ricewitnessed negative growth in July 2013 as it went down by 20.30 percent and reached to$57.61 million from $ 72.288 million in the same month of previous year.



HBL declares Rs 4 per share interimdividend for stakeholders

KARACHI - The board of directors of Habib Bank Limited (HBL), in its meeting held onThursday, reviewed the performance of the group and approved the financial statements forthe half year ended on 30 June 2013.The board declared the bank’s first interim dividend of Rs 4 per share for the year ending 31December, said a statement issued by the bank.It said in spite of declining policy rate, imposition of floor at 6 percent on saving and termdeposits on the basis of monthly average balances, lack of credit demand from businesses andchallenging economic environment in domestic and international markets, the after tax profitof the HBL for the second quarter ended 30 June was up by 6.4 percent at Rs 5.4 billion asagainst Rs 5.1 billion in the first quarter ended 31 March.The improvement in profitability during the quarter April–June 2013 is attributable mainly tothe reversal of provisioning and increase in non-interest income.The pre-tax and after tax profit of the bank stood at Rs 15.9 billion and Rs 10.5 billion,respectively, for the half year ended 30 June as against Rs 19.2 billion and Rs 11.9 billion forthe half year ended 30 June 2012. The pre-tax and after tax earnings per share for the halfyear ended 30 June 2013 was Rs 11.8 and Rs 7.8, respectively.The net interest income declined by 10 percent to Rs 26.2 billion for the half year ended 30June, while the non-interest income at Rs 8 billion registered a growth of 3 percent ascompared to first half of 2012.The deposit growth was modest at 3.6 percent to Rs 1.259 trillion as on 30 June as against Rs1.215 trillion as on 31 December 2012. The CASA of HBL improved to 73.8 percent as on 30June 2013 compared to 67.0 percent as on 31 December 2012.As on 30 June 2013 the advances stood at Rs 481 billion, while the investment was recordedat Rs 850 billion recorded growth of 6.6 percent compared to 31 December in 2012.



OPEN MARKET FOREX RATESUpdated at: 23/8/2013 7:57 AM (PST)

Currency Buying Selling

Australian Dollar 94 94.25

Bahrain Dinar 271 271.25

Canadian Dollar 99 99.25

China Yuan 16.5 16.75

Danish Krone 18.5 18.75

Euro 137.5 137.75

Hong Kong Dollar 13.15 13.4

Indian Rupee 1.65 1.75

Japanese Yen 1.043 1.063

Kuwaiti Dinar 357.5 358

Malaysian Ringgit 31.3 31.55

NewZealand $ 81.25 81.5

Norwegians Krone 17.25 17.5

Omani Riyal 267 267.25

Qatari Riyal 28.15 28.4

Saudi Riyal 27.4 27.65

Singapore Dollar 79.8 80.5

Swedish Korona 15.65 15.9

Swiss Franc 111 111.25

Thai Bhat 3.15 3.4

U.A.E Dirham 28.05 28.3

UK Pound Sterling 160.5 160.75

US Dollar 103.75 104



INTER BANK RATESUpdated at: 23/8/2013 7:57 AM (PST)

CurrencyBank Buying

TT CleanBank Selling

TT & OD

Australian Dollar 92.66 92.84

Canadian Dollar 98.24 98.43

Danish Krone 18.44 18.47

Euro 137.53 137.79

Hong Kong Dollar 13.29 13.32

Japanese Yen 1.0505 1.0525

Saudi Riyal 27.49 27.55

Singapore Dollar 80.32 80.48

Swedish Korona 15.67 15.7

Swiss Franc 111.54 111.76

U.A.E Dirham 28.07 28.12

UK Pound Sterling 160.86 161.17

US Dollar 103.1 103.3



Bullion Rates (Gold Prices) in PakistanRupee (PKR)As on Fri, Aug 23 2013, 04:00 GMT

Metal SymbolPKR

for 10 GmPKR

for 1 TolaPKR

for 1 Ounce

Gold 24K XAU 45,889 53,468 142,734

Palladium XPD 25,182 29,341 78,325

Platinum XPT 51,380 59,866 159,813

Silver XAG 771 899 2,399

Gold Rates in other Major Currencies

Currency Symbol 10 Gm 1 Tola1

Ounce

AustralianDollar

AUD 490 571 1,525

CanadianDollar

CAD 467 544 1,452

Euro EUR 332 387 1,032

JapaneseYen

JPY 43,832 51,071 136,335

U.A.EDirham

AED 1,627 1,896 5,062

UKPoundSterling

GBP 284 331 884

USDollar

USD 443 516 1,378



Gold Rates & Silver Rate from major citiesof Pakistan

A year by year reference of the daily Silver Price in Pakistan and history of Gold Rates inPakistan

Aug 22, 2013

Following table shows gold rates per Tola in Pakistan in Pakistani Rupess (PKR) in 24 caratper 10 Grams, 22 carat per 10 grams and sliver rates per 10 grams in pakistan.

City 24k per 10 Grams 24 carat per Tola 22k Per 10 Grams Silver 10 Grams

Karachi Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Lahore Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Multan Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Faisalabad Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Rawalpindi Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Hyderabad Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Gujranwala Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Peshawar Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Quetta Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Islamabad Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Sargodha Rs. 46000 Rs. 53800 Rs. 42271 Rs. 771.42

Source: Karachi Saraf.

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